Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. (b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below. (c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response. (d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement. (e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. (f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement. (g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). (h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32. (i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard. (j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans. (k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 11 contracts
Sources: Pooling and Servicing Agreement (BMO 2025-5c13 Mortgage Trust), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2025-5c7), Pooling and Servicing Agreement (Benchmark 2025-V17 Mortgage Trust)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by the immediately preceding Section 3.32(a) above), the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.32(e); and provided, however, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan as to such party and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan with respect to the Directing Certificateholder or the Holder of the majority of the Controlling Class and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder or the Risk Retention Consultation Party (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.32, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements, with the consent of or in consultation with the Directing Certificateholder prior to the occurrence and continuance of a Control Termination Event or the occurrence and continuance of a Consultation Termination Event, respectively (in each case, other than a Mortgage Loan that is an Excluded Loan as to such party)) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection Section 3.32(h) shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or the occurrence and continuance of a Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) and only to the extent such Mortgage Loan is not an Excluded Loan as to such party) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 8 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2016-Bnk2), Pooling and Servicing Agreement (GS Mortgage Securities Trust 2017-Gs7), Pooling and Servicing Agreement (UBS Commercial Mortgage Trust 2017-C1)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the a Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basisbasis but not more frequently than monthly) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.32(e); and provided, however, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The No Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the no Special Servicer nor the or Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this AgreementAgreement or reduce either such party’s rights hereunder.
(e) Notwithstanding the right of the a Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.32, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this AgreementAgreement or materially reduce its rights hereunder.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the no Master Servicer nor the or Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(ki) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Loan, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Trust-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 7 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2025-5c7), Pooling and Servicing Agreement (BBCMS Mortgage Trust 2025-5c38), Pooling and Servicing Agreement (Benchmark 2025-V17 Mortgage Trust)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, Combination) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Loan Combination, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC); and provided, further, that, with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of Rialto Capital Advisors, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 7 contracts
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2017-P8), Pooling and Servicing Agreement (GS Mortgage Securities Trust 2017-Gs6), Pooling and Servicing Agreement (CD 2017-Cd4 Mortgage Trust)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans that it is servicing, and other than any Excluded the applicable Master Servicer with respect to litigation involving non-Specially Serviced Mortgage Loans that it is servicing, and, in either case, if such Special Servicer Loan)or such Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate or the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, as applicable, shall submit any decision to commence any proceeding or similar action in a Material Litigation Control Matter or any decision to agree to or propose any terms of settlement in a Material Litigation Control Matter to the TrustSubordinate Class Representative (during a Subordinate Control Period) for its approval or consent (or its deemed approval or deemed consent as provided below) and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and as applicable, the applicable Special Servicer or applicable Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer as applicable, shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders, the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of a Special Servicer with respect to such Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary, and subject to agreement between the applicable Special Servicer and the Subordinate Class Representative as to scope of services and compensation to be paid to such Special Servicer by the Majority Subordinate Certificateholder, with respect to any Material Litigation Control Matter otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the applicable Master Servicer set forth above that such applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct the applicable Master Servicer and the applicable Special Servicer in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund; provided, further, so as long as the Trust Fund and any applicable Other Trustee are fully indemnified and/or made whole with respect to the related legal action or claim underlying such Litigation Control from recoveries with respect to such legal action or claim, the Majority Subordinate Certificateholder shall be reimbursed up to the amount of compensation paid to the Special Servicer for assuming and handling such Litigation Control but only to the extent that such recoveries exceed the amount necessary to fully indemnify and make the Trust Fund whole.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or a Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee Trustee, the Trust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or the Custodiana Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer Servicer, as applicable, shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee such Master Servicer or the Custodian, as applicable, such Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent given or withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at require or cause the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the applicable Special Servicer or the applicable Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the applicable Master Servicer’s or the applicable Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the applicable Special Servicer nor the applicable Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and – (iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 7 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C23), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C22), Pooling and Servicing Agreement (GS Mortgage Securities Trust 2014-Gc26)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer’s reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Midland Loan Servicing LLC Services, a Division of PNC Bank, National Association is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 7 contracts
Sources: Pooling and Servicing Agreement (UBS Commercial Mortgage Trust 2017-C1), Pooling and Servicing Agreement (CD 2017-Cd4 Mortgage Trust), Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2017-P7)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-an Outside Serviced Mortgage Loan and other than any or an Excluded Special Servicer Mortgage Loan), any Serviced Companion Whole Loan or any related REO Loan or related REO Property, the Special Servicer shall, shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Whole Loan, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Loan-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Performing Serviced Loan and to the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, the Master Servicer shall have the right to engage separate counsel relating to claims against the Master Servicer to the extent set forth in Section 3.33(e) if there are claims against the Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior only if the related Mortgage Loan is not an Excluded Loan as to a Control such party and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior related Mortgage Loan is not an Excluded Mortgage Loan as to a such party and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Trust Certificateholders and any the Uncertificated Interest Owners and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (Controlling Class Representative, the Risk Retention Consultation Party, the Operating Advisor or any other party to this Agreement) Agreement that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder Trust Certificateholder, any Uncertificated Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicer’s or Special Servicersuch party’s reasonable judgmentjudgment and in accordance with the Servicing Standard, may (i) cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage Loan documents Documents or (iv) subject the Master Servicer or Servicer, the Special Servicer or other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither In the event where the Master Servicer or Special Servicer is a named party neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or the Special Servicer, as applicable, any TrustLoan-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the TrustLoan-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer or the Special Servicer at the direction of the Special Servicer other shall be deemed (as to the Master Servicerparty taking the action) to be in compliance with the Servicing Standard Standard, and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) foregoing and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee or the Custodian, as applicableAsset Representations Reviewer or Operating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian Custodian, Asset Representations Reviewer or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee or the Custodian, as applicable, Asset Representations Reviewer or Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian, Asset Representations Reviewer or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), respectively to the extent required in this Section 3.32(c)3.33) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 3.33 shall mean Mortgage Loans (other than any Outside Serviced Mortgage Loans).
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing LNR Partners, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan (whether or not such replacement is effective effective) or such related Mortgage Loan or Whole Loan is an Excluded Special Servicer Mortgage Loan in respect of LNR Partners, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.ho
Appears in 7 contracts
Sources: Pooling and Servicing Agreement (BMO 2025-5c10 Mortgage Trust), Pooling and Servicing Agreement (Benchmark 2025-V14 Mortgage Trust), Pooling and Servicing Agreement (BMO 2025-5c9 Mortgage Trust)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s 's selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated Interest Owners and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder Certificateholder, any Uncertificated Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer's reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing CWCapital Asset Management LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 6 contracts
Sources: Pooling and Servicing Agreement (BMO 2022-C3 Mortgage Trust), Pooling and Servicing Agreement (BMO 2022-C2 Mortgage Trust), Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2022-Gc48)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report and to the extent review of the Trust-Related Litigation is necessary for the Operating Advisor to prepare the Operating Advisor Annual Report as required under Section 3.26(c).
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; , provided, however, that nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.32(i); and provided, however, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder or the holder of a Serviced Companion Loan (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.32, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in such Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the subject such Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, without the consent of the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf of any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without Litigation), provided that no such party’s consent unless: is required if (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, Agreement and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (iiB), (iiiC) and (ivD).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final last sentence in of Section 3.01(b) and subject to the power of attorney attorney, (i) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its respective individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicablethe case may be, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, the Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iii) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Loan, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Trust-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses Under clause (k)(i) and (iik)(ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this AgreementAgreement if (x) any of the parties listed in clause (k)(ii) above is an adverse party with respect to the Trust or the Special Servicer in Trust-Related Litigation, (y) any of the parties listed in clause (k)(ii) above holds any interest which is adverse to the Trust or the Special Servicer in the Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which such Trust-Related Litigation relates; or (z) if the parties described in (x) and (y) agree that the litigation control section applies to such Trust-Related Litigation. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 6 contracts
Sources: Pooling and Servicing Agreement (Bank5 2025-5yr19), Pooling and Servicing Agreement (Benchmark 2025-V19 Mortgage Trust), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2025-5c7)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded the applicable Master Servicer with respect to litigation involving non-Specially Serviced Mortgage Loans, and, in either case, if such Special Servicer Loan)or Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, the or Master Servicer shall (i) provide quarterly (unless requested submit any decision to commence any proceeding or similar action in writing from time a Material Litigation Control Matter or any decision to time on agree to or propose any terms of settlement in a more frequent basis) status reports Material Litigation Control Matter to the Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and as applicable, the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders, the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of a Special Servicer with respect to such Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary with respect to any Material Litigation Control Matter otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the applicable Master Servicer set forth above that such applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or a Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee Trustee, the Trust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or the Custodiana Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee such Master Servicer or the Custodian, as applicable, such Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at require or cause the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the applicable Special Servicer or the applicable Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the applicable Master Servicer’s or the applicable Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the applicable Special Servicer nor the applicable Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and –(iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 6 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2014-C14), Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2014-C15), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-Lc14)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Loan Combination, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated VRR Interest Owner and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder Certificateholder, the Uncertificated VRR Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC); and provided, further, that, with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing CWCapital Asset Management LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of CWCapital Asset Management LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 6 contracts
Sources: Pooling and Servicing Agreement (GS Mortgage Securities Trust 2020-Gsa2), Pooling and Servicing Agreement (Benchmark 2020-B21 Mortgage Trust), Pooling and Servicing Agreement (JPMDB Commercial Mortgage Securities Trust 2020-Cor7)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, Controlling Class Representative (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under only if the related Mortgage Loan documents, or otherwise relating to one or more is not an Excluded Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, Loan and for so long as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a no Control Termination Event or Consultation Termination Event, respectively, has occurred and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.is
Appears in 5 contracts
Sources: Pooling and Servicing Agreement (COMM 2019-Gc44 Mortgage Trust), Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2019-Gc43), Pooling and Servicing Agreement (GS Mortgage Securities Trust 2019-Gc42)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, documents or with respect to a Mortgage Loan (other than a Non-Serviced Mortgage Loan) or Serviced Whole Loan, as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related such Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the Master Servicer, the Trust, and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related a Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) the Directing Certificateholder (prior to a for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.32(c) above, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations in the Master Servicer’s sole discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicer’s or Special Servicersuch party’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause Grantor Trust Provisions, subject the Master Servicer or Servicer, the Special Servicer or other such party to violate the Servicing Standard or the express provisions of any other Section of this Agreementliability, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither In the event where the Master Servicer or Special Servicer is a named party neither the Special Servicer nor the Master Servicer shall will settle on behalf of the Master Servicer or Special Servicer, as applicableother such party, any TrustLoan-Related Litigation without such other party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, such other party and the Master Servicer or the Special Servicer are each such other party is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer such other party is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the TrustLoan-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, such other party with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicablesuch other party, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or the Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) and subject to the power of attorney this Agreement, (i) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian Administrator or the Operating AdvisorCustodian, as applicable, in its individual capacity capacity, or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, Custodian to grant such consent); and (iii) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate AdministratorTrustee, the Trustee Certificate Administrator or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Administrator or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related Litigation, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any UnderwriterInitial Purchaser, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in to such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterInitial Purchaser, or affiliate that is such a party or holds such interest. In , and in each case under clauses (k)(ii) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to the terms of this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 5 contracts
Sources: Pooling and Servicing Agreement (CSAIL 2016-C6 Commercial Mortgage Trust), Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2015-Ubs8), Pooling and Servicing Agreement (CSAIL 2015-C3 Commercial Mortgage Trust)
Litigation Control. (a).
(a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the applicable Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitationTrust, any action in which both the Trust and the Master Servicer are named) Servicer), and/or the any Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, documents or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the any Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigation), the applicable Master Servicer shall notify the applicable Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the such Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the applicable Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the a Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the a Special Servicer is named, in order to effectuate the role of the applicable Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the such Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the applicable Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the such Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the such Master Servicer remains a party to such the lawsuit, consult with, and take act at the direction from, of the applicable Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, the that such Master Servicer shall no longer have the reporting obligations right to engage separate counsel relating to claims against such Master Servicer to the extent set forth above in Section 3.32(e); and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherprovided, however, that if there are claims against the such Master Servicer and such Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to such Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The No Special Servicer shall not (i) undertake (or direct the any Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior only if the related Mortgage Loan is not an Excluded Loan as to a Control such party and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder is actually known to the such Special Servicer; provided that the such Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the such Special Servicer) and (B) the Directing Certificateholder (prior only if the related Mortgage Loan is not an Excluded Loan as to a such party and so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the such Special Servicer within such five ten (510) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion NoteholderCertificateholders, the VRR Interest Owners and, with respect to a Serviced Whole Loan, the related Companion Holders (taken as a whole), such Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or the Risk Retention Consultation Party or any other party to this Agreement) Agreement that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder Certificateholder, VRR Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC or the Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or purposes, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the such Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this Agreement.
(e) Notwithstanding the right of the a Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of such Special Servicer to direct the applicable Master Servicer’s actions in this Section 3.32, such Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the such Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in such Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the a Master Servicer or the Special Servicer Servicer, to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the subject such Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding any Master Servicer’s right to make determinations relating to claims against such Master Servicer, the applicable Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct such Master Servicer shall to settle on behalf of the any claims asserted against such Master Servicer (whether or not the Trust or the applicable Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of such party’s consent unless: Master Servicer relating to claims against such Master Servicer (iwhether or not the Trust or the applicable Special Servicer is named in any such claims or Trust-Related Litigation); provided in either case that (A) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the such Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the such Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of such Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the such Master Servicer at the direction of the applicable Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the applicable Special Servicer provides such Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the such Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the a Master Servicer and the a Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the such Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the such Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to the extent, that the applicable Special Servicer authorizes the applicable Master Servicer, and the such Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the applicable Master Servicer or the applicable Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the no Master Servicer nor the or Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the applicable Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 5 contracts
Sources: Pooling and Servicing Agreement (BMO 2025-C13 Mortgage Trust), Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2025-C35), Pooling and Servicing Agreement (BBCMS Mortgage Trust 2025-C35)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, Combination) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Loan Combination, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC); and provided, further, that, with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing LLC KeyBank National Association is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of KeyBank National Association as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 5 contracts
Sources: Pooling and Servicing Agreement (CD 2017-Cd6 Mortgage Trust), Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2017-C4), Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2017-C34)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any other such party the other, shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer’s reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Midland Loan Servicing LLC Services, a Division of PNC Bank, National Association is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of Midland Loan Services, a Division of PNC Bank, National Association as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 5 contracts
Sources: Pooling and Servicing Agreement (Benchmark 2018-B8 Mortgage Trust), Pooling and Servicing Agreement (Benchmark 2018-B7 Mortgage Trust), Pooling and Servicing Agreement (DBGS 2018-C1 Mortgage Trust)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any or an Excluded Special Servicer Loan), any Serviced Companion Whole Loan or any related REO Loan or related REO Property, the Special Servicer shall, shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Whole Loan, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Loan-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.30(a) above, ; the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, the Master Servicer shall have the right to engage separate counsel relating to claims against the Master Servicer to the extent set forth in Section 3.30(e) if there are claims against the Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior only if the related Mortgage Loan is not an Excluded Loan as to a Control such party and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) ), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and (B) the Directing Certificateholder (prior only if the related Mortgage Loan is not an Excluded Loan as to a such party and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.30, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (Certificateholder, the Risk Retention Consultation Party, the Operating Advisor or any other party to this Agreement) Agreement that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.30 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.30, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicer’s or Special Servicersuch party’s reasonable judgmentjudgment and in accordance with the Servicing Standard, may (i) cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or Servicer, the Special Servicer or other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither In the event where the Master Servicer or Special Servicer is named party neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or the Special Servicer, as applicable, any TrustLoan-Related Litigation without such party’s consent unless: (iA) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the TrustLoan-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer or the Special Servicer at the direction of the Special Servicer other shall be deemed (as to the Master Servicerparty taking the action) to be in compliance with the Servicing Standard Standard, and (vE) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (iiB), (iiiC) and (ivD).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.30.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) foregoing and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), respectively to the extent required in this Section 3.32(c)3.30) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 3.30 shall mean Mortgage Loans (other than any Non-Serviced Mortgage Loans.
(k) ). Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing LNR Partners, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan (whether or not such replacement is effective effective) or such related Mortgage Loan or Whole Loan is an Excluded Special Servicer Loan in respect of LNR Partners, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and clause (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.relati
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (BMO 2026-C14 Mortgage Trust), Pooling and Servicing Agreement (BBCMS Mortgage Trust 2025-C39), Pooling and Servicing Agreement (BBCMS Mortgage Trust 2025-C39)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated VRR Interest Owner and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder Certificateholder, the Uncertificated VRR Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer’s reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (GS Mortgage Securities Trust 2020-Gsa2), Pooling and Servicing Agreement (Benchmark 2020-B21 Mortgage Trust), Pooling and Servicing Agreement (Benchmark 2020-B20 Mortgage Trust)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-an Outside Serviced Mortgage Loan and other than or any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a3.33(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a3.33(a) above; provided, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the applicable Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) Holder (to the extent the identity of the Directing Certificateholder Holder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderHolder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the applicable Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) Holder has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the applicable Directing Certificateholder Holder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the applicable Directing Certificateholder Holder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion NoteholderLoan holders, the Special Servicer may take such action without waiting for the applicable Directing CertificateholderHolder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the applicable Directing Certificateholder Holder (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 3.33 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 3.33 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgmentjudgment and in accordance with the Servicing Standard, may (i) cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes, purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage related Loan documents Documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan, with the consent or consultation of the applicable Directing Holder and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation); provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, Agreement and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or the Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 3.33 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor or the Asset Representations Reviewer, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor or the Asset Representations Reviewer, as applicable, in its individual capacity, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or or the CustodianAsset Representations Reviewer, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian Custodian, the Operating Advisor or the Operating AdvisorAsset Representations Reviewer, as applicable, in its individual capacity capacity, or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the applicable Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), Holder to the extent required in Section 3.32(c3.33(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 3.33 shall mean Mortgage Loans other than Outside Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LNR Partners, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of LNR Partners, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Trust-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (CF 2019-Cf3 Mortgage Trust), Pooling and Servicing Agreement (UBS Commercial Mortgage Trust 2019-C18), Pooling and Servicing Agreement (Bank 2019-Bnk24)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-an Outside Serviced Mortgage Loan and other than or any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a3.33(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a3.33(a) above; provided, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the applicable Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) Holder (to the extent the identity of the Directing Certificateholder Holder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderHolder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the applicable Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) Holder has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the applicable Directing Certificateholder Holder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the applicable Directing Certificateholder Holder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion NoteholderLoan holders, the Special Servicer may take such action without waiting for the applicable Directing CertificateholderHolder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the applicable Directing Certificateholder Holder (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 3.33 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 3.33 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgmentjudgment and in accordance with the Servicing Standard, may (i) cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes, purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage related Loan documents Documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan, with the consent or consultation of the applicable Directing Holder and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation); provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, Agreement and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or the Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 3.33 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor or the Asset Representations Reviewer, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor or the Asset Representations Reviewer, as applicable, in its individual capacity, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian Custodian, the Operating Advisor or the Operating AdvisorAsset Representations Reviewer, as applicable, in its individual capacity capacity, or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee Trustee, the Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee Trustee, the Custodian, the Operating Advisor or the CustodianAsset Representations Reviewer, as applicable, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the applicable Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), Holder to the extent required in Section 3.32(c3.33(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 3.33 shall mean Mortgage Loans other than Outside Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LNR Partners, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of LNR Partners, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Trust-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (Bank 2020-Bnk26), Pooling and Servicing Agreement (Benchmark 2020-B16 Mortgage Trust), Pooling and Servicing Agreement (Bank 2019-Bnk24)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and any settlements or resolutions or material monetary settlements interim actions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of such Special Servicer to direct the Master Servicer’s actions in accordance with this Section, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer’s reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iviii). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing C-III Asset Management LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2016-P5), Pooling and Servicing Agreement (JPMCC Commercial Mortgage Securities Trust 2016-Jp3), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2016-Lc24)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans that it is servicing, and other than any Excluded the applicable Master Servicer with respect to litigation involving non-Specially Serviced Mortgage Loans that it is servicing, and, in either case, if such Special Servicer Loan)or such Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate or the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, as applicable, shall submit any decision to commence any proceeding or similar action in a Material Litigation Control Matter or any decision to agree to or propose any terms of settlement in a Material Litigation Control Matter to the TrustSubordinate Class Representative (during a Subordinate Control Period) for its approval or consent (or its deemed approval or deemed consent as provided below) and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and as applicable, the applicable Special Servicer or applicable Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer as applicable, shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders, the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of a Special Servicer with respect to such Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary, with respect to any Material Litigation Control Matter otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the applicable Master Servicer set forth above that such applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct the applicable Master Servicer and the applicable Special Servicer in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund; provided, further, so as long as the Trust Fund and any applicable Other Trustee are fully indemnified and/or made whole with respect to the related legal action or claim underlying such Litigation Control from recoveries with respect to such legal action or claim, the Majority Subordinate Certificateholder shall be reimbursed up to the amount of compensation paid to the Special Servicer for assuming and handling such Litigation Control but only to the extent that such recoveries exceed the amount necessary to fully indemnify and make the Trust Fund whole.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or a Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee Trustee, the Trust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or the Custodiana Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer Servicer, as applicable, shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee such Master Servicer or the Custodian, as applicable, such Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent given or withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at require or cause the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the applicable Special Servicer or the applicable Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the applicable Master Servicer’s or the applicable Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the applicable Special Servicer nor the applicable Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and – (iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2015-C27), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2015-C26), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2014-Lc18)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basisbasis but not more frequently than monthly) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.32(e); and provided, however, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the no Special Servicer nor the or Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this AgreementAgreement or reduce either such party’s rights hereunder.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.32, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this AgreementAgreement or materially reduce its rights hereunder.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 4 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2025-C35), Pooling and Servicing Agreement (Bank 2025-Bnk50), Pooling and Servicing Agreement (Bank 2025-Bnk49)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded The Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the TrustMortgagor, or of the Mortgagor guarantor or other Borrower-Related Party obligor under the related Mortgage Loan documents, documents or with respect to the related Mortgaged Property Trust or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, guarantor or other obligor under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) aboveclause (a), the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named; provided, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 9.34(e); provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a during any Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any related Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and the Controlling Class Representative (B) the Directing Certificateholder (prior to a during any Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided provided, that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and and, with respect to a Loan Pair, any related Serviced Companion NoteholderLoan holder, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Pair, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either result in an Adverse REMIC Event with respect to any REMIC Pool or an Adverse Grantor Trust REMIC created hereunder Event with respect to fail to qualify as a REMIC for federal income tax purposes or the Grantor Trust, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 9.34, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements, with the consent or consultation of the Controlling Class Representative during a Subordinate Control Period or Collective Consultation Period, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation); provided, that in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and under circumstances in which payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, and (ivD) any the Special Servicer provides the Master Servicer with assurance reasonably satisfactory to the Master Servicer as to the items in clauses (A), (B) and (C). Any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv)Standard.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.329.34.
(i) This Section 3.32 9.34 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (iA) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiB) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding directly relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise directly relating to one or more Mortgage Loans or Mortgaged PropertiesProperties pursuant to the power of attorney granted to the Special Servicer or the Master Servicer, as applicable, under this Agreement, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iiiC) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to Controlling Class Representative during a Subordinate Control Termination Event Period or Collective Consultation Termination EventPeriod, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c9.34(c) and subject to Section 9.34(d)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2014-C14), Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2014-C16), Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2014-C16)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the a Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.32(e); and provided, however, that if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The No Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the no Special Servicer nor the or Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this Agreement.
(e) Notwithstanding the right of the a Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.32, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the no Master Servicer nor the or Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (Bank5 2025-5yr15), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2025-5c4), Pooling and Servicing Agreement (Bank5 2025-5yr14)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the applicable Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitationTrust, any action in which both the Trust and the Master Servicer are named) and/or the any Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). The applicable Special Servicer shall (only if the related Mortgage Loan is not an Excluded Loan as to such party and for so long as no Consultation Termination Event has occurred and is continuing) (i) promptly notify the Directing Certificateholder of any such action and (ii) upon reasonable request, provide information updates regarding any such action to the Directing Certificateholder. In the event that the any Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the applicable Master Servicer shall notify the applicable Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the such Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the applicable Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the a Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the a Special Servicer is named, in order to effectuate the role of the applicable Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the such Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the such Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the such Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the applicable Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, the that such Master Servicer shall no longer have the reporting obligations right to engage separate counsel relating to claims against such Master Servicer to the extent set forth above in Section 3.32(e); and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherprovided, however, that if there are claims against the such Master Servicer and such Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to such Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The No Special Servicer shall not (i) undertake (or direct the any Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the such Special Servicer; provided that the such Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the such Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five ten (510) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the such Special Servicer within such five (5) 10 Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderWhole Loan, the related Companion Holders, such Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the no Special Servicer nor the or Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any other party to this Agreement) that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the such Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this Agreement.
(e) Notwithstanding the right of the a Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of such Special Servicer to direct the applicable Master Servicer’s actions in this Section 3.32, such Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the such Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in such Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the a Master Servicer or the Special Servicer to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the subject such Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding any Master Servicer’s right to make determinations relating to claims against such Master Servicer, the applicable Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct such Master Servicer shall to settle on behalf of the any claims asserted against such Master Servicer (whether or not the Trust or the applicable Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of such party’s consent unless: Master Servicer relating to claims against such Master Servicer (iwhether or not the Trust or the applicable Special Servicer is named in any such claims or Trust-Related Litigation), provided in either case that (A) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the such Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the such Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of such Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the such Master Servicer at the direction of the applicable Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) the applicable Special Servicer provides such Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the such Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the a Master Servicer and the a Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the such Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the such Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to event the extent, that the applicable Special Servicer authorizes the applicable Master Servicer, and the such Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacityTrustee, or in the event that any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the applicable Master Servicer or the applicable Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the no Master Servicer nor the or Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the applicable Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the applicable Special Servicer relating may require and rely on such certification and other reasonable information prior to releasing any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementinformation.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (Bank5 2025-5yr17), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2025-5c6), Pooling and Servicing Agreement (Bank5 2025-5yr16)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the applicable Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitationTrust, any action in which both the Trust and the Master Servicer are named) and/or the any Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the any Master Servicer is named in any Trust-Related Litigation but the no Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the applicable Master Servicer shall notify the applicable Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the such Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the applicable Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the a Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the a Special Servicer is named, in order to effectuate the role of the applicable Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the such Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basisbasis but not more frequently than monthly) status reports to the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the such Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the such Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the applicable Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, the that such Master Servicer shall no longer have the reporting obligations right to engage separate counsel relating to claims against such Master Servicer to the extent set forth above in Section 3.32(e); and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherprovided, however, that if there are claims against the such Master Servicer and such Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to such Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The No Special Servicer shall not (i) undertake (or direct the any Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the such Special Servicer; provided that the such Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the such Special Servicer) and (B) the Directing Certificateholder (only if the related Mortgage Loan is not an Excluded Loan and prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the such Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderWhole Loan, the related Companion Holders, such Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the no Special Servicer nor the or Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder or the Risk Retention Consultation Parties (or any other party to this Agreement) that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the such Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this AgreementAgreement or reduce either such party’s rights hereunder.
(e) Notwithstanding the right of the a Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of such Special Servicer to direct the applicable Master Servicer’s actions in this Section 3.32, such Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the such Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in such Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this AgreementAgreement or materially reduce its rights hereunder.
(f) Further, nothing in this Section 3.32 section shall require the a Master Servicer or the Special Servicer to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the subject such Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding any Master Servicer’s right to make determinations relating to claims against such Master Servicer, the applicable Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct such Master Servicer shall to settle on behalf of the any claims asserted against such Master Servicer (whether or not the Trust or the applicable Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of such party’s consent unless: Master Servicer relating to claims against such Master Servicer (iwhether or not the Trust or the applicable Special Servicer is named in any such claims or Trust-Related Litigation), provided in either case that (A) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the such Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the such Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of such Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the such Master Servicer at the direction of the applicable Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) the applicable Special Servicer provides such Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the such Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the a Master Servicer and the a Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the such Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the such Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) . This Section 3.32 shall not apply in the event, and to event the extent, that the applicable Special Servicer authorizes the applicable Master Servicer, and the such Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the applicable Master Servicer or the applicable Special Servicer, as applicablethe case may be, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the no Master Servicer nor the or Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection shall be interpreted to preclude the applicable Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(ki) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Loan, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Trust-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (BMO 2026-C14 Mortgage Trust), Pooling and Servicing Agreement (Bank 2025-Bnk51), Pooling and Servicing Agreement (Bank 2025-Bnk51)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Whole Loan other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Whole Loan, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s 's selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated Interest Owners and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder Certificateholder, any Uncertificated Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer's reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either any Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to fail to qualify as a grantor trust for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the CodeREMIC Provisions, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Loan, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.be
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (BMO 2023-C6 Mortgage Trust), Pooling and Servicing Agreement (BBCMS 2023-C20), Pooling and Servicing Agreement (BMO 2023-C4 Mortgage Trust)
Litigation Control. (a) With The Special Servicer (with respect to any each Mortgage Loan (and Serviced Whole Loan other than a Non-any Outside Serviced Mortgage Loan and other than any or Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Loan Documents with respect to the related Mortgage Loan documentsor Whole Loan, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel; provided that the Master Servicer will not be required to consult or act at the direction of the Special Servicer with respect to any claims or allegations relating to the Master Servicer or the actions or inactions of the Master Servicer. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s 's selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, the Master Servicer shall have the right to engage separate counsel relating to claims against the Master Servicer to the extent set forth in Section 3.33(e) if there are claims against the Master Servicer, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated Interest Owners and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder Certificateholder, any Uncertificated Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either any Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to fail to qualify as a grantor trust for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the CodeREMIC Provisions, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage any provision of any related Loan documents or (iv) Documents, subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither In the event where the Master Servicer or the Special Servicer is named party, neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or the Special Servicer, as applicable, any TrustLoan-Related Litigation without such party’s 's consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Special Servicer and the Special Master Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Special Servicer or the Master Servicer at the direction of the Special Servicer other shall be deemed (as to the Master Servicerparty taking the action) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Master Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, other such party with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to other such Party the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Mortgage Loans other than Outside Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan (whether or not such replacement is effective effective) or such related Mortgage Loan or Whole Loan is an Excluded Special Servicer Mortgage Loan in respect of 3650 REIT Loan Servicing LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.Loan
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (BMO 2023-C7 Mortgage Trust), Pooling and Servicing Agreement (BBCMS Mortgage Trust 2024-C30), Pooling and Servicing Agreement (BMO 2024-C10 Mortgage Trust)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-each Serviced Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Serviced Mortgage Loan documentsor Serviced Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Serviced Mortgage Loan (or related Whole Loan)Serviced Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Loan Related Litigation as provided in Section 3.32(a3.33(a) above, ; provided that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Serviced Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Serviced Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder Controlling Class Representative (or any other party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) . Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either any Trust REMIC to fail to qualify as a REMIC or the Grantor Trust to fail to qualify as a grantor trust for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or Servicer, the Special Servicer or other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(gf) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(hg) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(ih) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(ji) Notwithstanding the foregoing, and subject to the requirements power of attorney granted by the final Trustee pursuant to the first sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power requirements of attorney the second sentence in the second paragraph of Section 3.01(a) of this Agreement, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Serviced Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing LNR Partners, LLC is no longer the Special Servicer with respect to the related Serviced Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Serviced Mortgage Loan or related Whole Serviced Loan Combination (whether or not such replacement is effective effective) or such related Serviced Mortgage Loan or Serviced Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of LNR Partners, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Serviced Mortgage Loan or related Serviced Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (Benchmark 2019-B10 Mortgage Trust), Pooling and Servicing Agreement (GS Mortgage Securities Trust 2019-Gc38), Pooling and Servicing Agreement (Benchmark 2019-B9 Mortgage Trust)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The General Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, Mortgagor (other obligor on the related than a Mortgagor with respect to a Co-op Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”Loan) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the General Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of such Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party such Mortgagor, under the related Mortgage Loan documents (“"General Trust-Related Litigation”"). In The Co-op Special Servicer shall, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor with respect to the event that Co-op Mortgage Loans against the Trust and/or the Co-op Special Servicer and (2) represent the interests of the Trust in any litigation relating to the rights and obligations of such Mortgagor or the Trust, or the enforcement of the obligations of such Mortgagor under the related Mortgage Loan documents ("Co-op Trust-Related Litigation" and, collectively with General Trust-Related Litigation, "Trust-Related Litigation"). To the extent either Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate the role of the applicable Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the applicable Master Servicer shall (i1) notify the General Special Servicer (with respect to General Trust-Related Litigation) or the Co-op Special Servicer (with respect to Co-op Trust-Related Litigation) of such Trust-Related Litigation within ten (10) days of such Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the applicable Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the applicable Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the applicable Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) aboveprovided, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the applicable Master Servicer and such Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the applicable Master Servicer, . Notwithstanding the Trust, and rights of the Special ServicerServicers otherwise set forth above and below, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of provide the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder applicable Master Servicer with copies of any Serviced Companion Loan notices, process and/or pleadings submitted and/or filed in any such action, suit, litigation or proceeding; (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (Bii) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following applicable Master Servicer may retain its receipt of the subject notice (it being understood and agreed that if such written objection has not been received own counsel, whose reasonable costs shall be paid by the Special Servicer within such five (5) Business Day periodTrust under Section 8.24, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any action, suit, litigation or proceeding on its own behalf. The cost related behalf in order to represent, protect and defend its interests; and (iii) the applicable Master Servicer shall have the right to approve or incurred in connection with exercising such rights shall be subject to indemnification as disapprove of any judgment, settlement, final order or decree that may impose liability on the applicable Master Servicer or otherwise materially and adversely affect the applicable Master Servicer, including, but not limited to, damage to the extent provided in this Agreement.
(f) applicable Master Servicer's reputation as a master servicer. Further, nothing in this Section 3.32 section shall require the a Master Servicer or the Special Servicer to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s 's good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the such Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s 's obligations under this Agreement.
(g) Neither . Subject to the Special Servicer nor the Master Servicer shall settle on behalf rights of the Master Servicer or set forth above and below, the General Special Servicer and the Co-op Special Servicer shall have the right at any time to (1) direct the General Master Servicer and the NCB Master Servicer, as applicablerespectively, to settle any Trust-Related Litigation without brought against the Trust, including Trust-Related Litigation asserted against the General Master Servicer or the NCB Master Servicer, respectively (whether or not the Trust or the applicable Special Servicer is named in any such party’s consent unless: Trust-Related Litigation) and (i2) otherwise reasonably direct the actions of the General Master Servicer and the NCB Master Servicer, respectively, relating to Trust-Related Litigation against such Master Servicer (whether or not the Trust or the applicable Special Servicer is named in any such claims or Trust-Related Litigation), provided in either case that (A) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the such Master Servicer or otherwise materially and adversely affect the Special applicable Master Servicer, including, but not limited to, damage to the applicable Master Servicer's reputation as applicable, and the Master Servicer or the Special Servicer are each fully releaseda master servicer, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the such Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 8.24 hereof for all costs and expenses of such Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the such Master Servicer at the direction of the applicable Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) such Special Servicer provides the applicable Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the such Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both more than one of the Master Servicer Servicers and the Special Servicer Servicers or Trust are named in Trust-Related Litigationlitigation, to the extent that the applicable Master Servicer Servicers and the applicable Special Servicer deem it appropriate, the Master Servicer and the Special Servicer Servicers shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the applicable Master Servicer Servicers and the applicable Special Servicer the rights afforded to such party in this Section 3.32.
(i) 9.40. This Section 3.32 9.40 shall not apply in the event, and to event the extent, that the General Special Servicer authorizes the General Master Servicer, or the Co-op Special Servicer authorizes the NCB Master Servicer, and the applicable Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (ia) in the event that any action, suit, litigation or proceeding names the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicable, Certificate Registrar in its individual capacity, or in the event that any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicable, Certificate Registrar in its individual capacity, the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicableCertificate Registrar, upon prior written notice to the all applicable Master Servicer Servicers or the Special Servicer, as applicableServicers, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not provided that the applicable Master Servicer or applicable Special Servicer shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claimproceeding); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the General Master Servicer (with respect to the Mortgage Loans other than the NCB, FSB Loans) nor the General Special Servicer (with respect to the Mortgage Loans other than the Co-op Mortgage Loans) and neither the NCB Master Servicer (with respect to the NCB, FSB Loans) nor the Co-op Special Servicer (with respect to the Co-op Mortgage Loans) shall, without the prior written consent of the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicableCertificate Registrar, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicableCertificate Registrar, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Paying Agent and/or the Certificate AdministratorRegistrar, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicable, Certificate Registrar to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent)state; and (iiic) in the event that any court finds that the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicable, Certificate Registrar is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate AdministratorTrustee, the Trustee or Paying Agent and/or the Custodian, as applicable, Certificate Registrar shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as Trustee, the Paying Agent and/or the Certificate Administrator, the Trustee or the Custodian, as applicable, Registrar or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the applicable Master Servicer or the applicable Special Servicer (with respect shall retain the right to manage and direct any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any such action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loansproceeding).
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 3 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2007-Iq13), Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2007-Iq13), Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2007-Iq13)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor Mortgagor, guarantor or other Borrower-Related Party obligor, in each case under the related Mortgage Loan documents or Trust Companion Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)as applicable, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, guarantor or other obligor under the related Mortgage Loan documents or Trust Companion Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.35(e); and provided, however, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) -Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan, Serviced Whole Loan or the U-Haul Self-Storage Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.35 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements, with the consent or consultation of the Directing Certificateholder prior to a Control Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.35.
(i) This Section 3.32 3.35 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents or Trust Companion Loan documents, or otherwise relating to one or more Mortgage Loans or the Trust Companion Loan or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan or the Trust Companion Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c3.35(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (JPMBB Commercial Mortgage Securities Trust 2014-C23), Pooling and Servicing Agreement (JPMBB Commercial Mortgage Securities Trust 2014-C22)
Litigation Control. (a) With The Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded Special the Master Servicer Loan)with respect to litigation involving non-Specially Serviced Mortgage Loans, any Serviced Companion Loan or any related REO Loan or related REO Propertyand, in either case, if the Special Servicer or the Master Servicer, as applicable, contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but Control and is of a material nature (a “Material Litigation Control Matter”), the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), or the Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related LitigationMaterial Litigation Control Matter, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, or the Master Servicer shall (i) provide quarterly (unless requested submit any decision to commence any proceeding or similar action in writing from time a Material Litigation Control Matter or any decision to time on agree to or propose any terms of settlement in a more frequent basis) status reports Material Litigation Control Matter to the Special Servicer regarding Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent (or its deemed approval or deemed consent as provided below) and notice of any such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party decision to the lawsuit; related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction fromapplicable, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against or the Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the Special Servicer or Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer or the Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32related Companion Loan Holders, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with may take such action without waiting for the Servicing Standard, require or cause Subordinate Class Representative’s response; provided that the Special Servicer or the Master Servicer, as applicable, to violate provisions has confirmation that the Subordinate Class Representative has received notice of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result such action in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalfwriting. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing Nothing in this Section 3.32 shall require the Master Servicer be construed to alter, modify, limit or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master ServicerTrust Advisor’s or Special Servicer’s duties, rights and obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of the Master Servicer and the Special Servicer is and shall be indemnified as and with respect to the extent provided Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in this Agreement for all costs and expenses incurred in defending and settling respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the Trust-Related contrary with respect to any Material Litigation and for any judgment, (iv) any such action taken Control Matter otherwise required to be exercised hereunder by the Master Servicer at the direction of the Special Servicer shall be deemed relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the Master Servicer) to be in compliance with the Servicing Standard and (v) required notice from the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent set forth above that the Master Servicer and became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct in writing that such Litigation Control nevertheless be exercised by the Special Servicer deem it appropriateServicer; provided, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extenthowever, that the Special Servicer authorizes (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the Master Servicer, Servicer (and the Master Servicer agrees has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (both authority including legal fees and agreement expenses incurred up until such date of transfer of Litigation Control to the Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the Master Servicer pursuant to Section 6.03 of this Agreement shall be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of payable by the Trust in accordance with the Servicing StandardFund.
(jd) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the CustodianSpecial Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee, the Trust Advisor, the Certificate Administrator, the Master Servicer (if such party does not have Litigation Control) or the Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the Master Servicer or the Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer or the Custodian, as applicable, Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the Master Servicer or the Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced require or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer cause the Special Servicer or the Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the Master Servicer’s or the Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose the Master Servicer, the Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of the Special Servicer’s, the Master Servicer Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, Servicer nor the Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and – (iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C25), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C24)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and other than any Excluded Special Servicer Serviced Whole Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Whole Loan, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Controlling Class Representative (for so long as no Consultation Termination Event has occurred and is continuing) and the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth herein; provided, further, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) the Directing Certificateholder (prior to a for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in accordance with this Section, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause Grantor Trust Provisions, subject the Master Servicer or Servicer, the Special Servicer or other such party to violate the Servicing Standard or the express provisions of any other Section of this Agreementliability, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) (and with respect to any material settlements, with the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively), and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each Section 6.03 of this Agreement provides that the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, and (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related Litigation, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any UnderwriterInitial Purchaser, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in to such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Whole Loan (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterInitial Purchaser, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (CSAIL 2015-C3 Commercial Mortgage Trust), Pooling and Servicing Agreement (CSAIL 2015-C2 Commercial Mortgage Trust)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded the applicable Master Servicer with respect to litigation involving non-Specially Serviced Mortgage Loans, and, in either case, if such Special Servicer Loan)or Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, the or Master Servicer shall (i) provide quarterly (unless requested submit any decision to commence any proceeding or similar action in writing from time a Material Litigation Control Matter or any decision to time on agree to or propose any terms of settlement in a more frequent basis) status reports Material Litigation Control Matter to the Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and as applicable, the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders (consistent with the Servicing Standard), the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of a Special Servicer with respect to such Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary with respect to any Litigation Control otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the applicable Master Servicer set forth above that such applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or a Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee Trustee, the Trust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or the Custodiana Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee such Master Servicer or the Custodian, as applicable, such Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at require or cause the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the applicable Special Servicer or the applicable Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the applicable Master Servicer’s or the applicable Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Certificate Administrator’s or the Trustee’s responsibilities under this Agreement; and neither the applicable Special Servicer nor the applicable Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii)-(iv) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16)
Litigation Control. (a).
(a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, or other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) ), and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to a Mortgage Loan or any Serviced Companion Loan, as applicable, or the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documentsdocuments (including any related Intercreditor Agreement), or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Serviced Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents (including any related Intercreditor Agreement) (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation. The Operating Advisor shall not be required to review the actions of the Special Servicer with respect to Trust-Related Litigation unless such review is otherwise related to the performance of the Operating Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basisbasis but not more frequently than monthly) status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, from the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(asubject to the provisions of 3.30(a) above, ; the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, the Master Servicer shall have the right to engage separate counsel relating to claims against the Master Servicer to the extent set forth in Section 3.31(e). Moreover, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with and to the extent set forth in Section 3.32(h3.31(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control only if the related Mortgage Loan is not an Excluded Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a only if the related Mortgage Loan is not an Excluded Loan and so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five ten (510) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five ten (510) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any Certificateholders, the VRR Interest Owners and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderHolders (taken as a whole), the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.31, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or the Risk Retention Consultation Party or any other party to this Agreement) Agreement that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Serviced Whole Loan, expose any Certificateholder Certificateholder, VRR Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC or the Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or purposes, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the ’s or Master Servicer’s, as the Certificate Administrator’s or the Trustee’s, as applicablecase may be, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.31, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or Servicer, the Special Servicer or any other party to this Agreement to take or fail to take any action which, in the Master Servicer’s or Special Servicersuch party’s reasonable judgmentjudgment and in accordance with the Servicing Standard, may (i) cause either any Trust REMIC created hereunder to fail to quality as a REMIC or the Grantor Trust to fail to qualify as a REMIC grantor trust for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this AgreementStandard, (iii) result in a violation of applicable law or the Mortgage Loan documents (including any related Intercreditor Agreement) or (iv) subject the Master Servicer or Servicer, the Special Servicer or other such party to liability or materially expand the scope of the Master Servicer’s ’s, the Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder prior to a Control Termination Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unlessLitigation); provided in either case: (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (iiB), (iiiC) and (ivD).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) 3.31. This Section 3.32 3.31 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) . Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsdocuments (including any related Intercreditor Agreement), or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Loan, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c3.31(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Morgan Stanley Bank of America Merrill Lynch Trust 2025-5c2), Pooling and Servicing Agreement (Bank5 2025-5yr17)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded The Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the TrustMortgagor, or of the Mortgagor guarantor or other Borrower-Related Party obligor under the related Mortgage Loan documents, Documents or with respect to the related Mortgaged Property Trust or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, guarantor or other obligor under the related Mortgage Loan documents Documents, under the Mortgage Loan Documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.31(e); and provided, however, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to a during any Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod or Collective Consultation Period) (to the extent the identity of the Directing Certificateholder Subordinate Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderSubordinate Class Representative) and the related holder of any related Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and the Subordinate Class Representative (B) the Directing Certificateholder (prior to a during any Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Subordinate Class Representative that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanServiced Loan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.31 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements, with the consent or consultation of the Subordinate Class Representative during a Subordinate Control Period or Collective Consultation Period, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.31.
(i) This Section 3.32 3.31 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (iA) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiB) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iiiC) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to Subordinate Class Representative during a Subordinate Control Termination Event Period or Collective Consultation Termination EventPeriod, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c3.31(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2014-Lc16), Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2014-Lc16)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded the applicable Master Servicer with respect to litigation involving non-Specially Serviced Mortgage Loans, and, in either case, if such Special Servicer Loan)or such Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate or the role of the Special Servicer as contemplated by Section 3.32(a) above, the applicable Master Servicer shall (i) provide quarterly (unless requested submit any decision to commence any proceeding or similar action in writing from time a Material Litigation Control Matter or any decision to time on agree to or propose any terms of settlement in a more frequent basis) status reports Material Litigation Control Matter to the Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.32(e), if and as applicable, the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders, the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of a Special Servicer with respect to such Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary with respect to any Material Litigation Control Matter otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the applicable Master Servicer set forth above that such applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or a Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee Trustee, the Trust Advisor, the Certificate Administrator, a Master Servicer (if such party does not have Litigation Control) or the Custodiana Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee a Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, a Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee such Master Servicer or the Custodian, as applicable, such Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at require or cause the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the applicable Special Servicer or the applicable Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the applicable Master Servicer’s or the applicable Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the applicable Special Servicer nor the applicable Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and – (iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2014-Lc16), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C20)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any other such party the other, shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer’s reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Midland Loan Servicing LLC Services, a Division of PNC Bank, National Association is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2017-C41), Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2017-C4)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The General Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, Mortgagor (other obligor on the related than a Mortgagor with respect to a Co-op Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”Loan) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the General Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of such Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party such Mortgagor, under the related Mortgage Loan documents (“"General Trust-Related Litigation”"). In The Co-op Special Servicer shall, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor with respect to the event that Co-op Mortgage Loans against the Trust and/or the Co-op Special Servicer and (2) represent the interests of the Trust in any litigation relating to the rights and obligations of such Mortgagor or the Trust, or the enforcement of the obligations of such Mortgagor under the related Mortgage Loan documents ("Co-op Trust-Related Litigation" and, collectively with General Trust-Related Litigation, "Trust-Related Litigation"). To the extent either Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate the role of the applicable Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the applicable Master Servicer shall (i1) notify the General Special Servicer (with respect to General Trust-Related Litigation) or the Co-op Special Servicer (with respect to Co-op Trust-Related Litigation) of such Trust-Related Litigation within ten (10) days of such Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the applicable Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the applicable Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the applicable Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the applicable Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) aboveprovided, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the applicable Master Servicer and such Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the applicable Master Servicer, . Notwithstanding the Trust, and rights of the Special ServicerServicers otherwise set forth above and below, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of provide the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder applicable Master Servicer with copies of any Serviced Companion Loan notices, process and/or pleadings submitted and/or filed in any such action, suit, litigation or proceeding; (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (Bii) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following applicable Master Servicer may retain its receipt of the subject notice (it being understood and agreed that if such written objection has not been received own counsel, whose reasonable costs shall be paid by the Special Servicer within such five (5) Business Day periodTrust under Section 8.24, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any action, suit, litigation or proceeding on its own behalf. The cost related behalf in order to represent, protect and defend its interests; and (iii) the applicable Master Servicer shall have the right to approve or incurred in connection with exercising such rights shall be subject to indemnification as disapprove of any judgment, settlement, final order or decree that may impose liability on the applicable Master Servicer or otherwise materially and adversely affect the applicable Master Servicer, including, but not limited to, damage to the extent provided in this Agreement.
(f) applicable Master Servicer's reputation as a master servicer. Further, nothing in this Section 3.32 section shall require the a Master Servicer or the Special Servicer to take or fail to take any action which, in the such Master Servicer’s or Special Servicer’s 's good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the such Master Servicer or the Special Servicer to liability or materially expand the scope of the such Master Servicer’s or Special Servicer’s 's obligations under this Agreement.
(g) Neither . Subject to the Special Servicer nor the Master Servicer shall settle on behalf rights of the Master Servicer or set forth above and below, the General Special Servicer and the Co-op Special Servicer shall have the right at any time to (1) direct the General Master Servicer and the NCB Master Servicer, as applicablerespectively, to settle any Trust Related Litigation brought against the Trust, including Trust Related Litigation asserted against the General Master Servicer or the NCB Master Servicer, respectively (whether or not the Trust or the applicable Special Servicer is named in any such Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the General Master Servicer and the NCB Master Servicer, respectively, relating to Trust Related Litigation without against such party’s consent unless: Master Servicer (iwhether or not the Trust or the applicable Special Servicer is named in any such claims or Trust-Related Litigation), provided in either case that (A) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the such Master Servicer or otherwise materially and adversely affect the Special applicable Master Servicer, including, but not limited to, damage to the applicable Master Servicer's reputation as applicable, and the Master Servicer or the Special Servicer are each fully releaseda master servicer, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the such Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 8.24 hereof for all costs and expenses of such Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the such Master Servicer at the direction of the applicable Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) such Special Servicer provides the applicable Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the such Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both more than one of the Master Servicer Servicers and the Special Servicer Servicers or Trust are named in Trust-Related Litigationlitigation, to the extent that the applicable Master Servicer Servicers and the applicable Special Servicer deem it appropriate, the Master Servicer and the Special Servicer Servicers shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the applicable Master Servicer Servicers and the applicable Special Servicer the rights afforded to such party in this Section 3.32.
(i) 9.40. This Section 3.32 9.40 shall not apply in the event, and to event the extent, that the General Special Servicer authorizes the General Master Servicer, or the Co-op Special Servicer authorizes the NCB Master Servicer, and the applicable Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (ia) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the all applicable Master Servicer Servicers or the Special Servicer, as applicableServicers, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not provided that the applicable Master Servicer or applicable Special Servicer shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claimproceeding); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the General Master Servicer (with respect to the Mortgage Loans other than the NCB, FSB Loans and the NCCB Loan) nor the General Special Servicer (with respect to the Mortgage Loans other than the Co-op Mortgage Loans) and neither the NCB Master Servicer (with respect to the NCB, FSB Loans and the NCCB Loan) nor the Co-op Special Servicer (with respect to the Co-op Mortgage Loans) shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, LaSalle to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent)state; and (iiic) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the applicable Master Servicer or the applicable Special Servicer (with respect shall retain the right to manage and direct any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any such action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loansproceeding).
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2006-Iq11)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of the Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information determined that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if separate counsel is required for such written objection has not been received by the Special Servicer within claims, such five (5) Business Day period, then the Directing Certificateholder counsel shall be deemed reasonably acceptable to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) . Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.29 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counselcounsel in the Master Servicer’s reasonable discretion, to make settlement decisions and to appear in any proceeding on its own behalf. The the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and pursuant to the extent provided in this Agreement.
(f) Section 6.03. Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither . Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time to (1) direct the Master Servicer shall to settle on behalf any claims brought against the Trust, including claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that the Special Servicer provides the Master Servicer with assurance that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) 3.29. This Section 3.32 3.29 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (ia) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent)state; and (iiic) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C31)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor Mortgagor, guarantor or other Borrower-Related Party obligor, in each case under the related Mortgage Loan documents or the ESK Companion Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)as applicable, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, guarantor or other obligor under the related Mortgage Loan documents or the ESK Companion Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.35(e); and provided, however, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to the occurrence and continuance of a Control Consultation Termination Event and other than with respect to an Excluded LoanEvent) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to the occurrence and continuation of a Control Termination Event and other than with respect to an Excluded LoanEvent) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) -Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Whole Loan, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan, Serviced Whole Loan or the ESK Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust any REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or REMIC, result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, ’s or the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.35 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may may
(i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, Provisions or (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) (and with respect to any material settlements, with the consent or consultation of the Directing Certificateholder prior to a Control Event or Consultation Termination Event, respectively) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) In the event both the Master Servicer and the Special Servicer or of the Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.35.
(i) This Section 3.32 3.35 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents or the ESK Companion Loan documents, or otherwise relating to one or more Mortgage Loans or the ESK Companion Loan or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan or the ESK Companion Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c3.35(c), respectively) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (JPMBB Commercial Mortgage Securities Trust 2014-C24)
Litigation Control. (ai) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Specially Serviced Mortgage Loan and other than and, if directed by the Directing Certificateholder, any Excluded Special Mortagage Loan) or the Master Servicer (with respect to any Non-Specially Serviced Mortgage Loan, unless otherwise directed by the Directing Certificateholder), any Serviced Companion Loan or any related REO Loan or related REO Propertyas the case may be, the Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of the Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party borrower, under the related Mortgage Loan documents Documents (“for purposes of this Section 3.32(a), "Trust-Related Litigation”). In ") with respect to the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related LitigationMortgage Loans.
(bii) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by set forth in this Section 3.32(a) above), the Master Servicer shall (i1) notify the Special Servicer of such Trust Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) aboveprovided, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the extent the identity of the Directing Certificateholder is actually known to Master Servicer. If the Special Servicer; provided that Servicer handles a claim in which the Master Servicer (individually or in such capacity) is named, the Special Servicer shall make due inquiry of provide the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder Master Servicer with copies of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected notices, process and/or pleadings submitted and/or filed in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of any such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholdersuit, the Special Servicer may take such action without waiting for the Directing Certificateholder’s responselitigation or proceeding.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(eiii) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer's actions in Section 3.32(a)(iv) below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalfcounsel if necessary. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s 's good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law or the Mortgage Loan documents an Adverse REMIC Event or (iv2) subject the Master Servicer or the Special Servicer to material liability or materially expand the scope of the Master Servicer’s or Special Servicer’s 's obligations under this Agreement.
(giv) Neither Notwithstanding the Master Servicer's right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall (1) have the right at any time to direct the Master Servicer to settle any claims brought against the Trust, including claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation), provided in either case that (A) the Master Servicer shall settle have the right to approve or disapprove of any judgement, settlement, final order or decree that may impose liability on behalf of the Master Servicer or Special otherwise materially and adversely affect the Master Servicer, including but not limited to, damage to the Master Servicer's reputation as applicablea master servicer, any Trust-Related Litigation without such party’s consent unless: (iB) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or may retain its own counsel, whose reasonable costs shall be paid by the Special Servicer, as applicableTrust subject to Section 6.03, and the Master Servicer appear in any action, suit, litigation or the Special Servicer are each fully releasedproceeding on its own behalf in order to represent, (ii) protect and defend its interests, the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Trust Related Litigation and for any judgmentLitigation, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(hv) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(ivi) This Section 3.32 3.32(a) shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation litigation on behalf of the Trust in accordance with the Servicing StandardTrust.
(jb) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, in its individual capacity, the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not interests; provided that the Master Servicer or Special Servicer, as applicable, shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claim)proceeding; (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Mortgagor under the related Mortgage Loan documents, documents or otherwise relating to one or more a Mortgage Loans Loan or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorPaying Agent, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administratorstate, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, applicable shall have the right to retain counsel and appear in any such proceeding proceedings on its own behalf in order to protect and represent its interestsinterest, whether as the Certificate Administrator, the Trustee Paying Agent or the CustodianTrustee, as applicable, applicable or individually (but not to otherwise direct, manage or prosecute such litigation or claim)individually; provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, shall retain the right to manage and the Depositordirect any such action, Sponsorsuit, Mortgage Loan Seller, Placement Agent, Underwriter, litigation or affiliate that is such a party or holds such interestproceeding. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice [End of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.Article III]
Appears in 1 contract
Sources: Pooling and Servicing Agreement (J.P. Morgan Chase Commercial Mortgage Securities Trust 2006-Cibc17)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of such Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party such Mortgagor, under the related Mortgage Loan documents (“"Trust-Related Litigation”"). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) aboveprovided, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at . Notwithstanding the request rights of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The the Special Servicer shall not otherwise set forth above and below, (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of provide the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder Master Servicer with copies of any Serviced Companion Loan notices, process and/or pleadings submitted and/or filed in any such action, suit, litigation or proceeding; (if such matter affects such related Serviced Companion Loanii) (the Master Servicer may retain its own counsel, whose reasonable costs shall be paid by the Trust under Section 8.24, and appear in any action, suit, litigation or proceeding on its own behalf in order to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) represent, protect and defend its interests; and (Biii) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow have the right to approve or disapprove of any advicejudgment, direction settlement, final order or consultation provided by decree that may impose liability on the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Master Servicer or otherwise materially and adversely affect the Master Servicer, as applicableincluding, but not limited to, damage to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify 's reputation as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalfmaster servicer. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s 's good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s 's obligations under this Agreement.
(g) Neither . Subject to the Special Servicer nor the Master Servicer shall settle on behalf rights of the Master Servicer set forth above and below, the Special Servicer shall have the right at any time to (1) direct the Master Servicer to settle any Trust Related Litigation brought against the Trust, including Trust Related Litigation asserted against 271 the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to Trust Related Litigation without against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such party’s consent unless: claims or Trust-Related Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or otherwise materially and adversely affect the Special Master Servicer, as applicableincluding, and but not limited to, damage to the Master Servicer or the Special Servicer are each fully releasedServicer's reputation as a master servicer, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 8.24 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both more than one of the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer other the rights afforded to such party in this Section 3.32.
(i) 9.40. This Section 3.32 9.35 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b(a) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Certificate Administrator, Trustee and/or the Trustee or the Custodian, as applicable, Custodian in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, Trustee and/or the Trustee or the Custodian, as applicable, Custodian in its individual capacity, the Certificate Administrator, the Trustee or and/or the Custodian, as applicable, upon prior written notice to the Master Servicer Servicers or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not provided that the Master Servicer or the Special Servicer shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claimproceeding); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, LaSalle to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent)state; and (iiic) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, Custodian is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, Custodian shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, Custodian or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Master Servicer or the Special Servicer (with respect shall retain the right to manage and direct any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any such action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loansproceeding).
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2007-Hq12)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of the Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information determined that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if separate counsel is required for such written objection has not been received by the Special Servicer within claims, such five (5) Business Day period, then the Directing Certificateholder counsel shall be deemed reasonably acceptable to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) . Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.30 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counselcounsel in the Master Servicer’s reasonable discretion, to make settlement decisions and to appear in any proceeding on its own behalf. The the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and pursuant to the extent provided in this Agreement.
(f) Section 6.03. Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither . Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time to (1) direct the Master Servicer shall to settle on behalf any claims brought against the Trust, including claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that the Special Servicer provides the Master Servicer with assurance that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) 3.30. This Section 3.32 3.30 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (ia) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not provided that the Master Servicer or the Special Servicer, as applicable, shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claimproceeding); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (Bii) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (Diii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, LaSalle to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent)state; and (iiic) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, shall retain the right to manage and the Depositordirect any such action, Sponsorsuit, Mortgage Loan Seller, Placement Agent, Underwriter, litigation or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementproceeding).
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2006-C24)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of such Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party such Mortgagor, under the related Mortgage Loan documents (“"Trust-Related Litigation”"). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) aboveprovided, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at . Notwithstanding the request rights of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The the Special Servicer shall not otherwise set forth above and below, (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of provide the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder Master Servicer with copies of any Serviced Companion Loan notices, process and/or pleadings submitted and/or filed in any such action, suit, litigation or proceeding; (if such matter affects such related Serviced Companion Loanii) (the Master Servicer may retain its own counsel, whose reasonable costs shall be paid by the Trust under Section 8.24, and appear in any action, suit, litigation or proceeding on its own behalf in order to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) represent, protect and defend its interests; and (Biii) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow have the right to approve or disapprove of any advicejudgment, direction settlement, final order or consultation provided by decree that may impose liability on the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Master Servicer or otherwise materially and adversely affect the Master Servicer, as applicableincluding, but not limited to, damage to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify 's reputation as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalfmaster servicer. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s 's good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s 's obligations under this Agreement.
(g) Neither . Subject to the Special Servicer nor the Master Servicer shall settle on behalf rights of the Master Servicer set forth above and below, the Special Servicer shall have the right at any time to (1) direct the Master Servicer to settle any Trust Related Litigation brought against the Trust, including Trust Related Litigation asserted against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, cc1xxi Servicer is named in any such Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to Trust Related Litigation without against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such party’s consent unless: claims or Trust-Related Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or otherwise materially and adversely affect the Special Master Servicer, as applicableincluding, and but not limited to, damage to the Master Servicer or the Special Servicer are each fully releasedServicer's reputation as a master servicer, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 8.24 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the such Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both more than one of the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer other the rights afforded to such party in this Section 3.32.
(i) 9.40. This Section 3.32 9.40 shall not apply in the event, and to the extent, that event the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Trust. Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b(a) and subject to the power of attorney (i) in the event if that any action, suit, litigation or proceeding names the Certificate Administrator, Trustee and/or the Trustee or the Custodian, as applicable, Custodian in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, Trustee and/or the Trustee or the Custodian, as applicable, Custodian in its individual capacity, the Certificate Administrator, the Trustee or and/or the Custodian, as applicable, upon prior written notice to the Master Servicer Servicers or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not provided that the Master Servicer or the Special Servicer shall retain the right to otherwise directmanage and direct any such action, manage or prosecute such suit, litigation or claimproceeding); (iib) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Certificate AdministratorTrustee or Custodian, whether in such capacity or individually, (ii) engage counsel to represent the Trustee or Custodian, or (iii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, LaSalle to be registered to do business in any state; and (c) in the event that any court finds that the Trustee or Custodian is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee or Custodian shall have the Custodianright to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as Trustee or Custodian or individually (provided that the Master Servicer or the Special Servicer shall retain the right to manage and direct any such action, suit, litigation or proceeding). Notwithstanding the foregoing, (i) in the event that any action, suit, litigation or proceeding names the Paying Agent, Certificate Registrar and/or Authenticating Agent, as cc1xxii applicable, in its individual capacity, or in the event that any judgment is rendered against the Paying Agent, Certificate Registrar and/or Authenticating Agent, as applicable, in its individual capacity, the Paying Agent, Certificate Registrar and/or Authenticating Agent, as applicable, upon prior written notice to the Special Servicer, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim), (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor under the related Mortgage Loan documents, the Special Servicer shall not, without the prior written consent of the Paying Agent, Certificate Registrar and/or Authenticating Agent, as applicable, (A) initiate any action, suit, litigation or proceeding in the name of the Paying Agent, Certificate Registrar and/or Authenticating Agent, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Paying Agent, Certificate Administrator, the Trustee or the CustodianRegistrar and/or Authenticating Agent, as applicable, or (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Paying Agent, Certificate Administrator, the Trustee or the CustodianRegistrar and/or Authenticating Agent, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administratorstate, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Paying Agent, Certificate Administrator, the Trustee or the CustodianRegistrar and/or Authenticating Agent, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Paying Agent, Certificate Administrator, the Trustee or the CustodianRegistrar and/or Authenticating Agent, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Trust 2006-Hq10)
Litigation Control. (a) With The Special Servicer shall with respect to any Mortgage Loan (other than a Non-Specially Serviced Mortgage Loan Loans and at the direction of the Controlling Class Representative any other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) Fund and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust Fund in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documentsTrust Fund, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Fund or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust Fund replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust Fund in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) Business Day period, then the Directing Certificateholder shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust Fund in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.30 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counselcounsel in the Master Servicer’s reasonable discretion, to make settlement decisions and to appear in any proceeding on its own behalf. The the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and pursuant to the extent provided in this AgreementSection 3.30.
(fd) Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(ge) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time to (1) direct the Master Servicer shall to settle on behalf any claims brought against the Trust Fund, including claims asserted against the Master Servicer (whether or not the Trust Fund or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust Fund or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation); provided in either case that (iA) such settlement or other direction does not contain or require any admission admission, or is not likely to result in a finding of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementFund, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(hf) In the event both the Master Servicer and the Special Servicer or Trust Fund are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.30.
(ig) This Section 3.32 shall not apply in the event, and Notwithstanding anything to the extentcontrary herein, that the Special Servicer authorizes the Master Servicer, and if the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control controls certain Trust-Related Litigation on behalf of the Trust Fund with respect to performing, serviced Mortgage Loans in accordance with this Section 3.30, the Servicing StandardSpecial Servicer shall retain the right to make determinations relating to claims against the Special Servicer, including but not limited to the right to engage separate counsel in the Special Servicer’s reasonable discretion, the cost of which shall be subject to indemnification pursuant to Section 6.03. Nothing in this Section 3.30 shall be intended to limit the rights of the Controlling Class Representative under any other section of this Agreement.
(jh) Notwithstanding The Special Servicer or the foregoingMaster Servicer, as applicable, will have the right to direct, manage, prosecute and/or defend any and subject all litigation and/or claims relating to (a) the requirements enforcement of the final sentence in Section 3.01(bobligations of a Mortgagor under the related Mortgage Loan documents and (b) and subject to any claim or action brought by a Mortgagor against the power of attorney Trust Fund; provided that (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Special Servicer or the Special Master Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); , (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Mortgagor under the related Mortgage Loan documents, documents or otherwise relating to one or more a Mortgage Loans Loan or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither none of the Master Servicer nor Servicer, the Special Servicer or the Trustee shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); , and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided provided, however, that nothing in this subsection paragraph shall be interpreted to preclude either the Master Servicer or the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loansor Trust Fund.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C34)
Litigation Control. (a) With The Special Servicer shall with respect to any Mortgage Loan (other than a Non-Specially Serviced Mortgage Loan Loans and at the direction of the Controlling Class Representative any other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) Fund and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust Fund in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documentsTrust Fund, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Fund or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust Fund replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust Fund in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information determined that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if separate counsel is required for such written objection has not been received by the Special Servicer within claims, such five (5) Business Day period, then the Directing Certificateholder counsel shall be deemed reasonably acceptable to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) . Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust Fund in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.31 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counselcounsel in the Master Servicer’s reasonable discretion, to make settlement decisions and to appear in any proceeding on its own behalf. The the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and pursuant to the extent provided in this Agreement.
(f) Section 3.31. Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither . Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time to (1) direct the Master Servicer shall to settle on behalf any claims brought against the Trust Fund, including claims asserted against the Master Servicer (whether or not the Trust Fund or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust Fund or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation); provided in either case that (iA) such settlement or other direction does not contain or require any admission admission, or is not likely to result in a finding of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementFund, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both the Master Servicer and the Special Servicer or Trust Fund are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and 3.31. Notwithstanding anything to the extentcontrary herein, that the Special Servicer authorizes the Master Servicer, and if the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control controls certain Trust-Related Litigation on behalf of the Trust Fund with respect to Performing Serviced Mortgage Loans in accordance with this Section 3.31, the Servicing Standard.
(j) Notwithstanding Special Servicer shall retain the foregoingright to make determinations relating to claims against the Special Servicer, and including but not limited to the right to engage separate counsel in the Special Servicer’s reasonable discretion, the cost of which shall be subject to indemnification pursuant to Section 6.03. Nothing in this Section 3.31 shall be intended to limit the requirements rights of the final sentence in Section 3.01(bControlling Class Representative under any other section of this Agreement. The Special Servicer or the Master Servicer, as applicable, will have the right to direct, manage, prosecute and/or defend any and all litigation and/or claims relating to (a) the enforcement of the obligations of a Mortgagor under the related Mortgage Loan documents and subject to (b) any claim or action brought by a Mortgagor against the power of attorney Trust Fund; provided that (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, upon prior written notice to the Master Special Servicer or the Special Master Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); , (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Mortgagor under the related Mortgage Loan documents, documents or otherwise relating to one or more a Mortgage Loans Loan or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableTrustee, whether in such capacity or individually, (B) engage counsel to represent the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither none of the Master Servicer nor Servicer, the Special Servicer or the Trustee shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); , and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2006-C28)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (includingTrust, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party Party, under the related Mortgage Loan documentsor Loan Combination, as applicable, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such TrustLoan-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding subsection, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as ; provided in Section 3.32(a) above, that the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of right to engage separate counsel shall be subject relating to the consent of claims against the Master Servicer which consent shall not be unreasonably withheld. Furtherto the extent set forth in Section 3.33(e); and provided, further, that if there are claims against the Master Servicer, the Trust, Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel selected by the Special Servicer shall be reasonably acceptable to the Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated VRR Interest Owner and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder Certificateholder, the Uncertificated VRR Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 3.33 to represent the interests of the Trust in Trust Loan-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.33, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counsel, to make settlement decisions counsel and to appear in any proceeding on its own behalf. The behalf in the Master Servicer’s reasonable discretion, the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to (i) direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) and (ii) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any Trustsuch claims or Loan-Related Litigation without such party’s consent unless: Litigation), provided in either case that (iA) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC); and provided, further, that, with respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.33.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing Rialto Capital Advisors, LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of Rialto Capital Advisors, LLC as Special Servicer, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2019-Gc43)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and the Special Servicer’s 's selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld, delayed or conditioned. Further, if there are claims against the Master Servicer, the Trust, Trust and the Special Servicer, each party at the request of any the other such party shall enter into a joint defense agreement in accordance with Section 3.32(h3.33(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any the Uncertificated Interest Owners and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder Certificateholder, any Uncertificated Interest Owner or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to make determinations final decisions in the Master Servicer's reasonable discretion, relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions with respect to claims asserted against the Master Servicer and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor may not direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: unless (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, the Master Servicer and the Special Servicer shall (i) to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Loan Servicing CWCapital Asset Management LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination, whether or not such replacement is effective effective, or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (BMO 2022-C1 Mortgage Trust)
Litigation Control. (a) With The Special Servicer (with respect to any Mortgage Loan (other than a Non-Serviced each Mortgage Loan and Serviced Loan Combination other than any Excluded Special Servicer Mortgage Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the Special Servicer shall, ) shall in accordance with the Servicing Standard, direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicerServicer, and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related a Mortgage Loan documentsor Loan Combination, or with respect to as applicable, the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan)Loan Combination, or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party under the related Mortgage Loan documents Documents (“TrustLoan-Related Litigation”). In the event that the Master Servicer is named in any TrustLoan-Related Litigation but the Special Servicer is not named in such TrustLoan-Related Litigation (and regardless of whether the Trust is named in such Trust-Related Litigationnamed), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such TrustLoan-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the TrustLoan-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the such Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer Servicer, regarding such TrustLoan-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such TrustLoan-Related Litigation, including but not limited to the selection of counsel. If and/or when once the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the TrustLoan-Related Litigation as provided in Section 3.32(a3.33(a) above, the Master Servicer shall no longer have the reporting obligations obligation set forth above and and, to the extent the Master Servicer has not engaged separate counsel, the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer Servicer, which consent shall not be unreasonably withheld. Further, if there are claims against the Master Servicerdelayed, the Trust, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) belowor conditioned.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any TrustLoan-Related Litigation or (ii) initiate any material TrustLoan-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder Controlling Class Representative (prior to a Control only if the related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Consultation Termination Event has occurred and other than with respect to an Excluded Loan) (is continuing and to the extent the identity of the Directing Certificateholder Controlling Class Representative is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) Controlling Class Representative), and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced a Companion Loan) (Loan and to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) ), and the Controlling Class Representative (B) only if the Directing Certificateholder (prior to a related Mortgage Loan is not an Excluded Mortgage Loan and for so long as no Control Termination Event has occurred and other than with respect to an Excluded Loanis continuing) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Controlling Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer within such five (5) 5 Business Day period, then the Directing Certificateholder Controlling Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer may take such action without waiting for the Directing CertificateholderControlling Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.323.33, neither of the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) Controlling Class Representative that would require or cause the such Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the such Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole LoanLoan Combination, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either any Trust REMIC created hereunder to fail to qualify as a REMIC REMIC, or any Grantor Trust created hereunder to fail to qualify as a grantor trust for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions Provisions, or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under in this Section 3.32 to represent the interests of the Trust in Trust Loan-Related Litigation, the Master Servicer shall retain the right at all times to (i) make determinations final decisions in the Master Servicer’s reasonable discretion relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has does not otherwise been resolved pursuant to meet the terms conditions set forth in subclauses (i) through (v) of subsection the first sentence of clause (g) below, including but not limited to the right to (ii) engage separate counsel, to (iii) make settlement decisions with respect to claims asserted against the Master Servicer where a settlement by the Special Servicer does not meet the conditions set forth in subclauses (i) through (v) of the first sentence of clause (g) below, and to (iv) appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement. For the sake of clarity, the Master Servicer’s rights do not include the right to settle any claims against the Master Servicer without the Special Servicer’s consent if such settlement would (i) contain any admission of liability or wrongdoing on the part of the Master Servicer, the Trust, the Special Servicer or any other party to this Agreement, (ii) provide for the payment of damages or any sums for which the Master Servicer will seek indemnification from the Trust or any party to this Agreement or (iii) prejudice or impair the defense or counterclaims of the Trust or any party to this Agreement with respect to such Loan-Related Litigation.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer, any Special Servicer or the Special Servicer any other party to this Agreement to take or fail to take any action which, in the Master Servicersuch party’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions or Grantor Trust Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer, any Special Servicer or the Special Servicer other such party to liability liability, or materially expand the scope of the Master Servicer’s ’s, any Special Servicer or Special Servicersuch party’s obligations under this Agreement.
(g) Neither Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time in accordance with the Servicing Standard to direct the Master Servicer shall to settle on behalf any claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Loan-Related Litigation) without the consent of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: provided that (i) such settlement or other direction does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each is fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses of the Master Servicer incurred in defending and settling the TrustLoan-Related Litigation and for any related judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard Standard, and (v) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv). With respect to any material settlements with respect to any Mortgage Loan other than an Excluded Mortgage Loan, the Special Servicer shall be required to obtain the consent or consultation of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively.
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in TrustLoan-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32Section.
(i) This Section 3.32 shall not apply in the event, and to the extent, extent that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain TrustLoan-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final second sentence in the second paragraph of Section 3.01(b3.01(a) of this Agreement and subject to the power of attorney attorney, (ix) in the event that any action, suit, litigation or proceeding names the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicableOperating Advisor, in its respective individual capacity, or in the event that any judgment is rendered against the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, in its individual capacity, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (iiy) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documentsDocuments, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ai) initiate an action, suit, litigation or proceeding in the name of the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, whether in such capacity or individually, (Bii) engage counsel to represent the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, (Ciii) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity capacity, or (Div) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action actions with the intent to cause, and that actually causes, the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Trustee, Certificate Administrator, the Trustee Custodian or the Custodian, as applicable, Operating Advisor to grant such consent); and (iiiz) in the event that any court finds that the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee, the Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, shall have the right to retain separate counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Trustee, Certificate Administrator, the Trustee Custodian or the CustodianOperating Advisor, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that provided, however, nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material TrustLoan-Related LitigationLitigation with respect to any Mortgage Loan other than an Excluded Mortgage Loan, with the consent or consultation of the Directing Certificateholder (Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its own name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32Section, this Section 3.32 shall not apply to any TrustLoan-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such TrustLoan-Related Litigation is commenced or at any time during the continuance of such TrustLoan-Related Litigation, 3650 REIT Midland Loan Servicing LLC Services, a Division of PNC Bank, National Association is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan Combination (whether or not such replacement is effective effective) or such related Mortgage Loan or Loan Combination is an Excluded Special Servicer Mortgage Loan in respect of Midland Loan Services, a Division of PNC Bank, National Association as Special Servicer or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement AgentInitial Purchaser, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer Trust or the Special Servicer) in such TrustLoan-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer Trust or the Special ServicerServicer in the related Mortgage Loan or related Loan Combination (or any portion thereof) or the related Mortgaged Property to which Loan-Related Litigation relates, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement AgentInitial Purchaser, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any TrustLoan-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (CSAIL 2018-C14 Commercial Mortgage Trust)
Litigation Control. (a) With The Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded Special the Master Servicer Loan)with respect to litigation involving non-Specially Serviced Mortgage Loans, any Serviced Companion Loan or any related REO Loan or related REO Propertyand, in either case, if the Special Servicer or the Master Servicer, as applicable, contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but Control and is of a material nature (a “Material Litigation Control Matter”), the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction fromMaterial Litigation Control Matter, the Special Servicer with respect or the Master Servicer, as applicable, shall submit any decision to material decisions and material monetary settlements related commence any proceeding or similar action in a Material Litigation Control Matter or any decision to agree to or propose any terms of settlement in a Material Litigation Control Matter to the interests Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent (or its deemed approval or deemed consent as provided below) and notice of the Trust in any such Trust-Related Litigation, including but not limited decision to the selection of counselrelated Serviced Pari Passu Companion Loan Holder if such matter affects the related Serviced Pari Passu Companion Loan. If and/or when the Trust and/or the Special Servicer are namedSubject to Section 3.32(e), if and as applicable, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the or Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof receipt of such notice and having been provided with receipt of all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such notice. If such written objection has not been received by the Special Servicer or Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer or Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders, the Special Servicer or Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation ; provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with has confirmation that the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions Subordinate Class Representative has received notice of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result such action in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalfwriting. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing Nothing in this Section 3.32 shall require the Master Servicer be construed to alter, modify, limit or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master ServicerTrust Advisor’s or Special Servicer’s duties, rights and obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of the Special Servicer with respect to the Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(iiic) each Notwithstanding anything contained herein to the contrary, with respect to any Material Litigation Control Matter otherwise required to be exercised hereunder by the Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the Master Servicer set forth above that the Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct the Master Servicer and the Special Servicer is and shall in writing that such Litigation Control nevertheless be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken exercised by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer; provided, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extenthowever, that the Special Servicer authorizes (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the Master Servicer, Servicer (and the Master Servicer agrees has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (both authority including legal fees and agreement expenses incurred up until such date of transfer of Litigation Control to the Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the Master Servicer pursuant to Section 6.03 of this Agreement shall be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of payable by the Trust in accordance Fund; provided, further, so as long as the Trust Fund and any applicable Other Trustee are fully indemnified and/or made whole with respect to the Servicing Standardrelated legal action or claim underlying such Litigation Control from recoveries with respect to such legal action or claim, the Majority Subordinate Certificateholder shall be reimbursed up to the amount of compensation paid to the Special Servicer for assuming and handling such Litigation Control but only to the extent that such recoveries exceed the amount necessary to fully indemnify and make the Trust Fund whole.
(jd) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the CustodianSpecial Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee, the Trust Advisor, the Certificate Administrator, the Master Servicer (if such party does not have Litigation Control) or the Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the Master Servicer or the Special ServicerServicer (i.e., the party with Litigation Control), as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer Servicer, as applicable, shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer or the Custodian, as applicable, Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the Master Servicer or the Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control-related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent given or withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced require or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer cause the Special Servicer or the Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the Master Servicer’s or the Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose the Master Servicer, the Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of the Special Servicer’s, the Master Servicer Servicer’s, the Certificate Administrator’s, the Trustee’s or the Trust Advisor’s responsibilities under this Agreement; and neither the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, Servicer nor the Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii) and – (iiiv) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2015-Nxs1)
Litigation Control. (a) With The applicable Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans that it is servicing, and other than the applicable Master Servicer, with respect to litigation involving non-Specially Serviced Mortgage Loans that it is servicing, and, in either case, if any Excluded Special Servicer Loan)or Master Servicer, any Serviced Companion Loan or any related REO Loan or related REO Propertyas applicable, the Special Servicer contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but the Special Servicer Control and is not named in such Trust-Related of a material nature (a “Material Litigation (regardless of whether the Trust is named in such Trust-Related LitigationControl Matter”), the applicable Special Servicer or applicable Master Servicer Servicer, as applicable, shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to Material Litigation Control Matter, the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the applicable Special Servicer is named, in order to effectuate or the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction from, the Special Servicer with respect to material decisions and material monetary settlements related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the applicable Master Servicer, as applicable, shall submit any decision to commence any proceeding or similar action in a Material Litigation Control Matter or any decision to agree to or propose any terms of settlement in a Material Litigation Control Matter to the TrustSubordinate Class Representative (during a Subordinate Control Period) for its approval or consent (or its deemed approval or deemed consent as provided below) and notice of any such decision to the related Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. Subject to Section 3.31(e), if and as applicable, the applicable Special Servicer or applicable Master Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer as applicable, shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the applicable Special Servicer or applicable Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the applicable Special Servicer or the applicable Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related and, with respect to a Serviced Companion NoteholderLoan Combination, the related Companion Loan Holders, the applicable Special Servicer or applicable Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the applicable Special Servicer or the applicable Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received written notice of such action. Nothing in this Section 3.31 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of the applicable Special Servicer with respect to the applicable Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary, and subject to agreement between the applicable Special Servicer and the Subordinate Class Representative as to scope of services and compensation to be paid to such Special Servicer by the Majority Subordinate Certificateholder, with respect to any Litigation Control otherwise required to be exercised hereunder by the applicable Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.31(d), after receiving the required notice from the applicable Master Servicer set forth above that the applicable Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct the applicable Master Servicer and the applicable Special Servicer in writing that such Litigation Control nevertheless be exercised by the applicable Special Servicer; provided, however, that the applicable Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the applicable Master Servicer (and the applicable Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the applicable Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the applicable Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund; provided, further, so as long as the Trust Fund is fully indemnified and/or made whole with respect to the related legal action or claim underlying such Litigation Control from recoveries with respect to such legal action or claim, the Majority Subordinate Certificateholder shall be reimbursed up to the amount of compensation paid to the Special Servicer for assuming and handling such Litigation Control but only to the extent that such recoveries exceed the amount necessary to fully indemnify and make the Trust Fund whole.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee applicable Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, applicable Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, the Trustee applicable Master Servicer (if such party does not have Litigation Control) or the Custodianapplicable Special Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee, the Trust Advisor, the Certificate Administrator, the applicable Master Servicer (if such party does not have Litigation Control) or the applicable Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the applicable Master Servicer or the applicable Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the applicable Master Servicer nor the applicable Special Servicer Servicer, as applicable, shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee applicable Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, applicable Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee applicable Master Servicer or the Custodian, as applicable, applicable Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.31, nothing in this subsection paragraph shall be interpreted to preclude either the applicable Master Servicer or the applicable Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the TrustTrust Fund. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent given or withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced require or at cause any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer or Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, each Master Servicer’s or Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose any Master Servicer, any Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse party Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such person or expose any such person to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of any Special Servicer’s, any Master Servicer’s, the Trust Advisor’s, the Certificate Administrator’s or the Trustee’s responsibilities under this Agreement; and no Special Servicer or Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii)-(iv) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16)
Litigation Control. (a) With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan and other than any Excluded Special Servicer Loan), any Serviced Companion Loan or any related REO Loan or related REO Property, the The Special Servicer shall, in accordance with the Servicing Standard, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) Mortgagor against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, and (2) represent the interests of the Trust in any litigation relating to the rights and obligations (of the Mortgagor or the enforcement of obligations) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”). In the event that the Master Servicer is named in any Trust-Related Litigation but the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the Master Servicer shall notify the Special Servicer of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigation.
(b) With respect to any Non-Specially Serviced Loan and to To the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) abovethe immediately preceding paragraph, the Master Servicer shall (i1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide quarterly (unless requested in writing from time to time on a more frequent basis) monthly status reports to the Special Servicer Servicer, regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii3) use reasonable efforts seek to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii4) so long as the Master Servicer remains a party to such the lawsuit, consult with, with and take act at the direction from, of the Special Servicer with respect to material decisions and material monetary settlements resolutions related to the interests of the Trust in such Trust-Related Litigation, including but not limited to the selection of counsel. If and/or when the Trust and/or the Special Servicer are named, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Furtherhowever, if there are claims against the Master Servicer, the Trust, Servicer and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation unless and until (A) it has notified in writing the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing Certificateholder) and the related holder of any Serviced Companion Loan (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to a Control Termination Event and other than with respect to an Excluded Loan) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information determined that the Directing Certificateholder has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if separate counsel is required for such written objection has not been received by the Special Servicer within claims, such five (5) Business Day period, then the Directing Certificateholder counsel shall be deemed reasonably acceptable to have approved the taking of such action); provided that, if the Special Servicer determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any related Serviced Companion Noteholder, the Special Servicer may take such action without waiting for the Directing Certificateholder’s response.
(d) Notwithstanding anything to the contrary in this Section 3.32, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) . Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.29 below, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) belowServicer, including but not limited to the right to engage separate counselcounsel in the Master Servicer’s reasonable discretion, to make settlement decisions and to appear in any proceeding on its own behalf. The the cost related to or incurred in connection with exercising such rights of which shall be subject to indemnification as and pursuant to the extent provided in this Agreement.
(f) Section 6.03. Further, nothing in this Section 3.32 section shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s good faith and reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii1) result in a violation of applicable law an Adverse REMIC Event or the Mortgage Loan documents Adverse Grantor Trust Event or (iv2) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither . Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer nor shall have the right at any time to (1) direct the Master Servicer shall to settle on behalf any claims brought against the Trust, including claims asserted against the Master Servicer (whether or not the Trust or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust or the Special Servicer, as applicable, Servicer is named in any such claims or Trust-Related Litigation without such party’s consent unless: Litigation), provided in either case that the Special Servicer provides the Master Servicer with assurance that (iA) such settlement or other direction does not contain or require any admission of liability, liability or wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (iiB) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this AgreementTrust, (iiiC) each of the Master Servicer and the Special Servicer is and shall be indemnified as and pursuant to the extent provided in this Agreement Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (ivD) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (vE) the Master Special Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (iA), (ii), (iiiB) and (ivC).
(h) . In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriatelitigation, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.323.29.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that any action, suit, litigation or proceeding names the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, or in the event that any judgment is rendered against the Certificate Administrator, the Trustee or the Custodian, as applicable, in its individual capacity, the Certificate Administrator, the Trustee or the Custodian, as applicable, upon prior written notice to the Master Servicer or the Special Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor under the related Mortgage Loan documents, or otherwise relating to one or more Mortgage Loans or Mortgaged Properties, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the Custodian, as applicable, (A) initiate an action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicable, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (D) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, to be registered to do business in any state (provided that neither the Master Servicer nor the Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee or the Custodian, as applicable, to grant such consent); and (iii) in the event that any court finds that the Certificate Administrator, the Trustee or the Custodian, as applicable, is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Certificate Administrator, the Trustee or the Custodian, as applicable, shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually (but not to otherwise direct, manage or prosecute such litigation or claim); provided that nothing in this subsection shall be interpreted to preclude the Special Servicer (with respect to any material Trust-Related Litigation, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Event, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any action, suit, litigation or proceeding in its name as representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage Loans.
(k) Notwithstanding the foregoing or anything to the contrary in this Section 3.32, this Section 3.32 shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer the Special Servicer with respect to the related Mortgage Loan or related Whole Loan or has received notice of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or (ii) the Depositor, any Sponsor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, or any of their respective affiliates is an adverse party (with respect to the Trust, the Master Servicer or the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, the Master Servicer or the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, Underwriter, or affiliate that is such a party or holds such interest. In each case under clauses (k)(i) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreement.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C31)
Litigation Control. (a) With The Special Servicer, with respect to any Mortgage Loan (other than a Non-litigation involving Specially Serviced Mortgage Loan Loans, and other than any Excluded Special the Master Servicer Loan)with respect to litigation involving non-Specially Serviced Mortgage Loans, any Serviced Companion Loan or any related REO Loan or related REO Propertyand, in either case, if the Special Servicer or Master Servicer, as applicable, contemplates availing itself of indemnification as provided for under Section 6.03 of this Agreement, such servicer shall, in accordance with for the Servicing Standardbenefit of the Certificateholders, direct, manage, prosecute prosecute, defend and/or defend settle any action brought by a Mortgagor, guarantor, other obligor on the related Mortgage Note or any Affiliates thereof (each a “Borrower-Related Party”) against the Trust (including, without limitation, any action in which both the Trust and the Master Servicer are named) and/or the Special Servicer or any predecessor master servicer or special servicer, all claims and represent the interests of the Trust in any litigation relating to the rights and obligations (or the enforcement of obligationsi) of the Trust, or of the Mortgagor or other Borrower-Related Party under the related Mortgage Loan documents, or with respect to the related Mortgaged Property or other collateral securing such Mortgage Loan (or related Whole Loan), or otherwise with respect to the enforcement of the obligations of a Borrower-Related Party Borrower under the related Mortgage Loan documents Documents and (ii) any action brought against the Trust or any party to this Agreement with respect to the servicing of any such Mortgage Loan (the foregoing rights and obligations, “Trust-Related LitigationLitigation Control”). In Such Litigation Control shall be carried out in accordance with the event that terms of this Agreement, including, without limitation, the Master Servicer is Servicing Standard. Upon becoming aware of or being named in any Trust-Related claim or litigation that falls within the scope of Litigation but Control and is of a material nature (a “Material Litigation Control Matter”), the Special Servicer is not named in such Trust-Related Litigation (regardless of whether the Trust is named in such Trust-Related Litigation), the or Master Servicer shall promptly notify the Special Servicer Subordinate Class Representative (during a Subordinate Control Period or Collective Consultation Period) and the Trust Advisor (during any Collective Consultation Period and any Senior Consultation Period) of such litigation as soon as reasonably practicable but in any event no later than within ten (10) Business Days of the Master Servicer receiving service of such Trust-Related Litigationclaim or litigation.
(b) With respect to In connection with any Non-Specially Serviced Loan and to the extent the Master Servicer is named in the Trust-Related Litigation, and neither the Trust nor the Special Servicer is named, in order to effectuate the role of the Special Servicer as contemplated by Section 3.32(a) above, the Master Servicer shall (i) provide quarterly (unless requested in writing from time to time on a more frequent basis) status reports to the Special Servicer regarding such Trust-Related Litigation; provided, however, nothing in this requirement to deliver a status report shall require or obligate the Master Servicer to provide privileged or confidential information; (ii) use reasonable efforts to have the Trust replace the Master Servicer as the appropriate party to the lawsuit; and (iii) so long as the Master Servicer remains a party to such lawsuit, consult with, and take direction fromMaterial Litigation Control Matter, the Special Servicer with respect or Master Servicer shall submit any decision to material decisions and material monetary settlements related commence any proceeding or similar action in a Material Litigation Control Matter or any decision to agree to or propose any terms of settlement in a Material Litigation Control Matter to the interests Subordinate Class Representative (during a Subordinate Control Period) for its approval or consent and notice of the Trust in any such Trust-Related Litigation, including but not limited decision to the selection of counselrelated Pari Passu Companion Loan holder if such matter affects the related Pari Passu Companion Loan. If and/or when the Trust and/or the Special Servicer are namedSubject to Section 3.32(e), if and as applicable, the Special Servicer shall assume control of the Trust-Related Litigation as provided in Section 3.32(a) above, the Master Servicer shall no longer have the reporting obligations set forth above and the Special Servicer’s selection of counsel shall be subject to the consent of the Master Servicer which consent shall not be unreasonably withheld. Further, if there are claims against the or Master Servicer, the Trustas applicable, and the Special Servicer, each party at the request of any other such party shall enter into a joint defense agreement in accordance with Section 3.32(h) below.
(c) The Special Servicer shall not (i) undertake (or direct take any action implementing any such decision described in the Master Servicer to undertake) any material settlement of any Trust-Related Litigation or (ii) initiate any material Trust-Related Litigation preceding sentence unless and until (A) it has notified in writing the Directing Certificateholder Subordinate Class Representative (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded Loan) (to the extent the identity of the Directing Certificateholder is actually known to the Special Servicer; provided that the Special Servicer shall make due inquiry of the Certificate Administrator as to the identity of the Directing CertificateholderPeriod or Collective Consultation Period) and the related holder of any Serviced Companion Loan Subordinate Class Representative (if such matter affects such related Serviced Companion Loan) (to the extent the identity of the holder of such Serviced Companion Loan is actually known to the Special Servicer) and (B) the Directing Certificateholder (prior to during a Subordinate Control Termination Event and other than with respect to an Excluded LoanPeriod) has not objected in writing within five (5) Business Days of having been notified thereof and having been provided with all information that the Directing Certificateholder Subordinate Class Representative has reasonably requested with respect thereto promptly following its receipt of the subject notice (it being understood and agreed that if such written objection has not been received by the Special Servicer or Master Servicer, as applicable, within such five (5) -Business Day period, then the Directing Certificateholder Subordinate Class Representative shall be deemed to have approved the taking of such action); provided that, if the Special Servicer or Master Servicer, as applicable, determines (consistent with the Servicing Standard) that immediate action is necessary to protect the interests of the Certificateholders and any and, with respect to a Serviced Loan Combination, the related Serviced Companion NoteholderLoan Holders (consistent with the Servicing Standard), the Special Servicer or Master Servicer, as applicable, may take such action without waiting for the Directing CertificateholderSubordinate Class Representative’s response; provided that the Special Servicer or Master Servicer, as applicable, has confirmation that the Subordinate Class Representative has received notice of such action in writing. Nothing in this Section 3.32 shall be construed to alter, modify, limit or expand the Trust Advisor’s duties, rights and obligations in this Agreement, including, without limitation, in Sections 3.24, 3.28, 6.03 and 6.05, and the Trust Advisor shall not be required to review the actions of the Special Servicer with respect to the Special Servicer’s Litigation Control unless such review is otherwise related to the performance of the Trust Advisor’s duties, rights and obligations in respect of a Final Asset Status Report and/or Asset Status Report.
(c) Notwithstanding anything contained herein to the contrary with respect to any Litigation Control otherwise required to be exercised hereunder by the Master Servicer relating to a Mortgage Loan or Loan Combination that has either (i) been satisfied or paid in full, or (ii) as to which a Final Recovery Determination has been made, but subject to Section 3.32(d), after receiving the required notice from the Master Servicer set forth above that the Master Servicer became aware of or was named in any such claims or litigation, the Subordinate Class Representative (during a Subordinate Control Period) may direct in writing that such Litigation Control nevertheless be exercised by the Special Servicer; provided, however, that the Special Servicer (with the consent of the Subordinate Class Representative (during a Subordinate Control Period)) has determined and advised the Master Servicer (and the Master Servicer has reasonably concurred) that its actions with respect to such obligations are indemnifiable under Section 6.03 hereof, and accordingly, any loss, liability or expense (including legal fees and expenses incurred up until such date of transfer of Litigation Control to the Special Servicer) arising from the related legal action or claim underlying such Litigation Control and not otherwise paid to the Master Servicer pursuant to Section 6.03 of this Agreement shall be payable by the Trust Fund.
(d) Notwithstanding anything to the contrary in this Section 3.32foregoing, neither the Special Servicer nor the Master Servicer shall follow any advice, direction or consultation provided by the Directing Certificateholder (or any party to this Agreement) that would require or cause the Special Servicer or the Master Servicer, as applicable, to violate any applicable law, be inconsistent with the Servicing Standard, require or cause the Special Servicer or the Master Servicer, as applicable, to violate provisions of this Agreement, require or cause the Special Servicer or the Master Servicer, as applicable, to violate the terms of any Mortgage Loan or Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability, cause either Trust REMIC created hereunder to fail to qualify as a REMIC for federal income tax purposes or result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or materially expand the scope of the Special Servicer’s, the Master Servicer’s, the Certificate Administrator’s or the Trustee’s, as applicable, responsibilities under this Agreement.
(e) Notwithstanding the right of the Special Servicer provided under this Section 3.32 to represent the interests of the Trust in Trust Related Litigation, the Master Servicer shall retain the right at all times to make determinations relating to material and direct claims against the Master Servicer where a settlement by the Special Servicer has not otherwise been resolved pursuant to the terms of subsection (g) below, including but not limited to the right to engage separate counsel, to make settlement decisions and to appear in any proceeding on its own behalf. The cost related to or incurred in connection with exercising such rights shall be subject to indemnification as and to the extent provided in this Agreement.
(f) Further, nothing in this Section 3.32 shall require the Master Servicer or the Special Servicer to take or fail to take any action which, in the Master Servicer’s or Special Servicer’s reasonable judgment, may (i) cause either Trust REMIC to fail to qualify as a REMIC for federal income tax purposes, result in the imposition of “prohibited transaction” or “prohibited contribution” tax under the Code, or otherwise result in a violation of the REMIC Provisions, (ii) cause the Master Servicer or the Special Servicer to violate the Servicing Standard or the express provisions of any other Section of this Agreement, (iii) result in a violation of applicable law or the Mortgage Loan documents or (iv) subject the Master Servicer or the Special Servicer to liability or materially expand the scope of the Master Servicer’s or Special Servicer’s obligations under this Agreement.
(g) Neither the Special Servicer nor the Master Servicer shall settle on behalf of the Master Servicer or Special Servicer, as applicable, any Trust-Related Litigation without such party’s consent unless: (i) such settlement does not contain or require any admission of liability, wrongdoing or consent to injunctive relief on the part of the Master Servicer or the Special Servicer, as applicable, and the Master Servicer or the Special Servicer are each fully released, (ii) the cost of such settlement or any resulting judgment is and shall be paid by the Trust pursuant to the terms of this Agreement, and payment of such cost or judgment is provided for in this Agreement, (iii) each of the Master Servicer and the Special Servicer is and shall be indemnified as and to the extent provided in this Agreement for all costs and expenses incurred in defending and settling the Trust-Related Litigation and for any judgment, (iv) any such action taken by the Master Servicer at the direction of the Special Servicer shall be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (v) the Master Servicer or the Special Servicer, as applicable, provides the Master Servicer or the Special Servicer, as applicable, with assurance reasonably satisfactory to the Master Servicer or the Special Servicer, as applicable, as to the items in clauses (i), (ii), (iii) and (iv).
(h) In the event both the Master Servicer and the Special Servicer or Trust are named in Trust-Related Litigation, to the extent that the Master Servicer and the Special Servicer deem it appropriate, the Master Servicer and the Special Servicer shall (i) use reasonable efforts to enter into a joint defense agreement and (ii) otherwise cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.32.
(i) This Section 3.32 shall not apply in the event, and to the extent, that the Special Servicer authorizes the Master Servicer, and the Master Servicer agrees (both authority and agreement to be in writing), to make certain decisions or control certain Trust-Related Litigation on behalf of the Trust in accordance with the Servicing Standard.
(j) Notwithstanding the foregoing, and subject to the requirements of the final sentence in Section 3.01(b) and subject to the power of attorney (i) in the event that if any action, suit, litigation or proceeding names the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) in its their individual capacity, or in the event that if any judgment is rendered against the Certificate AdministratorTrustee, the Trustee or the Custodian, as applicable, in its individual capacityTrust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the CustodianSpecial Servicer (if such party does not have Litigation Control) in their individual capacity, the Trustee, the Trust Advisor, the Certificate Administrator, the Master Servicer (if such party does not have Litigation Control) or the Special Servicer (if such party does not have Litigation Control), as applicablethe case may be, upon prior written notice to the Master Servicer or the Special ServicerServicer with Litigation Control, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim); (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor, guarantor or other obligor Borrower under the related Mortgage Loan documents, loan documents or otherwise relating to one or more the servicing of a Mortgage Loans Loan, Loan Combination or Mortgaged PropertiesProperty, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Certificate Administrator, the Trustee or the CustodianCertificate Administrator, as applicable, (A) initiate an any action, suit, litigation or proceeding in the name of the Certificate Administrator, the Trustee or the Custodian, as applicableCertificate Administrator, whether in such capacity or individually, (B) engage counsel to represent the Certificate Administrator, the Trustee or the Custodian, as applicable, (C) settle any claim giving rise to liability to the Trustee, the Certificate Administrator, the Custodian or the Operating Advisor, as applicable, in its individual capacity or (DC) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Certificate Administrator, the Trustee or the Custodian, as applicable, Certificate Administrator to be registered to do business in any state (provided that neither the no Master Servicer nor the or Special Servicer shall be responsible for any delay due to the unwillingness of the Certificate Administrator, the Trustee Administrator or the CustodianTrustee, as applicable, to grant such consent); and (iii) in the event that if any court finds that the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer (if such party does not have Litigation Control) or the Custodian, as applicable, Special Servicer (if such party does not have Litigation Control) is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage LoanLoan or Loan Combination, the Trustee, the Trust Advisor, the Certificate Administrator, the Trustee Master Servicer or the Custodian, as applicable, Special Servicer shall each have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests, whether as the Certificate Administrator, the Trustee or the Custodian, as applicable, or individually interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided that . Subject to the rights of the Subordinate Class Representative under this Section 3.32, nothing in this subsection paragraph shall be interpreted to preclude either the Master Servicer or the Special Servicer (with respect to any material Trust-Related LitigationServicer, with the consent or consultation of the Directing Certificateholder (prior to a Control Termination Event or Consultation Termination Eventas applicable, respectively, and other than with respect to an Excluded Loan), to the extent required in Section 3.32(c)) from initiating any Litigation Control related action, suit, litigation or proceeding in its name as a representative of the Trustee of the Trust. References to Mortgage Loans (including references to Mortgagors, guarantors, obligors and Mortgaged Properties) in this Section 3.32 shall mean Serviced Mortgage LoansTrust Fund.
(ke) Notwithstanding the foregoing or anything herein to the contrary in this Section 3.32contrary, this Section 3.32 no advice, direction, objection of, or consent withheld by the Subordinate Class Representative shall not apply to any Trust-Related Litigation and shall have no force and effect with respect thereto, in the event that either (i) at the time such Trust-Related Litigation is commenced require or at any time during the continuance of such Trust-Related Litigation, 3650 REIT Loan Servicing LLC is no longer cause the Special Servicer or the Master Servicer to violate any provision of any Mortgage Loan Documents, any related Intercreditor Agreement, any related intercreditor, co-lender or similar agreement, applicable law, this Agreement or the REMIC Provisions, including without limitation, the Master Servicer’s or the Special Servicer’s obligation to act in accordance with respect to the Servicing Standard and the related Mortgage Loan or related Whole Loan or has received notice Documents, and to maintain the REMIC status of its replacement as Special Servicer with respect to the related Mortgage Loan or related Whole Loan whether or not such replacement is effective or any Trust REMIC, (ii) result in the imposition of a tax on any Trust REMIC under the REMIC Provisions or cause any REMIC Pool to fail to qualify as a REMIC or cause the Grantor Trust to fail to qualify as a grantor trust under subpart E, part I of subchapter J of the Code for federal income tax purposes, (iii) expose the Master Servicer, the Special Servicer, the Certificate Administrator, the Depositor, any Sponsorthe Trust Advisor, any Mortgage Loan Seller, any Placement Agent, any Underwriter, the Trust Fund or the Trustee or any of their respective affiliates is an adverse Affiliates, officers, directors, shareholders, partners, members, managers, employees or agents to any claim, suit, or liability for which this Agreement does not provide indemnification to such party or expose any such party to prosecution for a criminal offense, or (with respect to iv) materially expand the Trustscope of the Special Servicer’s, the Master Servicer Servicer’s, the Certificate Administrator’s or the Trustee’s responsibilities under this Agreement; and neither the Special Servicer) in such Trust-Related Litigation or holds any interest which is adverse to the Trust, Servicer nor the Master Servicer shall follow any such advice, direction or objection if given by the Special Servicer, unless otherwise agreed to in writing by each of the Master Servicer and/or the Special Servicer, as applicable, and the Depositor, Sponsor, Mortgage Loan Seller, Placement Agent, UnderwriterSubordinate Class Representative, or affiliate initiate any such actions, that is such a party or holds such interest. In each case under would have the effect described in clauses (k)(ii)-(iv) and (ii) above, the applicable party listed above shall use reasonable efforts to provide notice of such occurrence to the Master Servicer and/or the Special Servicer, as applicable, pursuant to this Agreement. For the avoidance of doubt, the rights and obligations of the Master Servicer and the Special Servicer relating to any Trust-Related Litigation shall be limited solely to the representation of the Trust and itself, separate and apart from the interests of any other party thereto. For the further avoidance of doubt, in such circumstance described in this paragraph, the rights and obligations of the Master Servicer and the Special Servicer relating to litigation shall be as otherwise set forth with respect to servicing in this Agreementsentence.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C17)