================================================================================
BEAR XXXXXXX COMMERCIAL MORTGAGE SECURITIES INC.
as Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer,
ARCAP SERVICING, INC.,
as Special Servicer,
LASALLE BANK NATIONAL ASSOCIATION,
as Trustee,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Paying Agent and Certificate Registrar,
and
ABN AMRO BANK N.V.,
as Fiscal Agent
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2004
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2004-TOP16
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS...................................................................................5
SECTION 1.2 CALCULATIONS RESPECTING MORTGAGE LOANS.......................................................74
SECTION 1.3 CALCULATIONS RESPECTING ACCRUED INTEREST.....................................................75
SECTION 1.4 INTERPRETATION...............................................................................75
SECTION 1.5 ARD LOANS....................................................................................75
SECTION 1.6 CERTAIN MATTERS WITH RESPECT TO LOAN PAIRS AND A/B MORTGAGE LOANS............................76
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
SECTION 2.1 CONVEYANCE OF MORTGAGE LOANS.................................................................78
SECTION 2.2 ACCEPTANCE BY TRUSTEE........................................................................81
SECTION 2.3 SELLERS' REPURCHASE OF MORTGAGE LOANS FOR MATERIAL DOCUMENT DEFECTS AND MATERIAL BREACHES OF
REPRESENTATIONS AND WARRANTIES...............................................................84
SECTION 2.4 REPRESENTATIONS AND WARRANTIES...............................................................90
SECTION 2.5 CONVEYANCE OF INTERESTS......................................................................91
ARTICLE III
THE CERTIFICATES
SECTION 3.1 THE CERTIFICATES.............................................................................91
SECTION 3.2 REGISTRATION.................................................................................92
SECTION 3.3 TRANSFER AND EXCHANGE OF CERTIFICATES........................................................93
SECTION 3.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES............................................99
SECTION 3.5 PERSONS DEEMED OWNERS........................................................................99
SECTION 3.6 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES....................................99
SECTION 3.7 BOOK-ENTRY CERTIFICATES.....................................................................100
SECTION 3.8 NOTICES TO CLEARING AGENCY..................................................................103
SECTION 3.9 DEFINITIVE CERTIFICATES.....................................................................103
ARTICLE IV
ADVANCES
SECTION 4.1 P&I ADVANCES BY MASTER SERVICER.............................................................104
-i-
SECTION 4.1A P&I ADVANCES WITH RESPECT TO NON-SERVICED MORTGAGE LOANS AND SERVICED PARI PASSU MORTGAGE
LOANS.......................................................................................105
SECTION 4.2 SERVICING ADVANCES..........................................................................106
SECTION 4.3 ADVANCES BY THE TRUSTEE AND THE FISCAL AGENT................................................107
SECTION 4.4 EVIDENCE OF NONRECOVERABILITY...............................................................108
SECTION 4.5 INTEREST ON ADVANCES; CALCULATION OF OUTSTANDING ADVANCES WITH RESPECT TO A MORTGAGE LOAN...109
SECTION 4.6 REIMBURSEMENT OF ADVANCES AND ADVANCE INTEREST..............................................110
SECTION 4.7 FISCAL AGENT TERMINATION EVENT..............................................................112
SECTION 4.8 PROCEDURE UPON TERMINATION EVENT............................................................112
SECTION 4.9 MERGER OR CONSOLIDATION OF FISCAL AGENT.....................................................113
SECTION 4.10 LIMITATION ON LIABILITY OF THE FISCAL AGENT AND OTHERS......................................113
SECTION 4.11 INDEMNIFICATION OF FISCAL AGENT.............................................................114
ARTICLE V
ADMINISTRATION OF THE TRUST
SECTION 5.1 COLLECTIONS.................................................................................114
SECTION 5.2 APPLICATION OF FUNDS IN THE CERTIFICATE ACCOUNT AND INTEREST RESERVE ACCOUNT................119
SECTION 5.3 DISTRIBUTION ACCOUNT AND RESERVE ACCOUNT....................................................128
SECTION 5.4 PAYING AGENT REPORTS........................................................................130
SECTION 5.5 PAYING AGENT TAX REPORTS....................................................................132
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS GENERALLY.....................................................................133
SECTION 6.2 REMIC I.....................................................................................133
SECTION 6.3 REMIC II....................................................................................134
SECTION 6.4 RESERVED....................................................................................136
SECTION 6.5 REMIC III...................................................................................136
SECTION 6.6 ALLOCATION OF REALIZED LOSSES, EXPENSE LOSSES AND SHORTFALLS DUE TO NONRECOVERABILITY.......141
SECTION 6.7 NET AGGREGATE PREPAYMENT INTEREST SHORTFALLS................................................143
SECTION 6.8 ADJUSTMENT OF SERVICING FEES................................................................144
SECTION 6.9 APPRAISAL REDUCTIONS........................................................................144
SECTION 6.10 COMPLIANCE WITH WITHHOLDING REQUIREMENTS....................................................145
SECTION 6.11 PREPAYMENT PREMIUMS.........................................................................145
-ii-
ARTICLE VII
CONCERNING THE TRUSTEE, THE FISCAL AGENT, THE PAYING AGENT AND THE LUXEMBOURG PAYING AGENT
SECTION 7.1 DUTIES OF THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT................................146
SECTION 7.2 CERTAIN MATTERS AFFECTING THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT................148
SECTION 7.3 THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT NOT LIABLE FOR CERTIFICATES OR INTERESTS
OR MORTGAGE LOANS...........................................................................150
SECTION 7.4 THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT MAY OWN CERTIFICATES.....................151
SECTION 7.5 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT.............151
SECTION 7.6 RESIGNATION AND REMOVAL OF THE TRUSTEE, THE FISCAL AGENT OR THE PAYING AGENT................152
SECTION 7.7 SUCCESSOR TRUSTEE, FISCAL AGENT OR PAYING AGENT.............................................154
SECTION 7.8 MERGER OR CONSOLIDATION OF TRUSTEE, FISCAL AGENT OR PAYING AGENT............................155
SECTION 7.9 APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE, AGENTS OR CUSTODIAN............................155
SECTION 7.10 AUTHENTICATING AGENTS.......................................................................157
SECTION 7.11 INDEMNIFICATION OF TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT...........................158
SECTION 7.12 FEES AND EXPENSES OF TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT.........................160
SECTION 7.13 COLLECTION OF MONEYS........................................................................160
SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR....................................................160
SECTION 7.15 NOTIFICATION TO HOLDERS.....................................................................163
SECTION 7.16 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT........163
SECTION 7.17 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY MAINTAINED BY THE TRUSTEE, THE FISCAL
AGENT AND THE PAYING AGENT..................................................................165
SECTION 7.18 APPOINTMENT OF LUXEMBOURG PAYING AGENT; NOTIFICATION TO CERTIFICATEHOLDERS..................166
ARTICLE VIII
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 8.1 SERVICING STANDARD; SERVICING DUTIES........................................................167
SECTION 8.2 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY MAINTAINED BY THE MASTER SERVICER...169
SECTION 8.3 MASTER SERVICER'S GENERAL POWER AND DUTIES..................................................170
SECTION 8.4 PRIMARY SERVICING AND SUB-SERVICING.........................................................176
SECTION 8.5 SERVICERS MAY OWN CERTIFICATES..............................................................178
-iii-
SECTION 8.6 MAINTENANCE OF HAZARD INSURANCE, OTHER INSURANCE, TAXES AND OTHER...........................178
SECTION 8.7 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS; DUE-ON-ENCUMBRANCE CLAUSE........181
SECTION 8.8 TRUSTEE TO COOPERATE; RELEASE OF TRUSTEE MORTGAGE FILES.....................................186
SECTION 8.9 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER SERVICER TO BE HELD FOR THE TRUSTEE
FOR THE BENEFIT OF THE CERTIFICATEHOLDERS...................................................187
SECTION 8.10 SERVICING COMPENSATION......................................................................187
SECTION 8.11 MASTER SERVICER REPORTS; ACCOUNT STATEMENTS.................................................189
SECTION 8.12 ANNUAL STATEMENT AS TO COMPLIANCE...........................................................191
SECTION 8.13 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.....................................191
SECTION 8.14 CMSA OPERATING STATEMENT ANALYSIS REPORTS REGARDING THE MORTGAGED PROPERTIES................192
SECTION 8.15 OTHER AVAILABLE INFORMATION AND CERTAIN RIGHTS OF THE MASTER SERVICER.......................193
SECTION 8.16 RULE 144A INFORMATION.......................................................................195
SECTION 8.17 INSPECTIONS.................................................................................196
SECTION 8.18 MODIFICATIONS, WAIVERS, AMENDMENTS, EXTENSIONS AND CONSENTS.................................196
SECTION 8.19 SPECIALLY SERVICED MORTGAGE LOANS...........................................................199
SECTION 8.20 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER............................200
SECTION 8.21 MERGER OR CONSOLIDATION.....................................................................201
SECTION 8.22 RESIGNATION OF MASTER SERVICER..............................................................202
SECTION 8.23 ASSIGNMENT OR DELEGATION OF DUTIES BY MASTER SERVICER.......................................202
SECTION 8.24 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS...................................203
SECTION 8.25 INDEMNIFICATION; THIRD-PARTY CLAIMS.........................................................205
SECTION 8.26 EXCHANGE ACT REPORTING......................................................................208
SECTION 8.27 COMPLIANCE WITH REMIC PROVISIONS AND GRANTOR TRUST PROVISIONS...............................210
SECTION 8.28 TERMINATION.................................................................................210
SECTION 8.29 PROCEDURE UPON TERMINATION..................................................................213
SECTION 8.30 OPERATING ADVISER CONTACT WITH MASTER SERVICER AND SPECIAL SERVICER.........................215
ARTICLE IX
ADMINISTRATION AND SERVICING OF SPECIALLY SERVICED MORTGAGE LOANS BY SPECIAL SERVICER
SECTION 9.1 DUTIES OF SPECIAL SERVICER..................................................................216
SECTION 9.2 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY OF SPECIAL SERVICER.................217
SECTION 9.3 SUB-SERVICERS...............................................................................218
SECTION 9.4 SPECIAL SERVICER GENERAL POWERS AND DUTIES..................................................218
-iv-
SECTION 9.5 "DUE-ON-SALE" CLAUSES; ASSIGNMENT AND ASSUMPTION AGREEMENTS; MODIFICATIONS OF SPECIALLY
SERVICED MORTGAGE LOANS; DUE-ON-ENCUMBRANCE CLAUSES.........................................221
SECTION 9.6 RELEASE OF MORTGAGE FILES...................................................................226
SECTION 9.7 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF SPECIAL SERVICER TO BE HELD FOR THE TRUSTEE...227
SECTION 9.8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPECIAL SERVICER...........................228
SECTION 9.9 STANDARD HAZARD, FLOOD AND COMPREHENSIVE GENERAL LIABILITY INSURANCE POLICIES...............229
SECTION 9.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS............................................231
SECTION 9.11 COMPENSATION TO THE SPECIAL SERVICER........................................................231
SECTION 9.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS...................................................233
SECTION 9.13 FORECLOSURE.................................................................................235
SECTION 9.14 OPERATION OF REO PROPERTY...................................................................235
SECTION 9.15 SALE OF REO PROPERTY........................................................................238
SECTION 9.16 REALIZATION ON COLLATERAL SECURITY..........................................................240
SECTION 9.17 RESERVED....................................................................................240
SECTION 9.18 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE...............................................240
SECTION 9.19 ANNUAL INDEPENDENT ACCOUNTANTS' SERVICING REPORT............................................240
SECTION 9.20 MERGER OR CONSOLIDATION.....................................................................241
SECTION 9.21 RESIGNATION OF SPECIAL SERVICER.............................................................241
SECTION 9.22 ASSIGNMENT OR DELEGATION OF DUTIES BY SPECIAL SERVICER......................................242
SECTION 9.23 LIMITATION ON LIABILITY OF THE SPECIAL SERVICER AND OTHERS..................................243
SECTION 9.24 INDEMNIFICATION; THIRD-PARTY CLAIMS.........................................................245
SECTION 9.25 RESERVED....................................................................................247
SECTION 9.26 SPECIAL SERVICER MAY OWN CERTIFICATES.......................................................247
SECTION 9.27 TAX REPORTING...............................................................................247
SECTION 9.28 APPLICATION OF FUNDS RECEIVED...............................................................247
SECTION 9.29 COMPLIANCE WITH REMIC PROVISIONS AND GRANTOR TRUST PROVISIONS...............................248
SECTION 9.30 TERMINATION.................................................................................248
SECTION 9.31 PROCEDURE UPON TERMINATION..................................................................251
SECTION 9.32 CERTAIN SPECIAL SERVICER REPORTS............................................................253
SECTION 9.33 SPECIAL SERVICER TO COOPERATE WITH THE MASTER SERVICER AND PAYING AGENT.....................257
SECTION 9.34 RESERVED....................................................................................258
SECTION 9.35 RESERVED....................................................................................258
SECTION 9.36 SALE OF DEFAULTED MORTGAGE LOANS............................................................258
SECTION 9.37 OPERATING ADVISER; ELECTIONS................................................................261
SECTION 9.38 LIMITATION ON LIABILITY OF OPERATING ADVISER................................................262
SECTION 9.39 DUTIES OF OPERATING ADVISER.................................................................263
SECTION 9.40 RIGHTS OF THE HOLDER OF A B NOTE............................................................265
-v-
ARTICLE X
PURCHASE AND TERMINATION OF THE TRUST
SECTION 00.0 XXXXXXXXXXX XX XXXXX XXXX XXXXXXXXXX OR LIQUIDATION OF ALL MORTGAGE LOANS...................266
SECTION 10.2 PROCEDURE UPON TERMINATION OF TRUST.........................................................268
SECTION 10.3 ADDITIONAL TRUST TERMINATION REQUIREMENTS...................................................269
ARTICLE XI
RIGHTS OF CERTIFICATEHOLDERS
SECTION 11.1 LIMITATION ON RIGHTS OF HOLDERS.............................................................270
SECTION 11.2 ACCESS TO LIST OF HOLDERS...................................................................271
SECTION 11.3 ACTS OF HOLDERS OF CERTIFICATES.............................................................271
ARTICLE XII
REMIC AND GRANTOR TRUST ADMINISTRATION
SECTION 12.1 REMIC ADMINISTRATION........................................................................272
SECTION 12.2 PROHIBITED TRANSACTIONS AND ACTIVITIES......................................................277
SECTION 12.3 MODIFICATIONS OF MORTGAGE LOANS.............................................................278
SECTION 12.4 LIABILITY WITH RESPECT TO CERTAIN TAXES AND LOSS OF REMIC STATUS............................278
SECTION 12.5 CLASS P GRANTOR TRUST.......................................................................278
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 BINDING NATURE OF AGREEMENT.................................................................279
SECTION 13.2 ENTIRE AGREEMENT............................................................................279
SECTION 13.3 AMENDMENT...................................................................................279
SECTION 13.4 GOVERNING LAW...............................................................................282
SECTION 13.5 NOTICES.....................................................................................282
SECTION 13.6 SEVERABILITY OF PROVISIONS..................................................................283
SECTION 13.7 INDULGENCES; NO WAIVERS.....................................................................283
SECTION 13.8 HEADINGS NOT TO AFFECT INTERPRETATION.......................................................283
SECTION 13.9 BENEFITS OF AGREEMENT.......................................................................283
SECTION 13.10 SPECIAL NOTICES TO THE RATING AGENCIES......................................................283
SECTION 13.11 COUNTERPARTS................................................................................285
SECTION 13.12 INTENTION OF PARTIES........................................................................285
SECTION 13.13 RECORDATION OF AGREEMENT....................................................................287
SECTION 13.14 RATING AGENCY MONITORING FEES...............................................................287
SECTION 13.15 ACKNOWLEDGEMENT BY PRIMARY SERVICER.........................................................287
-vi-
EXHIBITS AND SCHEDULES
----------------------
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 Form of Class A-4 Certificate
EXHIBIT A-5 Form of Class A-5 Certificate
EXHIBIT A-6 Form of Class A-6 Certificate
EXHIBIT A-7 Form of Class B Certificate
EXHIBIT A-8 Form of Class C Certificate
EXHIBIT A-9 Form of Class D Certificate
EXHIBIT A-10 Form of Class E Certificate
EXHIBIT A-11 Form of Class F Certificate
EXHIBIT A-12 Form of Class G Certificate
EXHIBIT A-13 Form of Class H Certificate
EXHIBIT A-14 Form of Class J Certificate
EXHIBIT A-15 Form of Class K Certificate
EXHIBIT A-16 Form of Class L Certificate
EXHIBIT A-17 Form of Class M Certificate
EXHIBIT A-18 Form of Class N Certificate
EXHIBIT A-19 Form of Class O Certificate
EXHIBIT A-20 Form of Class P Certificate
EXHIBIT A-21 Form of Class R-I Certificate
EXHIBIT A-22 Form of Class R-II Certificate
EXHIBIT A-23 Form of Class R-III Certificate
EXHIBIT A-24 Form of Class X-1 Certificate
EXHIBIT A-25 Form of Class X-2 Certificate
EXHIBIT B-1 Form of Initial Certification of Trustee (Section 2.2)
EXHIBIT B-2 Form of Final Certification of Trustee (Section 2.2)
EXHIBIT C Form of Request for Release
EXHIBIT D-1 Form of Transferor Certificate for Transfers to
Definitive Privately Offered Certificates
(Section 3.3(c))
EXHIBIT D-2A Form I of Transferee Certificate for Transfers of
Definitive Privately Offered Certificates
(Section 3.3(c))
EXHIBIT D-2B Form II of Transferee Certificate for Transfers of
Definitive Privately Offered Certificates
(Section 3.3(c))
EXHIBIT D-3A Form I of Transferee Certificate for Transfers of
Interests in Book-Entry Privately Offered
Certificates (Section 3.3(c))
EXHIBIT D-3B Form II of Transferee Certificate for Transfers of
Interests in Book-Entry Privately Offered
Certificates (Section 3.3(c))
EXHIBIT E-1 Form of Transfer Affidavit and Agreement (Section 3.3(e))
EXHIBIT E-2 Form of Transfer Affidavit and Agreement (Section 3.3(e))
EXHIBIT F Form of Regulation S Certificate
EXHIBIT G-1 Form of Principal Primary Servicing Agreement
EXHIBIT G-2 Reserved
-vii-
EXHIBIT H Form of Exchange Certification
EXHIBIT I Form of Euroclear Bank or Clearstream Bank Certificate
(Section 3.7(d)
EXHIBIT J List of Loans as to Which Excess Servicing Fees Are Paid
("Excess Servicing Fee")
EXHIBIT K-1 Form of Mortgage Loan Purchase Agreement I (BSCMI)
EXHIBIT K-2 Form of Mortgage Loan Purchase Agreement II (Xxxxx Fargo)
EXHIBIT K-3 Form of Mortgage Loan Purchase Agreement III (Principal)
EXHIBIT K-4 Form of Mortgage Loan Purchase Agreement IV (MSMC)
EXHIBIT K-5 Reserved
EXHIBIT L Form of Inspection Report
EXHIBIT M Form of Monthly Certificateholders Reports (Section 5.4(a))
EXHIBIT N Form of CMSA Operating Statement Analysis Report
EXHIBIT O Reserved
EXHIBIT P Reserved
EXHIBIT Q Reserved
EXHIBIT R Reserved
EXHIBIT S-1 Form of Power of Attorney to Master Servicer
(Section 8.3(c))
EXHIBIT S-2 Form of Power of Attorney to Special Servicer
(Section 9.4(a)
EXHIBIT T Form of Debt Service Coverage Ratio Procedures
EXHIBIT U Form of Assignment and Assumption Submission to
Special Servicer (Section 8.7(a))
EXHIBIT V Form of Additional Lien, Monetary Encumbrance and
Mezzanine Financing Submission Package to the
Special Servicer (Section 8.7(e))
EXHIBIT W Restricted Servicer Reports
EXHIBIT X Unrestricted Servicer Reports
EXHIBIT Y Investor Certificate (Section 5.4(a))
EXHIBIT Z Form of Notice and Certification Regarding Defeasance of
Mortgage Loans
EXHIBIT AA Form of Xxxxx Fargo primary servicing agreement
(Section 8.29(b))
EXHIBIT BB Controlling Class Certificateholder's Reports
Checklist
EXHIBIT CC Form of Performance Certification (Section 8.26 (b))
SCHEDULE I BSCMI Loan Schedule
SCHEDULE II Xxxxx Fargo Loan Schedule
SCHEDULE III Principal Loan Schedule
SCHEDULE IV MSMC Loan Schedule
SCHEDULE V Reserved
SCHEDULE VI List of Escrow Accounts Not Currently Eligible Accounts
(Section 8.3(e))
SCHEDULE VII Certain Escrow Accounts for Which a Report Under Section
5.1(g) is Required
SCHEDULE VIII List of Mortgagors that are Third-Party Beneficiaries
Under Section 2.3(a)
SCHEDULE IX Rates Used in Determination of Class X Pass-Through Rates
("Class X-1 Strip Rate" and "Class X-2 Strip Rate")
SCHEDULE X Mortgage Loans Secured by Mortgaged Properties Covered by an
Environmental Insurance Policy
-viii-
SCHEDULE XI List of Mortgage Loans that have Scheduled Payments after the
end of a Collection Period
SCHEDULE XII Loans that Accrue on an Actual/360 basis, but whose Servicing
Fees Accrue on a 30/360 Basis
-ix-
THIS POOLING AND SERVICING AGREEMENT is dated as of November
1, 2004 (this "Agreement") between BEAR XXXXXXX COMMERCIAL MORTGAGE SECURITIES
INC., a Delaware corporation, as depositor (the "Depositor"), XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as master servicer (the "Master Servicer"), ARCAP
SERVICING, INC., as special servicer (the "Special Servicer"), LASALLE BANK
NATIONAL ASSOCIATION, as trustee of the Trust (the "Trustee"), ABN AMRO BANK
N.V., only in its capacity as a fiscal agent pursuant to Article IV hereof (the
"Fiscal Agent") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, only in its capacity
as paying agent (the "Paying Agent") and certificate registrar.
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire the Mortgage
Loans from Principal Commercial Funding, LLC, as seller ("Principal"), Xxxxx
Fargo Bank, National Association, as seller ("Xxxxx Fargo"), Bear Xxxxxxx
Commercial Mortgage, Inc., as seller ("BSCMI") and Xxxxxx Xxxxxxx Mortgage
Capital Inc., as seller ("MSMC"), and will be the owner of the Mortgage Loans
and the other property being conveyed by it to the Trustee for inclusion in the
Trust which is hereby created. On the Closing Date, the Depositor will acquire
(i) the REMIC I Regular Interests and the Class R-I Certificates as
consideration for its transfer to the Trust of the Mortgage Loans (other than
any Excess Interest payable thereon) and the other property constituting REMIC
I; (ii) the REMIC II Regular Interests and the Class R-II Certificates as
consideration for its transfer of the REMIC I Regular Interests to the Trust;
and (iii) the REMIC III Certificates (other than the portion of the Class P
Certificates representing the right to receive Excess Interest) as consideration
for its transfer of the REMIC II Regular Interests to the Trust and the portion
of the Class P Certificates representing the right to receive Excess Interest as
consideration for its transfer to the Trust of such right. The Depositor has
duly authorized the execution and delivery of this Agreement to provide for the
foregoing and the issuance of (A) the REMIC I Regular Interests and the Class
R-I Certificates representing in the aggregate the entire beneficial ownership
of REMIC I, (B) the REMIC II Regular Interests and the Class R-II Certificates
representing in the aggregate the entire beneficial ownership of REMIC II and
(C) the REMIC III Certificates representing in the aggregate the entire
beneficial ownership of REMIC III and, in the case of the Class P Certificates,
the Class P Grantor Trust. Excess Interest received on the Mortgage Loans shall
be held in the Class P Grantor Trust for the benefit of the Class P
Certificates. All covenants and agreements made by the Depositor and the Trustee
herein with respect to the Mortgage Loans and the other property constituting
the Trust are for the benefit of the Holders of the REMIC I Regular Interests,
the REMIC II Regular Interests, the Residual Certificates and the REMIC Regular
Certificates (including the Class P Certificates to the extent of their interest
in any Excess Interest). The parties hereto are entering into this Agreement,
and the Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
The Class A, Class B, Class C, Class D, Class E and Class X-2
Certificates will be offered for sale pursuant to the prospectus (the
"Prospectus") dated June 11, 2004, as supplemented by the preliminary prospectus
supplement dated October 8, 2004 (together with the Prospectus, the "Preliminary
Prospectus Supplement"), and as further supplemented by the final prospectus
supplement dated October 20, 2004 (together with the Prospectus, the "Final
Prospectus Supplement"), and the Class X-1, Class F, Class G, Class H, Class J,
Class K, Class
L, Class M, Class N, Class O and Class P Certificates will be offered for sale
pursuant to a Private Placement Memorandum dated October 20, 2004.
REMIC I
Each REMIC I Regular Interest (a "Corresponding REMIC I
Regular Interest") will relate to a specific Mortgage Loan. Each Corresponding
REMIC I Regular Interest will have a pass-through rate equal to the REMIC I Net
Mortgage Rate of the related Mortgage Loan, an initial principal amount (the
initial "Certificate Balance") equal to the Scheduled Principal Balance as of
the Cut-Off Date of the Mortgage Loan to which the Corresponding REMIC I Regular
Interest relates, and a "latest possible maturity date" set to the Maturity Date
of the Mortgage Loan to which the Corresponding REMIC I Regular Interest
relates. The Class R-I Certificate will be designated as the sole Class of
residual interests in REMIC I and will have no Certificate Balance and no
Pass-Through Rate, but will be entitled to receive the proceeds of any assets
remaining in REMIC I after all Classes of REMIC I Regular Interests have been
paid in full.
REMIC II
The REMIC II Regular Interests have the pass-through rates and
Certificate Balances set forth in the definition thereof. The Class R-II
Certificates will be designated as the sole Class of residual interests in REMIC
II and will have no Certificate Balance and no Pass-Through Rate, but will be
entitled to receive the proceeds of any assets remaining in REMIC II after all
Classes of REMIC II Regular Interests have been paid in full.
-2-
The following table sets forth the Class or Component
designation, the corresponding REMIC II Regular Interest (the "CORRESPONDING
REMIC II REGULAR INTEREST"), the Corresponding Components of the Class X-1 or
Class X-2 Certificates and the initial Certificate Balance for each Class of
Principal Balance Certificates (the "CORRESPONDING CERTIFICATES").
CORRESPONDING
CORRESPONDING REMIC INITIAL REMIC II COMPONENTS OF CLASS
CORRESPONDING INITIAL CLASS II REGULAR INTERESTS REGULAR INTEREST X-1 OR CLASS X-2
CERTIFICATES CERTIFICATE BALANCE (1) CERTIFICATE BALANCE CERTIFICATES (1)
--------------------- --------------------- ----------------------- --------------------- ----------------------
Class A-1 $ 20,000,000 A-1 $ 20,000,000 A-1
Class A-2 $ 60,000,000 A-2A $ 14,956,000 A-2A
A-2B $ 45,044,000 A-2B
Class A-3 $100,000,000 A-3A $ 10,813,000 A-3A
A-3B $ 53,547,000 A-3B
A-3C $ 35,640,000 A-3C
Class A-4 $100,000,000 A-4A $ 15,005,000 A-4A
A-4B $ 84,995,000 A-4B
Class A-5 $ 80,000,000 A-5A $ 22,260,000 A-5A
A-5B $ 49,798,000 A-5B
A-5C $ 7,942,000 A-5C
Class A-6 $676,075,000 A-6A $ 91,170,000 A-6A
A-6B $ 26,049,000 A-6B
A-6C $ 558,856,000 A-6C
Class B $ 20,231,000 B-1 $ 10,113,000 B-1
B-2 $ 10,118,000 B-2
Class C $ 13,005,000 C-1 $ 7,017,000 C-1
C-2 $ 5,988,000 C-2
Class D $ 13,005,000 D-1 $ 2,092,000 X-0
X-0 $ 10,913,000 D-2
Class E $ 15,895,000 E $ 15,895,000 E
Class F $ 10,115,000 F-1 $ 7,868,000 F-1
F-2 $ 2,247,000 F-2
Class G $ 11,560,000 G $ 11,560,000 G
Class H $ 10,115,000 H-1 $ 7,729,000 H-1
H-2 $ 2,386,000 H-2
Class J $ 2,891,000 J $ 2,891,000 J
Class K $ 4,335,000 K $ 4,335,000 K
Class L $ 5,780,000 L $ 5,780,000 L
Class M $ 1,445,000 M $ 1,445,000 M
Class N $ 1,445,000 N $ 1,445,000 N
Class O $ 2,890,000 O $ 2,890,000 O
Class P $ 7,225,001 P $ 7,225,001 P
-3-
(1) The REMIC II Regular Interests and the Components of the Class X-1 and
Class X-2 Certificates that correspond to any particular Class of Principal
Balance Certificates also correspond to each other and, accordingly,
constitute the "CORRESPONDING REMIC II REGULAR INTEREST" and the
"CORRESPONDING COMPONENTS," respectively, with respect to each other.
REMIC III AND CLASS P GRANTOR TRUST
The following sets forth the Class designation, Pass-Through
Rate, initial Aggregate Certificate Balance (or initial Notional Amount) and
Final Scheduled Distribution Date for each Class of REMIC III Certificates
comprising the interests in REMIC III created hereunder, and the Class P
Certificates comprising the beneficial ownership interest in the Class P Grantor
Trust.
Initial Initial Aggregate
REMIC III Interest Pass-Through Certificate Balance or Final Scheduled Distribution
Designation Rate(a) Notional Amount Date(b)
----------- ------- --------------- -------
Class A-1 2.62000% $20,000,000 August 13, 2006
Class A-2 3.70000% $60,000,000 July 13, 2009
Class A-3 4.03000% $100,000,000 April 13, 2011
Class A-4 4.32000% $100,000,000 December 13, 2011
Class A-5 4.60000% $80,000,000 April 13, 2014
Class A-6 4.75000% $676,075,000 October 13, 2014
Class X-1 0.11868% $1,156,012,001 October 13, 2024
Class X-2 0.81251% $1,108,051,000 November 13, 2012
Class B 4.82000% $20,231,000 October 13, 2014
Class C 4.85000% $13,005,000 October 13, 2014
Class D 4.89000% $13,005,000 October 13, 2014
Class E 4.99000% $15,895,000 November 13, 2014
Class F 5.21000% $10,115,000 November 13, 2014
Class G 5.26311% $11,560,000 November 13, 2016
Class H 5.46311% $10,115,000 July 13, 2018
Class J 4.49300% $2,891,000 December 13, 2018
Class K 4.49300% $4,335,000 December 13, 2018
Class L 4.49300% $5,780,000 December 13, 2018
Class M 4.49300% $1,445,000 December 13, 2018
Class N 4.49300% $1,445,000 February 13, 2019
Class O 4.49300% $2,890,000 February 13, 2019
Class P(c) 4.49300% $7,225,001 October 13, 2024
Class R-III(d) N/A N/A N/A
(a) On each Distribution Date after the initial Distribution Date, the
Pass-Through Rate for each Class of Certificates (other than the Residual
Certificates) will be determined as described herein under the definition
of "Pass-Through Rate." The initial Pass-Through Rates shown above are
approximate for the Class G, Class H, Class X-1 and Class X-2 Certificates.
-4-
(b) The Final Scheduled Distribution Date for each Class of
Certificates is the Distribution Date on which such Class is expected to be
paid in full, assuming that timely payments (and no prepayments) will be
made on the Mortgage Loans in accordance with their terms (except that each
ARD Loan will be prepaid in full on its Anticipated Repayment Date).
(c) The Class P Certificates represent ownership of a REMIC III Regular
Interest (entitled to the principal and interest set forth above). In
addition, the Class P Certificates will be entitled to Excess Interest
(which will not be a part of any REMIC Pool). The parties intend that (i)
the portion of the Trust representing the Excess Interest and the Excess
Interest Sub-account shall be treated as a grantor trust under subpart E of
Part 1 of subchapter J of Chapter 1 of Subtitle A of the Code and (ii) the
Class P Certificates (other than the portion thereof consisting of a REMIC
III Regular Interest) shall represent undivided beneficial interests in the
portion of the Trust consisting of the entitlement to receive Excess
Interest (the "Class P Grantor Trust").
(d) The Class R-III Certificates will be entitled to receive the
proceeds of any remaining assets in REMIC III after the principal amounts
of all Classes of Certificates have been reduced to zero and any Realized
Losses previously allocated thereto (and any interest thereon) have been
reimbursed.
As of the Cut-Off Date, the Mortgage Loans had an Aggregate
Principal Balance of $1,156,012,001.
As provided herein, with respect to the Trust, the Paying
Agent on behalf of the Trustee will make an election for the segregated pool of
assets described in the first paragraph of Section 12.1(a) hereof (including the
Mortgage Loans (other than any Excess Interest payable with respect to such
Mortgage Loans)) to be treated for federal income tax purposes as a real estate
mortgage investment conduit ("REMIC I"). The REMIC I Regular Interests will be
designated as the "regular interests" in REMIC I and the Class R-I Certificates
will be designated as the sole Class of "residual interests" in REMIC I for
purposes of the REMIC Provisions.
As provided herein, with respect to the Trust, the Paying
Agent on behalf of the Trustee will make an election for the segregated pool of
assets described in the second paragraph of Section 12.1(a) hereof consisting of
the REMIC I Regular Interests to be treated for federal income tax purposes as a
real estate mortgage investment conduit ("REMIC II"). The REMIC II Regular
Interests will be designated as the "regular interests" in REMIC II and the
Class R-II Certificates will be designated as the sole Class of "residual
interests" in REMIC II for purposes of the REMIC Provisions.
As provided herein, with respect to the Trust, the Paying
Agent on behalf of the Trustee will make an election for the segregated pool of
assets described in the third paragraph of Section 12.1(a) hereof consisting of
the REMIC II Regular Interests to be treated for federal income tax purposes as
a real estate mortgage investment conduit ("REMIC III"). The REMIC III Regular
Interests (including, in the case of the Class P Certificates, the Class P REMIC
Interest represented by the Class P Certificates) will be designated as the
"regular interests" in REMIC III and the Class R-III Certificates (together with
the REMIC Regular Certificates, the "REMIC III Certificates") will be designated
as the sole Class of "residual interests" in REMIC III for purposes of the REMIC
Provisions.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
-5-
"A NOTE" means, with respect to any A/B Mortgage Loan, the
mortgage note (or notes) included in the Trust that is senior in right of
payment to the related B Note to the extent set forth in the related
Intercreditor Agreement.
"A/B LOAN CUSTODIAL ACCOUNT" means each of the custodial
sub-account(s) of the Certificate Account (but which are not included in the
Trust) created and maintained by the Master Servicer pursuant to Section 5.1(c)
on behalf of the holder of a related B Note (other than the Congress Center B
Note). Any such sub-account(s) shall be maintained as a sub-account of an
Eligible Account.
"A/B MORTGAGE LOAN" means the Congress Center A/B Mortgage
Loan or the Pearland Corner Shopping Center A/B Mortgage Loan, as the case may
be, or any mortgage loan serviced under this Agreement that is divided into
senior mortgage note(s) and a subordinated mortgage note, one or more of which
senior mortgage note(s) is included in the Trust. References herein to an A/B
Mortgage Loan shall be construed to refer to the aggregate indebtedness under
the related A Note and the related B Note. Notwithstanding the foregoing, for
purposes of the definitions of "Appraisal Event", "Appraisal Reduction" and
"Required Appraisal Loan", the Huntington Square Mortgage Loan and "Loan B" (as
such term is defined in the related Intercreditor Agreement) shall be deemed to
be an A/B Mortgage Loan and Loan B shall be deemed to be a B Note.
"ACCOUNTANT" means a person engaged in the practice of
accounting who is Independent.
"ACCRUED CERTIFICATE INTEREST" means with respect to each
Distribution Date and any Class of Interests or Principal Balance Certificates,
other than the Residual Certificates, interest accrued during the Interest
Accrual Period relating to such Distribution Date on the Aggregate Certificate
Balance of such Class or Interest as of the close of business on the immediately
preceding Distribution Date at the respective rates per annum set forth in the
definition of the applicable Pass-Through Rate for each such Class. Accrued
Certificate Interest on the Class X-1 and Class X-2 Certificates for each
Distribution Date will equal the aggregate Accrued Component Interest for the
related Interest Accrual Period for all of their respective Components for such
Distribution Date.
"ACCRUED COMPONENT INTEREST" With respect to each Component of
the Class X-1 and Class X-2 Certificates for any Distribution Date, one month's
interest at the Class X-1 Strip Rate or Class X-2 Strip Rate applicable to such
Component for such Distribution Date, accrued on the Component Notional Amount
of such Component outstanding immediately prior to such Distribution Date.
Accrued Component Interest shall be calculated on a 30/360 basis and, with
respect to any Component and any Distribution Date, shall be deemed to accrue
during the calendar month preceding the month in which such Distribution Date
occurs.
"ACQUISITION DATE" means the date upon which, under the Code
(and in particular the REMIC Provisions and Section 856(e) of the Code), the
Trust or a REMIC Pool is deemed to have acquired a Mortgaged Property (or an
interest therein, in the case of the Mortgaged Properties securing any A/B
Mortgage Loan, Non-Serviced Mortgage Loan, Non-Serviced Companion Mortgage Loan
and Loan Pair).
-6-
"ADDITIONAL REVIEW PERIOD" has the meaning set forth in
Section 9.4(d).
"ADDITIONAL TRUST EXPENSE" means any of the following items:
(i) Special Servicing Fees, Work-Out Fees and Liquidation Fees (to the extent
not collected from the related Mortgagor), (ii) Advance Interest that cannot be
paid in accordance with Section 4.6(c); (iii) amounts paid to indemnify the
Master Servicer, the Special Servicer, any applicable Non-Serviced Mortgage Loan
Master Servicer, any applicable Non-Serviced Mortgage Loan Special Servicer, the
Primary Servicer, the Trustee, the Paying Agent, the Fiscal Agent (or any other
Person) pursuant to the terms of this Agreement; (iv) to the extent not
otherwise paid, any federal, state, or local taxes imposed on the Trust or its
assets and paid from amounts on deposit in the Certificate Account or
Distribution Account and (v) to the extent not otherwise included in the
calculation of a Realized Loss and not covered by indemnification by one of the
parties hereto or otherwise, any other unanticipated cost, liability, or expense
(or portion thereof) of the Trust (including costs of collecting such amounts or
other Additional Trust Expenses) that the Trust has not recovered, and in the
judgment of the Master Servicer (or Special Servicer) will not, recover from the
related Mortgagor or Mortgaged Property or otherwise, including a Modification
Loss described in clause (ii) of the definition thereof; provided, however,
that, in the case of an A/B Mortgage Loan, "Additional Trust Expense" shall not
include any of the foregoing amounts that have been recovered from the related
Mortgagor or Mortgaged Property as a result of the subordination of the related
B Note in accordance with the terms of the related Intercreditor Agreement.
Notwithstanding anything to the contrary, "Additional Trust Expenses" shall not
include allocable overhead of the Master Servicer, the Special Servicer, any
Non-Serviced Mortgage Loan Master Servicer, any Non-Serviced Mortgage Loan
Special Servicer, the Trustee, the Paying Agent, the Certificate Registrar or
the Fiscal Agent, such as costs for office space, office equipment, supplies and
related expenses, employee salaries and related expenses, and similar internal
costs and expenses.
"ADMINISTRATIVE COST RATE" means, with respect to each
Mortgage Loan, the sum of the Master Servicing Fee Rate, the Primary Servicing
Fee Rate, the Excess Servicing Fee Rate, the Trustee Fee Rate and in the case of
any Non-Serviced Mortgage Loan, the related Pari Passu Loan Servicing Fee Rate.
"ADVANCE" means either a P&I Advance or a Servicing Advance.
"ADVANCE INTEREST" means interest payable to the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent on outstanding
Advances (other than Unliquidated Advances) pursuant to Section 4.5 of this
Agreement and any interest payable to any Non-Serviced Mortgage Loan Master
Servicer, any Non-Serviced Mortgage Loan Trustee or any Non-Serviced Mortgage
Loan Fiscal Agent with respect to Pari Passu Loan Nonrecoverable Advances
pursuant to Section 4.4(b) hereof.
"ADVANCE RATE" means a per annum rate equal to the Prime Rate
as published in the "Money Rates" section of The Wall Street Journal from time
to time or such other publication as determined by the Trustee in its reasonable
discretion.
"ADVANCE REPORT DATE" means the second Business Day prior to
each Distribution Date.
-7-
"ADVERSE GRANTOR TRUST EVENT" means any action that, under the
Code, if taken or not taken, as the case may be, would either (i) endanger the
status of any Grantor Trust Pool as a grantor trust or (ii) result in the
imposition of a tax upon the income of any Grantor Trust Pool or any of their
respective assets or transactions.
"ADVERSE REMIC EVENT" means any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, would either (i) endanger
the status of any REMIC Pool as a REMIC or (ii) subject to Section 9.14(e),
result in the imposition of a tax upon the income of any REMIC Pool or any of
their respective assets or transactions, including (without limitation) the tax
on prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on prohibited contributions set forth in Section 860G(d) of the Code.
"AFFILIATE" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE CERTIFICATE BALANCE" means the aggregate of the
Certificate Balances of the Principal Balance Certificates, the REMIC I Regular
Interests or the REMIC II Regular Interests, as the case may be, at any date of
determination. With respect to a Class of Principal Balance Certificates, REMIC
I Regular Interests or REMIC II Regular Interests, Aggregate Certificate Balance
shall mean the aggregate of the Certificate Balances of all Certificates or
Interests, as the case may be, of that Class at any date of determination.
"AGGREGATE PRINCIPAL BALANCE" means, at the time of any
determination and as the context may require, the aggregate of the Scheduled
Principal Balances for all Mortgage Loans.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"ANTICIPATED REPAYMENT DATE" means, with respect to each ARD
Loan, the anticipated maturity date set forth in the related Mortgage Note.
"APPRAISAL" means an appraisal by an Independent licensed MAI
appraiser having at least five years experience in appraising property of the
same type as, and in the same geographic area as, the Mortgaged Property being
appraised, which appraisal complies with the Uniform Standards of Professional
Appraisal Practices and states the "market value" of the subject property as
defined in 12 C.F.R. ss. 225.62.
"APPRAISAL EVENT" means, with respect to any Mortgage Loan,
A/B Mortgage Loan or Loan Pair, not later than the earliest of (i) the date 120
days after the occurrence of any delinquency in payment with respect to such
Mortgage Loan, A/B Mortgage Loan or Loan Pair if such delinquency remains
uncured, (ii) the date 30 days after receipt of notice that the related
Mortgagor has filed a bankruptcy petition or the related Mortgagor has become
the subject of involuntary bankruptcy proceedings or the related Mortgagor has
consented to the filing of a bankruptcy proceeding against it or a receiver is
appointed in respect of the related Mortgaged
-8-
Property, provided such petition or appointment is still in effect, (iii) the
date that is 30 days following the date the related Mortgaged Property becomes
an REO Property and (iv) the effective date of any modification to a Money Term
of a Mortgage Loan, A/B Mortgage Loan or Loan Pair, other than an extension of
the date that a Balloon Payment is due for a period of less than six months from
the original due date of such Balloon Payment.
"APPRAISAL REDUCTION" means, with respect to any Required
Appraisal Loan with respect to which an Appraisal or internal valuation is
performed pursuant to Section 6.9, an amount equal to the excess of (A) the sum
of (i) the Scheduled Principal Balance of such Mortgage Loan, Loan Pair or A/B
Mortgage Loan (or, in the case of an REO Property, the related REO Mortgage
Loan) less the principal amount of any guaranty or surety bond with a rating of
at least "BBB-" (or its equivalent) by a nationally recognized statistical
rating organization and the undrawn principal amount of any letter of credit or
debt service reserve, if applicable, that is then securing such Mortgage Loan or
Loan Pair, (ii) to the extent not previously advanced by the Master Servicer,
the Trustee or the Fiscal Agent, all accrued and unpaid interest on such
Mortgage Loan, Loan Pair or A/B Mortgage Loan at a per annum rate equal to the
Mortgage Rate, (iii) all unreimbursed Advances (including Unliquidated Advances)
and interest on Advances (other than Unliquidated Advances) at the Advance Rate
with respect to such Mortgage Loan, Loan Pair or A/B Mortgage Loan, and (iv) to
the extent funds on deposit in any applicable Escrow Accounts are not sufficient
therefor, and to the extent not previously advanced by the Master Servicer, the
Special Servicer, the Trustee or the Fiscal Agent, all currently due and unpaid
real estate taxes and assessments, insurance premiums and, if applicable, ground
rents and other amounts which were required to be deposited in any Escrow
Account (but were not deposited) in respect of such Mortgaged Property or REO
Property, as the case may be, over (B) 90% of the Appraised Value (net of any
prior mortgage liens) of such Mortgaged Property or REO Property as determined
by such Appraisal or internal valuation, as the case may be, plus the full
amount of any escrows held by or on behalf of the Trustee as security for the
Mortgage Loan, Loan Pair or A/B Mortgage Loan (less the estimated amount of the
obligations anticipated to be payable in the next twelve months to which such
escrows relate). Each Appraisal or internal valuation for a Required Appraisal
Loan shall be updated annually for so long as an Appraisal Reduction exists. The
Appraisal Reduction for each Required Appraisal Loan will be recalculated
annually based on subsequent Appraisals, internal valuations or updates. Any
Appraisal Reduction for any Mortgage Loan, Loan Pair or A/B Mortgage Loan shall
be reduced to reflect any Realized Principal Losses on the Required Appraisal
Loan, Loan Pair or A/B Mortgage Loan. Each Appraisal Reduction will be reduced
to zero as of the date the related Mortgage Loan, Loan Pair or A/B Mortgage Loan
is brought current under the then current terms of the Mortgage Loan, Loan Pair
or A/B Mortgage Loan for at least three consecutive months, and no Appraisal
Reduction will exist as to any Mortgage Loan, Loan Pair or A/B Mortgage Loan
after it has been paid in full, liquidated, repurchased or otherwise disposed
of. Any Appraisal Reduction in respect of any Non-Serviced Mortgage Loan shall
be calculated in accordance with the related Non-Serviced Mortgage Loan Pooling
and Servicing Agreement based upon the applicable allocation of the items set
forth in clauses (A) and (B) above between the Non-Serviced Mortgage Loans and
the related Non-Serviced Companion Mortgage Loans and all other related pari
passu loans. Any Appraisal Reduction in respect of any Loan Pair shall be
allocated, as between a Serviced Pari Passu Mortgage Loan and the related
Serviced Companion Mortgage Loan, pro rata according to their respective
Principal Balances. Any Appraisal Reduction with respect to an A/B Mortgage Loan
shall be allocated
-9-
first to the related B Note, up to the Principal Balance thereof, and any excess
shall be allocated to the related A Note.
"APPRAISED VALUE" means, (i) with respect to any Mortgaged
Property (other than the Mortgaged Property relating to a Non-Serviced Mortgage
Loan), the appraised value thereof determined by an Appraisal of the Mortgaged
Property securing such Mortgage Loan made by an Independent appraiser selected
by the Master Servicer or the Special Servicer, as applicable or, in the case of
an internal valuation performed by the Special Servicer pursuant to Section 6.9,
the value of the Mortgaged Property determined by such internal valuation and
(ii) with respect to the Mortgaged Property relating to a Non-Serviced Mortgage
Loan, the portion of the appraised value allocable thereto.
"ARD LOAN" means any Mortgage Loan designated as such on the
Mortgage Loan Schedule.
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage
Loan, any assignment of leases, rents and profits or equivalent instrument,
whether contained in the related Mortgage or executed separately, assigning to
the holder or holders of such Mortgage all of the related Mortgagor's interest
in the leases, rents and profits derived from the ownership, operation, leasing
or disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"ASSIGNMENT OF MORTGAGE" means an assignment of the Mortgage,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect the transfer of the Mortgage to the Trustee, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
"Assumed Scheduled Payment" means: (i) with respect to any
Balloon Mortgage Loan or any B Note as to which advancing is required hereunder
for its Maturity Date (provided that such Mortgage Loan or B Note has not been
paid in full, and no Final Recovery Determination or other sale or liquidation
has occurred in respect thereof, on or before the end of the Collection Period
in which such Maturity Date occurs) and for any subsequent Due Date therefor as
of which such Mortgage Loan or such B Note remains outstanding and part of the
Trust, if no Scheduled Payment (other than the related delinquent Balloon
Payment) is due for such Due Date, the scheduled monthly payment of principal
and/or interest deemed to be due in respect thereof on such Due Date equal to
the Scheduled Payment that would have been due in respect of such Mortgage Loan
or such B Note on such Due Date, if it had been required to continue to accrue
interest in accordance with its terms, and to pay principal in accordance with
the amortization schedule in effect immediately prior to, and without regard to
the occurrence of, its most recent Maturity Date (as such may have been extended
in connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan or such B
Note granted or agreed to by the Master Servicer or the Special Servicer
pursuant to the terms hereof), and (ii) with respect to any REO Mortgage Loan
for any Due Date therefor as of which the related REO Property remains part of
the Trust, the scheduled monthly payment of principal and interest deemed to be
due in respect thereof on such Due Date equal to the Scheduled Payment (or, in
the case of a Balloon Mortgage Loan or B Note described
-10-
in the preceding clause of this definition, the Assumed Scheduled Payment) that
was due in respect of the related Mortgage Loan or the related B Note on the
last Due Date prior to its becoming an REO Mortgage Loan. The amount of the
Assumed Scheduled Payment for any A Note or B Note shall be calculated solely by
reference to the terms of such A Note or B Note, as applicable (as modified in
connection with any bankruptcy or similar proceeding involving the related
Mortgagor or pursuant to a modification, waiver or amendment of such Mortgage
Loan granted or agreed to by the Master Servicer or the Special Servicer
pursuant to the terms hereof) and without regard to the remittance provisions of
the related Intercreditor Agreement.
"AUTHENTICATING AGENT" means any authenticating agent serving
in such capacity pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an
Officer's Certificate on behalf of the Depositor.
"AVAILABLE ADVANCE REIMBURSEMENT AMOUNT" has the meaning set
forth in Section 4.6(a).
"AVAILABLE DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, an amount equal to the aggregate of (a) all amounts on
deposit in the Distribution Account as of the commencement of business on such
Distribution Date that represent payments and other collections on or in respect
of the Mortgage Loans and any REO Properties that were received by the Master
Servicer or the Special Servicer through the end of the related Collection
Period exclusive of (i) any such amounts that were deposited in the Distribution
Account in error, (ii) amounts that are payable or reimbursable to any Person
other than the Certificateholders (including amounts payable to the Master
Servicer in respect of unpaid Master Servicing Fees, the Primary Servicer in
respect of unpaid Primary Servicing Fees, the Special Servicer in respect of
unpaid Special Servicer Compensation, the Trustee in respect of unpaid Trustee
Fees, the Paying Agent in respect of unpaid Paying Agent Fees or to the parties
entitled thereto in respect of the unpaid Excess Servicing Fees), (iii) amounts
that constitute Prepayment Premiums, (iv) if such Distribution Date occurs
during January, other than in a leap year, or February of any year, the Interest
Reserve Amounts with respect to Interest Reserve Loans deposited in the Interest
Reserve Account, (v) in the case of each REO Property related to an A/B Mortgage
Loan or Loan Pair, all amounts received with respect to such A/B Mortgage Loan
or Loan Pair that are required to be paid to the holder of the related B Note or
Serviced Companion Mortgage Loan, as applicable, pursuant to the terms of the
related B Note or Serviced Companion Mortgage Loan, as applicable, and the
related Intercreditor Agreement or Loan Pair Intercreditor Agreement (which
amounts will be deposited into the related A/B Loan Custodial Account or
Serviced Companion Mortgage Loan Custodial Account, as applicable, pursuant to
Section 5.1(c) and withdrawn from such accounts pursuant to Section 5.2(a)) and
(vi) Scheduled Payments collected but due on a Due Date subsequent to the
related Collection Period and (b) if and to the extent not already among the
amounts described in clause (a), (i) the aggregate amount of any P&I Advances
made by the Master Servicer, the Trustee or the Fiscal Agent for such
Distribution Date pursuant to Section 4.1 and/or Section 4.3, (ii) the aggregate
amount of any Compensating Interest payments made by the Master Servicer for
such Distribution Date pursuant to the terms hereof, and (iii) if such
Distribution Date occurs in March of any year, commencing March 2005, the
aggregate of the Interest Reserve Amounts then held on deposit in the Interest
Reserve Account in respect of each Interest Reserve Loan.
-11-
"B NOTE" means, with respect to any A/B Mortgage Loan, the
related subordinated Mortgage Note not included in the Trust, which is
subordinated in right of payment to the related A Note to the extent set forth
in the related Intercreditor Agreement.
"BALLOON MORTGAGE LOAN" means a Mortgage Loan, a Serviced
Companion Mortgage Loan or a B Note that provides for Scheduled Payments based
on an amortization schedule that is significantly longer than its term to
maturity and that is expected to have a remaining principal balance equal to or
greater than 5% of its original principal balance as of its stated maturity
date, unless prepaid prior thereto.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage
Loan, the Scheduled Payment payable on the Maturity Date of such Mortgage Loan.
"BANKRUPTCY LOSS" means a loss arising from a proceeding under
the United States Bankruptcy Code or any other similar state law or other
proceeding with respect to the Mortgagor of, or Mortgaged Property under, a
Mortgage Loan, including, without limitation, any Deficient Valuation Amount or
losses, if any, resulting from any Debt Service Reduction Amount for the month
in which the related Remittance Date occurs.
"BASE INTEREST FRACTION" means, with respect to any Principal
Prepayment of any Mortgage Loan that provides for payment of a Prepayment
Premium, and with respect to any Class of Certificates, a fraction (A) whose
numerator is the greater of (x) zero and (y) the difference between (i) the
Pass-Through Rate on that Class of Certificates and (ii) the Discount Rate used
in calculating the Prepayment Premium with respect to the Principal Prepayment
(or the current Discount Rate if not used in such calculation) and (B) whose
denominator is the difference between (i) the Mortgage Rate on the related
Mortgage Loan and (ii) the Discount Rate used in calculating the Prepayment
Premium with respect to that Principal Prepayment (or the current Discount Rate
if not used in such calculation), provided, however, that under no circumstances
will the Base Interest Fraction be greater than one. If the Discount Rate
referred to above is greater than the Mortgage Rate on the related Mortgage
Loan, then the Base Interest Fraction will equal zero.
"BENEFIT PLAN OPINION" means an Opinion of Counsel
satisfactory to the Paying Agent and the Master Servicer to the effect that any
proposed transfer will not (i) cause the assets of the Trust to be regarded as
plan assets for purposes of the Plan Asset Regulations or (ii) give rise to any
fiduciary duty on the part of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent, the Certificate Registrar or the Fiscal
Agent.
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a
beneficial interest in a Class of Certificates, ownership and transfer of which
shall be made through book entries as described in Section 3.7; provided, that
after the occurrence of a condition whereupon book-entry registration and
transfer are no longer authorized and Definitive Certificates are to be issued
to the Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"BSCMI" has the meaning set forth in the Preliminary Statement
hereto.
"BSCMI LOANS" means, collectively, those Mortgage Loans sold
to the Depositor pursuant to the Mortgage Loan Purchase Agreement I and shown on
Schedule I hereto.
-12-
"BUSINESS DAY" means any day other than (i) a Saturday or a
Sunday, (ii) a legal holiday in New York, New York, Chicago, Illinois, Des
Moines, Iowa (but only with respect to matters related to the performance of
obligations of Principal Global Investors, LLC as Primary Servicer under the
Primary Servicing Agreement), San Francisco, California or the principal cities
in which the Special Servicer, the Trustee, the Paying Agent or the Master
Servicer conducts servicing or trust operations, or (iii) a day on which banking
institutions or savings associations in Minneapolis, Minnesota, Columbia,
Maryland, New York, New York, Chicago, Illinois or San Francisco, California are
authorized or obligated by law or executive order to be closed.
"CASH LIQUIDATION" means, as to any Defaulted Mortgage Loan
other than a Mortgage Loan with respect to which the related Mortgaged Property
became REO Property, the sale of such Defaulted Mortgage Loan. The Master
Servicer shall maintain records in accordance with the Servicing Standard (and,
in the case of Specially Serviced Mortgage Loans, based on the written reports
with respect to such Cash Liquidation delivered by the Special Servicer to the
Master Servicer), of each Cash Liquidation.
"CATEGORY 1 REQUEST" means a "Category 1 Request" and a
"Deemed Category 1 Request" as such terms are defined in the Primary Servicing
Agreement.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et
seq.).
"CERTIFICATE ACCOUNT" means one or more separate accounts
established and maintained by the Master Servicer (or any Sub-Servicer or
Primary Servicer on behalf of the Master Servicer) pursuant to Section 5.1(a),
each of which shall be an Eligible Account.
"CERTIFICATE BALANCE" means, with respect to any Certificate
(other than the Class X Certificates and the Residual Certificates) or Interest
as of any Distribution Date, the maximum specified dollar amount of principal to
which the Holder thereof is then entitled hereunder, such amount being equal to
the initial principal amount set forth on the face of such Certificate (in the
case of a Certificate), or as ascribed thereto in the Preliminary Statement
hereto (in the case of an Interest), minus (A)(i) the amount of all principal
distributions previously made with respect to such Certificate pursuant to
Section 6.5(a) or deemed to have been made with respect to such Interest
pursuant to Section 6.2(a) or Section 6.3(a), as the case may be, and (ii) all
Realized Losses allocated or deemed to have been allocated to such Interest or
Certificate in reduction of Certificate Balance pursuant to Section 6.6, plus
(B) an amount equal to the amounts identified in clause (I)(C) of the definition
of Principal Distribution Amount with respect to such Distribution Date, such
increases to be allocated to the Principal Balance Certificates or Interests in
sequential order (i.e. to the most senior Class first), in each case up to the
amount of Realized Losses previously allocated thereto and not otherwise
reimbursed hereunder.
"CERTIFICATE OWNER" means, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency).
-13-
"CERTIFICATE REGISTER" has the meaning set forth in Section
3.2.
"CERTIFICATE REGISTRAR" means the registrar appointed
pursuant to Section 3.2 and initially shall be the Paying Agent.
"CERTIFICATEHOLDERS" has the meaning set forth in the
definition of "Holder."
"CERTIFICATES" means, collectively, the REMIC III
Certificates, the Class R-I Certificates and the Class R-II Certificates.
"CERTIFICATION PARTIES" has the meaning set forth in Section
8.26(b).
"CERTIFYING PERSON" has the meaning set forth in Section
8.26(b).
"CLASS" means, with respect to the REMIC I Interests, REMIC II
Interests or REMIC III Certificates, any Class of such Certificates or
Interests.
"CLASS A-1 CERTIFICATES," "CLASS A-2 CERTIFICATES," "CLASS A-3
CERTIFICATES," "CLASS A-4 CERTIFICATES," "CLASS A-5 CERTIFICATES," "CLASS A-6
CERTIFICATES," "CLASS X-1 CERTIFICATES," "CLASS X-2 CERTIFICATES," "CLASS B
CERTIFICATES," "CLASS C CERTIFICATES," "CLASS D CERTIFICATES," "CLASS E
CERTIFICATES," "CLASS F CERTIFICATES," "CLASS G CERTIFICATES," "CLASS H
CERTIFICATES," "CLASS J CERTIFICATES," "CLASS K CERTIFICATES," "CLASS L
CERTIFICATES," "CLASS M CERTIFICATES," "CLASS N CERTIFICATES," "CLASS O
CERTIFICATES," "CLASS P CERTIFICATES," "CLASS R-I CERTIFICATES," "CLASS R-II
CERTIFICATES" or "CLASS R-III CERTIFICATES," mean the Certificates designated as
"Class A-1," "Class A-2," "Class A-3," "Class A-4," "Class A-5," "Class A-6,"
"Class X-1," "Class X-2," "Class B," "Class C," "Class D," "Class E," "Class F,"
"Class G," "Class H," "Class J," "Class K," "Class L," "Class M," "Class N,"
"Class O," "Class P," "Class R-I," "Class R-II" and "Class R-III" respectively,
on the face thereof, in substantially the form attached hereto as Exhibits.
"CLASS A CERTIFICATES" means the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, Class A-4 Certificates,
Class A-5 Certificates and the Class A-6 Certificates, collectively.
"CLASS A-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-1 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-1.
"CLASS A-2A COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-2 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-2A.
"CLASS A-2B COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-2 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-2B.
"CLASS A-3A COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-3 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-3A.
-14-
"CLASS A-3B COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-3 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-3B.
"CLASS A-3C COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-3 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-3C.
"CLASS A-4A COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-4 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-4A.
"CLASS A-4B COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-4 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-4B.
"CLASS A-5A COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-5 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-5A.
"CLASS A-5B COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-5 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-5B.
"CLASS A-5C COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-5 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-5C.
"CLASS A-6A COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-6 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-6A.
"CLASS A-6B COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-6 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-6B.
"CLASS A-6C COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class A-6 Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest A-6C.
"CLASS B-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class B Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest B-1.
"CLASS B-2 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class B Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest B-2.
-15-
"CLASS C-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class C Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest C-1.
"CLASS C-2 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class C Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest C-2.
"CLASS D-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class D Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest D-1.
"CLASS D-2 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class D Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest D-2.
"CLASS E COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class E Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest E.
"CLASS F-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class F Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest F-1.
"CLASS F-2 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class F Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest F-2.
"CLASS G COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class G Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest G.
"CLASS H-1 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class H Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest H-1.
"CLASS H-2 COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class H Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest H-2.
"CLASS J COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class J Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest J.
"CLASS K COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class K Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest K.
-16-
"CLASS L COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class L Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest L.
"CLASS M COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class M Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest M.
"CLASS N COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class N Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest N.
"CLASS O COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class O Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest O.
"CLASS P COMPONENT" means a component of the beneficial
interest in REMIC III evidenced by the Class P Certificates, which component
represents a Component Notional Amount equal to the Certificate Balance of the
REMIC II Regular Interest P.
"CLASS P GRANTOR TRUST" means that portion of the Trust
consisting of the Class P Grantor Trust Interest.
"CLASS P GRANTOR TRUST INTEREST" means that portion of the
rights represented by the Class P Certificates that evidences beneficial
ownership of the Excess Interest and the Excess Interest Sub-account, as
described in Section 12.5(a) hereof.
"CLASS P REMIC INTEREST" means that portion of the rights
represented by the Class P Certificates that evidences a regular interest in
REMIC III, which rights consist of the rights to the distributions described in
Section 6.5 hereof and all other rights of the Holders of the Class P
Certificates other than those comprising the Class P Grantor Trust.
"CLASS X CERTIFICATES" means the Class X-1 Certificates and
the Class X-2 Certificates.
"CLASS X-1 NOTIONAL AMOUNT" means, with respect to the Class
X-1 Certificates and any date of determination, the aggregate of the outstanding
Certificate Balances of the Principal Balance Certificates.
"CLASS X-1 STRIP RATE" means, with respect to any Class of
Components (other than Components that are also Class X-2 Components) for any
Distribution Date, a rate per annum equal to (i) the Weighted Average REMIC I
Net Mortgage Rate for such Distribution Date, minus (ii) the Pass-Through Rate
for the Corresponding Certificates. In the case of any Class of Components that
are also Class X-2 Components, (i) for any Distribution Date occurring on or
before the related Class X-2 Component Crossover Date, a rate per annum equal
to, (x) the Weighted Average REMIC I Net Mortgage Rate for such Distribution
Date, minus (y) the greater of (1) the rate per annum corresponding to such
Distribution Date as set forth in Schedule IX attached hereto and (2) the Pass
Through Rate for the Class of Corresponding Certificates, and (ii) for any
Distribution Date occurring after the related Class X-2 Component
-17-
Crossover Date, a rate per annum equal to (x) the Weighted Average REMIC I Net
Mortgage Rate for such Distribution Date, minus (y) the Pass-Through Rate for
the Corresponding Certificates (provided that in no event shall any Class X-1
Strip Rate be less than zero).
"CLASS X-2 COMPONENT CROSSOVER DATE" means, (i) with respect
to the Class A-2B Component, Class A-3A Component, Class H-1 Component, Class J
Component, Class K Component and Class L Component, the Distribution Date
occurring in May 2006, (ii) with respect to the Class A-3B Component, Class F-1
Component, Class G Component and Class H-2 Component, the Distribution Date
occurring in May 2007, (iii) with respect to the Class A-3C Component, Class
A-4A Component, Class D-1 Component, Class E Component and Class F-2 Component,
the Distribution Date occurring in May 2008, (iv) with respect to the Class A-4B
Component, Class A-5A Component, Class C-1 Component and Class D-2 Component,
the Distribution Date occurring in May 2009, (v) with respect to the Class A-5B
Component, Class B-1 Component and Class C-2 Component, the Distribution Date
occurring in May 2010, (vi) with respect to Class A-5C Component, Class A-6A
Component and Class B-2 Component, the Distribution Date occurring in May 2011,
(vii) with respect to Class A-6B Component, the Distribution Date Occurring in
May 2012 and (viii) with respect to Class A-6C Component, the Distribution Date
occurring in November 2012.
"CLASS X-2 COMPONENTS" means each of the Class A-2B Component,
Class A-3A Component, Class A-3B Component, Class A-3C Component, Class A-4A
Component, Class A-4B Component, Class A-5A Component, Class A-5B Component,
Class A-5C Component, Class A-6A Component, Class A-6B Component, Class A-6C
Component, Class B-1 Component, Class B-2 Component, Class C-1 Component, Class
C-2 Component, Class D-1 Component, Class D-2 Component, Class E Component,
Class F-1 Component, Class F-2 Component, Class G Component, Class H-1
Component, Class H-2 Component, Class J Component, Class K Component and Class L
Component, in each case, only as of any date of determination on or prior to its
respective Class X-2 Component Crossover Date.
"CLASS X-2 NOTIONAL AMOUNT" means as of any date of
determination, the sum of the then Component Notional Amounts of the Class X-2
Components that have not passed their respective Class X-2 Component Crossover
Dates.
"CLASS X-2 STRIP RATE" means, with respect to each of the
Class X-2 Components for any Distribution Date, a rate per annum equal to (i)
for any Distribution Date occurring on or before the related Class X-2 Component
Crossover Date, the excess, if any, of (x) the lesser of (i) the rate per annum
corresponding to such Distribution Date as set forth in Schedule IX attached
hereto and (ii) the Weighted Average REMIC I Net Mortgage Rate for such
Distribution Date over (y) the Pass Through Rate for the Class of Corresponding
Certificates (provided that, in no event shall any Class X-2 Strip Rate be less
than zero), and (ii) for any Distribution Date occurring after the related Class
X-2 Component Crossover Date, 0% per annum.
"CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the 1934 Act, which initially shall
be the Depository.
"CLEARSTREAM BANK" means Clearstream Bank, societe anonyme.
-18-
"CLOSING DATE" means November 4, 2004.
"CMSA" means the Commercial Mortgage Securities Association,
or any association or organization that is a successor thereto. If neither such
association nor any successor remains in existence, "CMSA" shall be deemed to
refer to such other association or organization as may exist whose principal
membership consists of servicers, trustees, certificateholders, issuers, the
placement agent and underwriters generally involved in the commercial mortgage
loan securitization industry, which is the principal such association or
organization in the commercial mortgage loan securitization industry and whose
principal purpose is the establishment of industry standards for reporting
transaction-specific information relating to commercial mortgage pass-through
certificates and commercial mortgage-backed bonds and the commercial mortgage
loans and foreclosed properties underlying or backing them to investors holding
or owning such certificates or bonds, and any successor to such other
association or organization. If an organization or association described in one
of the preceding sentences of this definition does not exist, "CMSA" shall be
deemed to refer to such other association or organization as shall be selected
by the Master Servicer and reasonably acceptable to the Trustee, the Paying
Agent, the Special Servicer, the Primary Servicer and the majority
certificateholder of the Controlling Class.
"CMSA OPERATING STATEMENT ANALYSIS REPORT" means a report
which is one element of the CMSA Methodology for Analyzing and Reporting
Property Income Statements and which is substantially in the form of Exhibit N.
"CMSA REPORTS" means the Restricted Servicer Reports and the
Unrestricted Servicer Reports, collectively.
"CODE" means the Internal Revenue Code of 1986, as amended,
any successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form and proposed
regulations thereunder, to the extent that, by reason of their proposed
effective date, such proposed regulations would apply to the Trust.
"COLLECTION PERIOD" means, with respect to any Distribution
Date, the period beginning on the day after the Determination Date in the month
preceding the month of such Distribution Date (or in the case of the first
Distribution Date, the Cut-Off Date) and ending on the Determination Date in the
month in which the Distribution Date occurs.
"COMMISSION" has the meaning set forth in Section 8.26(a).
"COMPENSATING INTEREST" means with respect to any Distribution
Date, an amount equal to the lesser of (A) the excess of (i) Prepayment Interest
Shortfalls incurred in respect of the Mortgage Loans other than the Specially
Serviced Mortgage Loans resulting from (x) voluntary Principal Prepayments on
such Mortgage Loans (but not including any B Note, Non-Serviced Companion
Mortgage Loan or Serviced Companion Mortgage Loan) or (y) to the extent that the
Master Servicer did not apply the proceeds thereof in accordance with the terms
of the related Mortgage Loan documents, involuntary Principal Prepayments during
the related Collection Period over (ii) the aggregate of Prepayment Interest
Excesses resulting from Principal Prepayments on the Mortgage Loans (but not
including any B Note, Non-Serviced Companion Mortgage Loan or Serviced Companion
Mortgage Loan) during the same Collection
-19-
Period and (B) the aggregate of the portion of the aggregate Master Servicing
Fee accrued at a rate per annum equal to 2 basis points for the related
Collection Period calculated in respect of all the Mortgage Loans (including REO
Mortgage Loans but not including any B Note, Non-Serviced Companion Mortgage
Loan or Serviced Companion Mortgage Loan), plus any investment income earned on
the amount prepaid prior to such Distribution Date.
"COMPONENT" means any of the Class A-1 Component, the Class
A-2A Component, the Class A-2B Component, the Class A-3A Component, the Class
A-3B Component, the Class A-3C Component, the Class A-4A Component, the Class
A-4B Component, the Class A-5A Component, the Class A-5B Component, the Class
A-5C Component, the Class A-6A Component, the Class A-6B Component, the Class
A-6C Component, the Class B-1 Component, the Class B-2 Component, the Class C-1
Component, the Class C-2 Component, the Class D-1 Component, the Class D-2
Component, the Class E Component, the Class F-1 Component, the Class F-2
Component, the Class G Component, the Class H-1 Component, the Class H-2
Component, the Class J Component, the Class K Component, the Class L Component,
the Class M Component, the Class N Component, the Class O Component and the
Class P Component.
"COMPONENT NOTIONAL AMOUNT" means with respect to each
Component and any date of determination, an amount equal to the then Certificate
Balance of its Corresponding REMIC II Regular Interest.
"CONDEMNATION PROCEEDS" means any awards resulting from the
full or partial condemnation or any eminent domain proceeding or any conveyance
in lieu or in anticipation thereof with respect to a Mortgaged Property by or to
any governmental, quasi-governmental authority or private entity with
condemnation powers other than amounts to be applied to the restoration,
preservation or repair of such Mortgaged Property or released to the related
Mortgagor in accordance with the terms of the Mortgage Loan and (if applicable)
its related B Note or Serviced Companion Mortgage Loan. With respect to the
Mortgaged Property securing any Non-Serviced Mortgage Loan or Non-Serviced
Companion Mortgage Loan, only the portion of such amounts payable to the holder
of the related Non-Serviced Mortgage Loan shall be included in Condemnation
Proceeds, and with respect to the Mortgaged Property securing any Loan Pair or
A/B Mortgage Loan, only the portion of such amounts payable to the holder of the
related Serviced Pari Passu Mortgage or A Note, as applicable, shall be included
in Condemnation Proceeds.
"CONGRESS CENTER A/B MORTGAGE LOAN" means the Congress Center
Mortgage Loan and the Congress Center B Note.
"CONGRESS CENTER B NOTE" means, with respect to the Congress
Center A/B Mortgage Loan, the related subordinated Mortgage Note not included in
the Trust, which is subordinated in right of payment to the Congress Center
Mortgage Loan to the extent set forth in the related Intercreditor Agreement.
"CONGRESS CENTER MORTGAGE LOAN" means the Mortgage Loan
designated as Mortgage Loan No. 1 on the Mortgage Loan Schedule. The Congress
Center Mortgage Loan is a "Mortgage Loan."
-20-
"CONTROLLING CLASS" means the most subordinate Class of REMIC
Regular Certificates outstanding at any time of determination; provided, that,
if the aggregate Certificate Balance of such Class is less than 25% of the
initial Certificate Balance of such Class as of the Closing Date, the
Controlling Class shall be the next most subordinate Class of REMIC Regular
Certificates outstanding. As of the Closing Date, the Controlling Class will be
the Class P Certificates.
"CONTROLLING PERSON" means, with respect to any Person, any
other Person who "controls" such Person within the meaning of the 1933 Act.
"CORPORATE TRUST OFFICE" means, with respect to the
presentment and surrender of Certificates for the final distribution thereon or
the presentment and surrender of Certificates for any other purpose, the
principal corporate trust office of the Certificate Registrar. The principal
corporate trust office of the Trustee is presently located at 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Asset-Backed Securities Trust
Services Group-- Bear Xxxxxxx Commercial Mortgage Securities Inc. Series
2004-TOP16 and the office of the Certificate Registrar is presently located for
certificate transfer purposes at Xxxxx Fargo Center, Sixth and Marquette Avenue,
MAC #N9303-121, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: Corporate Trust
Services (CMBS)-- Bear Xxxxxxx Commercial Mortgage Securities Inc. Series
2004-TOP16, and for all other purposes at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Services (CMBS)-- Bear Xxxxxxx
Commercial Mortgage Securities Inc. Series 2004-TOP16, or at such other address
as the Trustee or Certificate Registrar may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer, the Paying
Agent and the Special Servicer.
"CORRESPONDING CERTIFICATE" means the Class of Certificates as
set forth in the Preliminary Statement with respect to any Corresponding
Component or any Corresponding REMIC II Regular Interest.
"CORRESPONDING COMPONENT" means the Component as set forth in
the Preliminary Statement with respect to any Corresponding Certificate or any
Corresponding REMIC II Regular Interest.
"CORRESPONDING REMIC I REGULAR INTEREST" means with respect to
each Mortgage Loan, the REMIC I Regular Interest having an initial Certificate
Balance equal to the Principal Balance of such Mortgage Loan outstanding as of
the Cut-Off Date, after taking into account all principal and interest payments
made or due prior to the Cut-Off Date.
"CORRESPONDING REMIC II REGULAR INTEREST" means the REMIC II
Regular Interest as defined in the Preliminary Statement with respect to any
Class of Corresponding Certificates or any Corresponding Component.
"CROSSED MORTGAGE LOAN" has the meaning set forth in Section
2.3(a).
"CUSTODIAN" means the Trustee or any Person who is appointed
by the Trustee at any time as custodian pursuant to Section 7.9 and who is
unaffiliated with the Depositor and each Seller and satisfies the eligibility
requirements of the Trustee as set forth in Section 7.5.
-21-
"CUSTOMER" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"CUT-OFF DATE" means the end of business on November 1, 2004.
The Cut-Off Date for any Mortgage Loan that has a Due Date on a date other than
the first day of each month shall be the end of business on November 1, 2004,
and Scheduled Payments due in November 2004 with respect to Mortgage Loans not
having Due Dates on the first of each month have been deemed received on
November 1, 2004, not the actual day on which such Scheduled Payments were due.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any
Mortgage Loan, as of any date of determination and for any period, the amount
calculated for such date of determination in accordance with the procedures set
forth in Exhibit T.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to a Due
Date and the related Determination Date, the amount of the reduction of the
Scheduled Payment which a Mortgagor is obligated to pay on such Due Date with
respect to a Mortgage Loan, a Serviced Companion Mortgage Loan or a B Note as a
result of any proceeding under bankruptcy law or any similar proceeding (other
than a Deficient Valuation Amount); provided, however, that in the case of an
amount that is deferred, but not forgiven, such reduction shall include only the
net present value (calculated at the related Mortgage Rate) of the reduction.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan or Serviced
Companion Mortgage Loan that is in default under the terms of the applicable
Mortgage Loan documentation and for which any applicable grace period has
expired.
"DEFEASANCE COLLATERAL" means, with respect to any Defeasance
Loan, the United States Treasury obligations required to be pledged in lieu of
prepayment pursuant to the terms thereof.
"DEFEASANCE LOAN" means any Mortgage Loan, Serviced Companion
Mortgage Loan or B Note which requires or permits the related Mortgagor (or
permits the holder of such Mortgage Loan, Serviced Companion Mortgage Loan or B
Note to require the related Mortgagor) to pledge Defeasance Collateral to such
holder in lieu of prepayment.
"DEFECTIVE MORTGAGE LOAN" has the meaning set forth in Section
2.3(a).
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan
(other than an A Note or a Serviced Pari Passu Mortgage Loan), any A/B Mortgage
Loan or any Loan Pair, a valuation by a court of competent jurisdiction of the
Mortgaged Property (or, with respect to a Non-Serviced Mortgage Loan or a
Serviced Pari Passu Mortgage Loan, the pro rata portion of the valuation
allocable to such Non-Serviced Mortgage Loan or Serviced Pari Passu Mortgage
Loan, as applicable) relating to such Mortgage Loan, A/B Mortgage Loan or Loan
Pair in an amount less than the then outstanding indebtedness under such
Mortgage Loan, A/B Mortgage Loan or Loan Pair, which valuation results from a
proceeding initiated under the United States Bankruptcy Code, as amended from
time to time, and that reduces the amount the Mortgagor is required to pay under
such Mortgage Loan, A/B Mortgage Loan or Loan Pair.
-22-
"DEFICIENT VALUATION AMOUNT" means (i) with respect to each
Mortgage Loan (other than an A Note or a Serviced Pari Passu Mortgage Loan), any
A/B Mortgage Loan or any Loan Pair, the amount by which the total amount due
with respect to such Mortgage Loan, A/B Mortgage Loan or Loan Pair (excluding
interest not yet accrued), including the Principal Balance of such Mortgage
Loan, A/B Mortgage Loan or Loan Pair plus any accrued and unpaid interest
thereon and any other amounts recoverable from the Mortgagor with respect
thereto pursuant to the terms thereof, is reduced in connection with a Deficient
Valuation and (ii) with respect to any A Note or Serviced Pari Passu Mortgage
Loan, the portion of any Deficient Valuation Amount for the related A/B Mortgage
Loan or Loan Pair, as applicable, that is borne by the holder of the A Note or
Serviced Pari Passu Mortgage Loan, as applicable, under the related
Intercreditor Agreement or Loan Pair Intercreditor Agreement, as applicable.
"DEFINITIVE CERTIFICATES" means Certificates of any Class
issued in definitive, fully registered, certificated form without interest
coupons.
"DELETED MORTGAGE LOAN" means a Mortgage Loan which is
repurchased from the Trust pursuant to the terms hereof or as to which one or
more Qualifying Substitute Mortgage Loans are substituted.
"DEPOSITOR" means Bear Xxxxxxx Commercial Mortgage Securities
Inc., a Delaware corporation, and its successors in interest.
"DEPOSITORY" has the meaning set forth in Section 3.7(a).
"DEPOSITORY AGREEMENT" means the Letter of Representations
dated the Closing Date and by and among the Depositor, the Paying Agent and the
Depository.
"DETERMINATION DATE" means, with respect to any Distribution
Date, the earlier of (i) the 8th day of the month in which such Distribution
Date occurs or, if such day is not a Business Day, the immediately preceding
Business Day, and (ii) the 5th Business Day prior to the related Distribution
Date, commencing December 6, 2004.
"DIRECTLY OPERATE" means, with respect to any REO Property,
the furnishing or rendering of services to the tenants thereof, the management
of such REO Property, the holding of such REO Property primarily for sale to
customers (other than a sale of an REO Property pursuant to and in accordance
with Section 9.15) or the performance of any construction work thereon, in each
case other than through an Independent Contractor; provided, however, that the
Trustee (or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer on behalf of the Trustee) establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs, tenant improvements or capital expenditures with
respect to such REO Property (including, without limitation, construction
activity to effect repairs or in connection with leasing activity) or undertakes
any ministerial action incidental thereto.
"DISCOUNT RATE" means the rate which, when compounded monthly,
is equivalent to the Treasury Rate when compounded semi-annually. The "Treasury
Rate," unless otherwise set forth in the Mortgage Loan documents, is the yield
calculated by the linear interpolation of the yields, as reported in Federal
Reserve Statistical Release H.15--Selected Interest Rates under
-23-
the heading "U.S. government securities/Treasury constant maturities" for the
week ending prior to the date of the relevant principal prepayment, of U.S.
Treasury constant maturities with a maturity date (one longer and one shorter)
most nearly approximating the maturity date (or the Anticipated Repayment Date,
if applicable) of the Mortgage Loan prepaid. If Release H.15 is no longer
published, the Master Servicer will select a comparable publication to determine
the Treasury Rate.
"DISQUALIFIED ORGANIZATION" means any of (i) the United
States, any State or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for FHLMC,
a majority of its board of directors is not selected by any such governmental
unit), (ii) a foreign government, international organization or any agency or
instrumentality of either of the foregoing, (iii) an organization (except
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from tax imposed by Chapter 1 of the Code (unless such organization is
subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381 of the Code, and (v) any other Person so designated by the Master
Servicer based upon an Opinion of Counsel that the holding of an ownership
interest in a Residual Certificate by such Person may cause any of the REMICs,
or any Person having an Ownership Interest in any Class of Certificates, other
than such Person, to incur a liability for any federal tax imposed under the
Code that would not otherwise be imposed but for the transfer of an ownership
interest in a Residual Certificate to such Person. The terms "United States,"
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
"DISTRIBUTABLE CERTIFICATE INTEREST" means, with respect to
any Distribution Date and any Class of Certificates (other than the Residual
Certificates) or Interests, the sum of (A) Accrued Certificate Interest in
respect of such Class or Interest, reduced (to not less than zero) by (i) any
Net Aggregate Prepayment Interest Shortfalls for such Class of Certificates or
Interests, allocated on such Distribution Date to such Class or Interest
pursuant to Section 6.7, and (ii) Realized Losses allocated on such Distribution
Date to reduce the Distributable Certificate Interest payable to such Class or
Interest pursuant to Section 6.6, plus (B) the Unpaid Interest, plus (C) if the
Aggregate Certificate Balance is reduced because of a diversion of principal in
accordance with Section 5.2(a)(II)(iv), and there is a subsequent recovery of
amounts as described in Section 6.6(c)(i), then interest at the applicable
Pass-Through Rate that would have accrued and been distributable with respect to
the amount that the Aggregate Certificate Balance was so reduced, which interest
shall accrue from the date that the related Realized Loss is allocated through
the end of the Interest Accrual Period related to the Distribution Date on which
such amounts are subsequently recovered.
"DISTRIBUTION ACCOUNT" means the Distribution Account
maintained by the Paying Agent on behalf of the Trustee, in accordance with the
provisions of Section 5.3, which account shall be an Eligible Account.
"DISTRIBUTION DATE" means the 13th day of each month or, if
such day is not a Business Day, the next succeeding Business Day, commencing
December 13, 2004.
"DUE DATE" means, with respect to a Mortgage Loan, a Serviced
Companion Mortgage Loan or a B Note, the date on which a Scheduled Payment is
due.
-24-
"ELIGIBLE ACCOUNT" means an account (or accounts) that is any
of the following: (i) maintained with a depository institution or trust company
whose (A) commercial paper, short-term unsecured debt obligations or other
short-term deposits are rated at least "A-1" by S&P and "F-1+" by Fitch, if the
deposits are to be held in the account for 30 days or less, or (B) long-term
unsecured debt obligations are rated at least "AA-" by S&P (or "A" (without
regard to any plus or minus), if the short-term unsecured debt obligations are
rated at least "A-1") and at least "AA-" by Fitch, if the deposits are to be
held in the account more than 30 days or (ii) a segregated trust account or
accounts maintained in the trust department of the Trustee, the Paying Agent or
other financial institution having a combined capital and surplus of at least
$50,000,000 and subject to regulations regarding fiduciary funds on deposit
similar to Title 12 of the Code of Federal Regulations Section 9.10(b), or (iii)
an account or accounts of a depository institution acceptable to each Rating
Agency, as evidenced by Rating Agency Confirmation with respect to the use of
any such account as the Certificate Account or the Distribution Account.
Notwithstanding anything in the foregoing to the contrary, an account shall not
fail to be an Eligible Account solely because it is maintained with Xxxxx Fargo
Bank, National Association, a wholly-owned subsidiary of Xxxxx Fargo & Co.,
provided that such subsidiary's or its parent's (A) commercial paper, short-term
unsecured debt obligations or other short-term deposits are at least "A-1" in
the case of S&P, and "F-1" in the case of Fitch, if the deposits are to be held
in the account for 30 days or less, or (B) long-term unsecured debt obligations
are rated at least "AA-" (or "A" (without regard to any plus or minus), if the
short-term unsecured debt obligations are rated at least "A-1") in the case of
S&P and at least "A+" in the case of Fitch, if the deposits are to be held in
the account for more than 30 days.
"ELIGIBLE INVESTMENTS" means any one or more of the following
financial assets or other property:
(i) direct obligations of, and obligations fully guaranteed
as to timely payment of principal and interest by, the United States of America,
FNMA, FHLMC or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America; provided that any obligation of FNMA or FHLMC, other than an
unsecured senior debt obligation of FNMA or FHLMC, shall be an Eligible
Investment only if Rating Agency Confirmation is obtained with respect to such
investment;
(ii) demand or time deposits in, unsecured certificates of
deposit of, money market deposit accounts of, or bankers' acceptances issued by,
any depository institution or trust company (including the Trustee, the Master
Servicer, the Special Servicer, the Paying Agent or any Affiliate of the Master
Servicer, the Special Servicer, the Paying Agent or the Trustee, acting in its
commercial capacity) incorporated or organized under the laws of the United
States of America or any State thereof and subject to supervision and
examination by federal or state banking authorities, so long as the commercial
paper or other short-term debt obligations of such depository institution or
trust company are rated "F-1+" by Fitch and "A-1+" by S&P or the long-term
unsecured debt obligations of such depository institution or trust company have
been assigned a rating by each Rating Agency at least equal "AA" by Fitch and
"AA-" by S&P or its equivalent or, in each case, if not rated by a Rating
Agency, then such Rating Agency has issued a Rating Agency Confirmation;
(iii) repurchase agreements or obligations with respect to
any security described in clause (i) above where such security has a remaining
maturity of one year or less
-25-
and where such repurchase obligation has been entered into with a depository
institution or trust company (acting as principal) described in clause (ii)
above and where such repurchase obligation will mature prior to the Business Day
preceding the next date upon which, as described in this Agreement, such amounts
are required to be withdrawn from the Certificate Account and which meets the
minimum rating requirement for such entity described above (or for which Rating
Agency Confirmation is obtained with respect to such ratings);
(iv) debt obligations (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof, which securities are rated "AA-" or its equivalent by each Rating
Agency, unless otherwise specified in writing by the Rating Agency; provided
that securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the
then-outstanding principal amount of securities issued by such corporation and
held in the Certificate Account to exceed 5% of the sum of the aggregate
Certificate Principal Balance of the Principal Balance Certificates and the
aggregate principal amount of all Eligible Investments in the Certificate
Account;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) rated "F-1+" by
Fitch and "A-1+" by S&P (or for which Rating Agency Confirmation is obtained
with respect to such ratings);
(vi) units of investment funds (including money market funds) that
are rated in the highest long-term category by Fitch, or if not rated by Fitch
then Fitch has issued a Rating Agency Confirmation, and "AAAm" by S&P;
(vii) guaranteed reinvestment agreements maturing within 365 days
or less issued by any bank, insurance company or other corporation whose
long-term unsecured debt rating is not less than "AA" (or its equivalent) by
Fitch and "AA-" by S&P (if rated by Fitch or, if not rated by Fitch, by S&P and
another nationally recognized statistical rating organization), or for which
Rating Agency Confirmation is obtained with respect to such ratings;
(viii) any money market funds (including those managed or advised
by the Paying Agent or its affiliates) that maintain a constant asset value and
that are rated "AAAm" or "AAAm-G" (or its equivalent rating) by S&P and "AAA"
(or its equivalent) by Fitch (if so rated by Fitch), and any other demand,
money-market or time deposit, or any other obligation, security or investment,
with respect to which Rating Agency Confirmation has been obtained; and
(ix) such other investments bearing interest or sold at a discount,
earning a return "in the nature of interest" within the meaning of Treasury
Regulation Section 1.860G-2(g)(1)(i) (as evidenced by an Opinion of Counsel
delivered to the Trustee and the Paying Agent by the Master Servicer at the
Master Servicer's expense), as are acceptable to the Rating Agencies (as
evidenced by Rating Agency Confirmation) and treated as "permitted investments"
that are "cash flow investments" under Section 860G(a)(5) of the Code;
provided (A) such investment is held for a temporary period pursuant to Section
1.860G-2(g)(i) of the Treasury Regulations, (B) such investment is payable by
the obligor in U.S. dollars, and (C) that no such instrument shall be an
Eligible Investment (1) if such instrument evidences either (a) a right to
receive only interest payments or only principal payments with respect to the
obligations underlying such instrument or (b) a right to receive both principal
and interest
-26-
payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to
maturity of greater than 120% of the yield to maturity at par of such underlying
obligations, or (2) if it may be redeemed at a price below the purchase price or
(3) if it is not treated as a "permitted investment" that is a "cash flow
investment" under Section 860G(a)(5) of the Code; and provided, further, that
any such instrument shall have a maturity date no later than the date such
instrument is required to be used to satisfy the obligations under this
Agreement, and, in any event, shall not have a maturity in excess of one year;
any such instrument must have a predetermined fixed dollar of principal due at
maturity that cannot vary or change; if rated, the obligation must not have an
"r" highlighter affixed to its rating; interest on any variable rate instrument
shall be tied to a single interest rate index plus a single fixed spread (if
any) and move proportionally with that index; and provided, further, that no
amount beneficially owned by any REMIC Pool (including any amounts collected by
the Master Servicer but not yet deposited in the Certificate Account) may be
invested in investments treated as equity interests for Federal income tax
purposes. No Eligible Investments shall be purchased at a price in excess of
par. For the purpose of this definition, units of investment funds (including
money market funds) shall be deemed to mature daily.
"ENVIRONMENTAL INSURANCE POLICY" shall mean, with respect to
any Mortgage Loan or the related Mortgaged Property or REO Property, any
insurance policy covering pollution conditions and/or other environmental
conditions that is maintained from time to time in respect of such Mortgage
Loan, Mortgaged Property or REO Property, as the case may be, for the benefit
of, among others, the Trustee on behalf of the Certificateholders.
"ENVIRONMENTAL LAWS" means any and all federal, state and
local statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to health or the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, urea-formaldehyde insulation, radon, industrial,
toxic or hazardous substances or wastes, into the environment, including,
without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ESCROW ACCOUNT" means an account established by or on behalf
of the Master Servicer pursuant to Section 8.3(e).
"ESCROW AMOUNT" means any amount payable with respect to a
Mortgage Loan (including an A/B Mortgage Loan) for taxes, assessments, water
rates, Standard Hazard Insurance Policy premiums, ground lease payments,
reserves for capital improvements, deferred maintenance, repairs, tenant
improvements, leasing commissions, rental achievements, environmental matters
and other reserves or comparable items.
-27-
"EUROCLEAR BANK" means Euroclear Bank, S.A./N.V., as operator
of the Euroclear system.
"EVENT OF DEFAULT" has the meaning set forth in Section
8.28(a).
"EXCESS INTEREST" means, with respect to an ARD Loan if an ARD
Loan is not prepaid in full on or before its Anticipated Repayment Date, the
excess, if any of (i) interest accrued at the rate of interest applicable to
such Mortgage Loan after such Anticipated Repayment Date (plus any interest on
such interest as may be provided for under the related Mortgage Loan documents)
over (ii) interest accrued at the rate of interest applicable to such Mortgage
Loan before such Anticipated Repayment Date. Excess Interest on an ARD Loan is
an asset of the Trust, but shall not be an asset of any REMIC Pool formed
hereunder.
"EXCESS INTEREST SUB-ACCOUNT" means an administrative account
deemed to be a sub-account of the Distribution Account. The Excess Interest
Sub-account shall not be an asset of any REMIC Pool.
"EXCESS LIQUIDATION PROCEEDS" means, with respect to any
Mortgage Loan, the excess of (i) Liquidation Proceeds of a Mortgage Loan or
related REO Property, over (ii) the amount that would have been received if a
Principal Prepayment in full had been made with respect to such Mortgage Loan
(or, in the case of an REO Property related to an A/B Mortgage Loan, a Principal
Prepayment in full had been made with respect to both the related A Note and B
Note, or, in the case of an REO Property related to a Loan Pair, a Principal
Prepayment in full had been made with respect to both the Serviced Pari Passu
Mortgage Loan and the Serviced Companion Mortgage Loan) on the date such
proceeds were received plus accrued and unpaid interest with respect to such
Mortgage Loan and any and all expenses (including Additional Trust Expenses and
Unliquidated Advances) with respect to such Mortgage Loan.
"EXCESS SERVICING FEE" means, with respect to the Mortgage
Loans or the Serviced Companion Mortgage Loans for which an "excess servicing
fee rate" is designated on the Mortgage Loan Schedule, the monthly fee payable
to Xxxxx Fargo Bank, National Association or its successors and assigns as
holder of excess servicing rights, which fee shall accrue on the Scheduled
Principal Balance of each such Mortgage Loan immediately prior to the Due Date
occurring in each month at the per annum rate (determined in the same manner as
the applicable Mortgage Rate for such Mortgage Loan is determined for such
month) specified on the Mortgage Loan Schedule (the "Excess Servicing Fee
Rate"). The holder of excess servicing rights is entitled to Excess Servicing
Fees only with respect to the Mortgage Loans or Serviced Companion Mortgage
Loans as indicated on Exhibit J hereto.
"EXCHANGE ACT" has the meaning set forth in Section 8.26(a).
"EXCHANGE CERTIFICATION" means an Exchange Certification
substantially in the form set forth in Exhibit H hereto executed by a holder of
an interest in a Regulation S Global Certificate or a Rule 144A-IAI Global
Certificate, as applicable.
"EXEMPTION" means each of the individual prohibited
transaction exemptions granted by the United States Department of Labor to the
Underwriters, as amended.
-28-
"EXPENSE LOSS" means a loss realized upon payment by the Trust
of an Additional Trust Expense.
"EXTENSION" has the meaning set forth in Section 9.15(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or
any successor thereto.
"FHLMC AUDIT PROGRAM" has the meaning set forth in Section
8.13.
"FINAL CERTIFICATION" has the meaning set forth in Section
2.2.
"FINAL JUDICIAL DETERMINATION" has the meaning set forth in
Section 2.3(a).
"FINAL PROSPECTUS SUPPLEMENT" has the meaning set forth in the
Preliminary Statement hereto.
"FINAL RECOVERY DETERMINATION" means a determination with
respect to any Mortgage Loan, B Note, Specially Serviced Mortgage Loan or
Serviced Companion Mortgage Loan by the Special Servicer in consultation with
the Operating Adviser and the Master Servicer (including a Mortgage Loan, a
Serviced Companion Mortgage Loan or a B Note that became an REO Property), in
each case, in its good faith discretion, consistent with the Servicing Standard,
that all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds,
Purchase Proceeds and other payments or recoveries that the Special Servicer
expects to be finally recoverable on such Mortgage Loan, Serviced Companion
Mortgage Loan or B Note, without regard to any obligation of the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the case may
be, to make payments from its own funds pursuant to Article IV hereof, have been
recovered. The Special Servicer shall be required to provide the Master Servicer
with prompt written notice of any Final Recovery Determination with respect to
any Specially Serviced Mortgage Loan upon making such determination. The Master
Servicer shall notify the Trustee and the Paying Agent of such determination and
the Paying Agent shall deliver a copy of such notice to each Rating Agency.
"FINAL SCHEDULED DISTRIBUTION DATE" means, for each Class of
rated Certificates, the Distribution Date on which such Class would be paid in
full if payments were made on the Mortgage Loans in accordance with their terms,
except that ARD Loans are assumed to be repaid on their Anticipated Repayment
Dates.
"FINANCIAL MARKET PUBLISHERS" means Xxxxx, LLC, Intex
Solutions, Inc. and S&P's Conquest, or any successor entities thereof.
"FISCAL AGENT" means ABN AMRO Bank N.V., a banking association
organized under the laws of the Netherlands and its permitted successors and
assigns.
"FISCAL AGENT TERMINATION EVENT" has the meaning set forth in
Section 4.7.
-29-
"FITCH" means Fitch, Inc. or its successor in interest.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
"GLOBAL CERTIFICATE" means any Rule 144A-IAI Global
Certificate, Regulation S Temporary Global Certificate or Regulation S Permanent
Global Certificate.
"GMAC 2004-C2 DEPOSITOR" means the "depositor" under the GMAC
2004-C2 Pooling and Servicing Agreement, which as of the date hereof is GMAC
Commercial Mortgage Securities, Inc.
"GMAC 2004-C2 FISCAL AGENT" means the "fiscal agent" under the
GMAC 2004-C2 Pooling and Servicing Agreement, which as of the date hereof is ABN
AMRO Bank N.V.
"GMAC 2004-C2 MASTER SERVICER" means the "master servicer"
under the GMAC 2004-C2 Pooling and Servicing Agreement, which as of the date
hereof is GMAC Commercial Mortgage Corporation.
"GMAC 2004-C2 POOLING AND SERVICING AGREEMENT" means the
pooling and servicing agreement dated as of December 23, 2003 by and between the
GMAC 2004-C2 Depositor, the GMAC 2004-C2 Master Servicer, the GMAC 2004-C2
Special Servicer, the GMAC 2004-C2 Trustee and the GMAC 2004-C2 Fiscal Agent,
pursuant to which the GMAC 2004-C2 Trust issued its Series 2004-C2 Mortgage
Pass-Through Certificates.
"GMAC 2004-C2 SPECIAL SERVICER" means the "special servicer"
under the GMAC 2004-C2 Pooling and Servicing Agreement, which as of the date
hereof is Midland Loan Services, Inc.
"GMAC 2004-C2 TRUST" means the trust established pursuant to
the GMAC 2004-C2 Pooling and Servicing Agreement.
"GMAC 2004-C2 TRUSTEE" means the "trustee" under the GMAC
2004-C2 Pooling and Servicing Agreement, which as of the date hereof is LaSalle
Bank National Association.
"GRANTOR TRUST POOL" means the segregated pool of assets
designated as the "Class P Grantor Trust" pursuant to Section 12.5 hereof.
"HOLDER" means the Person in whose name a Certificate is
registered on the Certificate Register.
"IAI DEFINITIVE CERTIFICATE" means, with respect to any Class
of Certificates sold to Institutional Accredited Investors who are not Qualified
Institutional Buyers, a Certificate in definitive, fully registered certificated
form without interest coupons.
-30-
"INDEPENDENT" means, when used with respect to any
Accountants, a Person who is "independent" within the meaning of Rule 2-01(B) of
the Securities and Exchange Commission's Regulation S-X. Independent means, when
used with respect to any other Person, a Person who (A) is in fact independent
of another specified Person and any Affiliate of such other Person, (B) does not
have any material direct or indirect financial interest in such other Person or
any Affiliate of such other Person, (C) is not connected with such other Person
or any Affiliate of such other Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions
and (D) is not a member of the immediate family of a Person defined in clause
(B) or (C) above.
"INDEPENDENT CONTRACTOR" means, either (i) with respect to any
Mortgage Loan (A) that is not a Specially Serviced Mortgage Loan, any Person
designated by the Master Servicer (other than the Master Servicer, but which may
be an Affiliate of the Master Servicer), or (B) that is a Specially Serviced
Mortgage Loan, any Person designated by the Special Servicer that would be an
"independent contractor" with respect to a REMIC Pool within the meaning of
Section 856(d)(3) of the Code if such REMIC Pool were a real estate investment
trust (except that the ownership test set forth in such Section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of the Aggregate Certificate Balance or Notional Amount, as the case may
be, of any Class of the Certificates (other than the Residual Certificates), a
Percentage Interest of 35% or more in the Residual Certificates or such other
interest in any Class of the Certificates or of the applicable REMIC Pool as is
set forth in an Opinion of Counsel, which shall be at no expense to the Trustee
or the Trust) so long as such REMIC Pool does not receive or derive any income
from such Person and provided that the relationship between such Person and such
REMIC is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer or the
Special Servicer) upon receipt by the Trustee of an Opinion of Counsel, which
shall be at the expense of the Person delivering such opinion to the Trustee, to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"INITIAL CERTIFICATION" has the meaning set forth in Section
2.2.
"INITIAL DEPOSIT" means the amount of all collections made on
the Mortgage Loans from the Cut-Off Date to and excluding the Closing Date.
"INITIAL REVIEW PERIOD" has the meaning set forth in Section
9.4(d).
"INSPECTION REPORT" means the report delivered by the Master
Servicer or the Special Servicer, as the case may be, substantially in the form
of Exhibit L hereto.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional
accredited investor qualifying pursuant to Rule 501(a)(1), (2), (3) or (7) of
Regulation D of the 1933 Act.
"INSURED ENVIRONMENTAL EVENT" has the meaning set forth in
Section 9.1(f).
-31-
"INSURANCE POLICIES" means, collectively, any Standard Hazard
Insurance Policy, flood insurance policy, title insurance policy, terrorism
insurance policy or Environmental Insurance Policy relating to the Mortgage
Loans or the Mortgaged Properties in effect as of the Closing Date or thereafter
during the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under
any Insurance Policy, other than amounts required to be paid over to the
Mortgagor pursuant to law, the related Mortgage Loan, the related Serviced
Companion Mortgage Loan, the related B Note or the Servicing Standard. With
respect to the Mortgaged Property securing any Non-Serviced Mortgage Loan or
Non-Serviced Companion Mortgage Loan, only the portion of such amounts payable
to the holder of the related Non-Serviced Mortgage Loan shall be included in
Insurance Proceeds, and with respect to the Mortgaged Property securing any Loan
Pair or A/B Mortgage Loan, only the portion of such amounts payable to the
holder of the related Serviced Pari Passu Mortgage Loan or the related A Note,
as applicable, shall be included in Insurance Proceeds.
"INTERCREDITOR AGREEMENT" means, with respect to an A/B
Mortgage Loan, the related intercreditor agreement by and between the holder of
the related A Note(s) and the holder of the related B Note relating to the
relative rights of such holders of the respective A Note(s) and B Note, as the
same may be further amended from time to time in accordance with the terms
thereof.
"INTEREST" means a REMIC I Interest or a REMIC II Interest, as
applicable.
"INTEREST ACCRUAL PERIOD" means, for any Distribution Date,
with respect to all Classes of Certificates and Interests (other than the
Residual Certificates), the period beginning on the first day of the month
preceding the month in which such Distribution Date occurs and ending on the
last day of the month preceding the month in which such Distribution Date
occurs.
"INTEREST RESERVE ACCOUNT" means that Interest Reserve Account
maintained by the Master Servicer pursuant to Section 5.1(a), which account
shall be an Eligible Account.
"INTEREST RESERVE AMOUNT" has the meaning set forth in Section
5.1(d).
"INTEREST RESERVE LOANS" shall mean the Mortgage Loans which
bear interest other than on the basis of a 360-day year consisting of twelve
(12) 30-day months.
"INTERESTED PERSON" means, as of any date of determination,
the Master Servicer, the Special Servicer, the Depositor, the holder of any
related Junior Indebtedness (with respect to any particular Mortgage Loan), a
holder of 50% or more of the Controlling Class, the Operating Adviser, any
Independent Contractor engaged by the Master Servicer or the Special Servicer
pursuant to this Agreement, or any Person actually known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"JERSEY GARDENS MALL COMPANION LOAN" means the note secured by
the Jersey Gardens Mall Pari Passu Mortgage on a pari passu basis with the
Jersey Gardens Mall Pari Passu Loan and which is not included in the Trust. No
Jersey Gardens Mall Companion Loan is a "Mortgage Loan."
-00-
"XXXXXX XXXXXXX XXXX LOAN GROUP" means, collectively, the
Jersey Gardens Mall Pari Passu Loan and the Jersey Gardens Mall Companion Loan.
"JERSEY GARDENS MALL PARI PASSU LOAN" means the Mortgage Loan
designated as Mortgage Loan No. 2 on the Mortgage Loan Schedule and which is
secured on a pari passu basis with the Jersey Gardens Mall Companion Loan
secured by the related Mortgaged Property pursuant to the Jersey Gardens Mall
Pari Passu Mortgage. The Jersey Gardens Mall Pari Passu Loan is a "Mortgage
Loan."
"JERSEY GARDENS MALL PARI PASSU MORTGAGE" means the Mortgage
securing the Jersey Gardens Mall Companion Loan and the Jersey Gardens Mall Pari
Passu Loan and any other note secured by the related Mortgaged Property.
"JUNIOR INDEBTEDNESS" means any indebtedness of any Mortgagor
that is secured by a lien that is junior in right of payment to the lien of the
Mortgage securing the related Mortgage Note.
"LATE COLLECTIONS" means, with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note, all amounts received during any
Collection Period, whether as late payments or as Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds, Purchase Proceeds or otherwise, that
represent payments or collections of Scheduled Payments due but delinquent for a
previous Collection Period and not previously recovered.
"LATE FEE" means a fee payable to the Master Servicer or the
Special Servicer, as the case may be, to the extent actually collected from the
Mortgagor as provided in the related Mortgage Loan, Serviced Companion Mortgage
Loan or the related B Note in connection with a late payment made by such
Mortgagor. References in this Agreement to Late Fees and default interest in
respect of any Loan Pair or in respect of any Non-Serviced Mortgage Loan and its
related Non-Serviced Companion Mortgage Loan shall mean only the portion thereof
that is received by the Trust in accordance with the applicable Loan Pair
Intercreditor Agreement or Non-Serviced Mortgage Loan Intercreditor Agreement.
Notwithstanding anything to the contrary in this Agreement, Late Fees relating,
and allocated, to the Congress Center B Note in accordance with the related
Intercreditor Agreement (after being first applied to Advance Interest) shall be
payable to the Holder of the Congress Center B Note in accordance with the
related Intercreditor Agreement.
"LIQUIDATION EXPENSES" means reasonable and direct expenses
incurred by the Special Servicer on behalf of the Trust in connection with the
liquidation of any Specially Serviced Mortgage Loan or REO Property acquired in
respect thereof including, without limitation, reasonable legal fees and
expenses in connection with a closing, brokerage commissions and conveyance
taxes for such Specially Serviced Mortgage Loan. All Liquidation Expenses
relating to disposition of the Specially Serviced Mortgage Loan shall be (i)
paid out of income from the related REO Property, to the extent available, (ii)
paid out of related proceeds from liquidation or (iii) advanced by the Master
Servicer or the Special Servicer, subject to Section 4.4 and Section 4.6(e)
hereof, as a Servicing Advance.
"LIQUIDATION FEE" means a fee equal to the product of (x) 1.0%
and (y) the Liquidation Proceeds received in connection with a final disposition
of a Specially Serviced
-33-
Mortgage Loan or REO Property or portion thereof and any Condemnation Proceeds
and Insurance Proceeds received by the Trust (net of any expenses incurred by
the Special Servicer on behalf of the Trust in connection with the collection of
such Condemnation Proceeds and Insurance Proceeds) other than Liquidation
Proceeds, Condemnation Proceeds or Insurance Proceeds received in connection
with any Non-Serviced Mortgage Loan. For the avoidance of doubt, a Liquidation
Fee will be payable in connection with a repurchase of an A Note by the holder
of the related B Note only to the extent set forth in the related Intercreditor
Agreement.
"LIQUIDATION PROCEEDS" means proceeds from the sale or
liquidation (provided that for the purposes of calculating Liquidation Fees
hereunder, Liquidation Proceeds shall not include any proceeds from a repurchase
of a Mortgage Loan by a Seller due to a Material Breach of a representation or
warranty or Material Document Defect) of a Mortgage Loan, a Serviced Companion
Mortgage Loan or a B Note or related REO Property (net of Liquidation Expenses)
and with respect to the sale or liquidation of any REO Property related to any
Non-Serviced Mortgage Loan and Non-Serviced Companion Mortgage Loan, any portion
of such amounts allocable to the related Non-Serviced Mortgage Loan.
"LIQUIDATION REALIZED LOSS" means, with respect to each
Mortgage Loan or REO Property, as the case may be, as to which a Cash
Liquidation or REO Disposition has occurred, an amount equal to the sum, without
duplication, of (A) the Principal Balance (as increased by any Unliquidated
Advance with respect to such Mortgage Loan) of the Mortgage Loan (or such deemed
Principal Balance, in the case of an REO Mortgage Loan) as of the date of the
Cash Liquidation or REO Disposition (adjusted in accordance with Section
6.6(c)(i)), plus (B) unpaid interest and interest accrued thereon at the
applicable Mortgage Rate (including interest accrued and unpaid on the portion
of the Principal Balance added in accordance with Section 6.6(c)(i), which
interest shall accrue from the date of the reduction in the Principal Balance
resulting from the allocation of a Realized Loss incurred pursuant to Section
6.6(b)(i)), plus (C) any expenses (including Additional Trust Expenses, unpaid
Servicing Advances and unpaid Advance Interest) incurred in connection with such
Mortgage Loan that have been paid or are payable or reimbursable to any Person,
other than amounts included in the definition of Liquidation Expenses and
amounts previously treated as Expense Losses attributable to principal (and
interest thereon) minus the sum of (i) REO Income applied as recoveries of
principal or interest on the related Mortgage Loan or REO Property, and (ii)
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Late
Collections and all other amounts recovered from the related Mortgagor and
received during the Collection Period in which such Cash Liquidation or REO
Disposition occurred and which are not required under any Intercreditor
Agreement, any Loan Pair Intercreditor Agreement or Non-Serviced Mortgage Loan
Intercreditor Agreement to be payable or reimbursable to any holder of a B Note,
a Serviced Companion Mortgage Loan or a Non-Serviced Companion Mortgage Loan.
REO Income and Liquidation Proceeds shall be applied first to reimburse the
Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent, as
applicable, to the extent that Section 5.2(a)(I) otherwise entitles such party
to reimbursement, for any Nonrecoverable Advance with respect to the related
Mortgage Loan, and then for all Workout-Delayed Reimbursement Amounts with
respect to such related Mortgage Loan (but not any such amount that has become
Unliquidated Advances), and any remaining REO Income and Liquidation Proceeds
and any Condemnation Proceeds and Insurance Proceeds shall be applied first
against any Additional Trust Expenses (to the extent not included in the
definition of Liquidation Expenses) for such Mortgage Loan, next as a recovery
of any Nonrecoverable Advance (and interest thereon) with respect to such
-34-
Mortgage Loan previously paid from principal collections pursuant to Section
5.2(a)(II), next to any Unliquidated Advances with respect to such Mortgage
Loan, next to the unpaid interest on the Mortgage Loan, calculated as described
in clause (B) above, and then against the Principal Balance of such Mortgage
Loan, calculated as described in clause (A) above.
"LOAN PAIR" means a Serviced Pari Passu Mortgage Loan and the
related Serviced Companion Mortgage Loan, collectively. There are no Serviced
Pari Passu Mortgage Loans in the Trust and therefore no Loan Pairs related to
the Trust.
"LOAN PAIR INTERCREDITOR AGREEMENT" means, with respect to a
Loan Pair, the related intercreditor agreement by and between the holders of the
related Serviced Pari Passu Mortgage Loan and the related Serviced Companion
Mortgage Loan relating to the relative rights of such holders, as the same may
be further amended from time to time in accordance with the terms thereof.
"LOAN-TO-VALUE RATIO" means, as of any date with respect to a
Mortgage Loan, the fraction, expressed as a percentage, the numerator of which
is the Principal Balance of such Mortgage Loan at the date of determination and
the denominator of which is the value of the Mortgaged Property as shown on the
most recent Appraisal or valuation of the Mortgaged Property which is available
as of such date or, in the case of any Non-Serviced Mortgage Loan or Loan Pair,
the allocable portion thereof.
"LOCK-BOX ACCOUNT" has the meaning set forth in Section
8.3(g).
"LOCK-BOX AGREEMENT" means, with respect to any Mortgage Loan,
any lock-box agreement relating to such Mortgage Loan among the related
Mortgagor, a depositary institution and the Master Servicer (or the Primary
Servicer or Sub-Servicer on its behalf) pursuant to which a Lock-Box Account is
created.
"LOSSES" has the meaning set forth in Section 12.4.
"LUXEMBOURG PAYING AGENT" has the meaning set forth in Section
7.18.
"LUXEMBOURG TRANSFER AGENT" has the meaning set forth in
Section 7.18.
"MAI" means Member of the Appraisal Institute.
"MASTER SERVICER" means Xxxxx Fargo Bank, National Association
and its permitted successors or assigns.
"MASTER SERVICER CONSENT MATTERS" has the meaning set forth in
Section 8.3(a).
"MASTER SERVICER INDEMNIFIED PARTIES" has the meaning set
forth in Section 8.25(a).
"MASTER SERVICER LOSSES" has the meaning set forth in Section
8.25(a).
"MASTER SERVICER REMITTANCE DATE" means, for each Distribution
Date, the Business Day immediately preceding such Distribution Date.
-35-
"MASTER SERVICER REMITTANCE REPORT" means a report prepared by
the Master Servicer and in such media as may be agreed upon by the Master
Servicer and the Paying Agent containing such information regarding the Mortgage
Loans as will permit the Paying Agent to calculate the amounts to be distributed
to the Certificateholders pursuant to this Agreement and to furnish the Monthly
Certificateholders Report to Certificateholders required to be delivered
hereunder and containing such additional information as the Master Servicer, the
Paying Agent and the Depositor may from time to time mutually agree.
"MASTER SERVICING FEE" means for each calendar month, as to
each Mortgage Loan, Serviced Companion Mortgage Loan and B Note (including REO
Mortgage Loans and Defeasance Loans) but not as to any Non-Serviced Mortgage
Loan (as to which there is no Master Servicing Fee payable to the Master
Servicer under this Trust), an amount equal to the Master Servicing Fee Rate
applicable to such month (determined in the same manner (other than the rate of
accrual) as the applicable Mortgage Rate is determined for such Mortgage Loan,
Serviced Companion Mortgage Loan or B Note for such month) multiplied by the
Scheduled Principal Balance of such Mortgage Loan, Serviced Companion Mortgage
Loan or B Note immediately before the Due Date occurring in such month, subject
to reduction in respect of Compensating Interest, as set forth in Section
8.10(c). Notwithstanding the foregoing, no Master Servicing Fee shall be payable
with respect to the Congress Center B Note or otherwise be allocable to such B
Note or the Trust.
"MASTER SERVICING FEE RATE" means, with respect to each
Mortgage Loan (other than any Non-Serviced Mortgage Loan), Serviced Companion
Mortgage Loan and B Note (including any Mortgage Loan relating to an REO
Property), the rate per annum specified as such on the Mortgage Loan Schedule.
With respect to a Non-Serviced Mortgage Loan, no Master Servicing Fee Rate is
charged by the Master Servicer, but the Pari Passu Loan Servicing Fee Rate is
charged by the applicable Non-Serviced Mortgage Loan Master Servicer pursuant to
the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
Notwithstanding the foregoing, no Master Servicing Fee shall be payable with
respect to the Congress Center B Note or otherwise be allocable to such B Note
or the Trust.
"MATERIAL BREACH" has the meaning set forth in Section 2.3(a).
"MATERIAL DOCUMENT DEFECT" has the meaning set forth in
Section 2.3(a).
"MATURITY DATE" means, with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note as of any date of determination, the
date on which the last payment of principal is due and payable thereunder, after
taking into account all Principal Prepayments received and any Deficient
Valuation, Debt Service Reduction Amount or modification of the Mortgage Loan,
Serviced Companion Mortgage Loan or B Note occurring prior to such date of
determination, but without giving effect to (i) any acceleration of the
principal of such Mortgage Loan, Serviced Companion Mortgage Loan or B Note or
(ii) any grace period permitted by such Mortgage Loan, B Note or Serviced
Companion Mortgage Loan.
"MERS" means Mortgage Electronic Registration Systems, Inc.
"MODIFICATION FEE" means a fee, if any, collected from a
Mortgagor by the Master Servicer in connection with a modification of any
Mortgage Loan (other than a Non-
-36-
Serviced Mortgage Loan), Serviced Companion Mortgage Loan or B Note other than a
Specially Serviced Mortgage Loan or collected in connection with a modification
by the Special Servicer of a Specially Serviced Mortgage Loan.
"MODIFICATION LOSS" means, with respect to each Mortgage Loan,
(i) a decrease in the Principal Balance of such Mortgage Loan as a result of a
modification thereof in accordance with the terms hereof, (ii) any expenses
connected with such modification, to the extent (x) reimbursable to the Trustee,
the Special Servicer or the Master Servicer and (y) not recovered from the
Mortgagor or (iii) in the case of a modification of such Mortgage Loan that
reduces the Mortgage Rate thereof, the excess, on each Due Date, of the amount
of interest that would have accrued at a rate equal to the original Mortgage
Rate, over interest that actually accrued on such Mortgage Loan during the
preceding Collection Period.
"MONEY TERM" means with respect to any Mortgage Loan, Serviced
Companion Mortgage Loan or B Note, the Maturity Date, Mortgage Rate, Principal
Balance, amortization term or payment frequency thereof or any provision thereof
requiring the payment of a prepayment premium, yield maintenance charge or
percentage premium in connection with a principal prepayment (and shall not
include late fees or default interest provisions).
"MONTHLY ADDITIONAL REPORT ON RECOVERIES AND REIMBURSEMENTS"
means with respect to each Collection Period, a report prepared by the Master
Servicer, in the format attached hereto or in such other format as may be
approved for use by CMSA, that identifies the following with respect to such
Collection Period, in all cases both on a loan-by-loan basis and in the
aggregate:
(a) the amount of any Advance (and accrued and unpaid
Advance Interest thereon) that became a Workout-Delayed Reimbursement
Amount during such Collection Period;
(b)(i) the amount of any Workout-Delayed
Reimbursement Amount that was reimbursed to the Master Servicer, the
Special Servicer, the Trustee or the Fiscal Agent during such
Collection Period, (ii) the extent to which any reimbursement of a
Workout-Delayed Reimbursement Amount made during such Collection Period
was made from principal collections on the related Mortgage Loan
received during the Collection Period as contemplated by subsection
(iii) of Section 5.2(a)(II), (iii) the extent to which any
reimbursement of a Workout-Delayed Reimbursement Amount made during
such Collection Period was made from principal collections on the
remainder of the Mortgage Loans received during such Collection Period
as contemplated by subsection (iii) of Section 5.2(a)(II) and (iv) the
amount of any related Unliquidated Advances;
(c) the amount of any Unliquidated Advances recovered
from the related Mortgagor or otherwise from the proceeds of the
related Mortgage Loan or REO Property on behalf of the Trust during the
current Collection Period;
(d)(i) the amount of any Unliquidated Advance that
became a Nonrecoverable Advance in the current Collection Period, and
(ii) the amount of any Workout-Delayed Reimbursement Amount that arose
in a prior Collection Period, was
-37-
not reimbursed to the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent in the current or a prior Collection Period
(and therefore had not become an Unliquidated Advance) but which has
became a Nonrecoverable Advance in the current Collection Period;
(e) the amount of any Advance (and accrued and unpaid
Advance Interest thereon), other than an amount described in clause (d)
above, that became a Nonrecoverable Advance during such Collection
Period;
(f)(i) the amount of any Nonrecoverable Advance (and
accrued and unpaid Advance Interest thereon) that was reimbursed to the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent
during the current Collection Period, (ii) the extent (if any) to which
any reimbursement of a Nonrecoverable Advance (and accrued and unpaid
Advance Interest thereon) was made from principal collections on the
Mortgage Loans received during such Collection Period as contemplated
by subsection (iv) of Section 5.2(a)(II), and (iii) the extent (if any)
to which any reimbursement of a Nonrecoverable Advance (and accrued and
unpaid Advance Interest thereon) was made from interest collections on
the Mortgage Loans received during such Collection Period;
(g)(i) the amount of any Advance reimbursed to the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent
as a Nonrecoverable Advance in a prior Collection Period but recovered
from the related Mortgagor or otherwise from the proceeds of the
related Mortgage Loan or REO Property on behalf of the Trust during the
current Collection Period (notwithstanding that it was previously
determined to constitute a Nonrecoverable Advance) and (ii) the extent
to which any such amount is an amount described by clause (I)(C) of the
definition of Principal Distribution Amount; and
(h) a reconciliation of Advance Interest accrued on
any Workout-Delayed Reimbursement Amount or any Nonrecoverable Advance,
any Late Fees and default interest collected during the related
Collection Period and the amount of Late Fees and default interest that
were applied to pay such Advance Interest.
The preparation of each Monthly Additional Report on
Recoveries and Reimbursements shall constitute a responsibility of the Master
Servicer and shall not constitute a responsibility of any other party. Each Loan
Periodic Update File prepared by the Master Servicer shall be accompanied by a
Monthly Additional Report on Recoveries and Reimbursements; provided, however,
that the Master Servicer shall not be responsible for preparing a Monthly
Additional Report on Recoveries and Reimbursements in any month prior to the
date that a Workout Delayed Reimbursement Amount or a Nonrecoverable Advance
exists with respect to any Mortgage Loan. The Master Servicer will not be
required to prepare a Monthly Additional Report on Recoveries and Reimbursements
if (1) the CMSA adopts a form of report that (i) incorporates the information
set forth above and (ii) is in form and format that is substantially similar to
the information set forth above and (2) the Master Servicer prepares and
delivers such CMSA report.
"MONTHLY CERTIFICATEHOLDERS REPORT" means a report provided
pursuant to Section 5.4 by the Paying Agent monthly as of the related
Determination Date generally in the form and substance of Exhibit M, which sets
forth, to the extent applicable: (i) the amount, if
-38-
any, of such distributions to the holders of each Class of Principal Balance
Certificates applied to reduce the respective Certificate Balances thereof; (ii)
the amount of such distribution to holders of each Class of Certificates
allocable to (A) interest accrued (including Excess Interest) at the respective
Pass-Through Rates, less any Net Aggregate Prepayment Interest Shortfalls and
(B) Prepayment Premiums; (iii) the number of outstanding Mortgage Loans and the
aggregate Principal Balance and Scheduled Principal Balance of the Mortgage
Loans at the close of business on such Determination Date; (iv) the number and
aggregate Scheduled Principal Balance of Mortgage Loans (A) delinquent 30-59
days, (B) delinquent 60-89 days, (C) delinquent 90 or more days, (D) as to which
foreclosure proceedings have been commenced, or (E) as to which bankruptcy
proceedings have been commenced; (v) with respect to any REO Property included
in the Trust, the Principal Balance of the related Mortgage Loan as of the date
of acquisition of the REO Property and the Scheduled Principal Balance thereof;
(vi) as of the related Determination Date (A) as to any REO Property sold during
the related Collection Period, the date of the related determination by the
Special Servicer that it has recovered all payments which it expects to be
finally recoverable and the amount of the proceeds of such sale deposited into
the Certificate Account, and (B) the aggregate amount of other revenues
collected by the Special Servicer with respect to each REO Property during the
related Collection Period and credited to the Certificate Account, in each case
identifying such REO Property by the loan number of the related Mortgage Loan;
(vii) the Aggregate Certificate Balance or Notional Amount, as the case may be,
of each Class of Certificates before and after giving effect to the distribution
made on such Distribution Date; (viii) the aggregate amount of Principal
Prepayments made during the related Collection Period; (ix) the Pass-Through
Rate applicable to each Class of Certificates for such Distribution Date; (x)
the aggregate amount of the Master Servicing Fee, the Primary Servicing Fee, the
Special Servicing Fee, the Excess Servicing Fees and the fees paid to the
applicable Non-Serviced Mortgage Loan Master Servicer and the Non-Serviced
Mortgage Loan Special Servicer solely as such fees relate to the Non-Serviced
Mortgage Loans; (xi) the amount of Unpaid Interest and Realized Losses, if any,
incurred with respect to the Mortgage Loans, including a breakout by type of
such Realized Losses; (xii) the aggregate amount of Servicing Advances and P&I
Advances outstanding separately stated that have been made by the Master
Servicer, the Special Servicer, the Trustee and the Fiscal Agent and the
aggregate amount of Servicing Advances and P&I Advances made by the applicable
Non-Serviced Mortgage Loan Master Servicer and Non-Serviced Mortgage Loan
Special Servicer in respect of the Non-Serviced Mortgage Loans and (xiii) the
amount of any Appraisal Reductions effected during the related Collection Period
on a loan-by-loan basis and the total Appraisal Reductions in effect as of such
Distribution Date (and in the case of the Non-Serviced Mortgage Loans, the
amount of any appraisal reductions effected under the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement). In the case of information
furnished pursuant to subclauses (i), (ii) and (xi) above, the amounts shall be
expressed in the aggregate and as a dollar amount per $1,000 of original
principal amount of the Certificates for all Certificates of each applicable
Class.
"MOODY'S" means Xxxxx'x Investors Service Inc. or its
successor in interest.
"MORTGAGE" means the mortgage, deed of trust or other
instrument securing a Mortgage Note.
"MORTGAGE FILE" means the mortgage documents listed below:
-39-
(i) the original Mortgage Note bearing all intervening
endorsements, endorsed in blank or endorsed "Pay to the order of LaSalle Bank
National Association, as Trustee for Bear Xxxxxxx Commercial Mortgage Securities
Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-TOP16, without
recourse, representation or warranty" or if the original Mortgage Note is not
included therein, then a lost note affidavit with a copy of the Mortgage Note
attached thereto;
(ii) the original Mortgage, with evidence of recording
thereon, and, if the Mortgage was executed pursuant to a power of attorney, a
certified true copy of the power of attorney certified by the public recorder's
office, with evidence of recording thereon (if recording is customary in the
jurisdiction in which such power of attorney was executed) or certified by a
title insurance company or escrow company to be a true copy thereof; provided
that if such original Mortgage cannot be delivered with evidence of recording
thereon on or prior to the 45th day following the Closing Date because of a
delay caused by the public recording office where such original Mortgage has
been delivered for recordation or because such original Mortgage has been lost,
the Depositor shall deliver or cause to be delivered to the Trustee a true and
correct copy of such Mortgage, together with (A) in the case of a delay caused
by the public recording office, an Officer's Certificate of the applicable
Seller stating that such original Mortgage has been sent to the appropriate
public recording official for recordation or (B) in the case of an original
Mortgage that has been lost after recordation, a certification by the
appropriate county recording office where such Mortgage is recorded that such
copy is a true and complete copy of the original recorded Mortgage;
(iii) the originals of all agreements modifying a Money Term
or other material modification, consolidation and extension agreements, if any,
with evidence of recording thereon (which are reflected in the Mortgage Loan
Schedule), or if such original modification, consolidation and extension
agreements have been delivered to the appropriate recording office for
recordation and either have not yet been returned on or prior to the 45th day
following the Closing Date with evidence of recordation thereon or have been
lost after recordation, true copies of such modifications, consolidations and
extensions certified by the applicable Seller together with (A) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
applicable Seller stating that such original modification, consolidation or
extension agreement has been dispatched or sent to the appropriate public
recording official for recordation or (B) in the case of an original
modification, consolidation or extension agreement that has been lost after
recordation, a certification by the appropriate county recording office where
such document is recorded that such copy is a true and complete copy of the
original recorded modification, consolidation or extension agreement, and the
originals of all assumption agreements, if any;
(iv) an original Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording, signed by the holder of
record in blank or in favor of "LaSalle Bank National Association, as Trustee
for Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16;" provided, if the related Mortgage
has been recorded in the name of MERS or its designee, no Assignment of Mortgage
in favor of the Trustee will be required to be recorded or delivered and
instead, the applicable Seller shall take all actions as are necessary to cause
the Trustee to be shown as, and the Trustee shall take all actions necessary to
confirm that it is shown as, the
-40-
owner of the related Mortgage on the record of MERS for purposes of the system
of recording transfers of beneficial ownership of mortgages maintained by MERS;
(v) originals of all intervening assignments of Mortgage
(except with respect to any Mortgage that has been recorded in the name of MERS
or its designees), if any, with evidence of recording thereon or, if such
original assignments of Mortgage have been delivered to the appropriate
recorder's office for recordation, certified true copies of such assignments of
Mortgage certified by the applicable Seller, or in the case of an original
blanket intervening assignment of Mortgage retained by the applicable Seller, a
copy thereof certified by the applicable Seller or, if any original intervening
assignment of Mortgage has not yet been returned on or prior to the 45th day
following the Closing Date from the applicable recording office or has been
lost, a true and correct copy thereof, together with (A) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
applicable Seller stating that such original intervening assignment of Mortgage
has been sent to the appropriate public recording official for recordation or
(B) in the case of an original intervening assignment of Mortgage that has been
lost after recordation, a certification by the appropriate county recording
office where such assignment is recorded that such copy is a true and complete
copy of the original recorded intervening assignment of Mortgage;
(vi) if the related Assignment of Leases is separate from the
Mortgage, the original of such Assignment of Leases with evidence of recording
thereon or, if such Assignment of Leases has not been returned on or prior to
the 45th day following the Closing Date from the applicable public recording
office, a copy of such Assignment of Leases certified by the applicable Seller
to be a true and complete copy of the original Assignment of Leases submitted
for recording, together with (A) an original of each assignment of such
Assignment of Leases with evidence of recording thereon and showing a complete
recorded chain of assignment from the named assignee to the holder of record,
and if any such assignment of such Assignment of Leases has not been returned
from the applicable public recording office, a copy of such assignment certified
by the applicable Seller to be a true and complete copy of the original
assignment submitted for recording, and (B) an original assignment of such
Assignment of Leases, in recordable form, signed by the holder of record in
favor of "LaSalle Bank National Association, as Trustee for Bear Xxxxxxx
Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through
Certificates, Series 2004-TOP16," which assignment may be effected in the
related Assignment of Mortgage; provided, if the related Assignment of Leases
has been recorded in the name of MERS or its designee, no assignment of
Assignment of Leases in favor of the Trustee will be required to be recorded or
delivered and instead, the applicable Seller shall take all actions as are
necessary to cause the Trustee to be shown as, and the Trustee shall take all
actions necessary to confirm that it is shown as, the owner of the related
Assignment of Leases on the record of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS;
(vii) the original of each guaranty, if any, constituting
additional security for the repayment of such Mortgage Loan;
(viii) the original Title Insurance Policy or in the event
such original Title Insurance Policy has not been issued, an original binder or
actual title commitment or a copy thereof certified by the title company with
the original Title Insurance Policy to follow within
-41-
180 days of the Closing Date or a preliminary title report with an original
Title Insurance Policy to follow within 180 days of the Closing Date;
(ix) (A) UCC financing statements (together with all
assignments thereof) and (B) UCC-2 or UCC-3 financing statements to the Trustee
duly authorized and executed and delivered in connection with the Mortgage Loan;
provided, if the related Mortgage has been recorded in the name of MERS or its
designee, no such UCC-2 or UCC-3 financing statements will be required to be
recorded or delivered and instead, the applicable Seller shall take all actions
as are necessary to cause the Trustee to be shown as, and the Trustee shall take
all actions necessary to confirm that it is shown as, the owner of the related
UCC financing statements on the record of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS;
(x) copies of the related ground lease(s), if any, related to
any Mortgage Loan where the Mortgagor is the lessee under such ground lease and
there is a lien in favor of the mortgagee in such lease;
(xi) copies of any loan agreements, lock-box agreements and
intercreditor agreements (including, without limitation, any Intercreditor
Agreement, any Non-Serviced Mortgage Loan Intercreditor Agreement and any Loan
Pair Intercreditor Agreement, and a copy (that is, not the original) of the
mortgage note evidencing the related Serviced Companion Mortgage Loan and B
Note) related to any Mortgage Loan;
(xii) either (A) the original of each letter of credit, if
any, constituting additional collateral for such Mortgage Loan, which shall be
assigned and delivered to the Trustee on behalf of the Trust with a copy to be
held by the Primary Servicer (or the Master Servicer), and applied, drawn,
reduced or released in accordance with documents evidencing or securing the
applicable Mortgage Loan, this Agreement and the Primary Servicing Agreement or
(B) the original of each letter of credit, if any, constituting additional
collateral for such Mortgage Loan, which shall be held by the Primary Servicer
(or the Master Servicer) on behalf of the Trustee, with a copy to be held by the
Trustee, and applied, drawn, reduced or released in accordance with documents
evidencing or securing the applicable Mortgage Loan, this Agreement and the
Primary Servicing Agreement (it being understood that each Seller has agreed (a)
that the proceeds of such letter of credit belong to the Trust, (b) to notify,
on or before the Closing Date, the bank issuing the letter of credit that the
letter of credit and the proceeds thereof belong to the Trust, and to use
reasonable efforts to obtain within 30 days (but in any event to obtain within
90 days) following the Closing Date, an acknowledgement thereof by the bank
(with a copy of such acknowledgement to be sent to the Trustee) and (c) to
indemnify the Trust for any liabilities, charges, costs, fees or other expenses
accruing from the failure of the Seller to assign the letter of credit
hereunder). In the case of clause (B) above, the Primary Servicer (and the
Master Servicer) acknowledges that any letter of credit held by it shall be held
in its capacity as agent of the Trust, and if the Primary Servicer (or Master
Servicer) sells its rights to service the applicable Mortgage Loan, the Primary
Servicer (or Master Servicer) will assign the applicable letter of credit to the
Trust or at the direction of the Special Servicer (with respect to any Specially
Serviced Mortgage Loan) to such party as the Special Servicer may instruct, in
each case, at the expense of the Primary Servicer (or Master Servicer). The
Primary Servicer (or Master Servicer) shall indemnify the Trust for any loss
caused by the ineffectiveness of such assignment;
-42-
(xiii) the original environmental indemnity agreement, if any,
related to any Mortgage Loan;
(xiv) third-party management agreements for all Mortgaged
Properties operated as hotels and for all Mortgaged Properties securing Mortgage
Loans with a Cut-Off Date Principal Balance equal to or greater than
$20,000,000;
(xv) any Environmental Insurance Policy;
(xvi) any affidavit and indemnification agreement; and
(xvii) with respect to any Non-Serviced Mortgage Loan, a copy
of the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
With respect to any Non-Serviced Mortgage Loan, the preceding
document delivery requirements will be met by the delivery by the Depositor of
copies of the documents specified above (other than the Mortgage Notes (and all
intervening endorsements) respectively evidencing such Non-Serviced Mortgage
Loan with respect to which the originals shall be required), including a copy of
such Non-Serviced Mortgage Loan Mortgage.
"MORTGAGE LOAN" means a Mortgage Note secured by a Mortgage,
and all amendments and modifications thereof, identified on the Mortgage Loan
Schedule, as amended from time to time, provided that the term "Mortgage Loan"
shall include any Defeasance Loan and any Non-Serviced Mortgage Loan (but shall
not include any Non-Serviced Companion Mortgage Loan) but with respect to (i)
any A/B Mortgage Loan, shall include the A Note (but shall not include the
related B Note) and (ii) any Loan Pair, shall include the Serviced Pari Passu
Mortgage Loan (but shall not include the related Serviced Companion Mortgage
Loan).
"MORTGAGE LOAN PURCHASE AGREEMENT" means Mortgage Loan
Purchase Agreement I, Mortgage Loan Purchase Agreement II, Mortgage Loan
Purchase Agreement III or Mortgage Loan Purchase Agreement IV, as the case may
be.
"MORTGAGE LOAN PURCHASE AGREEMENT I" means that certain
Mortgage Loan Purchase Agreement between BSCMI and the Depositor dated as of
October 20, 2004 with respect to the BSCMI Loans, a form of which is attached
hereto as Exhibit K-1.
"MORTGAGE LOAN PURCHASE AGREEMENT II" means that certain
Mortgage Loan Purchase Agreement between Xxxxx Fargo and the Depositor dated as
of October 20, 2004 with respect to the Xxxxx Fargo Loans, a form of which is
attached hereto as Exhibit K-2.
"MORTGAGE LOAN PURCHASE AGREEMENT III" means that certain
Mortgage Loan Purchase Agreement between Principal and the Depositor dated as of
October 20, 2004 with respect to the Principal Loans, a form of which is
attached hereto as Exhibit K-3.
"MORTGAGE LOAN PURCHASE AGREEMENT IV" means that certain
Mortgage Loan Purchase Agreement between MSMC and the Depositor dated as of
October 20, 2004 with respect to the MSMC Loans, a form of which is attached
hereto as Exhibit K-4.
-43-
"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means collectively
the schedule attached hereto as Schedule I, which identifies each BSCMI Loan,
the schedule attached hereto as Schedule II, which identifies each Xxxxx Fargo
Loan, the schedule attached hereto as Schedule III, which identifies each
Principal Loan and the schedule attached hereto as Schedule IV, which identifies
each MSMC Loan, as such schedules may be amended from time to time pursuant to
Section 2.3.
"MORTGAGE NOTE" means the note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"MORTGAGE RATE" means, for a given Mortgage Loan, Serviced
Companion Mortgage Loan or B Note, the per annum rate at which interest accrues
on such Mortgage Loan, Serviced Companion Mortgage Loan or B Note.
"MORTGAGED PROPERTY" means the real property, together with
improvements thereto, securing the indebtedness of the Mortgagor under the
related Mortgage Loan and, in the case of an A/B Mortgage Loan, the related B
Note and, in the case of a Loan Pair, the related Serviced Companion Mortgage
Loan.
"MORTGAGEE" means, with respect to any Mortgage as of any date
of determination, the mortgagee named therein as of such date.
"MORTGAGOR" means the obligor on a Mortgage Note.
"MSMC" has the meaning set forth in the Preliminary Statement
hereto.
"MSMC LOANS" means, collectively, those Mortgage Loans sold to
the Depositor pursuant to the Mortgage Loan Purchase Agreement IV and shown on
Schedule IV hereto.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means for any
Distribution Date, with respect to all Mortgage Loans which are not Specially
Serviced Mortgage Loans, the excess, if any, of aggregate Prepayment Interest
Shortfalls for such Mortgage Loans over the sum of (A) the Compensating Interest
to be paid by the Master Servicer on such Distribution Date and (B) the
aggregate Prepayment Interest Excesses for such Collection Period for all
Mortgage Loans which are not Specially Serviced Mortgage Loans.
"NEW LEASE" means any lease of any REO Property entered into
on behalf of the Trust, including any lease renewed or extended on behalf of the
Trust if the Trust has the right to renegotiate the terms of such lease.
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as
amended.
"NONDISQUALIFICATION OPINION" means a written Opinion of
Counsel to the effect that a contemplated action (i) will neither cause any
REMIC Pool to fail to qualify as a REMIC at any time that any Certificates are
outstanding nor cause a "prohibited transaction," "prohibited contribution" or
any other tax (other than a tax on "net income from foreclosure property"
-44-
permitted to be incurred under this Agreement) to be imposed on any REMIC Pool
or the Trust and (ii) will not cause the Class P Grantor Trust to fail to
qualify as a grantor trust.
"NONECONOMIC RESIDUAL INTEREST" means a residual interest that
is a "noneconomic residual interest" within the meaning of Treasury Regulation
Section 1.860E-1(c).
"NON-INVESTMENT GRADE CERTIFICATES" means each Class of
Certificates that, at the time of transfer, is not rated in one of the four
highest generic rating categories by at least one of Fitch or S&P.
"NONRECOVERABLE ADVANCE" means any of the following: (i) any
Pari Passu Loan Nonrecoverable Advance (including interest accrued thereon at
the Advance Rate) and (ii) the portion of any Advance (including interest
accrued thereon at the Advance Rate) or Unliquidated Advance (not including
interest thereon) previously made (and, in the case of an Unliquidated Advance,
not previously reimbursed to the Trust) or proposed to be made by the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, that, in its
respective sole discretion, exercised in good faith and, with respect to the
Master Servicer and the Special Servicer, taking into account the Servicing
Standard, will not be or, in the case of a current delinquency, would not be,
ultimately recoverable, from Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds or Purchase Proceeds (or from any other collections) with
respect to the related Mortgage Loan or Serviced Companion Mortgage Loan (and
taking into consideration any Crossed Mortgage Loans) (in the case of Servicing
Advances) or B Note (in the case of Servicing Advances) or REO Property (in the
case of P&I Advances and Servicing Advances), as evidenced by an Officer's
Certificate delivered pursuant to Section 4.4. Such Officer's Certificate shall
be delivered to the Trustee (upon which the Trustee may conclusively rely) or to
the Depositor (if the Trustee or the Fiscal Agent is delivering such Officer's
Certificate) and (in either case) to the Special Servicer and the Paying Agent
in the time periods as specified in Section 4.4 and shall include the
information and reports set forth in Section 4.4. Absent bad faith, the Master
Servicer's determination as to the recoverability of any Advance shall be
conclusive and binding on the Certificateholders and, in the case of any B Note
or Serviced Companion Mortgage Loan, the holder of such B Note or Serviced
Companion Mortgage Loan, as applicable, and may, in all cases, be relied on by
the Trustee and the Fiscal Agent; provided, however, that the Special Servicer
may, at its option, make a determination in accordance with the Servicing
Standard that any P&I Advance or Servicing Advance, if made, would be a
Nonrecoverable Advance and shall deliver to the Master Servicer and the Trustee
notice of such determination. Absent bad faith, any such determination shall be
conclusive and binding on the Certificateholders, the Master Servicer, the
Trustee and the Fiscal Agent. Absent bad faith, and pursuant to Section 4.1A of
this Agreement, any determination as to the recoverability of any advance made
with respect to any Non-Serviced Mortgage Loan by the Master Servicer or any
Other Master Servicer shall be conclusive and binding on the Certificateholders
and may, in all cases, be relied on by the Trustee, the Fiscal Agent and the
Master Servicer. In making any nonrecoverability determination as described
above, the relevant party shall be entitled (i) to consider (among other things)
the obligations of the Mortgagor under the terms of the Mortgage Loan as it may
have been modified, (ii) to consider (among other things) the related Mortgaged
Properties in their "as is" then-current conditions and occupancies and such
party's assumptions (consistent with the Servicing Standard in the case of the
Master Servicer or the Special Servicer) regarding the possibility and effects
of future adverse change with respect to such Mortgaged Properties, (iii) to
estimate and consider, consistent with the Servicing Standard in
-45-
the case of the Master Servicer or the Special Servicer (among other things),
future expenses and (iv) to estimate and consider, consistent with the Servicing
Standard (among other things), the timing of recovery to such party. In
addition, the relevant party may, consistent with the Servicing Standard in the
case of the Master Servicer or the Special Servicer, update or change its
nonrecoverability determinations at any time in accordance with the terms hereof
and may, consistent with the Servicing Standard in the case of the Master
Servicer or the Special Servicer, obtain from the Special Servicer any analysis,
appraisals or other information in the possession of the Special Servicer for
such purposes.
"NON-REGISTERED CERTIFICATE" means unless and until registered
under the Securities Act, any Class X-1, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O, Class P or Residual Certificate.
"NON-SERVICED COMPANION MORTGAGE LOAN" means the Jersey
Gardens Mall Companion Loan.
"NON-SERVICED MORTGAGE LOAN" means the Jersey Gardens Mall
Pari Passu Loan.
"NON-SERVICED MORTGAGE LOAN FISCAL AGENT" means the applicable
"fiscal agent" under the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN INTERCREDITOR AGREEMENT" means,
with respect to Mortgage Loan No. 2, that certain co-lender agreement, dated
August 12, 2004, by and between the holders of the Jersey Gardens Mall Pari
Passu Loan and the Jersey Gardens Mall Companion Loan, as the same may be
amended from time to time in accordance with the terms thereof.
"NON-SERVICED MORTGAGE LOAN MASTER SERVICER" means the
applicable "master servicer" under the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN MORTGAGE" means the Jersey
Gardens Mall Pari Passu Mortgage.
"NON-SERVICED MORTGAGE LOAN POOLING AND SERVICING AGREEMENT"
means the GMAC 2004-C2 Pooling and Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN SPECIAL SERVICER" means the
applicable "special servicer" under the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN TRUSTEE" means the applicable
"trustee" under the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement.
"NOTIONAL AMOUNT" means, as of any date of determination: (i)
with respect to all of the Class X-1 Certificates as a Class, the Class X-1
Notional Amount as of such date of determination; (ii) with respect to any Class
X-1 Certificate, the product of the Percentage Interest evidenced by such
Certificate and the Class X-1 Notional Amount as of such date of determination;
(iii) with respect to all of the Class X-2 Certificates as a Class, the Class
X-2 Notional Amount as of such date of determination and (iv) with respect to
any Class X-2
-46-
Certificate, the product of the Percentage Interest evidenced by such
Certificate and the Class X-2 Notional Amount as of such date of determination.
"OFFICER'S CERTIFICATE" means (v) in the case of the
Depositor, a certificate signed by one or more of the Chairman of the Board, any
Vice Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, or (w) in
the case of the Master Servicer and the Special Servicer, any of the officers
referred to above or an employee thereof designated as a Servicing Officer or
Special Servicing Officer pursuant to this Agreement, (x) in the case of the
Trustee or the Fiscal Agent, a certificate signed by a Responsible Officer, (y)
in the case of a Seller, a certificate signed by one or more of the Chairman of
the Board, any Vice Chairman, any Managing Director or Director, the President,
or any Executive Vice President, any Senior Vice President, Vice President,
Second Vice President or Assistant Vice President and (z) in the case of the
Paying Agent, a certificate signed by a Responsible Officer, each with specific
responsibilities for the matters contemplated by this Agreement.
"OPERATING ADVISER" shall mean the Person elected to serve as
the Operating Adviser pursuant to Section 9.37(a).
"OPINION OF COUNSEL" means a written opinion of counsel
addressed to the Trustee and the Paying Agent, reasonably acceptable in form and
substance to the Trustee and the Paying Agent, and who is not in-house counsel
to the party required to deliver such opinion but who, in the good faith
judgment of the Trustee and the Paying Agent, is Independent outside counsel
knowledgeable of the issues occurring in the practice of securitization with
respect to any such opinion of counsel concerning the taxation, or status as a
REMIC for tax purposes, of any REMIC Pool or status as a "grantor trust" under
the Code of the Class P Grantor Trust.
"OPTION PURCHASE PRICE" has the meaning set forth in Section
9.36(b) hereof.
"OTHER ADVANCE REPORT DATE" means with respect to a
Non-Serviced Companion Mortgage Loan or a Serviced Companion Mortgage Loan, as
applicable, which has been deposited into a commercial mortgage securitization
trust, the date under the related Other Companion Loan Pooling and Servicing
Agreement that the related Other Master Servicer is required (pursuant to the
terms thereof) to make a determination as to whether it will make a P&I Advance
as required under such Other Companion Loan Pooling and Servicing Agreement.
"OTHER COMPANION LOAN POOLING AND SERVICING AGREEMENT" means
the GMAC 2004-C2 Pooling and Servicing Agreement or any other pooling and
servicing agreement relating to a Non-Serviced Companion Mortgage Loan or a
Serviced Companion Mortgage Loan that creates a commercial mortgage
securitization trust, as applicable.
"OTHER MASTER SERVICER" means the GMAC 2004-C2 Master Servicer
or any other master servicer under an Other Companion Loan Pooling and Servicing
Agreement relating to a Non-Serviced Companion Mortgage Loan or a Serviced
Companion Mortgage Loan, as applicable.
"OTHER OPERATING ADVISER" has the meaning set forth in Section
9.4(d) hereof.
-47-
"OTHER POOLING AND SERVICING AGREEMENT" has the meaning set
forth in Section 9.4(d) hereof.
"OTHER SECURITIZATION" has the meaning set forth in Section
9.4(d) hereof.
"OTHER SPECIAL SERVICER" has the meaning set forth in Section
9.4(d) hereof.
"OWNERSHIP INTEREST" means, as to any Certificate, any
ownership or security interest in such Certificate as the Holder thereof and any
other interest therein, whether direct or indirect, legal or beneficial, as
owner or as pledgee.
"P&I ADVANCE" shall mean (other than with respect to a
Serviced Companion Mortgage Loan or a B Note) (i) with respect to any Mortgage
Loan or Specially Serviced Mortgage Loan as to which all or a portion of the
Scheduled Payment (other than a Balloon Payment) due during the related
Collection Period was not received by the Master Servicer as of the related
Determination Date (subject to Section 5.1(h)), the portion of such Scheduled
Payment not received; (ii) with respect to any Mortgage Loan that is a Balloon
Mortgage Loan (including any REO Property as to which the related Mortgage Loan
provided for a Balloon Payment) as to which a Balloon Payment was due during or
prior to the related Collection Period but was delinquent, in whole or in part,
as of the related Determination Date, an amount equal to the excess, if any, of
the Assumed Scheduled Payment for such Balloon Mortgage Loan for the related
Collection Period, over any Late Collections received in respect of such Balloon
Payment during such Collection Period; and (iii) with respect to each REO
Property, an amount equal to the excess, if any, of the Assumed Scheduled
Payment for the Mortgage Loan related to such REO Property during the related
Collection Period, over remittances of REO Income to the Master Servicer by the
Special Servicer, reduced by any amounts required to be paid as taxes on such
REO Income (including taxes imposed pursuant to Section 860G(c) of the Code);
provided, however, that the interest portion of any Scheduled Payment or Assumed
Scheduled Payment shall be advanced at a per annum rate equal to the sum of the
REMIC I Net Mortgage Rate relating to such Mortgage Loan or such REO Mortgage
Loan and the Trustee Fee Rate, such that the Scheduled Payment or Assumed
Scheduled Payment to be advanced as a P&I Advance shall be net of the Master
Servicing Fee, the Excess Servicing Fee and the Primary Servicing Fee; and
provided, further, that the Scheduled Payment or Assumed Scheduled Payment for
any Mortgage Loan which has been modified shall be calculated based on its terms
as modified and provided, further, that the interest component of any P&I
Advance with respect to a Mortgage Loan as to which there has been an Appraisal
Reduction shall be an amount equal to the product of (i) the amount of interest
required to be advanced without giving effect to this proviso and (ii) a
fraction, the numerator of which is the Principal Balance of such Mortgage Loan
as of the immediately preceding Determination Date less any Appraisal Reduction
applicable to such Mortgage Loan (or, in the case of a Non-Serviced Mortgage
Loan or a Serviced Pari Passu Mortgage Loan, the portion of such Appraisal
Reduction allocable (based upon their respective Principal Balances) to such
Non-Serviced Mortgage Loan or Serviced Pari Passu Mortgage Loan under the
related Intercreditor Agreement or the related Loan Pair Intercreditor
Agreement, or in the case of an A/B Mortgage Loan, the portion of such Appraisal
Reduction allocable to the A Note pursuant to the definition of "Appraisal
Reduction") and the denominator of which is the Principal Balance of such
Mortgage Loan as of such Determination Date. All P&I Advances for any Mortgage
Loans that have been modified shall be calculated on the basis of their terms as
modified.
-48-
"P&I ADVANCE AMOUNT" means, with respect to any Mortgage Loan
or any REO Property, the amount of the P&I Advance for each Mortgage Loan
computed for any Distribution Date.
"PARI PASSU LOAN NONRECOVERABLE ADVANCE" means any
"Nonrecoverable Servicing Advance" (as defined in the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement) made with respect to any
Non-Serviced Mortgage Loan pursuant to and in accordance with the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement; provided that if the
applicable Non-Serviced Mortgage Loan Master Servicer shall have made a
"Servicing Advance" (as defined in the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement) in the nature of an expenditure benefiting the
related Mortgaged Property generally, the portion thereof attributable to any
Non-Serviced Mortgage Loan shall be determined based on the outstanding balances
of such Non-Serviced Mortgage Loan and all the related pari passu loans secured
by such Non-Serviced Mortgage Loan Mortgage on a pari passu basis on the date
such advance was made.
"PARI PASSU LOAN SERVICING FEE RATE" means the "Master
Servicing Fee Rate" (as defined in the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement) and any other servicing fee rate (other than
those payable to the applicable Non-Serviced Mortgage Loan Special Servicer)
applicable to any Non-Serviced Mortgage Loan; provided, however, that the Pari
Passu Loan Servicing Fee Rate for purposes of any Non-Serviced Mortgage Loan set
forth on Schedule XIX as to which such fee is calculated on a 30/360 basis shall
be (a) the related "Master Servicing Fee Rate" set forth in the Non-Serviced
Mortgage Loan Pooling and Servicing Agreement, multiplied by (b) 30 divided by
the actual number of days in the loan accrual period with respect to such loan.
"PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"PASS-THROUGH RATE" or "PASS-THROUGH RATES" means with respect
to any Class of REMIC I Regular Interests, REMIC II Regular Interests or REMIC
Regular Certificates, other than the Class A-6, Class X, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class
N, Class O and Class P Certificates, for the first Distribution Date, the rate
set forth in the Preliminary Statement hereto (subject to the calculations set
forth in the following sentence). For any Distribution Date occurring thereafter
(and with respect to the Class A-6, Class X, Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O
and Class P Certificates, for each Distribution Date), the Pass-Through Rates
for (i) the REMIC I Regular Interests shall equal the REMIC I Net Mortgage Rate
on the related Mortgage Loan for such Distribution Date, (ii) the REMIC II
Regular Interests shall equal the Weighted Average REMIC I Net Mortgage Rate for
such Distribution Date, (iii) the Class A-1, Class A-2, Class A-3, Class A-4 and
Class A-5 Certificates, the fixed rate corresponding to such Class set forth in
the Preliminary Statement hereto, (iv) the Class A-6 Certificates shall equal
the lesser of (A) 4.75% per annum and (B) the Weighted Average REMIC I Net
Mortgage Rate for such Distribution Date, (v) the Class B Certificates shall
equal the lesser of (A) 4.82% per annum and (B) the Weighted Average REMIC I Net
Mortgage Rate for such Distribution Date, (vi) the Class C Certificates shall
equal the lesser of (A) 4.85% per annum and (B) the Weighted Average REMIC I Net
Mortgage Rate for
-49-
such Distribution Date, (vii) the Class D Certificates shall equal the lesser of
(A) 4.89% per annum and (B) the Weighted Average REMIC I Net Mortgage Rate for
such Distribution Date, (viii) the Class E Certificates shall equal the lesser
of (A) 4.99% per annum and (B) the Weighted Average REMIC I Net Mortgage Rate
for such Distribution Date, (ix) the Class F Certificates shall equal the lesser
of (A) 5.21% per annum and (B) the Weighted Average REMIC I Net Mortgage Rate
for such Distribution Date, (x) the Class G Certificates shall equal the
Weighted Average REMIC I Net Mortgage Rate for such Distribution Date less
0.20%, (xi) the Class H Certificates shall equal the Weighted Average REMIC I
Net Mortgage Rate for such Distribution Date, (xii) the Class J, Class K, Class
L, Class M, Class N, Class O and Class P Certificates shall equal the lesser of
(A) 4.493% per annum and (B) the Weighted Average REMIC I Net Mortgage Rate for
such Distribution Date, (xiii) the Class X-1 Certificates shall equal the per
annum rate equal to the weighted average of the Class X-1 Strip Rates for the
respective Class X-1 Components for such Distribution Date (weighted on the
basis of the respective Component Notional Amounts of such Components
outstanding immediately prior to such Distribution Date), and (xiv) the Class
X-2 Certificates shall equal the per annum rate equal to the weighted average of
the Class X-2 Strip Rates for the respective Class X-2 Components for such
Distribution Date (weighted on the basis of the respective Component Notional
Amount of such Components outstanding immediately prior to such Distribution
Date).
"PAYING AGENT" means Xxxxx Fargo Bank, National Association
and any successor or assign, as provided herein. The Luxembourg Paying Agent
shall not be the Paying Agent and the duties of the Luxembourg Paying Agent
shall be distinct from the duties of the Paying Agent.
"PAYING AGENT FEE" means the portion of the Trustee Fee
payable to the Paying Agent in an amount agreed to between the Trustee and the
Paying Agent.
"PEARLAND CORNER SHOPPING CENTER A/B MORTGAGE LOAN" means the
Pearland Corner Shopping Center Mortgage Loan and the Pearland Corner Shopping
Center B Note.
"PEARLAND CORNER SHOPPING CENTER B NOTE" means, with respect
to the Pearland Corner Shopping Center A/B Mortgage Loan, the related
subordinated Mortgage Note not included in the Trust, which is subordinated in
right of payment to the Pearland Corner Shopping Center Mortgage Loan to the
extent set forth in the related Intercreditor Agreement.
"PEARLAND CORNER SHOPPING CENTER MORTGAGE" means the Mortgage
securing the Pearland Corner Shopping Center A/B Mortgage Loan and any other
note secured by the related Mortgaged Property.
"PEARLAND CORNER SHOPPING CENTER MORTGAGE LOAN" means the
Mortgage Loan designated as Mortgage Loan No. 69 on the Mortgage Loan Schedule
and which is senior to the Pearland Corner Shopping Center B Note and is secured
by the related Mortgaged Property pursuant to the Pearland Corner Shopping
Center Mortgage. The Pearland Corner Shopping Center Mortgage Loan is a
"Mortgage Loan."
"PERCENTAGE INTEREST" means with respect to each Class of
Certificates other than the Residual Certificates, the fraction of such Class
evidenced by such Certificate, expressed as a percentage (carried to four
decimal places and rounded, if necessary), the numerator of which is the
Certificate Balance or Notional Amount, as applicable, represented by such
Certificate
-50-
determined as of the Closing Date (as stated on the face of such Certificate)
and the denominator of which is the Aggregate Certificate Balance or Notional
Amount, as applicable, of all of the Certificates of such Class determined as of
the Closing Date. With respect to each Residual Certificate, the percentage
interest in distributions (if any) to be made with respect to the relevant
Class, as stated on the face of such Certificate.
"PERFORMING PARTY" has the meaning set forth in Section
8.26(b).
"PERMITTED TRANSFEREE" means any Transferee other than a
Disqualified Organization.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PHASE I ENVIRONMENTAL REPORT" means a report by an
Independent Person who regularly conducts environmental site assessments in
accordance with then current standards imposed by institutional commercial
mortgage lenders and who has a reasonable amount of experience conducting such
assessments.
"PLACEMENT AGENT" means Bear, Xxxxxxx & Co. Inc., Xxxxxx
Xxxxxxx & Co. Incorporated, Xxxxxxx, Sachs & Co. and Xxxxx Fargo Brokerage
Services, LLC or its respective successor in interest.
"PLAN" has the meaning set forth in Section 3.3(d).
"PLAN ASSET REGULATIONS" means the Department of Labor
regulations set forth in 29 C.F.R. ss. 2510.3-101.
"PRELIMINARY PROSPECTUS SUPPLEMENT" has the meaning set forth
in the Preliminary Statement hereto.
"PREPAYMENT INTEREST EXCESS" means for any Distribution Date
and the related Collection Period, during which a full or partial Principal
Prepayment (including payment of a Balloon Payment other than in connection with
the foreclosure or liquidation of a Mortgage Loan) is made after the Due Date
for such Mortgage Loan through and including the last day of the Collection
Period, the amount of interest that accrues on the amount of such Principal
Prepayment from such Due Date to the date such payment was made, plus (if made)
any payment by the Mortgagor of interest that would have accrued to the next
succeeding Due Date (net of the Master Servicing Fee, the Primary Servicing Fee,
the Excess Servicing Fees, the Special Servicing Fee, the Trustee Fee and the
servicing fee and trustee fee payable in connection with any Non-Serviced
Mortgage Loan (in the case of any Non-Serviced Mortgage Loan), to the extent
collected.
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any
Distribution Date, a shortfall in the collection of a full month's interest on
any Mortgage Loan, by reason of a full or partial Principal Prepayment
(including payment of a Balloon Payment other than in connection with the
foreclosure or liquidation of a Mortgage Loan) made during any Collection Period
prior to the Due Date for such Mortgage Loan in such Collection Period
(including any shortfall
-51-
resulting from such a payment during the grace period relating to such Due
Date). The amount of any Prepayment Interest Shortfall shall equal the excess of
(A) the aggregate amount of interest which would have accrued on the Scheduled
Principal Balance of such Mortgage Loan if the Mortgage Loan had paid on its Due
Date and such Principal Prepayment or Balloon Payment had not been made (net of
the Master Servicing Fee, the Primary Servicing Fee, the Excess Servicing Fees,
the Special Servicing Fee, the Trustee Fee and the servicing fee payable in
connection with any Non-Serviced Mortgage Loan (in the case of any Non-Serviced
Mortgage Loan)) over (B) the aggregate interest that did so accrue through the
date such payment was made (net of such fees).
"PREPAYMENT PREMIUM" means, with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note for any Distribution Date, the
prepayment premiums, yield maintenance charges or percentage premiums, if any,
received during the related Collection Period in connection with Principal
Prepayments on such Mortgage Loan, Serviced Companion Mortgage Loan or B Note.
"PRIMARY COLLATERAL" means the portion of the Mortgaged
Property securing the Repurchased Loan or Crossed Mortgage Loan, as applicable,
that is encumbered by a first mortgage lien.
"PRIMARY SERVICER" means Principal Global Investors, LLC and
its permitted successors and assigns.
"PRIMARY SERVICING AGREEMENT" means the agreement between the
Primary Servicer and the Master Servicer, dated as of November 1, 2004, a form
of which is attached hereto as Exhibit G, under which the Primary Servicer
services the Mortgage Loans set forth on the schedule attached thereto.
"PRIMARY SERVICING FEE" means, for each calendar month, as to
each Mortgage Loan, the applicable Primary Servicing Fee Rate multiplied by the
Scheduled Principal Balance of such Mortgage Loan immediately before the Due
Date occurring in such month, but prorated for the number of days during the
calendar month for such Mortgage Loan for which interest actually accrues on
such Mortgage Loan and payable only from collections on such Mortgage Loan.
"PRIMARY SERVICING FEE RATE" means, the monthly fee payable to
the Primary Servicer (or the Master Servicer, as applicable) based on the per
annum rate specified on the Mortgage Loan Schedule, as more specifically
described, in the case of the Primary Servicer, in the Primary Servicing
Agreement (determined in the same manner (other than the rate of accrual) as the
applicable Mortgage Rate is determined for such Mortgage Loan for such month).
"PRINCIPAL" has the meaning set forth in the Preliminary
Statement hereto.
"PRINCIPAL BALANCE" means, with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan, B Note or REO Mortgage Loan, for purposes of
performing calculations with respect to any Distribution Date, the principal
balance of such Mortgage Loan, Serviced Companion Mortgage Loan, B Note or the
related REO Mortgage Loan outstanding as of the Cut-Off Date after taking into
account all principal and interest payments made or due on or prior to the
Cut-Off Date (assuming, for any Mortgage Loan, Serviced Companion Mortgage
-52-
Loan or B Note with a Due Date in November 2004 that is not November 1, 2004,
that principal and interest payments for such month were paid on November 1,
2004), reduced (to not less than zero) by (i) any payments or other collections
of amounts allocable to principal with respect to such Mortgage Loan, Serviced
Companion Mortgage Loan, B Note or any related REO Mortgage Loan that have been
collected or received during any preceding Collection Period, other than any
Scheduled Payments due in any subsequent Collection Period, and (ii) any
Realized Principal Loss incurred in respect of such Mortgage Loan or related REO
Mortgage Loan during any related Collection Period.
"PRINCIPAL BALANCE CERTIFICATES" means, collectively, the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class B, Class
C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class
M, Class N, Class O and Class P Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" means, on any Distribution
Date, the amount equal to the excess, if any, of
(I) the sum of:
(A) the aggregate (without duplication) of the following:
(i) the principal portion of all Scheduled Payments (other
than the principal portion of Balloon Payments) and any Assumed Scheduled
Payments, in each case, to the extent received or advanced, as the case may be,
in respect of the Mortgage Loans and any REO Mortgage Loans (but not in respect
of any Serviced Companion Mortgage Loan or B Note or its successor REO Mortgage
Loan) for their respective Due Dates occurring during the related Collection
Period; and
(ii) all payments (including Principal Prepayments and the
principal portion of Balloon Payments but not in respect of any Serviced
Companion Mortgage Loan or B Note or its respective successor REO Mortgage Loan)
and any other collections (including Liquidation Proceeds (other than the
portion thereof, if any, constituting Excess Liquidation Proceeds), Condemnation
Proceeds, Insurance Proceeds, Purchase Proceeds and REO Income) received on or
in respect of the Mortgage Loans during the related Collection Period and that
were identified and applied by the Master Servicer as recoveries of principal
thereof in accordance with this Agreement;
(B) the aggregate amount of any collections received on or in
respect of the Mortgage Loans during the related Collection Period that, in each
case, represents a delinquent amount as to which an Advance had been made, which
Advance (or interest thereon) was previously reimbursed during the Collection
Period for a prior Distribution Date as part of a Workout-Delayed Reimbursement
Amount for which a deduction was made under clause (II)(A) below with respect to
such Distribution Date; and
(C) the aggregate amount of any collections received on or in
respect of the Mortgage Loans during the related Collection Period that, in each
case, represents a recovery of an amount previously determined (in a Collection
Period for a prior Distribution Date) to have been a Nonrecoverable Advance (or
interest thereon) and for which a deduction was made under clause (II)(B) below
with respect to a prior Distribution Date, and which are applied pursuant to
Section 6.6(c)(i); over
-53-
(II) the sum of:
(A) the aggregate amount of Workout-Delayed Reimbursement
Amounts (and Advance Interest thereon) that was reimbursed or paid during the
related Collection Period to one or more of the Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent from amounts in the Collection
Account allocable to principal received or advanced with respect to the Mortgage
Loans pursuant to subsection (iii) of Section 5.2(a)(II); and
(B) the aggregate amount of Nonrecoverable Advances (and
Advance Interest thereon) that was reimbursed or paid during the related
Collection Period to one or more of the Master Servicer, the Special Servicer,
the Trustee and the Fiscal Agent during the related Collection Period from
amounts in the Collection Account allocable to principal received or advanced
with respect to the Mortgage Loans pursuant to subsection (iv) of Section
5.2(a)(II).
"PRINCIPAL LOANS" means, collectively those Mortgage Loans
sold to the Depositor pursuant to Mortgage Loan Purchase Agreement III and shown
on Schedule III hereto.
"PRINCIPAL PREPAYMENT" means any voluntary or involuntary
payment or collection of principal on a Mortgage Loan, a Serviced Companion
Mortgage Loan or a B Note which is received or recovered in advance of its
scheduled Due Date and applied to reduce the Principal Balance of the Mortgage
Loan, Serviced Companion Mortgage Loan or B Note in advance of its scheduled Due
Date, including, without limitation, all proceeds, to the extent allocable to
principal, received from the payment of cash in connection with a substitution
shortfall pursuant to Section 2.3; provided, that the pledge by a Mortgagor of
Defeasance Collateral with respect to a Defeasance Loan shall not be deemed to
be a Principal Prepayment.
"PRIVATE PLACEMENT MEMORANDUM" means the Private Placement
Memorandum dated October 20, 2004, pursuant to which the Class X-1, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O and Class
P Certificates will be offered for sale.
"PROSPECTUS" has the meaning set forth in the Preliminary
Statement hereto.
"PURCHASE PRICE" means, with respect to the purchase by the
Seller or liquidation by the Special Servicer of (i) a Mortgage Loan or an REO
Mortgage Loan pursuant to Article II of this Agreement, (ii) an REO Mortgage
Loan pursuant to Section 9.15 or (iii) a Mortgage Loan pursuant to Section 9.36
under the circumstances described therein, a price equal to the sum (without
duplication) of (A) 100% of the unpaid Principal Balance of such Mortgage Loan
(or deemed Principal Balance, in the case of an REO Mortgage Loan), plus (B)
accrued but unpaid interest thereon calculated at the Mortgage Rate to, but not
including, the Due Date in the Collection Period in which such purchase or
liquidation occurs, plus (C) the amount of any expenses related to such Mortgage
Loan and any related Serviced Companion Mortgage Loan, B Note or REO Property
(including any Servicing Advances and Advance Interest thereon (which have not
been paid by the Mortgagor or out of Late Fees or default interest paid by the
related Mortgagor on the related Mortgage Loan and any related Serviced
Companion Mortgage Loan or B Note) related to such Mortgage Loan and any related
Serviced Companion Mortgage Loan or B Note, the amount of any Servicing Advances
(and Advance Interest thereon) that were reimbursed from principal collections
on the Mortgage Pool pursuant to Section 5.2(a)(II)(iii) and not subsequently
recovered from the related Mortgagor, and all Special Servicing Fees and
-54-
Liquidation Fees paid with respect to the Mortgage Loan and any related Serviced
Companion Mortgage Loan or B Note) that are reimbursable or payable to the
Master Servicer, the Special Servicer, the Paying Agent, the Trustee, the Fiscal
Agent, any Non-Serviced Mortgage Loan Master Servicer or any Non-Serviced
Mortgage Loan Special Servicer, plus (D) if such Mortgage Loan or REO Mortgage
Loan is being repurchased or substituted for by a Seller pursuant to the related
Mortgage Loan Purchase Agreement, all expenses reasonably incurred or to be
incurred by the Primary Servicer, the Master Servicer, the Special Servicer, the
Depositor, the Paying Agent or the Trustee in respect of the Material Breach or
Material Document Defect giving rise to the repurchase or substitution
obligation (and that are not otherwise included in (C) above).
"PURCHASE PROCEEDS" means any cash amounts received by the
Master Servicer in connection with: (i) the repurchase of a Mortgage Loan or an
REO Mortgage Loan by a Seller pursuant to Section 2.3 or (ii) the purchase of
the Mortgage Loans and REO Properties by the Depositor, the Master Servicer, the
Special Servicer or the holders of the Class R-I Certificates pursuant to
Section 10.1(b).
"QUALIFIED BIDDER" means (A) as used in section 8.29(c), a
Person qualified to act as successor Master Servicer hereunder pursuant to
Section 8.22(b) (including the requirement set forth in Section 8.22(b) that
Rating Agency Confirmation shall have been obtained from each Rating Agency with
respect to such Person) and (B) as used in Section 9.31(c), any Person qualified
to act as successor Special Servicer hereunder pursuant to Section 9.21(b)
(including the requirement set forth in Section 9.21(b) that Rating Agency
Confirmation shall have been obtained form each Rating Agency with respect to
such Person).
"QUALIFIED INSTITUTIONAL BUYER" means a qualified
institutional buyer qualifying pursuant to Rule 144A.
"QUALIFIED INSURER" means, (i) with respect to any Mortgage
Loan, Serviced Companion Mortgage Loan or B Note, an insurance company duly
qualified as such under the laws of the state in which the related Mortgaged
Property is located, duly authorized and licensed in such state to transact the
applicable insurance business and to write the insurance, but in no event rated
lower than "A" by Fitch or if not so rated, then Fitch has issued a Rating
Agency Confirmation and "A" by S&P if rated by S&P or if not rated by S&P, then
S&P has issued a Rating Agency Confirmation, and (ii) with respect to the
Servicer Errors and Omissions Insurance Policy or Servicer Fidelity Bond an
insurance company that has a claim paying ability no lower than "A" by Fitch if
rated by Fitch, or if not rated by Fitch, then rated A:IX by A.M. Best or as to
which Fitch has issued a Rating Agency Confirmation, and "A" by S&P if rated by
S&P or if not rated by S&P, then S&P has issued a Rating Agency Confirmation, or
(iii) in either case, a company not satisfying clause (i) or (ii) but with
respect to which a Rating Agency Confirmation is obtained. "Qualified Insurer"
shall also mean any entity that satisfies all of the criteria, other than the
ratings criteria, set forth in one of the foregoing clauses and whose
obligations under the related insurance policy are guaranteed or backed by an
entity that satisfies the ratings criteria set forth in such clause (construed
as if such entity were an insurance company referred to therein).
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" means, in the case of a
Mortgage Loan substituted for a Deleted Mortgage Loan, a Mortgage Loan which, on
the date of substitution, (i)
-55-
has an outstanding principal balance, after deduction of the principal portion
of the Scheduled Payment due in the month of substitution, not in excess of the
Principal Balance of the Deleted Mortgage Loan; provided, however, that, to the
extent that the principal balance of such Mortgage Loan is less than the
Principal Balance of the Deleted Mortgage Loan, then such differential in
principal amount, together with interest thereon at the Mortgage Rate on the
related Mortgage Loan from the date as to which interest was last paid through
the last day of the month in which such substitution occurs, shall be paid by
the party effecting such substitution to the Master Servicer for deposit into
the Certificate Account, and shall be treated as a Principal Prepayment
hereunder; (ii) is accruing interest at a rate of interest at least equal to
that of the Deleted Mortgage Loan; (iii) has a remaining term to stated maturity
not greater than, and not more than two years less than, that of the Deleted
Mortgage Loan; (iv) has an original Loan-to-Value Ratio not higher than that of
the Deleted Mortgage Loan and a current Loan-to-Value Ratio (equal to the
outstanding principal balance on the date of substitution divided by its current
Appraised Value) not higher than the current Loan-to-Value Ratio of the Deleted
Mortgage Loan and has a current Debt Service Coverage Ratio equal to or greater
than the current Debt Service Coverage Ratio of the Deleted Mortgage Loan; (v)
will comply with all of the representations and warranties relating to Mortgage
Loans set forth herein, as of the date of substitution; (vi) has a Phase I
Environmental Report relating to the related Mortgaged Property in its Mortgage
Files and such Phase I Environmental Report does not, in the good faith
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard, raise material issues that have not been adequately addressed; (vii)
has an engineering report relating to the related Mortgaged Property in its
Mortgage Files and such engineering report does not, in the good faith
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard raise material issues that have not been adequately addressed; and
(viii) as to which the Trustee and the Paying Agent have received an Opinion of
Counsel, at the related Seller's expense, that such Mortgage Loan is a
"qualified replacement mortgage" within the meaning of Section 860G(a)(4) of the
Code; provided that no Mortgage Loan may have a Maturity Date after the date
three years prior to the Rated Final Distribution Date, and provided, further,
that no such Mortgage Loan shall be substituted for a Deleted Mortgage Loan
unless Rating Agency Confirmation is obtained, and provided, further that no
such Mortgage Loan shall be substituted for a Deleted Mortgage Loan unless the
Operating Adviser shall have approved of such substitution (provided, however,
that such approval of the Operating Adviser may not be unreasonably withheld).
In the event that either one mortgage loan is substituted for more than one
Deleted Mortgage Loan or more than one mortgage loan is substituted for one or
more Deleted Mortgage Loans, then (A) the Principal Balance referred to in
clause (i) above shall be determined on the basis of aggregate Principal
Balances and (B) the rates referred to in clause (ii) above and the remaining
term to stated maturity referred to in clause (iii) above shall be determined on
a weighted average basis (provided, that the REMIC I Net Mortgage Rate for any
Qualifying Substitute Mortgage Loan may not be less than the highest
Pass-Through Rate of any outstanding Class of Certificates that is not based on,
or subject to a cap equal to, the Weighted Average REMIC I Net Mortgage Rate).
Whenever a Qualifying Substitute Mortgage Loan is substituted for a Deleted
Mortgage Loan pursuant to this Agreement, the party effecting such substitution
shall certify that such Mortgage Loan meets all of the requirements of this
definition and shall send such certification to the Paying Agent, which shall
deliver a copy of such certification to the Special Servicer, the Trustee and
the Operating Adviser promptly, and in any event within five Business Days
following the Paying Agent's receipt of such certification.
-56-
"RATED FINAL DISTRIBUTION DATE" means with respect to each
rated Class of Certificates, the Distribution Date in February, 2046.
"RATING AGENCIES" means Fitch and S&P.
"RATING AGENCY CONFIRMATION" means, with respect to any
matter, confirmation in writing by each Rating Agency (or such Rating Agency as
is specified herein) that a proposed action, failure to act, or other event
specified herein will not in and of itself result in the withdrawal, downgrade,
or qualification, as applicable, of the then-current rating assigned by such
Rating Agency to any Class of Certificates then rated by such Rating Agency,
provided that with respect to any matter affecting any Serviced Companion
Mortgage Loan, such confirmation shall also refer to the nationally recognized
statistical rating organizations then rating the securities representing an
interest in such loan and such rating organizations' respective ratings of such
securities.
"REALIZED INTEREST LOSS" means, with respect to each Mortgage
Loan, (i) in the case of a Liquidation Realized Loss, the portion of any
Liquidation Realized Loss that exceeds the Realized Principal Loss on the
related Mortgage Loan, (ii) in the case of a Bankruptcy Loss, the portion of
such Realized Loss attributable to accrued interest on the related Mortgage
Loan, (iii) in the case of an Expense Loss, an Expense Loss resulting in any
period from the payment of the Special Servicing Fee and any Expense Losses
treated as Realized Interest Losses pursuant to clause (iv) of the definition of
"Realized Principal Loss" or (iv) in the case of a Modification Loss, a
Modification Loss described in clause (iii) of the definition thereof.
"REALIZED LOSS" means a Liquidation Realized Loss, a
Modification Loss, a Bankruptcy Loss or an Expense Loss with respect to a
Mortgage Loan.
"REALIZED PRINCIPAL LOSS" means, with respect to each Mortgage
Loan, (i) in the case of a Liquidation Realized Loss, the amount of such
Liquidation Realized Loss, to the extent that it does not exceed the Principal
Balance (plus the amount of any Unliquidated Advance with respect to such
Mortgage Loan) of the Mortgage Loan (or deemed Principal Balance, in the case of
REO Property), (ii) in the case of a Modification Loss, the amount of such
Modification Loss described in clause (i) of the definition thereof, (iii) in
the case of a Bankruptcy Loss, the portion of such Bankruptcy Loss attributable
to the reduction in the Principal Balance of the related Mortgage Loan, (iv) in
the case of an Expense Loss, the amount of such Expense Loss (other than Expense
Losses resulting from the payment of Special Servicing Fees) to the extent that
such Expense Loss does not exceed amounts collected in respect of the Mortgage
Loans that were identified as allocable to principal in the Collection Period in
which such Expense Losses were incurred, and any such excess shall be treated as
a Realized Interest Loss, (v) the amounts in respect thereof that are withdrawn
from the Certificate Account pursuant to Section 6.6(b)(i) and (vi) any
Unliquidated Advance that is determined by the Master Servicer to be a
Nonrecoverable Advance.
"RECORD DATE" means, for each Distribution Date and each Class
of Certificates, the close of business on the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
-57-
"RECOVERIES" means, as of any Distribution Date, any amounts
recovered with respect to a Mortgage Loan, a Serviced Companion Mortgage Loan, a
B Note or REO Property following the period in which a Final Recovery
Determination occurs plus other amounts defined as "Recoveries" herein.
"REGULATION S" means Regulation S under the 1933 Act.
"REGULATION S CERTIFICATE" means a written certification
substantially in the form set forth in Exhibit F hereto certifying that a
beneficial owner of an interest in a Regulation S Temporary Global Certificate
is not a U.S. Person (as defined in Regulation S).
"REGULATION S GLOBAL CERTIFICATES" means the Regulation S
Permanent Global Certificates together with the Regulation S Temporary Global
Certificates.
"REGULATION S PERMANENT GLOBAL CERTIFICATE" means any single
permanent global Certificate, in definitive, fully registered form without
interest coupons received in exchange for a Regulation S Temporary Global
Certificate.
"REGULATION S TEMPORARY GLOBAL CERTIFICATE" means, with
respect to any Class of Certificates offered and sold outside of the United
States in reliance on Regulation S, a single temporary global Certificate, in
definitive, fully registered form without interest coupons.
"REHABILITATED MORTGAGE LOAN" means any Specially Serviced
Mortgage Loan with respect to which (i) three consecutive Scheduled Payments
have been made (in the case of any such Mortgage Loan, Serviced Companion
Mortgage Loan or B Note that was modified, based on the modified terms), or a
complete defeasance shall have occurred, (ii) no other Servicing Transfer Event
has occurred and is continuing (or with respect to determining whether a
Required Appraisal Loan is a Rehabilitated Mortgage Loan for applying Appraisal
Reductions, no other Appraisal Event has occurred and is continuing) and (iii)
the Trust has been reimbursed for all costs incurred as a result of the
occurrence of a Servicing Transfer Event, such amounts constitute a
Workout-Delayed Reimbursement Amount, or such amounts have been forgiven. An A
Note shall not constitute a Rehabilitated Mortgage Loan unless its related B
Note would constitute a Rehabilitated Mortgage Loan. A B Note shall not
constitute a Rehabilitated Mortgage Loan unless its related A Note also would
constitute a Rehabilitated Mortgage Loan. A Serviced Pari Passu Mortgage Loan
shall not constitute a Rehabilitated Mortgage Loan unless its related Serviced
Companion Mortgage Loan would constitute a Rehabilitated Mortgage Loan. A
Serviced Companion Mortgage Loan shall not constitute a Rehabilitated Mortgage
Loan unless its related Serviced Pari Passu Mortgage Loan also would constitute
a Rehabilitated Mortgage Loan.
"RELEASE DATE" means the date 40 days after the later of (i)
the commencement of the offering of the Certificates and (ii) the Closing Date.
"REMIC" means a real estate mortgage investment conduit within
the meaning of Section 860D of the Code.
"REMIC I" means the segregated pool of assets consisting of
the Mortgage Loans (other than any Excess Interest payable thereon), such
amounts with respect thereto as shall from time to time be held in the
Certificate Account, the Reserve Account, the Distribution
-58-
Account (other than the portion thereof constituting the Excess Interest
Sub-account) and the Interest Reserve Account, the Insurance Policies (other
than the interests of the holder of any Serviced Companion Mortgage Loan or B
Note therein) and any REO Properties or beneficial interests therein (other than
the interests of the holder of any Serviced Companion Mortgage Loan or B Note
therein), for which a REMIC election has been made pursuant to Section 12.1(a)
hereof. Excess Interest on the Mortgage Loans and the Excess Interest
Sub-account shall constitute assets of the Trust but shall not be a part of any
REMIC Pool formed hereunder. The Non-Serviced Companion Mortgage Loans and any
amounts payable thereon shall not constitute assets of the Trust or any REMIC
Pool formed hereunder. No B Note or any amounts payable thereon shall constitute
an asset of the Trust or any REMIC Pool formed hereunder. No Serviced Companion
Mortgage Loan or any amounts payable thereon shall constitute an asset of the
Trust or any REMIC Pool formed hereunder.
"REMIC I INTERESTS" means, collectively, the REMIC I Regular
Interests and the Class R-I Certificates.
"REMIC I NET MORTGAGE RATE" means, with respect to any
Distribution Date, as to any REMIC I Regular Interest, a rate per annum equal to
(a) with respect to any Mortgage Loan that accrues interest on the basis of a
360-day year consisting of twelve (12) 30-day months ("30/360 basis"), (i) the
Mortgage Rate thereof (without taking into account any increase therein after
the Anticipated Repayment Date in respect of an ARD Loan or any default interest
rate) as of the Cut-Off Date and without regard to any modification, waiver or
amendment of the terms thereof following the Cut-Off Date, minus (ii) the
Administrative Cost Rate, and (b) with respect to any Mortgage Loan that accrues
interest on a basis other than a 30/360 basis, the annualized rate that, when
applied to the Principal Balance of the related Mortgage Loan (on the day prior
to the Due Date preceding such Distribution Date) on a 30/360 basis for the
related loan accrual period, yields the amount of net interest that would have
accrued during the related loan accrual period assuming a net interest rate
equal to the rate described in clause (a) above, and assuming an interest
accrual basis that is the same as the actual interest accrual basis of such
Mortgage Loan, provided that for purposes of this clause (b), (i) the REMIC I
Net Mortgage Rate for the loan accrual period relating to the Due Dates in both
January and February in any year that is not a leap year and in February in any
year that is a leap year, shall be determined net of any amounts transferred to
the Interest Reserve Account and (ii) the REMIC I Net Mortgage Rate for the loan
accrual period relating to the Due Date in March (commencing in 2005) shall be
determined taking into account the addition of any amounts withdrawn from the
Interest Reserve Account.
"REMIC I REGULAR INTERESTS" means, collectively, the
uncertificated interests designated as "regular interests" in REMIC I, which
shall consist of, with respect to each Mortgage Loan, an interest having an
initial Certificate Balance equal to the Cut-Off Date Scheduled Principal
Balance of such Mortgage Loan, and which has a Pass-Through Rate equal to the
REMIC I Net Mortgage Rate of such Mortgage Loan.
"REMIC II" means the segregated pool of assets consisting of
the REMIC I Regular Interests and related amounts in the Distribution Account
for which a REMIC election has been made pursuant to Section 12.1(a) hereof.
-59-
"REMIC II INTERESTS" means, collectively, the REMIC II Regular
Interests and the Class R-II Certificates.
"REMIC II REGULAR INTEREST A-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class A-1 Certificates, and which has a Pass-Through Rate equal
to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-2A" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $14,956,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-2B" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $45,044,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-3A" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $10,813,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-3B" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $53,547,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-3C" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $35,640,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-4A" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $15,005,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-4B" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $84,995,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-5A" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $22,260,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
-60-
"REMIC II REGULAR INTEREST A-5B" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $49,798,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-5C" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $7,942,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-6A" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $91,170,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-6B" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $26,049,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST A-6C" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $558,856,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST B-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $10,113,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST B-2" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $10,118,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST C-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $7,017,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST C-2" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $5,988,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST D-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $2,092,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
-61-
"REMIC II REGULAR INTEREST D-2" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $10,913,000, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST E" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class E Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST F-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $7,868,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST F-2" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $2,247,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST G" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class G Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST H-1" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $7,729,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST H-2" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having an initial Certificate Balance equal to $2,386,000, and which
has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST J" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class J Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST K" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class K Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST L" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class L Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
-62-
"REMIC II REGULAR INTEREST M" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class M Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST N" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class N Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST O" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class O Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST P" means the uncertificated
interest designated as a "regular interest" in REMIC II, which shall consist of
an interest having a Certificate Balance equal to the Aggregate Certificate
Balance of the Class P Certificates, and which has a Pass-Through Rate equal to
the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTERESTS" means, collectively, the REMIC II
Regular Interest A-1, REMIC II Regular Interest A-2A, REMIC II Regular Interest
A-2B, REMIC II Regular Interest A-3A, REMIC II Regular Interest A-3B, REMIC II
Regular Interest A-3C, REMIC II Regular Interest A-4A, REMIC II Regular Interest
A-4B, REMIC II Regular Interest A-5A, REMIC II Regular Interest A-5B, REMIC II
Regular Interest A-5C, REMIC II Regular Interest A-6A, REMIC II Regular Interest
A-6B, REMIC II Regular Interest A-6C, REMIC II Regular Interest B-1, REMIC II
Regular Interest B-2, REMIC II Regular Interest C-1, REMIC II Regular Interest
C-2, REMIC II Regular Interest D-1, REMIC II Regular Interest D-2, REMIC II
Regular Interest E, REMIC II Regular Interest F-1, REMIC II Regular Interest
F-2, REMIC II Regular Interest G, REMIC II Regular Interest H-1, REMIC II
Regular Interest H-2, REMIC II Regular Interest J, REMIC II Regular Interest K,
REMIC II Regular Interest L, REMIC II Regular Interest M, REMIC II Regular
Interest N, REMIC II Regular Interest O and REMIC II Regular Interest P.
"REMIC III" means the segregated pool of assets consisting of
the REMIC II Regular Interests and related amounts in the Distribution Account
for which a REMIC election has been made pursuant to Section 12.1(a) hereof.
"REMIC III CERTIFICATES" has the meaning set forth in the
final paragraph of the Preliminary Statement hereto.
"REMIC III REGULAR INTERESTS" means, collectively, the Class
A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, Class X-1
Certificates, Class X-2 Certificates, Class B Certificates, Class C
Certificates, Class D Certificates, Class E Certificates, Class F Certificates,
Class G Certificates, Class H Certificates, Class J Certificates, Class K
Certificates, Class L Certificates, Class M Certificates, Class N Certificates,
Class O Certificates and the portion of the Class P Certificates representing
the Class P REMIC Interest that is a "regular interest" in REMIC III.
-63-
"REMIC POOL" means each of the three segregated pools of
assets designated as a REMIC pursuant to Section 12.1(a) hereof.
"REMIC PROVISIONS" means the provisions of the federal income
tax law relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and final, temporary and proposed regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time to time and
taking account, as appropriate, of any proposed legislation or regulations
which, as proposed, would have an effective date prior to enactment or
promulgation thereof.
"REMIC REGULAR CERTIFICATES" means, collectively, the Class
A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class X-1, Class
X-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O and Class P Certificates.
"RENT LOSS POLICY" or "RENT LOSS INSURANCE" means a policy of
insurance generally insuring against loss of income or rent resulting from
hazards or acts of God.
"RENTS FROM REAL PROPERTY" means, with respect to any REO
Property, income of the character described in Section 856(d) of the Code.
"REO ACCOUNT" shall have the meaning set forth in Section
9.14(a) hereof.
"REO DISPOSITION" means the receipt by the Master Servicer or
the Special Servicer of Liquidation Proceeds and other payments and recoveries
(including proceeds of a final sale) from the sale or other disposition of REO
Property.
"REO INCOME" means, with respect to any REO Property that had
not been security for an A/B Mortgage Loan or Loan Pair for any Collection
Period, all income received in connection with such REO Property during such
period less any operating expenses, utilities, real estate taxes, management
fees, insurance premiums, expenses for maintenance and repairs and any other
capital expenses directly related to such REO Property paid during such period
or, with respect to an REO Property that had been security for an A/B Mortgage
Loan or Loan Pair, the portion of the amounts described above received with
respect to such REO Property and allocable to the related A Note or Serviced
Pari Passu Mortgage Loan, as applicable, pursuant to the related Intercreditor
Agreement or Loan Pair Intercreditor Agreement, as applicable. With respect to
any Non-Serviced Mortgage Loan (if the applicable Non-Serviced Mortgage Loan
Special Servicer has foreclosed upon the Mortgaged Property secured by such
Non-Serviced Mortgage Loan Mortgage), the REO Income shall comprise only such
portion of the foregoing that is allocable to the holder of such Non-Serviced
Mortgage Loan, and with respect to the Mortgaged Property securing any Loan Pair
or A/B Mortgage Loan, only the portion of such amounts allocable to the holder
of the related Serviced Pari Passu Mortgage or the related A Note, as
applicable, shall be included in REO Income.
"REO MORTGAGE LOAN" means a Mortgage Loan, a Serviced
Companion Mortgage Loan or a B Note as to which the related Mortgaged Property
is an REO Property.
"REO PROPERTY" means a Mortgaged Property (or an interest
therein, if the Mortgaged Property securing any Loan Pair or the Mortgaged
Property securing an A/B
-64-
Mortgage Loan has been acquired by the Trust) acquired by the Trust through
foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation from
bankruptcy in connection with a Defaulted Mortgage Loan or otherwise treated as
foreclosure property under the REMIC Provisions; provided that a Mortgaged
Property that secures a Non-Serviced Mortgage Loan shall constitute an REO
Property if and when it is acquired under the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement for the benefit of the Trustee as the holder of
such Non-Serviced Mortgage Loan and of the holder of the related Non-Serviced
Companion Loan(s) through foreclosure, acceptance of a deed-in-lieu of
foreclosure, abandonment or reclamation from bankruptcy in connection with a
default or otherwise treated as forclosure property under the REMIC provisions.
The Special Servicer shall not have any obligations with respect to an REO
Property that relates to a Mortgaged Property that secures a Non-Serviced
Mortgage Loan and all references to the Special Servicer's obligations in this
Agreement with respect to "REO Property" shall exclude any such Mortgaged
Property that secures a Non-Serviced Mortgage Loan.
"REPORT DATE" means the third Business Day before the related
Distribution Date.
"REPURCHASED LOAN" has the meaning set forth in Section
2.3(a).
"REQUEST FOR RELEASE" means a request for release of certain
documents relating to the Mortgage Loans, a form of which is attached hereto as
Exhibit C.
"REQUIRED APPRAISAL LOAN" means any Mortgage Loan, Loan Pair
or B Note as to which an Appraisal Event has occurred. In the case of an A/B
Mortgage Loan, upon the occurrence of an Appraisal Event in respect of either
the related A Note or B Note, the A/B Mortgage Loan shall be deemed to be a
single Required Appraisal Loan. A Mortgage Loan, Loan Pair or B Note will cease
to be a Required Appraisal Loan at such time as it is a Rehabilitated Mortgage
Loan.
"RESERVE ACCOUNT" shall mean the Reserve Account maintained by
the Paying Agent in accordance with the provisions of Section 5.3, which shall
be an Eligible Account.
"RESIDUAL CERTIFICATES" means, with respect to REMIC I, the
Class R-I Certificates, with respect to REMIC II, the Class R-II Certificates
and with respect to REMIC III, the Class R-III Certificates.
"RESPONSIBLE OFFICER" means, when used with respect to the
initial Trustee or the Fiscal Agent, any officer assigned to the Asset-Backed
Securities Trust Services Group, or with respect to the Paying Agent, any
officer assigned to the Corporate Trust Services Group, each with specific
responsibilities for the matters contemplated by this Agreement and when used
with respect to any successor Trustee, Fiscal Agent or Paying Agent, any Vice
President, Assistant Vice President, corporate trust officer or any assistant
corporate trust officer or persons performing similar roles on behalf of the
Trustee, Fiscal Agent or Paying Agent.
"RESTRICTED SERVICER REPORTS" means the following reports in
CMSA format (as in effect on the date hereof or as such formats may be changed
from time to time by the CMSA) in, and containing substantially the information
contemplated by, the forms attached hereto as part of Exhibit W prepared by the
Master Servicer (combining reports in such forms prepared by the Master Servicer
and the Special Servicer (with respect to Specially Serviced Mortgage Loans
-65-
and REO Properties)): (i) a Comparative Financial Status Report; (ii) without
duplication with Section 8.14, an NOI Adjustment Worksheet; (iii) without
duplication with Section 8.14, a CMSA Operating Statement Analysis Report, (iv)
subject to Section 8.11(h), a CMSA Watch List, (v) a Property File, (vi) without
duplication with Section 8.14, a Financial File, (vii) a CMSA Special Servicer
Loan File and (vii) a realized loss report substantially in the form included in
Exhibit W.
"REVERSE SEQUENTIAL ORDER" means sequentially to the Class P,
Class O, Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F,
Class E, Class D, Class C, Class B and finally to the Class X and Class A
Certificates, on a pro rata basis, as described herein.
"RULE 144A" means Rule 144A under the 1933 Act.
"RULE 144A-IAI GLOBAL CERTIFICATE" means, with respect to any
Class of Certificates offered and sold in reliance on Rule 144A or to certain
Institutional Accredited Investors, a single, permanent global Certificate, in
definitive, fully registered form without interest coupons.
"S&P" means Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"XXXXXXXX-XXXXX CERTIFICATION" has the meaning set forth in
Section 8.26(b).
"SCHEDULED PAYMENT" means each scheduled payment of principal
of, and/or interest on, a Mortgage Loan, a Serviced Companion Mortgage Loan or a
B Note required to be paid on its Due Date by the Mortgagor in accordance with
the terms of the related Mortgage Note, Serviced Companion Mortgage Loan or B
Note (excluding all amounts of principal and interest which were due on or
before the Cut-Off Date, whenever received, and taking account of any
modifications thereof and the effects of any Debt Service Reduction Amounts and
Deficient Valuation Amounts). Notwithstanding the foregoing, the amount of the
Scheduled Payment for any Serviced Pari Passu Mortgage Loan or Serviced
Companion Mortgage Loan or any A Note or B Note shall be calculated without
regard to the related Loan Pair Intercreditor Agreement or the related
Intercreditor Agreement, as applicable.
"SCHEDULED PRINCIPAL BALANCE" means, with respect to any
Mortgage Loan, Serviced Companion Mortgage Loan, Loan Pair, B Note or REO
Mortgage Loan, for purposes of performing calculations with respect to any
Distribution Date, the Principal Balance thereof minus the aggregate amount of
any P&I Advances of principal previously made with respect to such Mortgage
Loan, Serviced Companion Mortgage Loan, Loan Pair, B Note or REO Mortgage Loan.
"SELLER" means Principal, Xxxxx Fargo, BSCMI or MSMC as the
case may be.
"SENIOR CERTIFICATES" means the Class A and Class X
Certificates.
"SERVICED COMPANION MORTGAGE LOAN" means any and all mortgage
loans that are serviced under this Agreement, are not "Mortgage Loans" included
in the Trust, but are paid on a pari passu basis with a Mortgage Loan included
in the Trust. There are no Serviced Pari
66
Passu Mortgage Loans included in the Trust, and therefore there are no Serviced
Companion Mortgage Loans related to the Trust.
"SERVICED COMPANION MORTGAGE LOAN CUSTODIAL ACCOUNT" means
each of the custodial sub-account(s) of the Certificate Account (but which are
not included in the Trust) created and maintained by the Master Servicer
pursuant to Section 5.1(c) on behalf of the holder of the related Serviced
Companion Mortgage Loan. Any such sub-account(s) shall be maintained as a
sub-account of an Eligible Account.
"SERVICED PARI PASSU MORTGAGE" means the Mortgage securing a
Serviced Pari Passu Mortgage Loan and its related Serviced Companion Mortgage
Loan secured by the related Mortgaged Property.
"SERVICED PARI PASSU MORTGAGE LOAN" means a Mortgage Loan that
is serviced under this Agreement, is a "Mortgage Loan" included in the Trust and
is paid on a pari passu basis with a Serviced Companion Mortgage Loan. There are
no Serviced Pari Passu Mortgage Loans included in the Trust.
"SERVICER ERRORS AND OMISSIONS INSURANCE POLICY" or "ERRORS
AND OMISSIONS INSURANCE POLICY" means an errors and omissions insurance policy
maintained by the Master Servicer, the Special Servicer, the Trustee, the Fiscal
Agent or the Paying Agent, as the case may be, in accordance with Section 8.2,
Section 9.2 and Section 7.17, respectively.
"SERVICER FIDELITY BOND" or "FIDELITY BOND" means a bond or
insurance policy under which the insurer agrees to indemnify the Master
Servicer, the Special Servicer, the Trustee, the Fiscal Agent or the Paying
Agent, as the case may be, (subject to standard exclusions) for all losses (less
any deductible) sustained as a result of any theft, embezzlement, fraud or other
dishonest act on the part of the Master Servicer's, the Special Servicer's, the
Trustee's, the Fiscal Agent's or the Paying Agent's, as the case may be,
directors, officers or employees and is maintained in accordance with Section
8.2, Section 9.2 and Section 7.17, respectively.
"SERVICER MORTGAGE FILE" means copies of the mortgage
documents listed in the definition of "Mortgage File" relating to a Mortgage
Loan and shall also include, to the extent required to be (and actually)
delivered to the applicable Seller pursuant to the applicable Mortgage Loan
documents, copies of the following items: the Mortgage Note, any Mortgage, the
Assignment of Leases and the Assignment of Mortgage, any guaranty/indemnity
agreement, any loan agreement, any insurance policies or certificates (as
applicable), any property inspection reports, any financial statements on the
property, any escrow analysis, any tax bills, any Appraisal, any environmental
report, any engineering report, any asset summary, financial information on the
Mortgagor/sponsor and any guarantors, any letters of credit, any intercreditor
agreement and any Environmental Insurance Policies.
"SERVICING ADVANCE" means any cost or expense of the Master
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as the case may
be, designated as a Servicing Advance pursuant to this Agreement and any other
costs and expenses incurred by the Master Servicer, the Special Servicer, the
Trustee or the Fiscal Agent, as the case may be, to protect and
67
preserve the security for such Mortgage Loan and/or (if applicable) the related
Serviced Companion Mortgage Loan or B Note.
"SERVICING OFFICER" means, any officer or employee of the
Master Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans, any Serviced Companion Mortgage Loan and any B
Note whose name and specimen signature appear on a list of servicing officers or
employees furnished to the Trustee by the Master Servicer and signed by an
officer of the Master Servicer, as such list may from time to time be amended.
"SERVICING STANDARD" means, with respect to the Master
Servicer or the Special Servicer, as the case may be, to service and administer
the Mortgage Loans (and any Serviced Companion Mortgage Loan and B Note but not
any Non-Serviced Mortgage Loan) that it is obligated to service and administer
pursuant to this Agreement on behalf of the Trustee and in the best interests of
and for the benefit of the Certificateholders (and in the case of any Serviced
Companion Mortgage Loan or B Note, the related holder of the Serviced Companion
Mortgage Loan or B Note, as applicable) as a collective whole (as determined by
the Master Servicer or the Special Servicer, as the case may be, in its good
faith and reasonable judgment), in accordance with applicable law, the terms of
this Agreement and the terms of the respective Mortgage Loans, any Serviced
Companion Mortgage Loan and any B Note (and, in the case of any Loan Pair or any
A Note and B Note, the related Loan Pair Intercreditor Agreement or the related
Intercreditor Agreement, as applicable) and, to the extent consistent with the
foregoing, further as follows:
(a) with the same care, skill and diligence as is normal and
usual in its general mortgage servicing and REO property management activities
on behalf of third parties or on behalf of itself, whichever is higher, with
respect to mortgage loans and REO properties that are comparable to those for
which it is responsible hereunder;
(b) with a view to the timely collection of all scheduled
payments of principal and interest under the Mortgage Loans, any Serviced
Companion Mortgage Loan and any B Note or, if a Mortgage Loan, any Serviced
Companion Mortgage Loan or any B Note comes into and continues in default and
if, in the good faith and reasonable judgment of the Special Servicer, no
satisfactory arrangements can be made for the collection of the delinquent
payments, the maximization of the recovery of principal and interest on such
Mortgage Loan to the Certificateholders (as a collective whole) (or in the case
of any A/B Mortgage Loan and its related B Note or any Loan Pair, the
maximization of the recovery of principal and interest on such A/B Mortgage Loan
or Loan Pair, as applicable, to the Certificateholders and the holder of the
related B Note or Serviced Companion Mortgage Loan, as applicable, all taken as
a collective whole) on a net present value basis (the relevant discounting of
anticipated collections that will be distributable to Certificateholders to be
performed at the rate determined by the Special Servicer but in any event not
less than (i) the related REMIC I Net Mortgage Rate, in the case of the Mortgage
Loans (other than any A Note or Serviced Pari Passu Mortgage Loan) or (ii) the
weighted average of the mortgage rates on the related A Note and B Note, in the
case of any A/B Mortgage Loan, and on the related Serviced Pari Passu Mortgage
Loan and Serviced Companion Mortgage Loan in the case of any Loan Pair); and
without regard to: (I) any other relationship that the Master Servicer or the
Special Servicer, as the case may be, or any Affiliate thereof may have with the
related Mortgagor; (II) the ownership of any Certificate or any interest
68
in any Non-Serviced Companion Mortgage Loan, Serviced Companion Mortgage Loan, B
Note or any mezzanine loan related to a Mortgage Loan by the Master Servicer or
the Special Servicer, as the case may be, or any Affiliate thereof; (III) the
Master Servicer's obligation to make Advances; (IV) the right of the Master
Servicer (or any Affiliate thereof) or the Special Servicer (or any Affiliate
thereof), as the case may be, to receive reimbursement of costs, or the
sufficiency of any compensation payable to it, hereunder or with respect to any
particular transaction and (V) any obligation of the Master Servicer (or any
Affiliate thereof) to repurchase any Mortgage Loan from the Trust.
"SERVICING TRANSFER EVENT" means the occurrence of any of the
following events: (i) any Mortgage Loan (other than a Non-Serviced Mortgage
Loan), Serviced Companion Mortgage Loan or B Note as to which a Balloon Payment
is past due, and the Master Servicer has determined, in its good faith
reasonable judgment in accordance with the Servicing Standard, that payment is
unlikely to be made on or before the 60th day succeeding the date the Balloon
Payment was due, or any other payment is more than 60 days past due or has not
been made on or before the second Due Date following the Due Date such payment
was due; (ii) any Mortgage Loan (other than a Non-Serviced Mortgage Loan),
Serviced Companion Mortgage Loan or B Note as to which, to the Master Servicer's
knowledge, the Mortgagor has consented to the appointment of a receiver or
conservator in any insolvency or similar proceeding of, or relating to, such
Mortgagor or to all or substantially all of its property, or the Mortgagor has
become the subject of a decree or order issued under a bankruptcy, insolvency or
similar law and such decree or order shall have remained undischarged or
unstayed for a period of 30 days; (iii) any Mortgage Loan (other than a
Non-Serviced Mortgage Loan), Serviced Companion Mortgage Loan or B Note as to
which the Master Servicer shall have received notice of the foreclosure or
proposed foreclosure of any other lien on the Mortgaged Property; (iv) any
Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Companion
Mortgage Loan or B Note as to which the Master Servicer has knowledge of a
default (other than a failure by the related Mortgagor to pay principal or
interest) which in the good faith reasonable judgment of the Master Servicer
materially and adversely affects the interests of the Certificateholders or the
holder of any related Serviced Companion Mortgage Loan or B Note and which has
occurred and remains unremedied for the applicable grace period specified in
such Mortgage Loan (or, if no grace period is specified, 60 days); (v) any
Mortgage Loan (other than a Non-Serviced Mortgage Loan), Serviced Companion
Mortgage Loan or B Note as to which the Mortgagor admits in writing its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes an
assignment for the benefit of its creditors or voluntarily suspends payment of
its obligations and (vi) any Mortgage Loan (other than a Non-Serviced Mortgage
Loan), Serviced Companion Mortgage Loan or B Note as to which, in the good faith
reasonable judgment of the Master Servicer, (a) (other than with respect to any
A/B Mortgage Loan) a payment default is imminent or is likely to occur within 60
days, or (b) any other default is imminent or is likely to occur within 60 days
and such default, in the judgment of the Master Servicer, is reasonably likely
to materially and adversely affect the interests of the Certificateholders or
the holder of any related Serviced Companion Mortgage Loan or B Note (as the
case may be); provided, however, that (1) if the holder of the B Note exercised
its right to cure a monetary default and a monetary default occurs in the
following month due to the holder of the B Note's failure to cure, then
servicing of such Mortgage Loan shall be transferred to the Special Servicer on
the Business Day following the expiration of the Cure Period (as defined in the
related Intercreditor Agreement) of the holder of the B Note if the holder of
the B Note does not cure the current monetary default or (2) if the
69
holder of the B Note has exercised its right to cure the number of consecutive
monetary defaults it is permitted to cure under the related Intercreditor
Agreement and a monetary default occurs in the following month, then servicing
of such Mortgage Loan shall be transferred to the Special Servicer at the
expiration of the Mortgagor's grace period for the current monetary default. If
a Servicing Transfer Event occurs with respect to an A Note, it shall be deemed
to have occurred also with respect to its related B Note; provided, however,
that if a Servicing Transfer Event would otherwise have occurred with respect to
an A Note, but has not so occurred solely because the holder of the related B
Note has exercised its cure rights under the related Intercreditor Agreement,
then a Servicing Transfer Event will not occur with respect to such A/B Mortgage
Loan. If a Servicing Transfer Event occurs with respect to a B Note, it shall be
deemed to have occurred also with respect to its related A Note. If a Servicing
Transfer Event occurs with respect to any Serviced Pari Passu Mortgage Loan, it
shall be deemed to have occurred also with respect to the related Serviced
Companion Mortgage Loan. If a Servicing Transfer Event occurs with respect to
any Serviced Companion Mortgage Loan, it shall be deemed to have occurred also
with respect to the related Serviced Pari Passu Mortgage Loan. Under the
applicable Non-Serviced Mortgage Loan Pooling and Servicing Agreement, if a
Servicing Transfer Event occurs with respect to any Non-Serviced Companion
Mortgage Loan, it shall be deemed to have occurred also with respect to the
related Non-Serviced Mortgage Loan.
"SIMILAR LAWS" has the meaning set forth in Section 3.3(d).
"SINGLE-PURPOSE ENTITY" means a Person, other than an
individual, whose organizational documents provide substantially to the effect
that it is formed or organized solely for the purpose of owning and collecting
payments from Defeasance Collateral for the benefit of the Trust and which (i)
does not engage in any business unrelated thereto and the financing thereof;
(ii) does not have any assets other than those related to its interest in
Defeasance Collateral; (iii) maintains its own books, records and accounts, in
each case which are separate and apart from the books, records and accounts of
any other Person; (iv) conducts business in its own name and uses separate
stationery, invoices and checks; (v) does not guarantee or assume the debts or
obligations of any other Person; (vi) does not commingle its assets or funds
with those of any other Person; (vii) transacts business with affiliates on an
arm's length basis pursuant to written agreements; and (viii) holds itself out
as being a legal entity, separate and apart from any other Person, and otherwise
complies with the single-purpose requirements established by the Rating
Agencies. The entity's organizational documents also provide that any
dissolution and winding up or insolvency filing for such entity requires the
unanimous consent of all partners or members, as applicable, and that such
documents may not be amended with respect to the Single-Purpose Entity
requirements.
"SPECIAL SERVICER" means ARCap Servicing, Inc., or any
successor Special Servicer as herein provided, including without limitation, any
successor Special Servicer appointed pursuant to Section 9.39 hereof.
"SPECIAL SERVICER COMPENSATION" means, with respect to any
applicable period, the sum of the Special Servicing Fees, the Liquidation Fees
and Work-Out Fees and any other amounts to be paid to the Special Servicer
pursuant to the terms of this Agreement.
"SPECIAL SERVICER REMITTANCE DATE" means the Business Day
preceding each Determination Date.
70
"SPECIAL SERVICING FEE" means, for each calendar month, as to
each Mortgage Loan (other than any Non-Serviced Mortgage Loan), Serviced
Companion Mortgage Loan or B Note that is a Specially Serviced Mortgage Loan
(including REO Mortgage Loans), the fraction or portion of the Special Servicing
Fee Rate applicable to such month (determined using the same interest accrual
methodology that is applied with respect to the Mortgage Rate for such Mortgage
Loan, Serviced Companion Mortgage Loan or B Note for such month) multiplied by
the Scheduled Principal Balance of such Specially Serviced Mortgage Loan
immediately before the Due Date occurring in such month.
"SPECIAL SERVICING FEE RATE" means 0.25% per annum.
"SPECIAL SERVICING OFFICER" means any officer or employee of
the Special Servicer involved in, or responsible for, the administration and
servicing of the Specially Serviced Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee, the Paying Agent and the Master Servicer by the Special Servicer signed
by an officer of the Special Servicer, as such list may from time to time be
amended.
"SPECIALLY SERVICED MORTGAGE LOAN" means, as of any date of
determination, any Mortgage Loan (other than any Non-Serviced Mortgage Loan),
Serviced Companion Mortgage Loan or B Note with respect to which the Master
Servicer has notified the Special Servicer, the Operating Adviser and the
Trustee that a Servicing Transfer Event has occurred (which notice shall be
effective upon receipt) and the Special Servicer has received all information,
documents and records relating to such Mortgage Loan, Serviced Companion
Mortgage Loan or B Note as reasonably requested by the Special Servicer to
enable it to assume its duties with respect to such Mortgage Loan, Serviced
Companion Mortgage Loan or B Note. A Specially Serviced Mortgage Loan shall
cease to be a Specially Serviced Mortgage Loan from and after the date on which
the Special Servicer notifies the Master Servicer, the Operating Adviser, the
Paying Agent and the Trustee, in accordance with Section 8.1(b), that such
Mortgage Loan (and the related B Note in the case of an A/B Mortgage Loan, and
the related Serviced Companion Mortgage Loan in the case of a Loan Pair) has
become a Rehabilitated Mortgage Loan (and, in the case of an A Note (or B Note)
that is or was a Specially Serviced Mortgage Loan, its related B Note (or A
Note) has also become a Rehabilitated Mortgage Loan and, in the case of a
Serviced Pari Passu Mortgage Loan (or Serviced Companion Mortgage Loan) that is
or was a Specially Serviced Mortgage Loan, its related Serviced Companion
Mortgage Loan (or Serviced Pari Passu Mortgage Loan) has also become a
Rehabilitated Mortgage Loan), with respect to such Servicing Transfer Event,
unless and until the Master Servicer notifies the Special Servicer, the Paying
Agent and the Trustee, in accordance with Section 8.1(b) that another Servicing
Transfer Event with respect to such Mortgage Loan, Serviced Companion Mortgage
Loan or B Note exists or occurs.
"STANDARD HAZARD INSURANCE POLICY" means a fire and casualty
extended coverage insurance policy in such amount and with such coverage as
required by this Agreement.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC
II and REMIC III, the day designated as such in Section 12.1(b).
71
"SUB-SERVICER" has the meaning set forth in Section 8.4.
"SUBORDINATE CERTIFICATES" means, collectively, the Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N, Class O and Class P Certificates.
"SUCCESSFUL BIDDER" has the meaning set forth in Section
8.29(d) or Section 9.31(d), as applicable.
"TAX MATTERS PERSON" means the person designated as the "tax
matters person" of each REMIC Pool pursuant to Treasury Regulations Section
1.860F-4(d) and temporary Treasury Regulations Section 301.6231(a)(7)-1T.
"TERMINATION PRICE" has the meaning set forth in Section
10.1(b).
"TITLE INSURANCE POLICY" means a title insurance policy
maintained with respect to a Mortgage Loan issued on the date of origination of
the related Mortgage Loan.
"TRANSFER" means any direct or indirect transfer, sale,
pledge, hypothecation, or other form of assignment of any Ownership Interest in
a Certificate.
"TRANSFEREE" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRANSFEROR" means any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
"TRUST" means the trust created pursuant to this Agreement,
the assets which consist of all the assets of REMIC I (including the Mortgage
Loans (other than Excess Interest), such amounts related thereto as shall from
time to time be held in the Certificate Account, the Distribution Account, the
Reserve Account, the Interest Reserve Account, the Insurance Policies, any REO
Properties or beneficial interests therein and other items referred to in
Section 2.1(a) hereof), REMIC II, REMIC III, the Excess Interest Sub-account and
any Excess Interest on the Mortgage Loans. The Trust shall not include any
Non-Serviced Companion Mortgage Loan, any B Note, any interest of the holders of
a B Note, any A/B Loan Custodial Account or any Serviced Companion Mortgage
Loan, any interest of the holders of a Serviced Companion Mortgage Loan or any
Serviced Companion Mortgage Loan Custodial Account.
"TRUSTEE" means LaSalle Bank National Association, as trustee,
or its successor-in-interest, or if any successor trustee, or any co-trustee
shall be appointed as herein provided, then "Trustee" shall also mean such
successor trustee (subject to Section 7.7 hereof) and such co-trustee (subject
to Section 7.9 hereof), as the case may be.
"TRUSTEE FEE" means for each calendar month, as to each
Mortgage Loan (including REO Mortgage Loans and Defeasance Loans), the portion
of the Trustee Fee Rate applicable to such month (determined using the same
interest accrual methodology (other than the rate of accrual) that is applied
with respect to the Mortgage Rate for such Mortgage Loan for such month)
multiplied by the Scheduled Principal Balance of each such Mortgage Loan
immediately before the Due Date occurring in such month; provided that a portion
of the Trustee
72
Fee agreed upon between the Trustee and the Paying Agent shall be applied to pay
the Paying Agent Fee.
"TRUSTEE FEE RATE" means .0022% per annum (which includes the
Paying Agent Fee).
"TRUSTEE MORTGAGE FILE" means the mortgage documents listed in
the definition of "Mortgage File" hereof pertaining to a particular Mortgage
Loan (and, if applicable, the related Serviced Companion Mortgage Loan and the
related B Note) and any additional documents required to be added to the
Mortgage File pursuant to this Agreement; provided that whenever the term
"Trustee Mortgage File" is used to refer to documents actually received by the
Trustee or a Custodian on its behalf, such terms shall not be deemed to include
such documents required to be included therein unless they are actually so
received.
"UNDERWRITER" means each of Bear, Xxxxxxx & Co. Inc., Xxxxxx
Xxxxxxx & Co. Incorporated, Xxxxxxx, Sachs & Co. and Xxxxx Fargo Brokerage
Services, LLC or its successors in interest.
"UNITED STATES TAX PERSON" means any of (i) a citizen or
resident of the United States, (ii) corporation or partnership organized in or
under the laws of the United States, any State thereof or the District of
Columbia, (iii) an estate the income of which is includible in gross income for
United States tax purposes, regardless of its source or (iv) a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more United States Tax Persons has the
authority to control all substantial decisions of such trust.
"UNLIQUIDATED ADVANCE" means any Advance previously made by a
party hereto that has been previously reimbursed to that party by the Trust Fund
as part of a Workout-Delayed Reimbursement Amount pursuant to subsection (iii)
of Section 5.2(a)(II), but that has not been recovered from the Mortgagor or
otherwise from collections on or the proceeds of the Mortgage Loan or REO
Property in respect of which the Advance was made.
"UNPAID INTEREST" means, on any Distribution Date with respect
to any Class of Interests or Certificates (other than the Residual
Certificates), the portion of Distributable Certificate Interest for such Class
remaining unpaid as of the close of business on the preceding Distribution Date,
plus one month's interest thereon at the applicable Pass-Through Rate.
"UNRESTRICTED SERVICER REPORTS" means the following reports in
CMSA format (as in effect on the date hereof or as such formats may be changed
from time to time by the CMSA) in, and containing substantially the information
contemplated by, the forms attached hereto as part of Exhibit X prepared by the
Master Servicer (combining reports in such forms prepared by the Master Servicer
and the Special Servicer (with respect to Specially Serviced Mortgaged Loans and
REO Properties)): (a) the following electronic files; (i) a Loan Setup File
(with respect to the initial Distribution Date only); and (ii) a Loan Periodic
Update File; and (b) the following supplemental reports: (i) a Delinquent Loan
Status Report, (ii) an Historical Loan Modification Report, (iii) an Historical
Liquidation Report, (iv) an REO Status Report, and (v) a CMSA Loan Level
Reserve/LOC Report.
"USAP" shall have the meaning set forth in Section 8.13.
73
"WEIGHTED AVERAGE REMIC I NET MORTGAGE RATE" means, with
respect to any Distribution Date, the weighted average of the REMIC I Net
Mortgage Rates for the REMIC I Regular Interests, weighted on the basis of their
respective Certificate Balances as of the close of business on the preceding
Distribution Date.
"XXXXX FARGO" has the meaning set forth in the Preliminary
Statement hereto.
"XXXXX FARGO LOANS" means, collectively, those Mortgage Loans
sold to the Depositor pursuant to Mortgage Loan Purchase Agreement II and shown
on Schedule II hereto.
"WORKOUT-DELAYED REIMBURSEMENT AMOUNT" has the meaning set
forth in subsection (II)(i) of Section 5.2(a).
"WORK-OUT FEE" means a fee payable with respect to any
Rehabilitated Mortgage Loan (other than any Non-Serviced Mortgage Loan),
Serviced Companion Mortgage Loan or B Note, equal to the product of (x) 1.0% and
(y) the amount of each collection of interest (other than default interest and
any Excess Interest) and principal received (including any Condemnation Proceeds
received and applied as a collection of such interest and principal) on such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note for so long as it
remains a Rehabilitated Mortgage Loan.
SECTION 1.2 CALCULATIONS RESPECTING MORTGAGE LOANS.
(a) Calculations required to be made by the Paying Agent
pursuant to this Agreement with respect to any Mortgage Loan, Serviced Companion
Mortgage Loan or B Note shall be made based upon current information as to the
terms of such Mortgage Loan, Serviced Companion Mortgage Loan and B Note and
reports of payments received from the Master Servicer on such Mortgage Loan,
Serviced Companion Mortgage Loan and B Note and payments to be made to the
Paying Agent as supplied to the Paying Agent by the Master Servicer. The Paying
Agent shall not be required to recompute, verify or recalculate the information
supplied to it by the Master Servicer and may conclusively rely upon such
information in making such calculations. If, however, a Responsible Officer of
the Paying Agent has actual knowledge of an error in the calculations, the
Paying Agent shall inform the Master Servicer of such error.
(b) Unless otherwise required by law or the applicable
Mortgage Loan, Serviced Companion Mortgage Loan or B Note documents (or the
related Intercreditor Agreement or related Loan Pair Intercreditor Agreement, as
applicable), or as otherwise provided for in the definition of Liquidation
Realized Loss, any amounts (other than escrow and reserve deposits and
reimbursements of lender advances and expenses) received in respect of a
Mortgage Loan, a Serviced Companion Mortgage Loan or a B Note as to which a
default has occurred and is continuing shall be applied first to overdue
interest due with respect to such Mortgage Loan, Serviced Companion Mortgage
Loan or B Note at the Mortgage Rate thereof, next to current interest due with
respect to such Mortgage Loan, Serviced Companion Mortgage Loan or B Note at the
Mortgage Rate thereof, next to the reduction of the Principal Balance of such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note to zero if such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note has been accelerated
and in respect of any scheduled payments of principal then due to the extent
that such Mortgage Loan, Serviced Companion
74
Mortgage Loan or B Note has not yet been accelerated, next to any default
interest and other amounts due on such Mortgage Loan, Serviced Companion
Mortgage Loan or B Note and finally to Late Fees due with respect to such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note. The foregoing
allocations are intended to govern loan level allocations but shall not govern
allocations of such amounts at the trust level for the purpose of determining
Principal Distribution Amounts or Distributable Certificate Interest.
SECTION 1.3 CALCULATIONS RESPECTING ACCRUED INTEREST. Accrued
interest on any Certificate shall be calculated based upon a 360-day year
consisting of twelve 30-day months and Pass-Through Rates shall be carried out
to eight decimal places, rounded if necessary. All dollar amounts calculated
hereunder shall be rounded to the nearest xxxxx.
SECTION 1.4 INTERPRETATION.
(a) Whenever the Agreement refers to a Distribution Date and a
"related" Collection Period, Interest Accrual Period, Record Date, Due Date,
Report Date, Monthly Certificateholders Report, Special Servicer Remittance
Date, Master Servicer Remittance Date or Determination Date, such reference
shall be to the Collection Period, Interest Accrual Period, Record Date, Due
Date, Report Date, Special Servicer Remittance Date, Master Servicer Remittance
Date or Determination Date, as applicable, immediately preceding such
Distribution Date.
(b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.1 shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting principles, as
applicable.
(c) The words "hereof," "herein" and "hereunder," and words of
similar import, when used in this Agreement, shall refer to this agreement as a
whole and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(d) Whenever a term is defined herein, the definition ascribed
to such term shall be equally applicable to both the singular and plural forms
of such term and to masculine, feminine and neuter genders of such term.
(e) This Agreement is the result of arm's-length negotiations
between the parties and has been reviewed by each party hereto and its counsel.
Each party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
SECTION 1.5 ARD LOANS.
Notwithstanding any provision of this Agreement:
(a) For the ARD Loans, the Excess Interest accruing as a
result of the step-up in the Mortgage Rate upon failure of the related Mortgagor
to pay the principal due on the Anticipated Repayment Date as specifically
provided for in the related Mortgage Note shall not
75
be taken into account for purposes of the definitions of "Appraisal Reduction,"
"Assumed Scheduled Payment," "Mortgage Rate," "Purchase Price" and "Realized
Loss."
(b) Excess Interest shall constitute an asset of the Trust but
not an asset of any REMIC Pool.
(c) Neither the Master Servicer nor the Special Servicer shall
take any enforcement action with respect to the payment of Excess Interest on
any Mortgage Loan unless the taking of such action is consistent with the
Servicing Standard and all other amounts due under such Mortgage Loan have been
paid, and, in the good faith and reasonable judgment of the Master Servicer and
the Special Servicer, as the case may be, the Liquidation Proceeds expected to
be recovered in connection with such enforcement action will cover the
anticipated costs of such enforcement action and, if applicable, any associated
interest thereon.
(d) Liquidation Fees shall not be deemed to be earned on
Excess Interest.
(e) With respect to an ARD Loan, after its Anticipated
Repayment Date, the Master Servicer or the Special Servicer, as the case may be,
shall be permitted, in its discretion, to waive in accordance with Section 8.18
and Section 9.5 hereof, all or any accrued Excess Interest if, prior to the
related Maturity Date, the related Mortgagor has requested the right to prepay
the Mortgage Loan in full together with all payments required by the Mortgage
Loan in connection with such prepayment except for all or a portion of accrued
Excess Interest, provided that the Master Servicer's or the Special Servicer's
determination to waive the right to such accrued Excess Interest is in
accordance with the Servicing Standard and with Section 8.18 and Section 9.5
hereof. The Master Servicer or the Special Servicer, as the case may be, will
have no liability to the Trust, the Certificateholders or any other person so
long as such determination is based on such criteria.
SECTION 1.6 CERTAIN MATTERS WITH RESPECT TO LOAN PAIRS AND A/B
MORTGAGE LOANS.
(a) The parties hereto acknowledge that, pursuant to the
related Loan Pair Intercreditor Agreement or the related Intercreditor
Agreement, if a Serviced Pari Passu Mortgage Loan or B Note, as applicable, is
no longer part of the Trust Fund or is no longer serviced pursuant to the terms
of this Agreement, the holder of such Serviced Pari Passu Mortgage Loan or B
Note, as applicable, shall negotiate one or more new servicing agreements with
the Master Servicer and the Special Servicer, provided that, prior to entering
into any such new servicing agreement, the new holder of such Serviced Pari
Passu Mortgage Loan or B Note, as applicable, shall obtain and provide to the
holder of the related Serviced Companion Mortgage Loan and/or B Note written
confirmation from each rating agency then rating any securitization relating to
such Serviced Companion Mortgage Loan and/or B Note providing that such new
servicing agreement will not result in the downgrade, qualification or
withdrawal of its then-current ratings of any securities issued in such
securitization; provided, that prior to such time the Master Servicer and the
Special Servicer shall continue to service the related Loan Pair and/or A/B
Mortgage Loan to the extent provided in the related Loan Pair Intercreditor
Agreement or the related Intercreditor Agreement, as applicable.
76
(b) For the avoidance of doubt and subject to subsection (a)
above, the parties acknowledge that the rights and duties of each of the Master
Servicer and the Special Servicer under Article VIII and Article IX and the
obligation of the Master Servicer to make Advances, insofar as such rights,
duties and obligations relate to any A/B Mortgage Loan (including both the
related A Note and the related B Note) or Loan Pair, shall terminate upon the
earliest to occur of the following with respect to such A/B Mortgage Loan or
Loan Pair, as the case may be: (i) any repurchase of or substitution for the
related A Note or Serviced Pari Passu Mortgage Loan by the applicable Seller
pursuant to Section 2.3, (ii) any purchase of the related A Note by the owner of
the related B Note pursuant to the terms of the related Intercreditor Agreement
and (iii) any payment in full of any and all amounts due (or deemed due) under
the related A Note or Serviced Pari Passu Mortgage Loan (or its successor REO
Mortgage Loan) (including amounts to which the holder of such A Note or Serviced
Pari Passu Mortgage Loan is entitled under the related Intercreditor Agreement
or related Loan Pair Intercreditor Agreement), as applicable; provided, however,
that this statement shall not limit (A) the duty of the Master Servicer or the
Special Servicer to deliver or make available the reports otherwise required of
it hereunder with respect to the Collection Period in which such event occurs or
(B) the rights of the Master Servicer or the Special Servicer that may otherwise
accrue or arise in connection with the performance of its duties hereunder with
respect to such A/B Mortgage Loan or Loan Pair prior to the date on which such
event occurs.
(c) In connection with any purchase described in clause (ii)
of subsection (b) or an event described in clause (iii) of subsection (b), the
Trustee, the Master Servicer and the Special Servicer shall each tender to (in
the case of a purchase under such clause (ii)) the related purchaser (provided
that the related purchaser shall have paid the full amount of the applicable
purchase price) or (in the case of such clause (iii)) to the holder of the
related Serviced Companion Mortgage Loan or B Note (if then still outstanding),
upon delivery to them of a receipt executed by such purchaser or holder, all
portions of the Mortgage File and other documents pertaining to such Loan Pair
or A/B Mortgage Loan, as applicable, possessed by it, and each document that
constitutes a part of the Mortgage File shall be endorsed or assigned to the
extent necessary or appropriate to such purchaser or holder (or the designee of
such purchaser or holder) in the same manner, and pursuant to appropriate forms
of assignment, substantially similar to the manner and forms pursuant to which
documents were previously assigned to the Trustee by the related Seller, but in
any event, without recourse, representation or warranty; provided that such
tender by the Trustee shall be conditioned upon its receipt from the Master
Servicer of a Request for Release. The Master Servicer shall, and is also hereby
authorized and empowered by the Trustee to, convey to such purchaser or such
holder any deposits then held in an Escrow Account relating to the applicable
A/B Mortgage Loan or Loan Pair. If a Serviced Pari Passu Mortgage Loan and the
related Serviced Companion Mortgage Loan or an A Note and the related B Note
under the applicable Mortgage Loan are then REO Mortgage Loans, then the Special
Servicer shall, and is also hereby authorized and empowered by the Trustee to,
convey to such purchaser or such holder, in each case, to the extent not needed
to pay or reimburse the Master Servicer, the Special Servicer, the Trustee or
the Fiscal Agent in accordance with this Agreement, deposits then held in the
REO Account insofar as they relate to the related REO Property.
(d) If an expense under this Agreement relates, in the
reasonable judgment of the Master Servicer, the Special Servicer, the Trustee or
the Paying Agent, as applicable, primarily to the administration of the Trust
Fund or any REMIC formed hereunder or to any
77
determination respecting the amount, payment or avoidance of any tax under the
REMIC Provisions or the actual payment of any REMIC tax or expense with respect
to any REMIC formed hereunder, then such expense shall not be allocated to,
deducted or reimbursed from, or otherwise charged against the holder of any
Serviced Companion Mortgage Loan or B Note and such holder shall not suffer any
adverse consequences as a result of the payment of such expense.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
Section 2.1 Conveyance of Mortgage Loans.
(a) Effective as of the Closing Date, the Depositor does
hereby assign in trust to the Trustee, without recourse, for the benefit of the
Certificateholders all the right, title and interest of the Depositor, in, to
and under (i) the Mortgage Loans identified on the Mortgage Loan Schedule
including the related Mortgage Notes, Mortgages, security agreements and title,
hazard and other insurance policies, including all Qualifying Substitute
Mortgage Loans, all distributions with respect thereto payable after the Cut-Off
Date, the Mortgage File and all rights, if any, of the Depositor in the
Distribution Account, all REO Accounts, the Certificate Account, the Reserve
Account and the Interest Reserve Account, (ii) the Depositor's rights under each
Mortgage Loan Purchase Agreement that are permitted to be assigned to the
Trustee pursuant to Section 14 thereof, (iii) the Initial Deposit, (iv) the
Depositor's rights under any Intercreditor Agreement, Loan Pair Intercreditor
Agreement, Non-Serviced Mortgage Loan Intercreditor Agreement and the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement with respect to any
Non-Serviced Mortgage Loan and (v) all other assets included or to be included
in REMIC I for the benefit of REMIC II and REMIC III or the Class P Grantor
Trust for the benefit of the Class P Certificates. Such assignment includes all
interest and principal received or receivable on or with respect to the Mortgage
Loans and due after the Cut-Off Date. The transfer of the Mortgage Loans and the
related rights and property accomplished hereby is absolute and is intended by
the parties to constitute a sale. In connection with the initial sale of the
Certificates by the Depositor, the purchase price to be paid includes a portion
attributable to interest accruing on the Certificates from and after the Cut-Off
Date. The transfer and assignment of any Non-Serviced Mortgage Loans to the
Trustee and the right to service such Mortgage Loans are subject to the terms
and conditions of the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement and the related Non-Serviced Mortgage Loan Intercreditor Agreement,
and the Trustee, by the execution and delivery of this Agreement, hereby agrees
that such Mortgage Loans remain subject to the terms of the related Non-Serviced
Mortgage Loan Intercreditor Agreement and, with respect to each Serviced Pari
Passu Mortgage Loan and Serviced Companion Mortgage Loan, the related Loan Pair
Intercreditor Agreement.
(b) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall direct, and hereby represents and
warrants that it has directed, each Seller pursuant to the applicable Mortgage
Loan Purchase Agreement to deliver to and deposit with, or cause to be delivered
to and deposited with, the Trustee or a Custodian appointed hereunder, on or
before the Closing Date, the Mortgage Note for each Mortgage Loan so assigned,
endorsed to the Trustee as specified in clause (i) of the definition of
"Mortgage File."
78
Each Seller is required, pursuant to the applicable Mortgage Loan Purchase
Agreement, to deliver to the Trustee the remaining documents constituting the
Mortgage File for each Mortgage Loan within the time period set forth therein.
None of the Trustee, the Fiscal Agent, the Paying Agent, any Custodian, the
Master Servicer or the Special Servicer shall be liable for any failure by any
Seller or the Depositor to comply with the document delivery requirements of the
Mortgage Loan Purchase Agreements and this Section 2.1(b).
(c) The applicable Seller shall, at the expense of such Seller
as to each of its respective Mortgage Loans, promptly (and in any event within
45 days following the receipt thereof) cause to be submitted for recording or
filing (except with respect to any Mortgage that has been recorded in the name
of MERS or its designees), as the case may be, in the appropriate public office
for real property records or UCC financing statements, as appropriate, each
assignment to the Trustee referred to in clauses (iv), (vi)(B) and (ix)(B) of
the definition of "Mortgage File;" provided, if the related Mortgage and UCC
financing statements have been recorded in the name of MERS or its designee, no
such assignments will be required to be submitted for recording or filing and
instead, the applicable Seller has agreed in the applicable Mortgage Loan
Purchase Agreement to take all actions as are necessary to cause the Trustee to
be shown as, and the Trustee shall take all actions necessary to confirm that it
is shown as, the owner of the related Mortgage on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS. Each such assignment shall reflect that it should
be returned by the public recording office to the Trustee following recording or
filing; provided that in those instances where the public recording office
retains the original Assignment of Mortgage, assignment of Assignment of Leases
or assignment of UCC financing statements, the applicable Seller shall obtain
therefrom a certified copy of the recorded original. The applicable Seller shall
forward copies thereof to the Trustee and the Special Servicer and, if recorded
in the name of MERS, shall deliver to the Master Servicer and the Special
Servicer, within 45 days of the Closing Date, evidence confirming that the
Trustee is shown as the owner on the record of MERS. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the applicable Seller shall, pursuant to the
applicable Mortgage Loan Purchase Agreement, promptly prepare or cause to be
prepared a substitute therefor or cure such defect, as the case may be, and
thereafter the applicable Seller shall upon receipt thereof cause the same to be
duly recorded or filed, as appropriate. After the applicable Seller has caused
the Trustee to be identified on the records of MERS as the owner of a Mortgage,
it shall be the sole responsibility of the Master Servicer to ensure that
subsequent relevant events relating to the Mortgage (as, for example,
assumptions and partial releases) are promptly and properly registered with MERS
throughout the term of the related Mortgage Loan for so long as the Mortgage
Loan is an asset of the Trust.
The parties acknowledge the obligation of each Seller pursuant
to Section 2 of the related Mortgage Loan Purchase Agreement to deliver to the
Trustee, on or before the fifth Business Day after the Closing Date, five
limited powers of attorney substantially in the form attached as Exhibit C to
the Primary Servicing Agreement in favor of the Trustee and the Special Servicer
to empower the Trustee and, in the event of the failure or incapacity of the
Trustee, the Special Servicer, to submit for recording, at the expense of the
applicable Seller, any mortgage loan documents required to be recorded as
described in the preceding paragraph and any intervening assignments with
evidence of recording thereon that are required to be included in the Mortgage
Files (so long as original counterparts have previously been delivered to the
Trustee). The Sellers agree to reasonably cooperate with the Trustee and the
Special Servicer in
79
connection with any additional powers of attorney or revisions thereto that are
requested by such parties for purposes of such recordation. The Trustee and each
other party hereto agrees that no such power of attorney shall be used with
respect to any Mortgage Loan by or under authorization by any party hereto
except to the extent that the absence of a document described in the second
preceding sentence with respect to such Mortgage Loan remains unremedied as of
the earlier of (i) the date that is 180 days following the delivery of notice of
such absence to the related Seller, but in no event earlier than 18 months from
the Closing Date, and (ii) the date (if any) on which such Mortgage Loan becomes
a Specially Serviced Mortgage Loan. The Trustee shall submit such documents for
recording, at the related Seller's expense, after the periods set forth above;
provided, however, the Trustee shall not submit such assignments for recording
if the applicable Seller produces evidence that it has sent any such assignment
for recording and certifies that it is awaiting its return from the applicable
recording office.
(d) All relevant servicing or loan documents and records in
the possession of the Depositor or the Sellers that relate to the Mortgage
Loans, Serviced Companion Mortgage Loans or B Notes and that are not required to
be a part of a Mortgage File in accordance with the definition thereof shall be
delivered to the Master Servicer or the Primary Servicer on its behalf, on or
before the date that is 45 days following the Closing Date and shall be held by
the Master Servicer or the Primary Servicer on behalf of the Trustee in trust
for the benefit of the Certificateholders. To the extent delivered to the Master
Servicer or the Primary Servicer by the related Seller, the Servicer Mortgage
File, will include, to the extent required to be (and actually) delivered to the
applicable Seller pursuant to the applicable Mortgage Loan documents, copies of
the following items: the Mortgage Note, any Mortgage, the Assignment of Leases
and the Assignment of Mortgage, any guaranty/indemnity agreement, any loan
agreement, the insurance policies or certificates (as applicable), the property
inspection reports, any financial statements on the property, any escrow
analysis, the tax bills, the Appraisal, the environmental report, the
engineering report, the asset summary, financial information on the
Mortgagor/sponsor and any guarantors, any letters of credit, any intercreditor
agreement and any Environmental Insurance Policies. Delivery of any of the
foregoing documents to the Primary Servicer (or sub-servicer) shall be deemed
delivery to the Master Servicer and satisfy the Depositor's obligations under
this Section 2.1(d). None of the Master Servicer, the Special Servicer or the
Primary Servicer shall have any liability for the absence of any of the
foregoing items from the Servicing Mortgage File if such item was not delivered
by the related Seller.
(e) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall deliver to the Trustee on or before
the Closing Date a copy of a fully executed counterpart of each Mortgage Loan
Purchase Agreement, as in full force and effect on the Closing Date, which
Mortgage Loan Purchase Agreements shall contain the representations and
warranties made by the Sellers with respect to each related Mortgage Loan as of
the Closing Date.
(f) In connection herewith, the Depositor has acquired the
Principal Loans from Principal, the Xxxxx Fargo Loans from Xxxxx Fargo, the
BSCMI Loans from BSCMI and the MSMC Loans from MSMC. The Depositor will deliver
or cause to be delivered the original Mortgage Notes (or lost note affidavits
with copies of the related Mortgage Notes, as described in the definition of
"Mortgage File") relating to the Principal Loans to the Trustee, endorsed as
otherwise provided herein, to effect the transfer to the Trustee of such
Mortgage Notes and all related deeds of trust, mortgages and other loan
documents. The Depositor will deliver or cause
80
to be delivered the original Mortgage Notes (or lost note affidavits with copies
of the related Mortgage Notes, as described in the definition of "Mortgage
File") relating to the Xxxxx Fargo Loans to the Trustee, endorsed as otherwise
provided herein, to effect the transfer to the Trustee of such Mortgage Notes
and all related deeds of trust, mortgages and other loan documents. The
Depositor will deliver or cause to be delivered the original Mortgage Notes (or
lost note affidavits with copies of the related Mortgage Notes, as described in
the definition of "Mortgage File") relating to the BSCMI Loans to the Trustee,
endorsed as otherwise provided herein, to effect the transfer to the Trustee of
such Mortgage Notes and all related deeds of trust, mortgages and other loan
documents. The Depositor will deliver or cause to be delivered the original
Mortgage Notes (or lost note affidavits with copies of the related Mortgage
Notes, as described in the definition of "Mortgage File") relating to the MSMC
Loans to the Trustee, endorsed as otherwise provided herein, to effect the
transfer to the Trustee of such Mortgage Notes and all related deeds of trust,
mortgages and other loan documents. To avoid the unnecessary expense and
administrative inconvenience associated with the execution and recording of
multiple assignment documents, Principal, Xxxxx Fargo, BSCMI and MSMC, as
applicable, are required under the Mortgage Loan Purchase Agreements to deliver
Assignments of Mortgages and assignments of Assignments of Leases and
assignments of UCC financing statements naming the Trustee, on behalf of the
Certificateholders, as assignee. Notwithstanding the fact that the assignments
shall name the Trustee, on behalf of the Certificateholders, as the assignee,
the parties hereto acknowledge and agree that for all purposes the Principal
Loans shall be deemed to have been transferred from Principal to the Depositor,
the Xxxxx Fargo Loans shall be deemed to have been transferred from Xxxxx Fargo
to the Depositor, the BSCMI Loans shall be deemed to have been transferred from
BSCMI to the Depositor and the MSMC Loans shall be deemed to have been
transferred from MSMC to the Depositor, and all Mortgage Loans shall be deemed
to have been transferred from the Depositor to the Trustee on behalf of the
Certificateholders.
SECTION 2.2 ACCEPTANCE BY TRUSTEE. The Trustee will hold (i)
the documents constituting a part of the Mortgage Files delivered to it, (ii)
the REMIC I Regular Interests, and (iii) the REMIC II Regular Interests, in each
case, in trust for the use and benefit of all present and future
Certificateholders. To the extent that the contents of the Mortgage File for any
A Note relate to the corresponding B Note, the Trustee, or the Custodian on the
Trustee's behalf, will also hold such Mortgage File in trust for the benefit of
the holder of the related B Note; provided, that if a B Note remains outstanding
following payment in full of the amounts due under the related A Notes, the
Mortgage Loan documents relating to such A/B Mortgage Loan (exclusive of any
such documents related solely to the A Notes) shall be assigned to the holder of
the B Note or its designee. To the extent that the contents of the Mortgage File
for any Serviced Pari Passu Mortgage Loan relate to the corresponding Serviced
Companion Mortgage Loan, the Trustee, or the Custodian, on the Trustee's behalf,
will also hold such Mortgage File in trust for the benefit of the holder of the
related Serviced Companion Mortgage Loan.
On the Closing Date in respect of the Initial Certification,
and within 75 days after the Closing Date in respect of the Final Certification,
the Trustee shall examine the Mortgage Files in its possession, and shall
deliver to the Depositor, the Sellers, the Master Servicer, the Special
Servicer, the Operating Adviser and the holder of any Serviced Companion
Mortgage Loan a certification (the "Initial Certification" and the "Final
Certification", respectively, in the respective forms set forth as Exhibit B-1
and Exhibit B-2 hereto), which shall be in electronic format (i) in the case of
the Initial Certification, as to each Mortgage Loan listed in the Mortgage Loan
Schedule, except as may be specified in the schedule of exceptions attached
thereto, to the
81
effect that: (A) all documents pursuant to clause (i) of the definition of
"Mortgage File" are in its possession, (B) such documents have been reviewed by
it and have not been materially mutilated, damaged, defaced, torn or otherwise
physically altered, and such documents relate to such Mortgage Loan, and (C)
each Mortgage Note has been endorsed as provided in clause (i) of the definition
of "Mortgage File", and (ii) in the case of the Final Certification, as to each
Mortgage Loan listed in the Mortgage Loan Schedule, except as may be specified
in the schedule of exceptions attached thereto, to the effect that: (A) (I) all
documents pursuant to clauses (i), (ii), (iv), (v), (vi), (viii), (x) and (xii)
of the definition of "Mortgage File" required to be included in the Mortgage
File (to the extent required to be delivered pursuant to this Agreement and the
Primary Servicing Agreement), and with respect to all documents specified in the
other clauses of the definition of "Mortgage File" to the extent known by a
Responsible Officer of the Trustee to be required pursuant to this Agreement,
are in its possession, and (II) for each Mortgage recorded in the name of MERS
or its designee, the Trustee is shown as the transferee of the related Mortgage
on the records of MERS for purposes of the system maintained by MERS of
recording transfers of beneficial ownership for mortgages, (B) such documents
have been reviewed by it and have not been materially mutilated, damaged,
defaced, torn or otherwise physically altered, and such documents relate to such
Mortgage Loan, (C) based on its examination and only as to the Mortgage Note and
Mortgage, the street address of the Mortgaged Property set forth in the Mortgage
Loan Schedule respecting such Mortgage Loan accurately reflects the information
contained in the documents in the Mortgage File, and (D) each Mortgage Note has
been endorsed. Notwithstanding the foregoing, the delivery of a commitment to
issue a Title Insurance Policy in lieu of the delivery of the actual Title
Insurance Policy shall not be considered a Material Document Defect with respect
to any Mortgage File if such actual Title Insurance Policy is delivered to the
Trustee or a Custodian on its behalf not later than the 180th day following the
Closing Date.
Within 360 days after the Cut-Off Date, the Trustee shall
provide a confirmation of receipt of recorded assignments of Mortgage (as
described in the definition of "Mortgage File," with evidence of recording
thereon) or otherwise provide evidence of such recordation to the Master
Servicer, the Special Servicer, the Operating Adviser and each Seller, and if
any recorded assignment of Mortgage has not been received by the Trustee by such
time, the Trustee shall provide information in such confirmation on the status
of missing assignments. The Trustee agrees to use reasonable efforts to submit
for recording any unrecorded assignments of Mortgage that have been delivered to
it (including effecting such recordation process through or cooperating with the
applicable Seller), such recordation to be at the expense of the applicable
Seller; provided, however, that the Trustee shall not submit for recording any
such assignments if the applicable Seller produces evidence that it has sent any
such assignment for recording and is awaiting its return from the applicable
recording office. In giving the certifications required above, the Trustee shall
be under no obligation or duty to inspect, review or examine any such documents,
instruments, securities or other papers to determine whether they or the
signatures thereon are valid, legal, genuine, enforceable, in recordable form or
appropriate for their represented purposes, or that they are other than what
they purport to be on their face, or to determine whether any Mortgage File
should include any assumption agreement, modification agreement, consolidation
agreement, extension agreement, Assignment of Lease, ground lease, UCC financing
statement, guaranty, written assurance, substitution agreement, lock box
agreement, intercreditor agreement, management agreement or letter of credit.
82
If any exceptions are noted on a schedule of exceptions
attached to the Final Certification, including exceptions resulting from the
fact that the recordation and/or filing has not been completed (based solely on
the absence of receipt by the Custodian (or the Trustee) of the particular
documents showing evidence of the recordation and/or filing), then the Custodian
on behalf of the Trustee (or the Trustee) shall continuously update such
schedule of exceptions to reflect receipt of any corrected documents, additional
documents or instruments or evidences of recordation and/or filing, as to each
Mortgage Loan, until the earliest of the following dates: (i) the date on which
all such exceptions are eliminated (any such elimination resulting from the fact
that recordation and/or filing has been completed shall be based solely on
receipt by the Custodian or the Trustee of the particular documents showing
evidence of the recordation and/or filing), (ii) the date on which all the
affected Mortgage Loans are removed from the Trust and (iii) the second
anniversary of the Closing Date, and shall provide such updated schedule of
exceptions (which may be in electronic format) to each of the Depositor, each
Seller (as to its respective Mortgage Loans only), the Master Servicer, the
Special Servicer, the Operating Adviser, the Paying Agent and the holder of any
Serviced Companion Mortgage Loan on or about the date that is 180 days after the
Closing Date and then again every 90 days thereafter (until the earliest date
specified above). Upon request, the Paying Agent shall promptly forward a copy
thereof to each Certificateholder in the Controlling Class and shall deliver or
make available a copy thereof to other Certificateholders. Promptly, and in any
event within two Business Days, following any request therefor by the Depositor,
the Master Servicer, the Special Servicer, the Operating Adviser or the holder
of any Serviced Companion Mortgage Loan that is made later than two years
following the Closing Date, the Custodian (or the Trustee) shall deliver an
updated schedule of exceptions, which may be in electronic format (to the extent
the prior schedule showed exceptions), to the requesting Person and the Paying
Agent, which shall make available a copy thereof. Upon request, the Master
Servicer shall provide to the Trustee the names and addresses of each holder of
a Serviced Companion Mortgage Loan of which the Master Servicer has received
notice in accordance with this Agreement and/or the related Loan Pair
Intercreditor Agreement.
The Trustee or its authorized agents shall retain possession
and custody of each Trustee Mortgage File in accordance with and subject to the
terms and conditions set forth herein.
SECTION 2.3 SELLERS' REPURCHASE OF MORTGAGE LOANS FOR MATERIAL
DOCUMENT DEFECTS AND MATERIAL BREACHES OF REPRESENTATIONS AND WARRANTIES.
(a) If any party hereto discovers that any document or
documents constituting a part of a Mortgage File has not been delivered as and
when required, has not been properly executed, or is defective on its face or
discovers or receives notice of a breach of any of the representations and
warranties relating to the Mortgage Loans required to be made by a Seller
regarding the characteristics of the Mortgage Loans and/or related Mortgaged
Properties as set forth in the related Mortgage Loan Purchase Agreements, and,
in either case, the party discovering such defect or breach determines that
either (i) the defect or breach materially and adversely affects the interests
of the holders of the Certificates in the related Mortgage Loan or (ii) both (A)
the defect or breach materially and adversely affects the value of the Mortgage
Loan and (B) the Mortgage Loan is a Specially Serviced Mortgage Loan or
Rehabilitated Mortgage Loan (any such defect described in the preceding clause
(i) or (ii), a "Material Document Defect", and such a breach described in the
preceding clause (i) or (ii), a "Material Breach") the
83
party determining that such Material Document Defect or Material Breach exists
shall give prompt written notice to the other parties hereto and to each Rating
Agency subject to the terms of the applicable Mortgage Loan Purchase Agreement.
Promptly (but in any event within three Business Days) upon determining (or
becoming aware of another party's determination) that any such Material Document
Defect or Material Breach exists (which determination shall, absent evidence to
the contrary, be presumed to be no earlier than three Business Days prior to the
delivery of the notice referred to below), the Master Servicer shall, and the
Special Servicer may, request that the related Seller, not later than 90 days
from such Seller's receipt of the notice of such Material Document Defect or
Material Breach, cure such Material Document Defect or Material Breach, as the
case may be, in all material respects; provided, however, that if such Material
Document Defect or Material Breach, as the case may be, cannot be corrected or
cured in all material respects within such 90-day period, and such Material
Document Defect or Material Breach would not cause the Mortgage Loan to be other
than a "qualified mortgage" (as defined in the Code) but the related Seller is
diligently attempting to effect such correction or cure, as certified by such
Seller in an Officer's Certificate delivered to the Trustee, then the cure
period will be extended for an additional 90 days unless, solely in the case of
a Material Document Defect, (x) the Mortgage Loan is then a Specially Serviced
Mortgage Loan and a Servicing Transfer Event has occurred as a result of a
monetary default or as described in clause (ii) or clause (v) of the definition
of "Servicing Transfer Event" and (y) the Material Document Defect was
identified in a certification delivered to the Seller by the Trustee pursuant to
Section 2.2 not less than 90 days prior to the delivery of the notice of such
Material Document Defect. The parties acknowledge that neither delivery of a
certification or schedule of exceptions to a Seller pursuant to Section 2.2 or
otherwise nor possession of such certification or schedule by the Seller shall,
in and of itself, constitute delivery of notice of any Material Document Defect
or knowledge or awareness by the Seller or any party hereto of any Material
Document Defect listed therein.
If any such Material Document Defect or Material Breach cannot
be corrected or cured in all material respects within the above cure periods,
the related Seller will be obligated, not later than the last day of such
permitted cure period, to (i) repurchase the affected Mortgage Loan or REO
Mortgage Loan from the Trust at the applicable Purchase Price in accordance with
the related Mortgage Loan Purchase Agreement, or (ii) if within the three-month
period commencing on the Closing Date (or within the two-year period commencing
on the Closing Date if the related Mortgage Loan is a "defective obligation"
within the meaning of Section 860G(a)(4)(B)(ii) of the Code and Treasury
Regulation Section 1.860G-2(f)), at the related Seller's option, without
recourse (other than the representations and warranties made with respect
thereto), replace such Mortgage Loan or REO Mortgage Loan with a Qualifying
Substitute Mortgage Loan. If such Material Document Defect or Material Breach
would cause the Mortgage Loan to be other than a "qualified mortgage" (as
defined in the Code), then notwithstanding the previous sentence or the previous
paragraph, the repurchase must occur within 85 days from the date the related
Seller was notified of the defect and substitution must occur within the sooner
of (i) 85 days from the date the related Seller was notified of the defect or
(ii) two years from the Closing Date.
As to any Qualifying Substitute Mortgage Loan or Loans, the
Master Servicer shall not execute any instrument effecting the substitution
unless the related Seller has delivered to the Trustee for such Qualifying
Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the related
Assignment of Mortgage, and such other documents and agreements as are
84
required by Section 2.1, with the Mortgage Note endorsed as required by Section
2.1, and the Master Servicer shall be entitled to rely on statements and
certifications from the Trustee for this purpose. No substitution may be made in
any calendar month after the Determination Date for such month. Monthly payments
due with respect to Qualifying Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust and will be retained by Master
Servicer and remitted by the Master Servicer to the related Seller on the next
succeeding Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on the related Deleted
Mortgage Loan for such month and thereafter the related Seller shall be entitled
to retain all amounts received in respect of such Deleted Mortgage Loan.
The Master Servicer shall amend or cause to be amended the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Qualifying Substitute Mortgage Loan or Loans and upon
such amendment the Master Servicer shall deliver or cause to be delivered such
amended Mortgage Loan Schedule to the Trustee, the Paying Agent and the Special
Servicer. Upon such substitution, the Qualifying Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects. Upon
receipt of the Trustee Mortgage File pertaining to any Qualifying Substitute
Mortgage Loans, the Trustee shall release the Trustee Mortgage File relating to
such Deleted Mortgage Loan to the related Seller, and the Trustee (and the
Depositor, if necessary) shall execute and deliver such instruments of transfer
or assignment in the form presented to it, in each case without recourse,
representation or warranty, as shall be necessary to vest title (provided,
however, if applicable, the Master Servicer will take all necessary action to
register the transfer of ownership of the Mortgage related to such Deleted
Mortgage Loan on the records of MERS) (to the extent that such title was
transferred to the Trustee or the Depositor) in the related Seller or its
designee to any Deleted Mortgage Loan (including any property acquired in
respect thereof or any insurance policy proceeds relating thereto) substituted
for pursuant to this Section 2.3.
If (x) a Mortgage Loan is to be repurchased or replaced as
contemplated above (a "Defective Mortgage Loan"), (y) such Defective Mortgage
Loan is cross-collateralized and cross-defaulted with one or more other Mortgage
Loans ("Crossed Mortgage Loans") and (z) the applicable document defect or
breach does not constitute a Material Document Defect or Material Breach, as the
case may be, as to such Crossed Mortgage Loans (without regard to this
paragraph), then the applicable document defect or breach (as the case may be)
shall be deemed to constitute a Material Document Defect or Material Breach (as
the case may be) as to each such Crossed Mortgage Loan for purposes of the above
provisions, and the related Seller shall be obligated to repurchase or replace
each such Crossed Mortgage Loan in accordance with the provisions above unless,
in the case of such breach or document defect, the Seller (A) provides a
Nondisqualification Opinion to the Trustee at the expense of the Seller and (B)
both of the following conditions would be satisfied if the related Seller were
to repurchase or replace only those Mortgage Loans as to which a Material Breach
or Material Document Defect had occurred without regard to this paragraph (the
"Affected Loan(s)"): (i) the Debt Service Coverage Ratio for all such other
Mortgage Loans (excluding the Affected Loan(s)) for the four calendar quarters
immediately preceding the repurchase or replacement is not less than the lesser
of (A) 0.10x below the debt service coverage ratio for all such other Mortgage
Loans (including the Affected Loan(s)) set forth in Appendix II to the Final
Prospectus Supplement and (B) the debt service coverage ratio for all such
Crossed Mortgage Loans (including the Affected Loan(s)) for the four preceding
calendar quarters preceding the repurchase or replacement, and (ii) the
Loan-to-Value Ratio for all such Crossed Mortgage Loans (excluding the Affected
Loan(s)) is not greater than
85
the greater of (A) the loan-to-value ratio, expressed as a whole number (taken
to one decimal place), for all such Crossed Mortgage Loans (including the
Affected Loan(s)) set forth in Appendix II to the Final Prospectus Supplement
plus 10% and (B) the loan-to-value ratio for all such Crossed Mortgage Loans
(including the Affected Loan(s)), at the time of repurchase or replacement. The
determination of the Master Servicer as to whether the conditions set forth
above have been satisfied shall be conclusive and binding in the absence of
manifest error. The Master Servicer will be entitled to cause to be delivered,
or direct the related Seller to (in which case the related Seller shall) cause
to be delivered to the Master Servicer, an Appraisal of any or all of the
related Mortgaged Properties for purposes of determining whether the condition
set forth in clause (ii) above has been satisfied, in each case at the expense
of the related Seller if the scope and cost of the Appraisal is approved by the
related Seller (such approval not to be unreasonably withheld).
With respect to any Defective Mortgage Loan, to the extent
that the applicable Seller is required to repurchase or substitute for such
Defective Mortgage Loan (each, a "Repurchased Loan") in the manner prescribed
above while the Trustee continues to hold any Crossed Mortgage Loan, the
applicable Seller and the Depositor have agreed in the related Mortgage Loan
Purchase Agreement to forbear from enforcing any remedies against the other's
Primary Collateral but each is permitted to exercise remedies against the
Primary Collateral securing its respective Mortgage Loans, including with
respect to the Trustee, the Primary Collateral securing Mortgage Loans still
held by the Trustee, so long as such exercise does not impair the ability of the
other party to exercise its remedies against its Primary Collateral. If the
exercise of remedies by one party would impair the ability of the other party to
exercise its remedies with respect to the Primary Collateral securing the
Mortgage Loan or Mortgage Loans held by such party, then both parties have
agreed to forbear from exercising such remedies until the loan documents
evidencing and securing the relevant Mortgage Loans can be modified in a manner
that complies with the applicable Mortgage Loan Purchase Agreement to remove the
threat of impairment as a result of the exercise of remedies. Any reserve or
other cash collateral or letters of credit securing the Crossed Mortgage Loans
shall be allocated between such Mortgage Loans in accordance with the Mortgage
Loan documents, or otherwise on a pro rata basis based upon their outstanding
Principal Balances. All other terms of the Mortgage Loans shall remain in full
force and effect, without any modification thereof. The Mortgagors set forth on
Schedule VIII hereto are intended third-party beneficiaries of the provisions
set forth in this paragraph and the preceding paragraph. The provisions of this
paragraph and the preceding paragraph may not be modified with respect to any
Mortgage Loan without the related Mortgagor's consent.
Any of the following document defects shall be conclusively
presumed materially and adversely to affect the interests of Certificateholders
in a Mortgage Loan and be a Material Document Defect: (a) the absence from the
Mortgage File of the original signed Mortgage Note, unless the Mortgage File
contains a signed lost note affidavit and indemnity that appears to be regular
on its face; (b) the absence from the Mortgage File of the original signed
Mortgage (or with respect to any Non-Serviced Mortgage Loan, a copy thereof)
that appears to be regular on its face, unless there is included in the Mortgage
File a certified copy of the Mortgage by the local authority with which the
Mortgage was recorded; (c) the absence from the Mortgage File of the item called
for by paragraph (viii) of the definition of "Mortgage File" (or with respect to
any Non-Serviced Mortgage Loan, a copy thereof) or (d) the absence from the
Mortgage File of the item called for by paragraph (xii) of the definition of
"Mortgage File" (or with respect to any
86
Non-Serviced Mortgage Loan, a copy thereof). If any of the foregoing Material
Document Defects is discovered by the Custodian (or the Trustee if there is no
Custodian), the Trustee (or as set forth in Section 2.3(a), the Master Servicer)
will take the steps described elsewhere in this section, including the giving of
notices to the Rating Agencies, the parties hereto and, to the extent any
Material Document Defect relates to a Serviced Pari Passu Mortgage Loan, the
holder of the related Serviced Companion Mortgage Loan, and making demand upon
the related Seller for the cure of the document defect or repurchase or
replacement of the related Mortgage Loan.
If the related Seller disputes that a Material Document Defect
or Material Breach exists with respect to a Mortgage Loan or otherwise refuses
(i) to effect a correction or cure of such Material Document Defect or Material
Breach, (ii) to repurchase the affected Mortgage Loan from the Trust or (iii) to
replace such Mortgage Loan with a Qualifying Substitute Mortgage Loan, each in
accordance with the related Mortgage Loan Purchase Agreement, then provided that
(x) the period of time provided for the related Seller to correct, repurchase or
cure has expired and (y) the Mortgage Loan is then in default and is then a
Specially Serviced Mortgage Loan, the Special Servicer may, subject to the
Servicing Standard, modify, workout or foreclose, sell or otherwise liquidate
(or permit the liquidation of) the Mortgage Loan pursuant to Section 9.5,
Section 9.12, Section 9.15 and Section 9.36, as applicable, hereof, while
pursuing the repurchase claim. The related Seller has acknowledged and agreed
under the related Mortgage Loan Purchase Agreement that any modification of the
Mortgage Loan pursuant to a workout shall not constitute a defense to any
repurchase claim nor shall such modification and workout change the Purchase
Price due from the related Seller for any repurchase claim. In the event of any
such modification and workout, the related Seller has agreed under the related
Mortgage Loan Purchase Agreement to repurchase the Mortgage Loan as modified and
that the Purchase Price shall include any Work-Out Fee paid to the Special
Servicer up to the date of repurchase plus the present value (calculated at a
discount rate equal to the applicable Mortgage Rate) of the Work-Out Fee that
would have been payable to the Special Servicer in respect of such Mortgage Loan
if the Mortgage Loan performed in accordance with its terms to its Maturity
Date, provided that no amount shall be paid by the related Seller in respect of
any Work-Out Fee if a Liquidation Fee already comprises (or will comprise) a
portion of the Purchase Price. The related Seller shall be notified promptly and
in writing by (i) the Trustee of any notice that it receives that an Option
Holder intends to exercise its Option to purchase the Mortgage Loan in
accordance with and as described in Section 9.36 hereof and (ii) the Special
Servicer of any offer that it receives to purchase the applicable REO Property,
each in connection with such liquidation. Upon the receipt of such notice by the
related Seller, the related Seller shall then have the right to purchase the
related Mortgage Loan or REO Property, as applicable, from the Trust at a
purchase price equal to, in the case of clause (i) of the immediately preceding
sentence, the Option Purchase Price or, in the case of clause (ii) of the
immediately preceding sentence, the amount of such offer. Notwithstanding
anything to the contrary contained herein or in the related Mortgage Loan
Purchase Agreement, the right of any Option Holder to purchase such Mortgage
Loan shall be subject and subordinate to the Seller's right to purchase such
Mortgage Loan as described in the immediately preceding sentence. The related
Seller shall have five (5) Business Days to notify the Trustee or the Special
Servicer, as applicable, of its intent to so purchase the Mortgage Loan or
related REO Property from the date that it was notified of such intention to
exercise such Option or of such offer. The Special Servicer shall be obligated
to provide the related Seller with any appraisal or other third party reports
relating to the Mortgaged Property within its possession to enable the related
Seller to evaluate the related Mortgage Loan or REO Property. Any sale of the
related Mortgage Loan, or foreclosure upon such Mortgage
87
Loan and sale of the related REO Property, to a Person other than the related
Seller shall be without (i) recourse of any kind (either expressed or implied)
by such Person against the related Seller and (ii) representation or warranty of
any kind (either expressed or implied) by the related Seller to or for the
benefit of such Person.
The fact that a Material Document Defect or Material Breach is
not discovered until after foreclosure (but in all instances prior to the sale
of the related REO Property or Mortgage Loan) shall not prejudice any claim
against the Seller for repurchase of the REO Mortgage Loan or REO Property. In
such an event, the Master Servicer shall notify the related Seller of the
discovery of the Material Document Defect or Material Breach and the related
Seller shall have 90 days to correct or cure such Material Document Defect or
Material Breach or purchase the REO Property at the Purchase Price. If the
related Seller fails to correct or cure the Material Document Defect or Material
Breach or purchase the REO Property, then the provisions above regarding notice
of offers related to such REO Property and the related Seller's right to
purchase such REO Property shall apply. After a final liquidation of the
Mortgage Loan or REO Mortgage Loan, if a court of competent jurisdiction issues
a final order after the expiration of any applicable appeal period that the
related Seller is or was obligated to repurchase the related Mortgage Loan or
REO Mortgage Loan (a "Final Judicial Determination") or the related Seller
otherwise accepts liability, then, but in no event later than the termination of
the Trust pursuant to Section 9.30 hereof, the related Seller will be obligated
to pay to the Trust the difference between any Liquidation Proceeds received
upon such liquidation (including those arising from any sale to the related
Seller) and the Purchase Price.
Notwithstanding anything to the contrary contained herein, in
connection with any sale or other liquidation of a Mortgage Loan or REO Property
as described in this Section 2.3, the Special Servicer shall not receive a
Liquidation Fee from the applicable Seller (but may collect such Liquidation Fee
from the related Liquidation Proceeds as otherwise provided herein); provided,
however, that in the event the applicable Seller is obligated to repurchase the
Mortgage Loan or REO Property after a final liquidation of such Mortgage Loan or
REO Property pursuant to the immediately preceding paragraph, an amount equal to
any Liquidation Fee (calculated on the basis of Liquidation Proceeds) payable to
the Special Servicer shall be included in the definition of "Purchase Price" in
respect of such Mortgage Loan or REO Property. Except as expressly set forth
above, no Liquidation Fee shall be payable in connection with a repurchase of a
Mortgage Loan by a Seller.
In any month in which the related Seller substitutes one or
more Qualifying Substitute Mortgage Loans for one or more Deleted Mortgage
Loans, the Master Servicer will determine the amount (if any) by which the
aggregate Principal Balance of all such Qualifying Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Principal Balance of all
such Deleted Mortgage Loans (in each case after application of scheduled
principal portion of the monthly payments received in the month of
substitution). The Depositor shall cause the related Seller to deposit the
amount of such shortage into the Certificate Account in the month of
substitution, without any reimbursement thereof. In addition, the Depositor
shall cause the related Seller to deposit into the Certificate Account, together
with such shortage, if any, an amount equal to interest on the Deleted Mortgage
Loans at a rate equal to the sum of the applicable Mortgage Rate from the Due
Date as to which interest was last paid up to the Due Date next succeeding such
substitution together with the amount of unreimbursed Servicing Advances,
amounts required to be paid to the Special Servicer but remaining unpaid or
88
unreimbursed, and interest on unreimbursed Advances with respect to such Deleted
Mortgage Loans at the Advance Rate. The Depositor shall cause the related
Seller, in the case of the Mortgage Loans, to give notice in writing
(accompanied by an Officer's Certificate as to the calculation of such shortage)
to the Trustee, the Paying Agent and the Master Servicer of such event which
notice shall be accompanied by an Officer's Certificate as to the calculation of
such shortfall.
If the affected Mortgage Loan is to be repurchased, the Master
Servicer shall designate the Certificate Account as the account to which funds
in the amount of the Purchase Price are to be wired. Any such purchase of a
Mortgage Loan shall be on a whole loan, servicing released basis.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.3, the Trustee, the Master Servicer
and the Special Servicer shall each tender to the related Seller, upon delivery
to each of them of a receipt executed by such Seller, all portions of the
Mortgage File and other documents pertaining to such Mortgage Loan possessed by
it, and each document that constitutes a part of the Mortgage File shall be
endorsed or assigned to the extent necessary or appropriate to the related
Seller or its designee in the same manner, and pursuant to appropriate forms of
assignment, substantially similar to the manner and forms pursuant to which
documents were previously assigned to the Trustee, but in any event, without
recourse, representation or warranty; provided that such tender by the Trustee
shall be conditioned upon its receipt from the Master Servicer of a Request for
Release. The Master Servicer shall, and is hereby authorized and empowered by
the Trustee to, prepare, execute and deliver in its own name, on behalf of the
Certificateholders and the Trustee or any of them, the endorsements and
assignments contemplated by this Section 2.3, and the Trustee shall execute and
deliver any powers of attorney necessary to permit the Master Servicer to do so.
The Master Servicer shall, and is also hereby authorized and empowered by the
Trustee to, reconvey to the related Seller any deposits then held in an Escrow
Account relating to the Mortgage Loan being repurchased or substituted for. The
Master Servicer shall indemnify the Trustee for all costs, liabilities and
expenses (including attorneys' fees) incurred by the Trustee in connection with
any negligent or intentional misuse of any such powers of attorney by the Master
Servicer.
(c) The Mortgage Loan Purchase Agreements provide the sole
remedies available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Material Document Defect or Material Breach.
The parties hereunder understand that (i) Principal, as Seller under Mortgage
Loan Purchase Agreement III, will be providing the remedies with respect to the
Principal Loans, (ii) Xxxxx Fargo, as Seller under Mortgage Loan Purchase
Agreement II, will be providing the remedies with respect to the Xxxxx Fargo
Loans, (iii) BSCMI, as Seller under Mortgage Loan Purchase Agreement I, will be
providing the remedies with respect to the BSCMI Loans and (iv) MSMC, as Seller
under Mortgage Loan Purchase Agreement IV, will be providing the remedies with
respect to the MSMC Loans.
(d) The Trustee or its designee (which, with the Master
Servicer's consent, may be the Master Servicer or which, with the Special
Servicer's consent, may be the Special Servicer) shall enforce the provisions of
this Section 2.3.
89
SECTION 2.4 REPRESENTATIONS AND WARRANTIES. The Depositor
hereby represents and warrants to the Master Servicer, the Special Servicer, the
Trustee (in its capacity as Trustee of the Trust), the Fiscal Agent and the
Paying Agent as of the Closing Date that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its property, to
carry on its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant hereto;
(b) The execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Depositor; neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, (i) any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Depositor or its
properties; (ii) the certificate of incorporation or bylaws of the Depositor; or
(iii) the terms of any indenture or other agreement or instrument to which the
Depositor is a party or by which it is bound; neither the Depositor nor any of
its Affiliates is a party to, bound by, or in breach of or violation of any
indenture or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially and
adversely affects or to the best knowledge of the Depositor may in the future
materially and adversely affect (i) the ability of the Depositor to perform its
obligations under this Agreement or (ii) the business, operations, financial
condition, properties or assets of the Depositor;
(c) The execution, delivery and performance by the Depositor
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof;
(d) This Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms;
(e) There are no actions, suits or proceedings pending or, to
the best of the Depositor's knowledge, threatened or likely to be asserted
against or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any other
matter which in the judgment of the Depositor will be determined adversely to
the Depositor and will, if determined adversely to the Depositor, materially and
adversely affect it or its business, assets, operations or condition, financial
or otherwise, or adversely affect its ability to perform its obligations under
this Agreement; and
(f) Immediately prior to the consummation of the transactions
contemplated in this Agreement, the Depositor had good title to and was the sole
owner of each Mortgage Loan free and clear of any and all adverse claims,
charges or security interests (including liens
90
arising under the federal tax laws or the Employee Retirement Income Security
Act of 1974, as amended).
SECTION 2.5 CONVEYANCE OF INTERESTS. Effective as of the
Closing Date, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, in trust, all the right,
title and interest of the Depositor in and to (i) the REMIC I Regular Interests
in exchange for the REMIC II Certificates and (ii) the REMIC II Regular
Interests in exchange for the REMIC III Certificates (other than the portion of
the Class P Certificates representing the right to Excess Interest) and the
right to receive Excess Interest in exchange for the Class P Grantor Trust
Interest.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 THE CERTIFICATES.
(a) The Certificates shall be in substantially the forms set
forth in the Exhibits attached hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the reasonable judgment of the Trustee or the
Depositor be necessary, appropriate or convenient to comply, or facilitate
compliance, with applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be determined
by the officers executing such Certificates, as evidenced by their execution
thereof.
The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(b) The Class A Certificates will be issuable in denominations
of $25,000 initial Certificate Balance and in any whole dollar denomination in
excess thereof. The Class X-1, Class B, Class C, Class D, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O and Class
P Certificates will be issuable in denominations of $100,000 initial Certificate
Balance or initial Notional Amount (as applicable) or in any whole dollar
denomination in excess thereof. The Class X-2 Certificates will be issuable in
denominations of $1,000,000 initial Notional Amount or in any whole dollar
denomination in excess thereof. The Class R-I, Class R-II and Class R-III
Certificates will be issued in minimum Percentage Interests of 10% and integral
multiples of 10% in excess thereof.
(c) Each Certificate shall, on original issue, be executed by
the Certificate Registrar and authenticated by the Authenticating Agent upon the
order of the Depositor. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by an authorized officer of the Authenticating Agent by
manual
91
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Authenticating Agent for authentication and the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and not
otherwise. In the event that additional Certificates need to be prepared at any
time subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the Class A, Class X, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N, Class O and Class P Certificates that are issued in book-entry
form, on the Closing Date, the Authenticating Agent upon the order of the
Depositor shall authenticate Book-Entry Certificates that are issued to a
Clearing Agency or its nominee as provided in Section 3.7 against payment of the
purchase price thereof. With respect to the Class J, Class K, Class L, Class M,
Class N, Class O and Class P Certificates that are issued in definitive form, on
the Closing Date, the Authenticating Agent upon the order of the Depositor shall
authenticate Definitive Certificates that are issued to the registered holder
thereof against payment of the purchase price thereof.
SECTION 3.2 REGISTRATION. The Paying Agent shall be the
initial Certificate Registrar in respect of the Certificates and the Certificate
Registrar shall maintain books for the registration and for the transfer of
Certificates (the "Certificate Register"). The Certificate Registrar may resign
or be discharged or removed by the Paying Agent or the Certificateholders, and a
new successor may be appointed, in accordance with the procedures and
requirements set forth in Sections 7.6 and 7.7 hereof with respect to the
resignation, discharge or removal of the Paying Agent and the appointment of a
successor Paying Agent. The Certificate Registrar may appoint, by a written
instrument delivered to the Holders and the Trustee, any trust company to act as
co-registrar under such conditions as the Certificate Registrar may prescribe;
provided that the Certificate Registrar shall not be relieved of any of its
duties or responsibilities hereunder by reason of such appointment.
SECTION 3.3 TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate may be transferred by the Holder thereof
only upon presentation and surrender of such Certificate at the Corporate Trust
Office, duly endorsed or accompanied by a written instrument of transfer duly
executed by such Holder or such Holder's duly authorized attorney in such form
as shall be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, and subject to the
restrictions set forth in the other subsections of this Section 3.3, the
Certificate Registrar shall execute, and the Authenticating Agent shall
authenticate and deliver to the transferee, one or more new Certificates of the
same Class and evidencing, in the aggregate, the same aggregate initial
Certificate Balance, initial Notional Amount or Percentage Interest, as the case
may be, as the Certificate being transferred. No service charge shall be made to
a Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
or transfer of Certificates. The Certificate Registrar may decline to accept any
request for a registration of transfer of any Certificate during the period
beginning five calendar days prior to any Distribution Date.
92
(b) A Certificate may be exchanged by the Holder thereof for
any number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same initial Certificate Balance, initial
Notional Amount or Percentage Interest, as the case may be, as the Certificate
surrendered, upon surrender of the Certificate to be exchanged at the offices of
the Certificate Registrar duly endorsed or accompanied by a written instrument
of exchange duly executed by such Holder or such Holder's duly authorized
attorney in such form as is satisfactory to the Certificate Registrar.
Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Certificate Registrar shall
execute and the Authenticating Agent shall authenticate, date and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(c) No transfer, sale, pledge or other disposition of any
Non-Registered Certificate or interest therein shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and
such state securities laws. If a transfer of any Non-Registered Certificate held
as a Definitive Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Non-Registered Certificate by the Depositor
or one of its Affiliates), then the Certificate Registrar shall refuse to
register such transfer unless it receives (and upon receipt, may conclusively
rely upon) either: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit D-1 hereto
and a certificate from such Certificateholder's prospective Transferee
substantially in the form attached either as Exhibit D-2A hereto or as Exhibit
D-2B hereto; or (ii) an Opinion of Counsel satisfactory to the Certificate
Registrar to the effect that such transfer shall be made without registration
under the Securities Act, together with the written certification(s) as to the
facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such Certificateholder's prospective Transferee on which
such Opinion of Counsel is based (such Opinion of Counsel shall not be an
expense of the Trust or of the Depositor, the Master Servicer, the Special
Servicer, the Paying Agent, the Trustee or the Certificate Registrar in their
respective capacities as such). If a transfer of any interest in a
Non-Registered Certificate that constitutes a Book-Entry Certificate is to be
made without registration under the Securities Act (other than in connection
with the initial issuance of the Certificates or a transfer of any interest in
such Non-Registered Certificate by the Depositor or any of its Affiliates), then
the Certificate Owner desiring to effect such transfer shall be required to
obtain either (i) a certificate from such Certificate Owner's prospective
Transferee substantially in the form attached as Exhibit D-3A hereto or as
Exhibit D-3B hereto, or (ii) an Opinion of Counsel to the effect that such
transfer may be made without registration under the Securities Act. None of the
Depositor, the Fiscal Agent, the Paying Agent, the Trustee, the Master Servicer,
the Special Servicer or the Certificate Registrar is obligated to register or
qualify any Class of Non-Registered Certificates under the Securities Act or any
other securities law or to take any action not otherwise required under this
Agreement to permit the transfer of any Certificate. Any Certificateholder or
Certificate Owner desiring to effect a transfer of Non-Registered Certificates
or interests therein shall, and does hereby agree to, indemnify the Depositor,
each Underwriter, the Trustee, the Fiscal Agent, the Master Servicer, the
Special Servicer, the Paying Agent and the
93
Certificate Registrar against any liability that may result if the transfer is
not exempt from such registration or qualification or is not made in accordance
with such federal and state laws.
(d) No transfer of a Non-Investment Grade Certificate or
Residual Certificate or any interest therein shall be made (A) to any employee
benefit plan or other retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and collective investment funds and separate
accounts in which such plans, accounts or arrangements are invested, including,
without limitation, insurance company general accounts, that is subject to Title
I of ERISA or Section 4975 of the Code or any applicable federal, state or local
law ("Similar Laws") materially similar to the foregoing provisions of ERISA or
the Code (each, a "Plan"), (B) in book-entry form to an Institutional Accredited
Investor who is not also a Qualified Institutional Buyer or (C) to any Person
who is directly or indirectly purchasing such Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with "plan assets" of a
Plan, unless: (i) in the case of a Non-Investment Grade Certificate that
constitutes a Book-Entry Certificate and is being sold to a Qualified
Institutional Buyer, the purchase and holding of such Certificate or interest
therein qualifies for the exemptive relief available under Sections I and III of
U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60;
or (ii) in the case of a Non-Investment Grade Certificate held as a Definitive
Certificate, the prospective Transferee provides the Certificate Registrar with
a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Certificate Registrar that such transfer will not constitute
or result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code or subject the Depositor, the Trustee, the Fiscal
Agent, the Paying Agent, the Master Servicer, the Special Servicer or the
Certificate Registrar to any obligation in addition to those undertaken in this
Agreement. Each Person who acquires any Non-Investment Grade Certificate or
Residual Certificate or interest therein (unless it shall have acquired such
Certificate or interest therein from the Depositor or an Affiliate thereof or
unless it shall have delivered to the Certificate Registrar the certification of
facts and Opinion of Counsel referred to in clause (ii) of the preceding
sentence) shall be required to deliver to the Certificate Registrar (or, in the
case of an interest in a Non-Investment Grade Certificate that constitutes a
Book-Entry Certificate, to the Certificate Owner that is transferring such
interest) a certification to the effect that: (i) it is neither a Plan nor any
Person who is directly or indirectly purchasing such Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with "plan
assets" of a Plan; or (ii) that, in the case of a Non-Investment Grade
Certificate, the purchase and holding of such Certificate or interest therein by
such person qualifies for the exemptive relief available under Sections I and
III of PTCE 95-60 or another exemption from the "prohibited transactions" rules
under ERISA by the U.S. Department of Labor or similar exemption under Similar
Laws.
(e) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably authorized the Paying Agent under clause (F) below to
deliver payments to a Person other than such Person and to have irrevocably
authorized the Certificate Registrar under clause (G) below to negotiate the
terms of any mandatory sale and to execute all instruments of Transfer and to do
all other things necessary in connection with any such sale. The rights of such
person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
94
(A) (1) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and a United States Tax Person and shall promptly
notify the Certificate Registrar of any change or impending
change in its status as a Permitted Transferee and (2) each
Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Qualified Institutional Buyer
and shall promptly notify the Certificate Registrar of any
change or impending change in its status as a Qualified
Institutional Buyer.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate, the Certificate
Registrar shall require delivery to it, and no Transfer of any
Residual Certificate shall be registered until the Certificate
Registrar receives, an affidavit and agreement substantially
in the form attached hereto as Exhibit E-1 (a "Transfer
Affidavit and Agreement") from the proposed Transferee, in
form and substance satisfactory to the Certificate Registrar,
representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is a Qualified
Institutional Buyer, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for so long as
it retains its Ownership Interest in a Residual Certificate,
it will endeavor to remain a Permitted Transferee, that it is
a United States Tax Person, that if such Transferee is a
partnership, trust or disregarded entity for U.S. federal
income tax purposes, then each Person that may be allocated
income from a Residual Certificate is a United States Tax
Person, that it is not a foreign permanent establishment or
fixed base, within the meaning of any applicable income tax
treaty, of any United States Tax Person, that it has
historically paid its debts as they have come due and will
continue to do so in the future, that it understands that its
tax liability with respect to the Residual Certificates may
exceed cash flows thereon and it intends to pay such taxes as
they come due, that it will not cause income with respect to
the Residual Certificates to be attributable to a foreign
permanent establishment or fixed base, within the meaning of
any applicable income tax treaty, of such proposed Transferee
or any other United States Tax Person, that it will provide
the Certificate Registrar with all information necessary to
determine that the applicable paragraphs of Section 13 of such
Transfer Affidavit and Agreement are true or that Section 13
is not applicable, and that it has reviewed the provisions of
this Section 3.3(e) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause (B) above,
if the Certificate Registrar has actual knowledge that the
proposed Transferee is not a Permitted Transferee or is not a
United States Tax Person, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring an Ownership
Interest in a Residual Certificate shall agree (1) to require
a Transfer Affidavit and Agreement from any prospective
Transferee to whom such Person attempts to transfer its
Ownership Interest in such Residual Certificate and (2) not to
transfer its Ownership Interest in such Residual Certificate
unless it provides to the
95
Certificate Registrar a certificate substantially in the
form attached hereto as Exhibit E-2 among other things
stating that (x) it has conducted a reasonable investigation
of the financial condition of the proposed Transferee and,
as a result of the investigation, the Transferor determines
that the proposed Transferee had historically paid its debts
as they came due and found no significant evidence that the
proposed Transferee will not continue to pay its debts as
they come due in the future and, (y) it has no actual
knowledge that such prospective Transferee is not a
Permitted Transferee, is not a United States Tax Person, is
a foreign permanent establishment or fixed base, within the
meaning of any applicable income tax treaty, of any United
States Tax Person or is a Person with respect to which
income on the Residual Certificate is attributable to a
foreign permanent establishment or fixed base, within the
meaning of any applicable income tax treaty.
(E) Each Person holding or acquiring an Ownership
Interest in a Residual Certificate that is a "pass-through
interest holder" within the meaning of temporary Treasury
Regulation Section 1.67-3T(a)(2)(i)(A) or is holding an
Ownership Interest in a Residual Certificate on behalf of a
"pass-through interest holder", by purchasing an Ownership
Interest in such Certificate, agrees to give the Certificate
Registrar written notice of its status as such immediately
upon holding or acquiring such Ownership Interest in a
Residual Certificate.
(F) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this
Section 3.3(e) or if any Holder of a Residual Certificate
shall lose its status as a Permitted Transferee or a United
States Tax Person, then the last preceding Holder of such
Residual Certificate that was in compliance with the
provisions of this Section 3.3(e) shall be restored, to the
extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. None of the Trustee,
the Fiscal Agent, the Master Servicer, the Special Servicer,
the Certificate Registrar or the Paying Agent shall be under
any liability to any Person for any registration of Transfer
of a Residual Certificate that is in fact not permitted by
this Section 3.3(e) or for making any payments due on such
Certificate to the Holder thereof or for taking any other
action with respect to such Holder under the provisions of
this Agreement.
(G) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the restrictions in
this Section 3.3(e), or if any Holder of a Residual
Certificate shall lose its status as a Permitted Transferee or
a United States Tax Person, and to the extent that the
retroactive restoration of the rights and obligations of the
prior Holder of such Residual Certificate as described in
clause (F) above shall be invalid, illegal or unenforceable,
then the Trustee shall have the right, without notice to the
Holder or any prior Holder of such Residual Certificate, but
not the obligation, to sell or cause to be sold such Residual
Certificate to a purchaser selected by the Trustee on such
terms as the Trustee may choose. Such noncomplying Holder
shall promptly endorse and deliver such Residual Certificate
in accordance with the instructions of the Certificate
Registrar. Such purchaser may be the Certificate Registrar
itself or any Affiliate
96
of the Certificate Registrar. The proceeds of such sale, net
of the commissions (which may include commissions payable to
the Certificate Registrar or its Affiliates), expenses and
taxes due, if any, will be remitted by the Certificate
Registrar to such noncomplying Holder. The terms and
conditions of any sale under this clause (G) shall be
determined in the sole discretion of the Certificate
Registrar, and the Certificate Registrar shall not be liable
to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.
The Master Servicer, on behalf of the Paying Agent, shall make available, upon
written request from the Paying Agent, to the Internal Revenue Service and those
Persons specified by the REMIC Provisions, all information necessary to compute
any tax imposed (A) as a result of the Transfer of an Ownership Interest in a
Residual Certificate to any Person who is not a Permitted Transferee, including
the information described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such Residual
Certificate and (B) as a result of any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate or organization
described in Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any time any Person
which is not a Permitted Transferee. The Person holding such Ownership Interest
shall be responsible for the reasonable compensation of the Master Servicer and
the Paying Agent for providing such information.
The provisions of this Section 3.3(e) may be modified, added
to or eliminated, provided that there shall have been delivered to the Trustee,
the Paying Agent, the Certificate Registrar, the Master Servicer, the Operating
Adviser and the Depositor the following:
(A) written notification from each Rating Agency to the
effect that the modification of, addition to or elimination of
such provisions will not cause such Rating Agency to qualify,
downgrade or withdraw its then current rating of any Class of
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trustee, the Certificate Registrar and the
Depositor, to the effect that such modification of, addition
to or elimination of such provisions will not cause any of
REMIC I, REMIC II or REMIC III to (x) cease to qualify as a
REMIC or (y) be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person which is not
a Permitted Transferee, or cause a Person other than the
prospective Transferee to be subject to a tax caused by the
Transfer of a Residual Certificate to a Person which is not a
Permitted Transferee.
(f) None of the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent, the Paying Agent or the Certificate Registrar shall
have any liability to the Trust arising from a transfer of any Certificate in
reliance upon a certification, ruling or Opinion of Counsel described in this
Section 3.3; provided, however, that the Certificate Registrar shall not
register the transfer of a Residual Certificate if it has actual knowledge that
the proposed transferee does not meet the qualifications of a permitted Holder
of a Residual Certificate as set forth in Section 3.3(e); provided, further,
that the Certificate Registrar shall not register the transfer of a Noneconomic
Residual Interest if it shall have received notice that the Transferor has
97
determined, as a result of the investigation under Section 3.3(e)(D), that the
proposed Transferee has not paid its debts as they came due or that it will not
pay its debts as they come due in the future. The Certificate Registrar shall
have no obligation or duty to monitor, determine or inquire as to compliance
with any restriction on transfer or exchange of Certificates or any interest
therein imposed under this Article III or under applicable law other than to
require delivery of the certifications and/or opinions described in this Article
III; provided, however, that the Certificate Registrar shall not register the
transfer of a Residual Certificate if it has actual knowledge that the proposed
transferee does not meet the qualifications of a permitted Holder of a Residual
Certificate as set forth in Section 3.3(e). The Certificate Registrar shall have
no liability for transfers (including without limitation transfers made through
the book-entry facilities of the Depository or between or among Participants or
Certificate Owners) made in violation of applicable restrictions, provided that
the Certificate Registrar has satisfied its duties expressly set forth in
Sections 3.3(c), 3.3(d) and 3.3(e).
(g) All Certificates surrendered for transfer and exchange
shall be physically cancelled by the Certificate Registrar, and the Certificate
Registrar shall hold such cancelled Certificates in accordance with its standard
procedures.
(h) The Certificate Registrar shall provide the Master
Servicer, the Special Servicer and the Depositor, upon written request, with an
updated copy of the Certificate Register within a reasonable period of time
following receipt of such request.
(i) Unless and until it is exchanged in whole for the
individual Certificates represented thereby, a Global Certificate representing
all of the Certificates of a Class may not be transferred, except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Clearing Agency or a nominee of such successor
Clearing Agency, and no such transfer to any such other Person may be
registered; provided that this subsection (i) shall not prohibit any transfer of
a Certificate of a Class that is issued in exchange for a Global Certificate of
the same Class pursuant to Section 3.9 below. Nothing in this subsection (i)
shall prohibit or render ineffective any transfer of a beneficial interest in a
Global Certificate effected in accordance with the other provisions of this
Section 3.3.
SECTION 3.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (A) any mutilated Certificate is surrendered to the Certificate Registrar, or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (B) except in the case of a
mutilated Certificate so surrendered, there is delivered to the Certificate
Registrar such security or indemnity as may be required by it to save it
harmless, then, in the absence of notice to the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Certificate
Registrar shall execute, and the Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and interest in the Trust.
In connection with the issuance of any new Certificate under this Section 3.4,
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Certificate
Registrar) connected therewith. Any replacement Certificate issued pursuant to
this Section 3.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
98
SECTION 3.5 PERSONS DEEMED OWNERS. Prior to presentation of a
Certificate for registration of transfer, the Master Servicer, the Special
Servicer, the Fiscal Agent, the Trustee, the Operating Adviser, the Paying Agent
and any agent of the Master Servicer, the Special Servicer, the Fiscal Agent,
the Paying Agent, the Trustee or the Operating Adviser may treat the Person in
whose name any Certificate is registered as of the related Record Date as the
owner of such Certificate for the purpose of receiving distributions as provided
in this Agreement and for all other purposes whatsoever, and neither the Master
Servicer, the Special Servicer, the Fiscal Agent, the Trustee, the Paying Agent,
the Operating Adviser nor any agent of the Master Servicer, the Special
Servicer, the Fiscal Agent, the Trustee, the Paying Agent or the Operating
Adviser shall be affected by any notice to the contrary.
SECTION 3.6 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
If three or more Certificateholders, a Certificateholder
holding all the Certificates of any Class of Certificates, the Master Servicer,
the Special Servicer, the Paying Agent, the Trustee, the Operating Adviser or
the Depositor (A) request in writing from the Certificate Registrar a list of
the names and addresses of Certificateholders and (B) in the case of a request
by Certificateholders, state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, then the Certificate Registrar shall, within ten
Business Days after the receipt of such request, afford such Certificateholders,
the Master Servicer, the Special Servicer, the Depositor, the Paying Agent, the
Trustee or the Operating Adviser, as applicable, access during normal business
hours to a current list of the Certificateholders. The expense of providing any
such information requested by such Person shall be borne by the party requesting
such information and shall not be borne by the Certificate Registrar or the
Trustee. Every Certificateholder, by receiving and holding a Certificate, agrees
that the Certificate Registrar and the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 3.7 BOOK-ENTRY CERTIFICATES.
(a) The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class X-1, Class X-2, Class B, Class C, Class D, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O and Class
P Certificates, upon original issuance, each shall be issued in the form of one
or more Certificates representing the Book-Entry Certificates, to be delivered
to the Certificate Registrar, as custodian for The Depository Trust Company (the
"Depository"), the initial Clearing Agency, by, or on behalf of, the Depositor,
provided, that any Non-Investment Grade Certificates sold to Institutional
Accredited Investors that are not Qualified Institutional Buyers will be issued
as Definitive Certificates. The Certificates shall initially be registered on
the Certificate Register in the name of Cede & Co., the nominee of the
Depository, as the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Certificates, except as provided in Section 3.9. Unless and until
Definitive Certificates have been issued to the Certificate Owners pursuant to
Section 3.9:
(i) the provisions of this Section 3.7 shall be in full
force and effect with respect to each such Class;
99
(ii) the Depositor, the Master Servicer, the Paying
Agent, the Certificate Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Certificates) as the authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section
3.7 conflict with any other provisions of this Agreement, the provisions of this
Section 3.7 shall control with respect to each such Class; and
(iv) the rights of the Certificate Owners of each such
Class shall be exercised only through the Clearing Agency and the applicable
Participants and shall be limited to those established by law and agreements
between such Certificate Owners and the Clearing Agency and/or the Participants.
Pursuant to the Depository Agreement, unless and until Certificates are issued
pursuant to Section 3.9, the initial Clearing Agency will make book-entry
transfers among the Participants and receive and transmit distributions of
principal and interest on the related Certificates to such Participants.
(b) For purposes of any provision of this Agreement requiring
or permitting actions with the consent of, or at the direction of, Holders of
the Certificates evidencing a specified percentage of the aggregate unpaid
principal amount of Certificates, such direction or consent may be given by the
Clearing Agency at the direction of Certificate Owners owning Certificates
evidencing the requisite percentage of principal amount of Certificates. The
Clearing Agency may take conflicting actions with respect to the Certificates to
the extent that such actions are taken on behalf of the Certificate Owners.
(c) The Certificates of each Class (other than the Residual
Certificates) initially sold in reliance on Rule 144A or with respect to the
Class F, Class G and Class H Certificates sold to Institutional Accredited
Investors shall be represented by the Rule 144A-IAI Global Certificate for such
Class, which shall be deposited with the Certificate Registrar, as custodian for
the Depository and registered in the name of Cede & Co. as nominee of the
Depository. The Class J, Class K, Class L, Class M, Class N, Class O and Class P
Certificates initially sold to Institutional Accredited Investors that are not
Qualified Institutional Buyers shall be represented by IAI Definitive
Certificates for such Class. The Certificates evidenced by any Rule 144A-IAI
Global Certificate or IAI Definitive Certificate shall be subject to certain
restrictions on transfer as set forth in Section 3.3 hereof and shall bear
legend(s) regarding such restrictions described herein.
(d) The Certificates of each Class (other than the Residual
Certificates) initially sold in offshore transactions in reliance on Regulation
S shall be represented by the Regulation S Temporary Global Certificate for such
Class, which shall be deposited with the Certificate Registrar, as custodian for
the Depository and registered in the name of Cede & Co. as nominee of the
Depository. Not earlier than the Release Date, beneficial interests in any
Regulation S Temporary Global Certificate shall be exchangeable for beneficial
interests in the Regulation S Permanent Global Certificate for such Class.
Beneficial interests in any Regulation S Temporary Global Certificate may be
held only through Euroclear Bank or Clearstream Bank; provided, however, that
such interests may be exchanged for interests in the Rule 144A-IAI Global
Certificate for such Class in accordance with the certification requirements
described in Section 3.7(f). The Regulation S Permanent Global Certificates
shall be deposited with the
100
Certificate Registrar, as custodian for the Depository and registered in the
name of Cede & Co. as nominee of the Depository.
On or prior to the Release Date and on or prior to any
Distribution Date occurring prior to the Release Date, each Certificate Owner of
a Regulation S Temporary Global Certificate that holds a beneficial interest
therein on the Release Date or on any such Distribution Date, as the case may
be, must deliver to Euroclear Bank or Clearstream Bank (as applicable) a
Regulation S Certificate; provided, however, that any Certificate Owner that
holds a beneficial interest in a Regulation S Temporary Global Certificate on
the Release Date or on any such Distribution Date that has previously delivered
a Regulation S Certificate to Euroclear Bank or Clearstream Bank with respect to
its interest therein does not need to deliver any subsequent Regulation S
Certificate (unless the certificate previously delivered is no longer true as of
such subsequent date, and such Certificate Owner must promptly notify Euroclear
Bank or Clearstream Bank, as applicable, thereof). Euroclear Bank or Clearstream
Bank, as applicable, shall be required to promptly deliver to the Certificate
Registrar a certificate substantially in the form of Exhibit I hereto to the
effect that it has received the requisite Regulation S Certificates for each
such Class, and no Certificate Owner (or transferee from any such Certificate
Owner) shall be entitled to receive an interest in the Regulation S Permanent
Global Certificate for such Class or any payment or principal or interest with
respect to its interest in such Regulation S Temporary Global Certificate prior
to the Certificate Registrar receiving such certification from Euroclear Bank or
Clearstream Bank with respect to the portion of the Regulation S Temporary
Global Certificate owned by such Certificate Owner (and, with respect to an
interest in the applicable Regulation S Permanent Global Certificate, prior to
the Release Date). After the Release Date, distributions due with respect to any
beneficial interest in a Regulation S Temporary Global Certificate shall not be
made to the holders of such beneficial interests unless exchange for a
beneficial interest in the related Regulation S Permanent Global Certificate is
improperly withheld or refused. No interest in a Regulation S Global Certificate
may be held by or transferred to a U.S. Person (as defined in Regulation S)
except for exchanges for a beneficial interest in the Rule 144A-IAI Global
Certificate for such Class as described in Section 3.7(f).
(e) Except in the limited circumstances described below in
Section 3.9, owners of beneficial interests in Global Certificates shall not be
entitled to receive physical delivery of Definitive Certificates. The
Certificates are not issuable in bearer form. Upon the issuance of each Global
Certificate, the Depository or its custodian shall credit, on its internal
system, the respective principal amount of the individual beneficial interests
represented by such Global Certificate to the accounts of Persons who have
accounts with such Depository. Such accounts initially shall be designated by or
on behalf of the Underwriters and Placement Agents. Ownership of beneficial
interests in a Global Certificate shall be limited to Customers or Persons who
hold interests directly or indirectly through Customers. Ownership of beneficial
interests in the Global Certificates shall be shown on, and the transfer of that
ownership shall be effected only through, records maintained by the Depository
or its nominee (with respect to interests of Customers) and the records of
Customers (with respect to interests of Persons other than Customers).
So long as the Depository, or its nominee, is the registered
holder of a Global Certificate, the Depository or such nominee, as the case may
be, shall be considered the sole owner and holder of the Certificates
represented by such Global Certificate for all purposes under this Agreement and
the Certificates, including, without limitation, obtaining consents and
101
waivers thereunder, and the Trustee, the Paying Agent and the Certificate
Registrar shall not be affected by any notice to the contrary. Except under the
circumstance described in Section 3.9, owners of beneficial interests in a
Global Certificate will not be entitled to have any portions of such Global
Certificate registered in their names, will not receive or be entitled to
receive physical delivery of Definitive Certificates in certificated form and
shall not be considered the owners or holders of the Global Certificate (or any
Certificates represented thereby) under this Agreement or the Certificates. In
addition, no Certificate Owner of an interest in a Global Certificate shall be
able to transfer that interest except in accordance with the Depository's
applicable procedures (in addition to those under this Agreement and, if
applicable, those of Euroclear Bank and Clearstream Bank).
(f) Any holder of an interest in a Regulation S Global
Certificate shall have the right, upon prior written notice to the Certificate
Registrar, Euroclear Bank or Clearstream Bank, as applicable, and the
Depository, in the form of an Exchange Certification (substantially in the form
of Exhibit H attached hereto), to exchange all or a portion of such interest (in
authorized denominations as set forth in Section 3.1(b)) for an equivalent
interest in the Rule 144A-IAI Global Certificate for such Class in connection
with a transfer of its interest therein to a transferee that is eligible to hold
an interest in such Rule 144A-IAI Global Certificate as described herein;
provided, however, that no Exchange Certification shall be required if any such
exchange occurs after the Release Date. Any holder of an interest in the Rule
144A-IAI Global Certificate shall have the right, upon prior written notice to
the Certificate Registrar, the Depository and Euroclear Bank or Clearstream
Bank, as applicable, in the form of an Exchange Certification, to exchange all
or a portion of such interest (in authorized denominations as set forth in
Section 3.1(b)) for an equivalent interest in the Regulation S Global
Certificate for such Class in connection with a transfer of its interest therein
to a transferee that is eligible to hold an interest in such Regulation S Global
Certificate as described herein; provided, however, that if such exchange occurs
prior to the Release Date, the transferee shall acquire an interest in a
Regulation S Temporary Global Certificate only and shall be subject to all of
the restrictions associated therewith described in Section 3.7(d). Following
receipt of any Exchange Certification or request for transfer, as applicable, by
the Certificate Registrar: (i) the Certificate Registrar shall endorse the
schedule to any Global Certificate representing the Certificate or Certificates
being exchanged to reduce the stated principal amount of such Global Certificate
by the denominations of the Certificate or Certificates for which such exchange
is to be made, and (ii) the Certificate Registrar shall endorse the schedule to
any Global Certificate representing the Certificate or Certificates for which
such exchange is to be made to increase the stated principal amount of such
Global Certificate by the denominations of the Certificate or Certificates being
exchanged therefor. The form of the Exchange Certification shall be available
from the Certificate Registrar.
SECTION 3.8 NOTICES TO CLEARING AGENCY. Whenever notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.9, the Paying Agent shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related Participants in accordance with its applicable
rules, regulations and procedures.
SECTION 3.9 DEFINITIVE CERTIFICATES.
102
(a) Definitive Certificates will be issued to the owners of
beneficial interests in a Global Certificate or their nominees if (i) the
Clearing Agency notifies the Depositor and the Certificate Registrar in writing
that the Clearing Agency is unwilling or unable to continue as depositary for
such Global Certificate and a qualifying successor depositary is not appointed
by the Depositor within 90 days thereof, (ii) the Trustee has instituted or
caused to be instituted or has been directed to institute any judicial
proceeding in a court to enforce the rights of the Certificateholders under this
Agreement and under such Global Certificate and the Trustee has been advised by
counsel that in connection with such proceeding it is necessary or advisable for
the Trustee or its custodian to obtain possession of such Global Certificate, or
(iii) after the occurrence of an Event of Default, Certificate Owners
representing a majority in aggregate outstanding Certificate Balance of such
Global Certificate advise the Clearing Agency through the Participants in
writing (and the Clearing Agency so advises the Depositor, the Certificate
Registrar and the Master Servicer in writing) that the continuation in global
form of the Certificates being evidenced by such Global Certificate is no longer
in their best interests; provided, that under no circumstances will Definitive
Certificates be issued to Certificate Owners of the Regulation S Temporary
Global Certificate. Upon notice of the occurrence of any of the events described
in the preceding sentence, the Certificate Registrar shall notify the Clearing
Agency and request the Clearing Agency to notify all Certificate Owners, through
the applicable Participants, of the occurrence of the event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of the Global Certificates
by the Clearing Agency, accompanied by registration instructions from the
Clearing Agency for registration, the Certificate Registrar shall execute, and
the Authenticating Agent shall authenticate and deliver, the Definitive
Certificates. None of the Depositor, the Trustee, the Paying Agent, the
Certificate Registrar or the Fiscal Agent shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Certificate Registrar, to the extent applicable with respect to
such Definitive Certificates, and the Certificate Registrar and the Trustee and
the Paying Agent shall recognize the Holders of Definitive Certificates as
Certificateholders hereunder.
(b) Distributions of principal and interest on the Definitive
Certificates shall be made by the Paying Agent directly to holders of Definitive
Certificates in accordance with the procedures set forth in this Agreement.
ARTICLE IV
ADVANCES
P&I Advances and Servicing Advances shall be made as provided
herein by the Master Servicer and, if the Master Servicer does not make such
Advances, by the Trustee, and if the Trustee does not make such Advances, by the
Fiscal Agent except to the extent that the Master Servicer, the Trustee or the
Fiscal Agent, as applicable, determines in accordance with Section 4.4 below,
that any such Advance would be a Nonrecoverable Advance.
SECTION 4.1 P&I ADVANCES BY MASTER SERVICER.
103
(a) On or prior to the Advance Report Date, the Master
Servicer shall notify the Trustee and the Paying Agent if the P&I Advance Amount
for such Distribution Date is greater than zero, and the Master Servicer shall
make a P&I Advance in respect of each Mortgage Loan of such amount no later than
the Master Servicer Remittance Date. It is understood that the obligation of the
Master Servicer to make such P&I Advances is mandatory and shall apply through
any court appointed stay period or similar payment delay resulting from any
insolvency of the Mortgagor or related bankruptcy, notwithstanding any other
provision of this Agreement. Notwithstanding the foregoing, the Master Servicer
shall not be required to make such P&I Advance, if the Master Servicer
determines, in accordance with Section 4.4 below, that any such P&I Advance
would be a Nonrecoverable Advance and shall not make such P&I Advance if such
P&I Advance if made would be a Nonrecoverable Advance as determined by the
Special Servicer in accordance with the Servicing Standard, in which event the
Special Servicer shall promptly direct the Master Servicer not to make such P&I
Advance. Such determination shall be conclusive and binding on the Trustee, the
Fiscal Agent and the Certificateholders. The Special Servicer shall not make P&I
Advances under this Agreement. If the Master Servicer fails to make a P&I
Advance that it is required to make under this Section 4.1, it shall promptly
notify the Trustee and the Paying Agent of such failure.
(b) If the Master Servicer determines that there is a P&I
Advance Amount for a Distribution Date, the Master Servicer shall on the related
Master Servicer Remittance Date either (A) deposit in the Certificate Account an
amount equal to the P&I Advance Amount or (B) utilize funds in the Certificate
Account being held for future distributions or withdrawals to make such Advance.
Any funds being held in the Certificate Account for future distribution or
withdrawal and so used shall be replaced by the Master Servicer from its own
funds by deposit in the Certificate Account on or before any future Master
Servicer Remittance Date to the extent that funds in the Certificate Account on
such Master Servicer Remittance Date shall be less than payments to the Paying
Agent or other Persons required to be made on such date.
SECTION 4.1A P&I ADVANCES WITH RESPECT TO NON-SERVICED
MORTGAGE LOANS AND SERVICED PARI PASSU MORTGAGE LOANS.
With respect to the Non-Serviced Mortgage Loans and Serviced
Pari Passu Mortgage Loans (the "P&I Pari Passu Loans"), the Master Servicer
shall make its determination that a P&I Advance previously made on any P&I Pari
Passu Loan is a Nonrecoverable Advance or that any proposed P&I Advance, if
made, would constitute a Nonrecoverable Advance with respect to such P&I Pari
Passu Loan in accordance with Section 4.1 independently of any determination
made by any Other Master Servicer under the related Other Companion Loan Pooling
and Servicing Agreement in respect of any P&I Pari Passu Loan following deposit
of the Non-Serviced Companion Mortgage Loans or Serviced Companion Mortgage
Loans into a commercial mortgage securitization trust, and the Other Master
Servicer shall make its own determination that it has made a P&I Advance that is
a Nonrecoverable Advance (both as defined in the related Other Companion Loan
Pooling and Servicing Agreement) or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable Advance (both as defined in the related Other
Companion Loan Pooling and Servicing Agreement) with respect to the Non-Serviced
Companion Mortgage Loans or Serviced Companion Mortgage Loans, as applicable, in
accordance with the related Other Companion Loan Pooling and Servicing
Agreement. The determination by either the Master Servicer or the Other Master
Servicer made on the earlier of (i) the Advance Report Date and (ii) the Other
Advance Report Date that any such P&I Advance
104
is nonrecoverable shall be binding on the Other Master Servicer and the Master
Servicer, as applicable, the Certificateholders and the holders of any
securities relating to the Non-Serviced Companion Mortgage Loans or Serviced
Companion Mortgage Loans, as applicable.
The Master Servicer shall not make a P&I Advance with respect
to any P&I Pari Passu Loan after its receipt of notice from the related Other
Master Servicer that it has determined that it has made a P&I Advance that is a
Nonrecoverable Advance on the Non-Serviced Companion Mortgage Loans or Serviced
Companion Mortgage Loans, as applicable, or that any proposed P&I Advance, if
made, would constitute a Nonrecoverable Advance pursuant to the relevant Other
Companion Loan Pooling and Servicing Agreement. If the Master Servicer
determines that a P&I Advance would be (if made), or any outstanding P&I Advance
previously made is, a Nonrecoverable Advance, the Master Servicer shall provide
the Other Master Servicer written notice of such determination. If the Master
Servicer receives written notice by the Other Master Servicer that it has
determined, with respect to any Mortgage Loan, that any proposed future P&I
Advance would be, or any outstanding P&I Advance is, a Nonrecoverable Advance,
the Master Servicer shall not make any additional P&I Advances with respect to
such Mortgage Loan unless the Master Servicer has consulted with the Other
Master Servicer and they both agree that circumstances with respect to such
Mortgage Loan have changed such that a proposed future P&I Advance would not be
a Nonrecoverable Advance. Notwithstanding the foregoing, the Master Servicer
shall continue to have the discretion provided in this Agreement to determine
that any future P&I Advance or outstanding P&I Advance would be, or is, as
applicable, a Nonrecoverable Advance. Once such a determination is made by the
Master Servicer or the Master Servicer receives written notice of such
determination by the Other Master Servicer, the Master Servicer shall follow the
process set forth in this paragraph before making any additional P&I Advances
with respect to such Mortgage Loan.
Following a securitization of a Serviced Companion Mortgage
Loan, the Master Servicer shall be required to deliver to the related Other
Master Servicer the following information: (i) any loan related information (in
the form received), including without limitation CMSA Reports relating to the
related Serviced Pari Passu Mortgage Loan, applicable to a determination that an
Advance is or would be a Nonrecoverable Advance, within one Business Day of the
Master Servicer's receipt thereof, (ii) notice of any Servicing Advance it, the
Trustee or the Fiscal Agent makes with respect to the related Serviced Pari
Passu Mortgage Loan within one Business Day of the making of such Advance and
(iii) notice of any determination that any Servicing Advance is a Nonrecoverable
Advance within one Business Day thereof.
SECTION 4.2 SERVICING ADVANCES. The Master Servicer and, if
the Master Servicer does not, the Trustee to the extent the Trustee receives
written notice from the Paying Agent that such Advance has not been made by the
Master Servicer, and if the Trustee does not, the Fiscal Agent (if the Fiscal
Agent has knowledge that such Advance is required to be made), shall make
Servicing Advances to the extent provided in this Agreement, except to the
extent that the Master Servicer, the Trustee or the Fiscal Agent, as applicable,
determines in accordance with Section 4.4 below, that any such Advance would be
a Nonrecoverable Advance and, subject to the last sentence of this Section 4.2,
except to the extent the Special Servicer determines in accordance with the
Servicing Standard and Section 4.4 that such Advance, if made, would be a
Nonrecoverable Advance, in which event the Special Servicer shall promptly
direct the Master Servicer not to make such Advance. Such determination by the
Master Servicer or the Special Servicer shall be conclusive and binding on the
Trustee, the Fiscal Agent and the
105
Certificateholders and, in the case of any B Note, the holder of the related B
Note and, in the case of any Serviced Pari Passu Mortgage Loan, the holder of
the related Serviced Companion Mortgage Loan. The Special Servicer shall not be
required to make Servicing Advances under this Agreement but may make such
Servicing Advances at its option in which event the Master Servicer shall
reimburse the Special Servicer for such Servicing Advance within 30 days of
receipt of a statement therefor. Promptly after discovering that the Master
Servicer has failed to make a Servicing Advance that the Master Servicer is
required to make hereunder, the Paying Agent shall promptly notify the Trustee
in writing of the failure by the Master Servicer to make such Servicing Advance.
The Master Servicer may make Servicing Advances in its own discretion if it
determines that making such Servicing Advance is in the best interest of the
Certificateholders, even if the Master Servicer or the Special Servicer has
determined, in accordance with Section 4.4 below, that any such Advance would be
a Nonrecoverable Advance.
The applicable Non-Serviced Mortgage Loan Master Servicer is
obligated to make Servicing Advances pursuant to the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement with respect to any Non-Serviced
Mortgage Loan, and the Master Servicer shall have no obligation or authority to
make Servicing Advances with respect to such Mortgage Loan.
SECTION 4.3 ADVANCES BY THE TRUSTEE AND THE FISCAL AGENT.
(a) To the extent that the Master Servicer fails to make a P&I
Advance with respect to a Mortgage Loan by the Master Servicer Remittance Date
(other than a P&I Advance that the Master Servicer or the Special Servicer
determines is a Nonrecoverable Advance), the Trustee shall make such P&I Advance
with respect to such Mortgage Loan to the extent the Trustee receives written
notice from the Paying Agent not later than 10:00 a.m. (New York City time) on
the Distribution Date that such Advance has not been made by the Master Servicer
on the Master Servicer Remittance Date unless the Trustee determines that such
P&I Advance, if made, would be a Nonrecoverable Advance. To the extent that the
Trustee fails to make a P&I Advance required to be made by the Trustee hereunder
on the Distribution Date (other than a P&I Advance that the Master Servicer or
the Trustee determines is a Nonrecoverable Advance), the Fiscal Agent will
advance such P&I Advance unless the Fiscal Agent determines that any such P&I
Advance, if made, would be a Nonrecoverable Advance. To the extent that the
Fiscal Agent is required hereunder to make P&I Advances on the Mortgage Loans,
it shall deposit the amount thereof in the Distribution Account by 1:00 p.m.
(New York City time) on each such Distribution Date. The Paying Agent shall
notify the Trustee in writing as soon as practicable, but not later than 10:00
a.m. (New York City time) on the Distribution Date if the Master Servicer has
failed to make a P&I Advance.
(b) To the extent that the Master Servicer fails to make a
Servicing Advance by the date such Servicing Advance is required to be made
(other than a Servicing Advance that the Master Servicer determines is a
Nonrecoverable Advance), and a Responsible Officer of the Trustee receives
notice thereof, the Trustee shall make such Servicing Advance promptly, but in
any event, not later than five Business Days after notice thereof in accordance
with Section 4.2, unless the Trustee determines that such Servicing Advance, if
made, would be a Nonrecoverable Advance.
106
(c) To the extent that the Trustee fails to make a Servicing
Advance required to be made by the Trustee hereunder by the later of (i) the
date such Servicing Advance is required to be made and (ii) five Business Days
after the date the Trustee has received notice pursuant to subsection (b) above,
that such Servicing Advance has not been made by the Master Servicer (other than
a Servicing Advance that the Master Servicer or the Trustee has determined to be
a Nonrecoverable Advance), the Fiscal Agent will advance such Servicing Advance,
unless the Fiscal Agent determines that such Servicing Advance, if made, would
be a Nonrecoverable Advance.
The initial Trustee's failure to make any Advance required to
be made by it hereunder shall not constitute a default by the initial Trustee
hereunder if the initial Fiscal Agent makes such Advance at or before the time
when the Trustee was required to make such Advance.
SECTION 4.4 EVIDENCE OF NONRECOVERABILITY.
(a) If the Master Servicer or the Special Servicer determines
at any time, in its sole discretion, exercised in good faith, that any Advance
previously made (or Unliquidated Advance in respect thereof) or any proposed
Advance, if made, would constitute a Nonrecoverable Advance, such determination
shall be evidenced by an Officer's Certificate delivered to the Trustee, the
Master Servicer, the Paying Agent, the Special Servicer, the Operating Adviser
and the Rating Agencies (and the holder of the Serviced Companion Mortgage Loan
if the Advance relates to a Loan Pair) by the Business Day prior to the
Distribution Date. Such Officer's Certificate shall set forth the reasons for
such determination of nonrecoverability, together with, to the extent such
information, report or document is in the Master Servicer's or Special
Servicer's possession, any related financial information such as related income
and expense statements, rent rolls, occupancy status, property inspections and
any Appraisals performed within the last 12 months on the Mortgaged Property,
and, if such reports are used by the Master Servicer or the Special Servicer, as
applicable, to determine that any P&I Advance or Servicing Advance, as
applicable, would be a Nonrecoverable Advance, any engineers' reports,
environmental surveys, internal final valuations or other information relevant
thereto which support such determination. If the Trustee or the Fiscal Agent, as
applicable, determines at any time that any portion of an Advance previously
made or a portion of a proposed Advance that the Trustee or the Fiscal Agent, as
applicable, is required to make pursuant to this Agreement, if made, would
constitute a Nonrecoverable Advance, such determination shall be evidenced by an
Officer's Certificate of a Responsible Officer of the Trustee or the Fiscal
Agent, as applicable, delivered to the Depositor, the Master Servicer, the
Special Servicer, the Paying Agent and the Operating Adviser similar to the
Officer's Certificate of the Master Servicer or the Special Servicer described
in the prior sentence. If the Special Servicer determines at any time that any
portion of an Advance previously made would constitute a Nonrecoverable Advance,
such determination shall be evidenced by an Officer's Certificate of a
Responsible Officer of the Special Servicer, delivered to the Depositor, the
Master Servicer, the Trustee, the Fiscal Agent, the Paying Agent and the
Operating Adviser similar to the Officer's Certificate of the Master Servicer
described above. The Trustee and the Fiscal Agent shall not be required to make
an Advance that the Master Servicer or the Special Servicer (or with respect to
a Mortgage Loan included in a Loan Pair or any Non-Serviced Mortgage Loan, the
related Other Master Servicer) has previously determined to be a Nonrecoverable
Advance. Notwithstanding any other provision of this Agreement, none of the
Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent shall be
obligated to, nor
107
shall it, make any Advance or make any payment that is designated in this
Agreement to be an Advance, if it determines in its good faith judgment that
such Advance or such payment (including interest accrued thereon at the Advance
Rate) would be a Nonrecoverable Advance. The Master Servicer's determination in
accordance with the above provisions shall be conclusive and binding on the
Trustee, the Fiscal Agent, the Paying Agent and the Certificateholders. The
Master Servicer shall consider Unliquidated Advances in respect of prior P&I
Advances and Servicing Advances as outstanding Advances for purposes of
nonrecoverablility determinations as if such Unliquidated Advance were a P&I
Advance or Servicing Advance, as applicable.
(b) Any Non-Serviced Mortgage Loan Master Servicer,
Non-Serviced Mortgage Loan Trustee or Non-Serviced Mortgage Loan Fiscal Agent,
as applicable, shall be entitled to reimbursement for Pari Passu Loan
Nonrecoverable Advances pursuant to and to the extent set forth in the related
Non-Serviced Mortgage Loan Intercreditor Agreement (with, in each case, any
accrued and unpaid interest thereon provided for under the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement) in the manner set forth in
Section 5.2.
SECTION 4.5 INTEREST ON ADVANCES; CALCULATION OF OUTSTANDING
ADVANCES WITH RESPECT TO A MORTGAGE LOAN. Any unreimbursed Advance funded from
the Master Servicer's, the Special Servicer's, the Trustee's or the Fiscal
Agent's own funds shall accrue interest on a daily basis, at a per annum rate
equal to the Advance Rate, from and including the date such Advance was made to
but not including the date on which such Advance has been reimbursed; provided,
however, that neither the Master Servicer nor any other party shall be entitled
to interest accrued on the amount of any P&I Advance with respect to any
Mortgage Loan or any B Note for the period commencing on the date of such P&I
Advance and ending on the day on which the grace period applicable to the
related Mortgagor's obligation to make the related Scheduled Payment expires
pursuant to the related Mortgage Loan or B Note documents. All Late Collections
on any Non-Serviced Mortgage Loan in respect of interest shall, promptly
following receipt thereof, be applied by the Master Servicer to reimburse the
interest component of any P&I Advance outstanding with respect to such
Non-Serviced Mortgage Loan. Any party that makes a P&I Advance with respect to
any Non-Serviced Mortgage Loan shall provide to the applicable Non-Serviced
Mortgage Loan Master Servicer monthly, at least two Business Days prior to the
next succeeding Due Date for such Non-Serviced Mortgage Loan, written notice of
whether (and, if any, how much) Advance Interest will be payable on the interest
component of that P&I Advance through the next succeeding related Master
Servicer Remittance Date. For purposes of determining whether a P&I Advance is
outstanding, amounts collected with respect to a particular Mortgage Loan, B
Note or REO Property and treated as collections of principal or interest shall
be applied first to reimburse the earliest P&I Advance, and then each succeeding
P&I Advance to the extent not inconsistent with Section 4.6. The Master Servicer
shall use efforts consistent with the Servicing Standard to collect (but shall
have no further obligation to collect), with respect to the Mortgage Loans (and
the Serviced Companion Mortgage Loans) that are not Specially Serviced Mortgage
Loans, Late Fees and default interest from the Mortgagor in an amount sufficient
to pay Advance Interest. The Master Servicer shall be entitled to retain Late
Fees and default interest paid by any Mortgagor during a Collection Period with
respect to any Mortgage Loan (other than the portion of such Late Fee and
default interest that relates to the period commencing after the Servicing
Transfer Event in respect of a Specially Serviced Mortgage Loan, as to which the
Special Servicer shall retain Late Fees and default interest with respect to
such Specially Serviced Mortgage Loan, subject to the offsets set forth below)
as
108
additional servicing compensation only to the extent such Late Fees and default
interest exceed Advance Interest on a "pool basis" for all Mortgage Loans other
than Specially Serviced Mortgaged Loans. The Special Servicer, with respect to
any Specially Serviced Mortgage Loan, shall (i) pay from any Late Fees and
default interest collected from such Specially Serviced Mortgage Loan (a) any
outstanding and unpaid Advance Interest in respect of such Specially Serviced
Mortgage Loan to the Master Servicer, the Trustee or the Fiscal Agent, as
applicable and (b) to the Trust, any losses previously incurred by the Trust
with respect to such Specially Serviced Mortgage Loan and (ii) retain any
remaining portion of such Late Fees and default interest as additional Special
Servicer Compensation. Notwithstanding the foregoing, any allocation of Late
Fees and default interest (after being first applied to Advance Interest) with
respect to the Congress Center A/B Mortgage Loan shall be made to the Master
Servicer and the Special Servicer after giving effect to allocation of such
amounts to the holder of the related A Note and B Note as provided for under the
related Intercreditor Agreement.
SECTION 4.6 REIMBURSEMENT OF ADVANCES AND ADVANCE INTEREST.
(a) Advances made with respect to each Mortgage Loan, Serviced
Companion Mortgage Loan, B Note, Specially Serviced Mortgage Loan or REO
Property (including Advances later determined to be Nonrecoverable Advances) and
Advance Interest thereon shall be reimbursed to the extent of the amounts
identified to be applied therefor in Section 5.2. The aggregate of the amounts
available to repay Advances and Advance Interest thereon pursuant to Section 5.2
collected in any Collection Period with respect to Mortgage Loans, any Serviced
Companion Mortgage Loan or any B Note or Specially Serviced Mortgage Loans or
REO Property shall be an "Available Advance Reimbursement Amount."
(b) To the extent that Advances have been made on the Mortgage
Loans, any Serviced Companion Mortgage Loan, any B Note, any Specially Serviced
Mortgage Loans or any REO Mortgage Loans, the Available Advance Reimbursement
Amount with respect to any Determination Date shall be applied to reimburse (i)
the Fiscal Agent for any Advances outstanding to the Fiscal Agent with respect
to any of such Mortgage Loans, Serviced Companion Mortgage Loan, B Note,
Specially Serviced Mortgage Loans or REO Mortgage Loans, plus any Advance
Interest owed to the Fiscal Agent with respect to such Advances and then (ii)
the Trustee for any Advances outstanding to the Trustee with respect to any of
such Mortgage Loans, Serviced Companion Mortgage Loan, B Note, Specially
Serviced Mortgage Loans or REO Mortgage Loans, plus any Advance Interest owed to
the Trustee with respect to such Advances and then (iii) the Master Servicer for
any Advances outstanding to the Master Servicer with respect to any of such
Mortgage Loans, Serviced Companion Mortgage Loan, B Note, Specially Serviced
Mortgage Loans or REO Mortgage Loans, plus any Advance Interest owed to the
Master Servicer with respect to such Advances and then (iv) the Special Servicer
for any Advances outstanding to the Special Servicer with respect to any of such
Mortgage Loans, Serviced Companion Mortgage Loan, B Note, Specially Serviced
Mortgage Loans or REO Mortgage Loans, plus any Advance Interest owed to the
Special Servicer with respect to such Advances. To the extent that any Advance
Interest payable to the Master Servicer, the Special Servicer, the Trustee or
the Fiscal Agent with respect to a Specially Serviced Mortgage Loan or REO
Mortgage Loan cannot be recovered from the related Mortgagor, the amount of such
Advance Interest shall be payable to the Fiscal Agent, the Trustee, the Special
Servicer or the Master Servicer, as the case may be, from amounts on deposit in
the Certificate Account (or sub-account thereof) or the Distribution Account, to
the extent of amounts identified to be applied
109
therefor, pursuant to Section 5.2(a) or Section 5.3(b)(ii). The Master
Servicer's, the Special Servicer's, the Fiscal Agent's and the Trustee's right
of reimbursement under this Agreement for Advances shall be prior to the rights
of the Certificateholders (and, in the case of a Serviced Companion Mortgage
Loan, the holder thereof and, in the case of a B Note, the holder thereof) to
receive any amounts recovered with respect to such Mortgage Loans, Serviced
Companion Mortgage Loans, B Notes or REO Mortgage Loans.
(c) Advance Interest will be paid to the Fiscal Agent, the
Trustee, the Master Servicer and/or the Special Servicer (in accordance with the
priorities specified in the preceding paragraph) first, from Late Fees and
default interest collected from the Mortgage Loans during the Collection Period
during which the related Advance is reimbursed, and then from Excess Liquidation
Proceeds then available prior to payment from any other amounts. Late Fees and
default interest will be applied on a "pool basis" for non-Specially Serviced
Mortgage Loans and on a "loan-by-loan basis" (under which Late Fees and default
interest will be offset against the Advance Interest arising only from that
particular Specially Serviced Mortgage Loan) for Specially Serviced Mortgage
Loans, as the case may be, to the payment of Advance Interest on all Advances on
such non-Specially Serviced Mortgage Loans or such Specially Serviced Mortgage
Loans, as the case may be, then being reimbursed. Advance Interest payable to
the Master Servicer, the Special Servicer, the Fiscal Agent or the Trustee in
respect of Servicing Advances on any Loan Pair shall be allocated to the
Serviced Pari Passu Mortgage Loan and the Serviced Companion Mortgage Loan on a
pro rata basis based upon the Principal Balance thereof.
(d) Amounts applied to reimburse Advances shall first be
applied to reduce Advance Interest thereon that was not paid from amounts
specified in the preceding paragraph (c) and then to reduce the outstanding
amount of such Advances.
(e) To the extent that the Special Servicer incurs
out-of-pocket expenses, in accordance with the Servicing Standard, in connection
with servicing Specially Serviced Mortgage Loans, the Master Servicer shall
reimburse the Special Servicer for such expenditures within 30 days after
receiving an invoice and a report from the Special Servicer, subject to Section
4.4. With respect to each Collection Period, the Special Servicer shall deliver
such invoice and report to the Master Servicer by the following Determination
Date. All such amounts reimbursed by the Master Servicer shall be a Servicing
Advance, subject to Section 4.4. In the event that the Master Servicer fails to
reimburse the Special Servicer hereunder or the Master Servicer determines that
such Servicing Advance was or, if made, would be a Nonrecoverable Advance and
the Master Servicer does not make such payment, the Special Servicer shall
notify the Master Servicer and the Paying Agent in writing of such nonpayment
and the amount payable to the Special Servicer and shall be entitled to receive
reimbursement from the Trust as an Additional Trust Expense. The Master
Servicer, the Paying Agent and the Trustee shall have no obligation to verify
the amount payable to the Special Servicer pursuant to this Section 4.6(e) and
circumstances surrounding the notice delivered by the Special Servicer pursuant
to this Section 4.6(e).
SECTION 4.7 FISCAL AGENT TERMINATION EVENT. "Fiscal Agent
Termination Event," wherever used herein, means any one of the following events:
110
(i) Any failure by the Fiscal Agent to remit to the
Paying Agent when due any required Advance for any Mortgage Loan; or
(ii) A decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or similar
law for the appointment of a conservator, receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Fiscal Agent and such decree or order shall have remained in force undischarged
or unstayed for a period of 60 days; or
(iii) The Fiscal Agent shall consent to the appointment
of a conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings or relating to the Fiscal Agent or relating
to all or substantially all of its property; or
(iv) The Fiscal Agent shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or reorganization statute,
make an assignment for the benefit of its creditors, voluntarily suspend payment
of its obligations, or take any corporate action in furtherance of the
foregoing; or
(v) Fitch has indicated its intent to reduce, qualify or
withdraw, as applicable, the outstanding rating of any Class of Certificates
because the prospective financial condition or capacity to make Advances of the
Fiscal Agent is insufficient to maintain such rating;
(vi) The long-term unsecured debt of the Fiscal Agent is
rated below "AA-" by Fitch (or "A+" by Fitch if the Fiscal Agent's short-term
unsecured debt is rated at least "F-1" by Fitch) or "AA-" by S&P (or "A+" by S&P
if the Fiscal Agent's short-term unsecured debt is rated at least "A-1" by S&P),
unless such other rating shall be acceptable to the Rating Agencies as evidenced
by a Rating Agency Confirmation; or
(vii) With respect to the initial Fiscal Agent, LaSalle
Bank National Association resigns or is removed pursuant to Section 7.6 hereof.
SECTION 4.8 PROCEDURE UPON TERMINATION EVENT.
(a) On the date specified in a written notice of termination
given to the Fiscal Agent pursuant to Section 7.6(c), all authority, power and
rights of the Fiscal Agent under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall terminate and a successor Fiscal Agent, if
necessary, shall be appointed by the Trustee, with the consent of the Depositor;
provided that the successor Fiscal Agent meets the eligibility requirements set
forth in Section 7.5. The Fiscal Agent agrees to cooperate with the Trustee in
effecting the termination of the Fiscal Agent's responsibilities and rights
hereunder as Fiscal Agent.
(b) Notwithstanding the termination of its activities as
Fiscal Agent, the terminated Fiscal Agent shall continue to be entitled to
reimbursement to the extent provided in Section 4.6 but only to the extent such
reimbursement relates to the period up to and including
111
the date on which the Fiscal Agent's termination is effective. The Fiscal Agent
shall be reimbursed for all amounts owed to it hereunder on or prior to the
effective date of its termination from amounts on deposit in the Certificate
Account.
SECTION 4.9 MERGER OR CONSOLIDATION OF FISCAL AGENT. Any
Person into which the Fiscal Agent may be merged or consolidated, or any Person
resulting from any merger, conversion, other change in form or consolidation to
which the Fiscal Agent shall be a party, or any Person succeeding to the
business of the Fiscal Agent, shall be the successor of the Fiscal Agent
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided that (i) the successor to the Fiscal Agent or
resulting Person shall have a net worth of not less than $100,000,000, (ii) such
successor or resulting Person shall be satisfactory to the Trustee, (iii) such
successor or resulting Person shall execute and deliver to the Trustee an
agreement, in form and substance satisfactory to the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Fiscal Agent
under this Agreement from and after the date of such agreement, (iv) the
successor or surviving entity meets the eligibility requirements set forth in
Section 7.5, and (v) the Fiscal Agent shall deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel acceptable to the Trustee (which opinion
shall be at the expense of the Fiscal Agent) stating that all conditions
precedent to such action under this Section 4.9 have been completed and such
action is permitted by and complies with the terms of this Section 4.9.
SECTION 4.10 LIMITATION ON LIABILITY OF THE FISCAL AGENT AND
OTHERS. Neither the Fiscal Agent nor any of the directors, officers, employees,
agents or Controlling Persons of the Fiscal Agent shall be under any liability
to the Certificateholders, the Depositor or the Trustee for any action taken or
for refraining from the taking of any action in good faith, and using reasonable
business judgment pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Fiscal Agent or any such
Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in its performance of duties under
this Agreement. The Fiscal Agent and any director, officer, employee or agent of
the Fiscal Agent may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Fiscal Agent shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its obligations
under this Agreement. In such event, all legal expenses and costs of such action
shall be expenses and costs of the Trust, and the Fiscal Agent shall be entitled
to be reimbursed therefor as Servicing Advances as provided by this Agreement.
The provisions of this Section 4.10 shall survive the resignation or removal of
the Fiscal Agent and the termination of this Agreement.
SECTION 4.11 INDEMNIFICATION OF FISCAL AGENT. The Fiscal Agent
and each of its directors, officers, employees, agents and Controlling Persons
shall be indemnified by the Trust and held harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments
and any other costs, liabilities, fees and expenses incurred in connection with
any legal action relating to this Agreement other than any loss, liability or
expense incurred by reason of the Fiscal Agent's willful misfeasance, bad faith
or negligence in the performance of its duties hereunder. The Depositor shall
indemnify and hold harmless the Fiscal Agent, its directors, officers,
employees, agents or Controlling Persons from and against any loss, claim,
damage or liability, joint or several, and any action in respect thereof, to
which
112
the Fiscal Agent, its directors, officers, employees, agents or Controlling
Person may become subject under the 1933 Act, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon any untrue statement
or alleged untrue statement of a material fact contained in the Private
Placement Memorandum, Preliminary Prospectus Supplement, Final Prospectus
Supplement or Prospectus or arises out of, or is based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made, not misleading and shall reimburse the Fiscal Agent, its
directors, officers, employees, agents or Controlling Person for any legal and
other expenses reasonably incurred by the Fiscal Agent or any such director,
officer, employee, agent or Controlling Person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action.
The Fiscal Agent shall immediately notify the Depositor, the Sellers, the Paying
Agent, the Special Servicer, the Master Servicer and the Trustee if a claim is
made by a third party with respect to this Section 4.11 entitling the Fiscal
Agent, its directors, officers, employees, agents or Controlling Person to
indemnification hereunder, whereupon the Depositor shall assume the defense of
any such claim (with counsel reasonably satisfactory to the Fiscal Agent) and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or them in respect of such claim. Any failure to so notify the Depositor
shall not affect any rights the Fiscal Agent, its directors, officers,
employees, agents or Controlling Person may have to indemnification under this
Section 4.11, unless the Depositor's defense of such claim is materially
prejudiced thereby. The indemnification provided herein shall survive the
termination of this Agreement and the resignation or removal of the Fiscal
Agent.
ARTICLE V
ADMINISTRATION OF THE TRUST
SECTION 5.1 COLLECTIONS.
(a) On or prior to the Closing Date, the Master Servicer shall
open, or cause to be opened, and shall thereafter maintain, or cause to be
maintained, a separate account or accounts, which accounts must be Eligible
Accounts, in the name of "Xxxxx Fargo Bank, National Association, as Master
Servicer for LaSalle Bank National Association, as Trustee for the Holders of
Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16" (the "Certificate Account"). On or
prior to the Closing Date, the Master Servicer shall open, or cause to be
opened, and shall maintain, or cause to be maintained an additional separate
account or accounts in the name of "Xxxxx Fargo Bank, National Association, as
Master Servicer for LaSalle Bank National Association, as Trustee for the
Holders of Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16" (the "Interest Reserve Account").
(b) On or prior to the date the Master Servicer shall first
deposit funds in a Certificate Account or the Interest Reserve Account, as the
case may be, the Master Servicer shall give to the Paying Agent and the Trustee
prior written notice of the name and address of the depository institution(s) at
which such accounts are maintained and the account number of such accounts. The
Master Servicer shall take such actions as are necessary to cause the depository
institution holding the Certificate Account and the Interest Reserve Account to
hold such account
113
in the name of the Master Servicer as provided in Section
5.1(a), subject to the Master Servicer's (or its Primary Servicer's or its
Sub-Servicer's) right to direct payments and investments and its rights of
withdrawal under this Agreement.
(c) The Master Servicer shall deposit, or cause to be
deposited, into the Certificate Account on the Business Day following receipt
(or, in the case of an inadvertent failure to make such deposit on the Business
Day following receipt, within 3 Business Days of discovery of such failure and
in the case of unscheduled remittances of principal or interest, on the Business
Day following identification of the proper application of such amounts), the
following amounts received by it (including amounts remitted to the Master
Servicer by the Special Servicer from an REO Account pursuant to Section 9.14),
other than in respect of interest and principal on the Mortgage Loans, any
Serviced Companion Mortgage Loan or any B Note due on or before the Cut-Off Date
which shall be remitted to the Depositor (provided that the Master Servicer (I)
may retain amounts otherwise payable to the Master Servicer as provided in
Section 5.2(a) rather than deposit them into the Certificate Account, (II)
shall, rather than deposit them in the Certificate Account, directly remit to
the Primary Servicer the Primary Servicing Fees payable as provided in Section
5.2(a)(iv)(unless already retained by the Primary Servicer), and (III) shall,
rather than deposit them in the Certificate Account, directly remit the Excess
Servicing Fees to the holders thereof as provided in Section 5.2(a)(iv))(unless
already retained by the applicable holder of the excess servicing rights)):
(A) Principal: all payments on account of principal,
including Principal Prepayments, the principal component of
Scheduled Payments, and any Late Collections in respect
thereof, on the Mortgage Loans, any Serviced Companion
Mortgage Loan and any B Note;
(B) Interest: subject to subsection (d) hereof, all
payments on account of interest on the Mortgage Loans, any
Serviced Companion Mortgage Loan and any B Note (minus any
portion of any such payment that is allocable to the period
prior to the Cut-Off Date which shall be remitted to the
Depositor and excluding Interest Reserve Amounts to be
deposited in the Interest Reserve Account pursuant to Section
5.1(d) below);
(C) Liquidation Proceeds: all Liquidation Proceeds with
respect to the Mortgage Loans, any Serviced Companion Mortgage
Loan and any B Note;
(D) Insurance Proceeds: all Insurance Proceeds other than
proceeds to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the
related Mortgagor in accordance with the Servicing Standard,
which proceeds shall be deposited by the Master Servicer into
an Escrow Account and not deposited in the Certificate
Account;
(E) Condemnation Proceeds: all Condemnation Proceeds
other than proceeds to be applied to the restoration or repair
of the property subject to the related Mortgage or released to
the related Mortgagor in accordance with the Servicing
Standard, which proceeds shall be deposited by the Master
Servicer into an Escrow Account and not deposited in the
Certificate Account;
114
(F) REO Income: all REO Income received from the Special
Servicer;
(G) Investment Losses: any amounts required to be
deposited by the Master Servicer pursuant to Section 5.1(e) in
connection with losses realized on Eligible Investments with
respect to funds held in the Certificate Account and amounts
required to be deposited by the Special Servicer pursuant to
Section 9.14(b) in connection with losses realized on Eligible
Investments with respect to funds held in the REO Account;
(H) Advances: all P&I Advances unless made directly to
the Distribution Account;
(I) Other: all other amounts, including Prepayment
Premiums, required to be deposited in the Certificate Account
pursuant to this Agreement, including Purchase Proceeds of any
Mortgage Loans repurchased by a Seller or substitution
shortfall amounts (as described in the fifth paragraph of
Section 2.3(a)) paid by a Seller in connection with the
substitution of any Qualifying Substitute Mortgage Loans,
payments or recoveries in respect of Unliquidated Advances or
in respect of Nonrecoverable Advances paid from principal
collections on the Mortgage Loan pursuant Section 5.2(a)(II),
any other amounts received with respect to any Serviced
Companion Mortgage Loan and with respect to any B Note, all
other amounts received pursuant to the cure and purchase
rights set forth in the applicable Intercreditor Agreement;
and
(J) to the extent not otherwise set forth above, all
amounts received from each Non-Serviced Mortgage Loan Master
Servicer, Non-Serviced Mortgage Loan Special Servicer or
Non-Serviced Mortgage Loan Trustee pursuant to the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement and
Non-Serviced Mortgage Loan Intercreditor Agreement.
With respect to any A/B Mortgage Loan other than the Congress
Center A/B Mortgage Loan, the Master Servicer shall establish and maintain one
or more sub-accounts of the Certificate Account (each an "A/B Loan Custodial
Account") into which the Master Servicer shall deposit any amounts described
above that are required to be paid to the holder of the related B Note pursuant
to the terms of the related Intercreditor Agreement, in each case on the same
day as the deposit thereof into the Certificate Account. Any A/B Loan Custodial
Account shall be held in trust for the benefit of the holder of the related B
Note and shall not be part of any REMIC Pool.
With respect to any Loan Pair, the Master Servicer shall
establish and maintain one or more sub-accounts of the Certificate Account
(each, a "Serviced Companion Mortgage Loan Custodial Account") into which the
Master Servicer shall deposit any amounts described above that are required to
be paid to the holder of the related Serviced Companion Mortgage Loan pursuant
to the terms of the related Loan Pair Intercreditor Agreement, in each case on
the same day as the deposit thereof into the Certificate Account. Each Serviced
Companion Mortgage Loan Custodial Account shall be held in trust for the benefit
of the holder of the related Serviced Companion Mortgage Loan and shall not be
part of any REMIC Pool.
115
Remittances from any REO Account to the Master Servicer for
deposit in the Certificate Account shall be made by the Special Servicer no
later than the Special Servicer Remittance Date.
(d) The Master Servicer, with respect to each Distribution
Date occurring in January (other than in any leap year) and February of each
year, shall deposit in the Interest Reserve Account in respect of each Interest
Reserve Loan, an amount equal to one day's interest at the related REMIC I Net
Mortgage Rate (without any conversion to a 30/360 basis as provided in the
definition thereof) on the Scheduled Principal Balance of such Mortgage Loan as
of the Due Date in the month in which such Distribution Date occurs, to the
extent a Scheduled Payment or P&I Advance is timely made in respect thereof for
such Due Date (all amounts so deposited in any consecutive January and February
in respect of each Interest Reserve Loan, the "Interest Reserve Amount"). For
purposes of determining amounts to be deposited into the Interest Reserve
Account, the REMIC I Net Mortgage Rate used in this calculation for those months
will be calculated without regard to any adjustment for Interest Reserve Amounts
or the interest accrual basis as described in the proviso to the definition of
"REMIC I Net Mortgage Rate."
(e) Funds in the Certificate Account (including any A/B Loan
Custodial Accounts and Serviced Companion Mortgage Loan Custodial Accounts) and
Interest Reserve Account may be invested and, if invested, shall be invested by,
and at the risk of, the Master Servicer in Eligible Investments selected by the
Master Servicer which shall mature, unless payable on demand, not later than the
Business Day immediately preceding the next Master Servicer Remittance Date, and
any such Eligible Investment shall not be sold or disposed of prior to its
maturity unless payable on demand. All such Eligible Investments shall be made
in the name of "LaSalle Bank National Association, as Trustee for the Holders of
the Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16 and the holder of any related
Serviced Companion Mortgage Loan or B Note as their interests may appear." None
of the Depositor, the Mortgagors, the Paying Agent or the Trustee shall be
liable for any loss incurred on such Eligible Investments.
An amount equal to all income and gain realized from any such
investment shall be paid to the Master Servicer as additional servicing
compensation and shall be subject to its withdrawal at any time from time to
time. The amount of any losses incurred in respect of any such investments shall
be for the account of the Master Servicer which shall deposit the amount of such
loss (to the extent not offset by income from other investments) in the
Certificate Account (and, solely to the extent that the loss is of an amount
credited to an A/B Loan Custodial Account or Serviced Companion Mortgage Loan
Custodial Account, deposit to the related A/B Loan Custodial Account or Serviced
Companion Mortgage Loan Custodial Account, as the case may be) or Interest
Reserve Account, as the case may be, out of its own funds immediately as
realized. If the Master Servicer deposits in or transfers to the Certificate
Account, any A/B Loan Custodial Account, any Serviced Companion Mortgage Loan
Custodial Account or the Interest Reserve Account, as the case may be, any
amount not required to be deposited therein or transferred thereto, it may at
any time withdraw such amount or retransfer such amount from the Certificate
Account, such A/B Loan Custodial Account, such Serviced Companion Mortgage Loan
Custodial Account or the Interest Reserve Account, as the case may be, any
provision herein to the contrary notwithstanding.
116
(f) Except as expressly provided otherwise in this Agreement,
if any default occurs in the making of a payment due under any Eligible
Investment, or if a default occurs in any other performance required under any
Eligible Investment, the Paying Agent on behalf of and at the direction of the
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings; provided, however, that if the Master Servicer shall have deposited
in the Certificate Account, the related Serviced Companion Mortgage Loan
Custodial Account, the related A/B Loan Custodial Account or the Interest
Reserve Account, as applicable, an amount equal to all amounts due under any
such Eligible Investment (net of anticipated income or earnings thereon that
would have been payable to the Master Servicer as additional servicing
compensation) the Master Servicer shall have the sole right to enforce such
payment or performance.
(g) Certain of the Mortgage Loans may provide for payment by
the Mortgagor to the Master Servicer of amounts to be used for payment of Escrow
Amounts for the account of the Mortgagor. The Master Servicer shall deal with
these amounts in accordance with the Servicing Standard, the terms of the
related Mortgage Loans and Section 8.3(e) hereof, and the Primary Servicer will
be entitled to hold any Escrow Accounts relating to the Mortgage Loans that it
services in accordance with the requirements set forth in Section 8.3(e). Within
20 days following the first anniversary of the Closing Date, the Master Servicer
shall deliver to the Trustee, the Paying Agent and the Operating Adviser, for
each Mortgage Loan set forth on Schedule VII hereto, a brief statement as to the
status of the work or project based on the most recent information provided by
the Mortgagor. Schedule VII sets forth those Mortgage Loans as to which an
upfront reserve was collected at closing in an amount in excess of $75,000 with
respect to specific immediate engineering work, completion of additional
construction, environmental remediation or similar one-time projects (but not
with respect to escrow accounts maintained for ongoing obligations, such as real
estate taxes, insurance premiums, ongoing property maintenance, replacements and
capital improvements or debt service). If the work or project is not completed
in accordance with the requirements of the escrow, the Master Servicer and the
Special Servicer (which shall itself consult with the Operating Adviser) will
consult with each other as to whether there exists a material default under the
underlying Mortgage Loan documents.
(h) In the case of the Mortgage Loans set forth on Schedule
XI, as to which the Scheduled Payment is due in a calendar month on a Due Date
(including any grace period) that may occur after the end of the Collection
Period ending in such calendar month, the Master Servicer shall, unless the
Scheduled Payment is received before the end of such Collection Period, make a
P&I Advance by deposit to the Certificate Account on the Master Servicer
Remittance Date in an amount equal to the Scheduled Payment or the Assumed
Scheduled Payment, as applicable, and for purposes of the definition of
"Available Distribution Amount" and "Principal Distribution Amount," such
Scheduled Payment or Assumed Scheduled Payment, as applicable, shall be deemed
to have been received in such Collection Period.
SECTION 5.2 APPLICATION OF FUNDS IN THE CERTIFICATE ACCOUNT
AND INTEREST RESERVE ACCOUNT.
(a) Subsection (I). The Master Servicer shall, from time to
time, make withdrawals from the Certificate Account and remit them by wire
transfer prior to 12:00 p.m., New York City time, on the related Master Servicer
Remittance Date in immediately available
117
funds to the account specified in this Section or otherwise (w) to such account
as it shall determine from time to time of amounts payable to the Master
Servicer from the Certificate Account (or, insofar as they relate to a B Note,
from the related A/B Loan Custodial Account or, insofar as they relate to a
Serviced Companion Mortgage Loan, from the related Serviced Companion Mortgage
Loan Custodial Account) pursuant to clauses (i), (ii), (iii), (iv), (vi), (viii)
and (ix) below; (x) to the account specified in writing by the Paying Agent from
time to time of amounts payable to the Paying Agent and the Trustee from the
Certificate Account (and, insofar as they relate to a B Note, from the related
A/B Loan Custodial Account and, insofar as they relate to a Serviced Companion
Mortgage Loan, from the Serviced Companion Mortgage Loan Custodial Account)
pursuant to clauses (ii), (iii), (v), (vi), (xi), (xii) and (xiii) below; and
(y) to the Special Servicer from time to time of amounts payable to the Special
Servicer from the Certificate Account (or, insofar as they relate to a B Note,
from the related A/B Loan Custodial Account or, insofar as they relate to a
Serviced Companion Mortgage Loan, from the related Serviced Companion Mortgage
Loan Custodial Account) pursuant to clauses (i), (iv), (vi), (vii) and (ix)
below of the following amounts, from the amounts specified for the following
purposes:
(i) Fees: the Master Servicer shall pay (A) to itself
Late Fees (in excess of amounts used to pay Advance Interest) relating to
Mortgage Loans, Serviced Companion Mortgage Loans or B Notes which are not
Specially Serviced Mortgage Loans, Modification Fees relating to Mortgage Loans,
Serviced Companion Mortgage Loans or B Notes which are not Specially Serviced
Mortgage Loans as provided in Section 8.18, 50% of any assumption fees payable
under Section 8.7(a) or 8.7(b), 100% of any extension fees payable under Section
8.10 or other fees payable to the Master Servicer hereunder and (B) directly to
the Special Servicer, 50% of any assumption fees as provided in Section 8.7(a),
50% of any assumption fees as provided in Section 8.7(b), all assumption fees
relating to Specially Serviced Mortgage Loans, Modification Fees and other fees
collected on Specially Serviced Mortgage Loans, in each case to the extent
provided for herein from funds paid by the applicable Mortgagor, and Late Fees
and default interest collected on any Specially Serviced Mortgage Loan in excess
of Advance Interest payable to the Master Servicer, the Trustee or the Fiscal
Agent in respect of such Specially Serviced Mortgage Loan (which Advance
Interest the Master Servicer shall retain or pay to the Trustee or the Fiscal
Agent, as the case may be, to the extent provided for in this Agreement) to the
extent the Special Servicer is entitled to such Late Fees and default interest
under Section 4.5;
(ii) Servicing Advances (including amounts later
determined to be Nonrecoverable Advances): (A) in the case of all Mortgage
Loans, Serviced Companion Mortgage Loans and B Notes, subject to clause (B)
below and subsection (iv) of Section 5.2(a)(II), to reimburse or pay to the
Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent,
pursuant to Section 4.6, (x) prior to a Final Recovery Determination or
determination in accordance with Section 4.4 that any Advance is a
Nonrecoverable Advance, Servicing Advances on the related Mortgage Loan,
Serviced Companion Mortgage Loan or B Note, as applicable, from payments made by
the related Mortgagor of the amounts to which a Servicing Advance relates or
from REO Income from the related REO Property or from Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds or Purchase Proceeds and, to the
extent that a Servicing Advance has been or is being reimbursed, any related
Advance Interest thereon first, from Late Fees and default interest collected
during the Collection Period during which such Advance is reimbursed, and then
from Excess Liquidation Proceeds then available and then from any other amounts
on deposit in the Certificate Account; provided that,
118
Late Fees and default interest will be applied on a "pool basis" for
non-Specially Serviced Mortgage Loans (and any Serviced Companion Mortgage Loans
and B Notes that are not Specially Serviced Mortgage Loans) and on a
"loan-by-loan basis" (under which Late Fees and default interest will be offset
against the Advance Interest arising only from the particular Specially Serviced
Mortgage Loan) for Specially Serviced Mortgage Loans, as the case may be, to the
payment of Advance Interest on all Advances on such non-Specially Serviced
Mortgage Loans (and any Serviced Companion Mortgage Loan and B Notes that are
not Specially Serviced Mortgage Loans) or such Specially Serviced Mortgage
Loans, as the case may be, then being reimbursed or (y) after a Final Recovery
Determination or determination that any Servicing Advance on the related
Mortgage Loan, Serviced Companion Mortgage Loan or B Note is a Nonrecoverable
Advance, any Servicing Advances made on the related Mortgage Loan, related
Serviced Companion Mortgage Loan, related B Note or REO Property from any funds
on deposit in the Certificate Account (regardless of whether such amount was
recovered from the applicable Mortgage Loan, Serviced Companion Mortgage Loan, B
Note or REO Property) and pay Advance Interest thereon first, from Late Fees and
default interest collected during the Collection Period during which such
Advance is reimbursed (applying such Late Fees and default interest on a "pool
basis" for all non-Specially Serviced Mortgage Loans (and any Serviced Companion
Mortgage Loans and B Notes that are not Specially Serviced Mortgage Loans) and
on a "loan-by-loan basis", as described above, for all Specially Serviced
Mortgage Loans, as the case may be, to the payment of Advance Interest on all
Advances on such non-Specially Serviced Mortgage Loans (and any Serviced
Companion Mortgage Loans and B Notes that are not Specially Serviced Mortgage
Loans) or such Specially Serviced Mortgage Loans, as the case may be, then being
reimbursed), then from Excess Liquidation Proceeds then available and then from
any other amounts on deposit in the Certificate Account and (B) in the case of
any Non-Serviced Mortgage Loan and from any funds on deposit in the Certificate
Account, to reimburse the applicable Non-Serviced Mortgage Loan Master Servicer,
the applicable Non-Serviced Mortgage Loan Special Servicer, the applicable
Non-Serviced Mortgage Loan Trustee and the applicable Non-Serviced Mortgage Loan
Fiscal Agent for Pari Passu Loan Nonrecoverable Advances and any accrued and
unpaid interest thereon provided for under the related Non-Serviced Mortgage
Loan Intercreditor Agreement and Non-Serviced Mortgage Loan Pooling and
Servicing Agreement;
(iii) P&I Advances (including amounts later to be
determined to be Nonrecoverable Advances): in the case of all Mortgage Loans,
subject to subsection (iv) of Section 5.2(a)(II), to reimburse or pay to the
Master Servicer, the Trustee and the Fiscal Agent, pursuant to Section 4.6, (x)
if prior to a Final Recovery Determination or determination that any Advance is
a Nonrecoverable Advance, any P&I Advances from Late Collections made by the
Mortgagor of the amounts to which a P&I Advance relates, or REO Income from the
related REO Property or from Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds or Purchase Proceeds and, to the extent that a P&I Advance
has been or is being reimbursed, any related Advance Interest thereon, first,
from Late Fees and default interest collected during the Collection Period
during which such Advance is reimbursed, and then from Excess Liquidation
Proceeds then available and then from any other amounts on deposit in the
Certificate Account; provided that, Late Fees and default interest will be
applied on a "pool basis" for non-Specially Serviced Mortgage Loans and on a
"loan-by-loan basis" (under which Late Fees and default interest will be offset
against the Advance Interest arising only from the particular Specially Serviced
Mortgage Loan) for Specially Serviced Mortgage Loans, as the case may be, to the
payment of Advance Interest on all Advances on such non-Specially Serviced
Mortgage Loans
119
or such Specially Serviced Mortgage Loans, as the case may be, then being
reimbursed or (y) if after a Final Recovery Determination or determination in
accordance with Section 4.4 that any P&I Advance on the related Mortgage Loan is
a Nonrecoverable Advance, any P&I Advances made on the related Mortgage Loan or
REO Property from funds on deposit in the Certificate Account (regardless of
whether such amount was recovered from the applicable Mortgage Loan or REO
Property) and any Advance Interest thereon, first, from Late Fees and default
interest collected during the Collection Period during which such Advance is
reimbursed (applying such Late Fees and default interest on a "pool basis" for
all non-Specially Serviced Mortgage Loans and on a "loan-by-loan basis", as
described above, for all Specially Serviced Mortgage Loans, as the case may be,
to the payment of Advance Interest on all Advances on such non-Specially
Serviced Mortgage Loans or such Specially Serviced Mortgage Loans, as the case
may be, then being reimbursed), then from Excess Liquidation Proceeds then
available and then from any other amounts on deposit in the Certificate Account;
(iv) Servicing Fees and Special Servicer Compensation: to
pay to itself the Master Servicing Fee, subject to reduction for any
Compensating Interest, to pay to the Special Servicer the Special Servicing Fee
and the Work-Out Fee, to pay to the Primary Servicer (or the Master Servicer)
the Primary Servicing Fees, and to pay to the parties entitled thereto the
Excess Servicing Fees (to the extent not previously retained by any of such
parties);
(v) Trustee Fee and Paying Agent Fee: to pay to the
Distribution Account for withdrawal by the Paying Agent, the Paying Agent Fee
and the Trustee Fee;
(vi) Expenses of Trust: to pay to the Person entitled
thereto any amounts specified herein to be Additional Trust Expenses (at the
time set forth herein or in the definition thereof), and any other amounts that
in fact constitute Additional Trust Expenses whose payment is not more
specifically provided for in this Agreement; provided that the Depositor shall
not be entitled to receive reimbursement for performing its duties under this
Agreement;
(vii) Liquidation Fees: upon the occurrence of a Final
Recovery Determination to pay to the Special Servicer from the Certificate
Account, the amount certified by the Special Servicer equal to the Liquidation
Fee, to the extent provided in Section 9.11 hereof;
(viii) Investment Income: to pay to itself income and
gain realized on the investment of funds deposited in the Certificate Account
(including any A/B Loan Custodial Accounts and Serviced Companion Mortgage Loan
Custodial Accounts);
(ix) Prepayment Interest Excesses: to pay to the Master
Servicer the amount of the aggregate Prepayment Interest Excesses relating to
Mortgage Loans which are not Specially Serviced Mortgage Loans (to the extent
not offset by Prepayment Interest Shortfalls relating to such Mortgage Loans);
and to pay to the Special Servicer the amount of the aggregate Prepayment
Interest Excesses relating to Specially Serviced Mortgage Loans which have
received voluntary Principal Prepayments (not from Liquidation Proceeds or from
modifications to Specially Serviced Mortgage Loans), to the extent not offset by
Prepayment Interest Shortfalls relating to such Mortgage Loans.
120
(x) Correction of Errors: to withdraw funds deposited in
the Certificate Account in error;
(xi) Distribution Account: to make payment on each Master
Servicer Remittance Date of the remaining amounts in the Certificate Account
(including any Excess Interest) to the Distribution Account (or in the case of
any Excess Interest, deposit to the Excess Interest Sub-account under Section
5.3(b)) other than amounts held for payment in future periods or pursuant to
clause (xii) below;
(xii) Reserve Account: to make payment on each Master
Servicer Remittance Date to the Reserve Account, any Excess Liquidation Proceeds
(subject to Section 4.6(c)); and
(xiii) Clear and Terminate: to clear and terminate the
Certificate Account pursuant to Section 8.29;
provided, however, that in the case of any B Note for which an A/B Loan
Custodial Account is required to be established by the Master Servicer:
(A) the Master Servicer shall be entitled to make transfers
from time to time, from the related A/B Loan Custodial Account
to the portion of the Certificate Account that does not
constitute the A/B Loan Custodial Account, of amounts
necessary for the payments or reimbursement of amounts
described in any one or more of clauses (i), (ii), (iii),
(iv), (vi), (vii), (viii), (ix) and (xii) above, but only
insofar as the payment or reimbursement described therein
arises from or is related solely to such A/B Mortgage Loan and
is allocable to the A/B Mortgage Loan pursuant to this
Agreement or the related Intercreditor Agreement, and the
Master Servicer shall also be entitled to make transfers from
time to time, from the related A/B Loan Custodial Account to
the portion of the Certificate Account that does not
constitute the A/B Loan Custodial Account, of amounts
transferred to such related A/B Loan Custodial Account in
error, and amounts necessary for the clearing and termination
of the Certificate Account pursuant to Section 8.29;
(B) the Master Servicer shall be entitled to make transfers
from time to time, from the related A/B Loan Custodial Account
to the portion of the Certificate Account that does not
constitute the A/B Loan Custodial Account, of amounts not
otherwise described in clause (A) above to which the holder of
an A Note is entitled under the A/B Mortgage Loan and the
related Intercreditor Agreement (including in respect of
interest, principal and Prepayment Premiums in respect of the
A Note (whether or not by operation of any provision of the
related Intercreditor Agreement that entitles the holder of
such A Note to receive remittances in amounts calculated
without regard to any modification, waiver or amendment of the
economic terms of such A Note)); and
(C) the Master Servicer shall on each Master Servicer
Remittance Date remit to the holder of the related B Note all
amounts on deposit in such A/B Loan Custodial Account (net of
amounts permitted or required to be transferred therefrom as
described in clauses (A) and/or (B) above), to the extent that
the
121
holder of such B Note is entitled thereto under the related
Intercreditor Agreement (including by way of the operation of
any provision of the related Intercreditor Agreement that
entitles the holder of such B Note to reimbursement of cure
payments made by it).
and provided further, however, that in the case of any Serviced Companion
Mortgage Loan:
(A) the Master Servicer shall be entitled to make transfers
from time to time, from the related Serviced Companion
Mortgage Loan Custodial Account to the portion of the
Certificate Account that does not constitute any Serviced
Companion Mortgage Loan Custodial Account, of amounts
necessary for the payments or reimbursement of amounts
described in any one or more of clauses (i), (ii), (iii),
(iv), (v), (vi), (vii), (viii), (ix) and (xii) above, but only
insofar as the payment or reimbursement described therein
arises from or is related solely to such Loan Pair and is
allocable to the Serviced Companion Mortgage Loan, and the
Master Servicer shall also be entitled to make transfers from
time to time, from the related Serviced Companion Mortgage
Loan Custodial Account to the portion of the Certificate
Account that does not constitute any Serviced Companion
Mortgage Loan Custodial Account, of amounts transferred to
such related Serviced Companion Mortgage Loan Custodial
Account in error, and amounts necessary for the clearing and
termination of the Certificate Account pursuant to Section
8.29; provided, however that the Master Servicer shall not be
entitled to make transfers from the portion of the Certificate
Account that does not constitute any Serviced Companion
Mortgage Loan Custodial Account (other than amounts previously
transferred from the related Serviced Companion Mortgage Loan
Custodial Account in accordance with this clause (A)) of
amounts necessary for the payment or reimbursement of amounts
described in any one or more of the foregoing clauses;
(B) the Master Servicer shall be entitled to make transfers
from time to time, from the related Serviced Companion
Mortgage Loan Custodial Account to the portion of the
Certificate Account that does not constitute any Serviced
Companion Mortgage Loan Custodial Account, of amounts not
otherwise described in clause (A) above to which the holder of
a Serviced Pari Passu Mortgage Loan is entitled under the
related Loan Pair Intercreditor Agreement (including in
respect of interest, principal and Prepayment Premiums); and
(C) the Master Servicer shall, on the later of (i) one (1)
Business Day after the related Determination Date or (ii) one
(1) Business Day after receipt from the Primary Servicer,
remit to the holder of the related Serviced Companion Mortgage
Loan all amounts on deposit in such related Serviced Companion
Mortgage Loan Custodial Account (net of amounts permitted or
required to be transferred therefrom as described in clauses
(A) and/or (B) above), to the extent that the holder of such
Serviced Companion Mortgage Loan is entitled thereto under the
related Loan Pair Intercreditor Agreement.
No decision by the Master Servicer, the Trustee or the Fiscal
Agent under either this Section 5.2(a) or subsection (iv) of Section 5.2(a)(II),
to defer the reimbursement of
122
Advances and/or Advance Interest shall be construed as an agreement by the
Master Servicer to subordinate (in respect of realizing losses), to any Class of
Certificates, such party's right to such reimbursement during such period of
deferral.
Expenses incurred with respect to any Loan Pair shall be
allocated in accordance with the related Loan Pair Intercreditor Agreement.
Expenses incurred with respect to an A/B Mortgage Loan shall be allocated in
accordance with the related Intercreditor Agreement. The Master Servicer shall
keep and maintain a separate accounting for each Mortgage Loan, Serviced
Companion Mortgage Loan and B Note for the purpose of justifying any withdrawal
or transfer from the Certificate Account, each Serviced Companion Mortgage Loan
Custodial Account and any A/B Loan Custodial Account, as applicable. If funds
collected in respect of the A Notes are insufficient to pay the Master Servicing
Fee, then the Master Servicer shall be entitled to withdraw the amount of such
shortfall from the collections on, and other proceeds of, the B Note that are
held in the related A/B Loan Custodial Account. The Master Servicer shall not be
permitted to withdraw any funds from the portion of the Certificate Account that
does not constitute the A/B Loan Custodial Account unless there are no remaining
funds in the related A/B Loan Custodial Account available and required to be
paid in accordance with the related Intercreditor Agreement.
Subsection (II). The provisions of this subsection II of this
Section 5.2(a) shall apply notwithstanding any contrary provision of subsection
(I) of this Section 5.2(a):
(i) Identification of Workout-Delayed Reimbursement
Amounts. If any Advance made with respect to any Mortgage Loan
on or before the date on which such Mortgage Loan becomes (or,
but for the requirement that the Mortgagor shall have made
three consecutive scheduled payments under its modified terms,
would then constitute) a Rehabilitated Mortgage Loan, together
with Advance Interest accrued thereon, is not, pursuant to the
operation of the provisions of Section 5.2(a)(I), reimbursed
to the Person who made such Advance on or before the date, if
any, on which such Mortgage Loan becomes a Rehabilitated
Mortgage Loan, such Advance, together with such Advance
Interest, shall constitute a "Workout-Delayed Reimbursement
Amount" to the extent that such amount has not been determined
to constitute a Nonrecoverable Advance. All references herein
to "Workout-Delayed Reimbursement Amount" shall be construed
always to mean the related Advance and any Advance Interest
thereon, together with any further Advance Interest that
accrues on the unreimbursed portion of such Advance from time
to time in accordance with the other provisions of this
Agreement. That any amount constitutes all or a portion of any
Workout-Delayed Reimbursement Amount shall not in any manner
limit the right of any Person hereunder to determine that such
amount instead constitutes a Nonrecoverable Advance.
(ii) General Relationship of Provisions. Subsection (iii)
below (subject to the terms and conditions thereof) sets forth
the terms of and conditions to the right of a Person to be
reimbursed for any Workout-Delayed Reimbursement Amount to the
extent that such Person is not otherwise entitled to
reimbursement and payment of such Workout-Delayed
Reimbursement Amount pursuant to the operation of Section
5.2(a)(I) above. Subsection (iv) below
123
(subject to the terms and conditions thereof) authorizes the
Master Servicer to abstain from reimbursing itself (or, if
applicable, the Trustee or the Fiscal Agent to abstain from
obtaining reimbursement) for Nonrecoverable Advances under
certain circumstances at its sole option. Upon any
determination that all or any portion of a Workout-Delayed
Reimbursement Amount constitutes a Nonrecoverable Advance,
then the reimbursement or payment of such amount (and any
further Advance Interest that may accrue thereon) shall
cease to be subject to the operation of subsection (iii)
below, such amount (and further Advance Interest) shall be
as fully payable and reimbursable to the relevant Person as
would any other Nonrecoverable Advance (and Advance Interest
thereon) and, as a Nonrecoverable Advance, such amount may
become the subject of the Master Servicer's (or, if
applicable, the Trustee's or the Fiscal Agent's) exercise of
its sole option authorized by subsection (iv) below.
(iii) Reimbursements of Workout-Delayed Reimbursement
Amounts. The Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent, as applicable, shall be entitled
to reimbursement and payment for all Workout-Delayed
Reimbursement Amounts in each Collection Period; provided,
however, that the aggregate amount (for all such Persons
collectively) of such reimbursements and payments in such
Collection Period shall not exceed (and the reimbursement and
payment shall be made from) the aggregate amount in the
Collection Account allocable to principal received or advanced
with respect to the Mortgage Loans for such Collection Period
contemplated by clause (I)(A) of the definition of Principal
Distribution Amount (but not including any such amounts that
constitute Advances) and net of any Nonrecoverable Advances
then outstanding and reimbursable from such principal in
accordance with Section 5.2(a)(II)(iv) below. As and to the
extent provided in clause (II)(A) of the definition thereof,
the Principal Distribution Amount for the Distribution Date
related to such Collection Period shall be reduced to the
extent that such payment or reimbursement of a Workout-Delayed
Reimbursement Amount is made from the aggregate amount in the
Collection Account allocable to principal pursuant to the
preceding sentence.
(iv) Reimbursement of Nonrecoverable Advances; Sole
Option to Abstain from Reimbursements of Certain
Nonrecoverable Advances. To the extent that Section 5.2(a)(I)
otherwise entitles the Master Servicer to reimbursement for
any Nonrecoverable Advance (or payment of Advance Interest
thereon from a source other than Late Fees and default
interest on the related Mortgage Loan) during any Collection
Period, then, notwithstanding any contrary provision of
subsection (I) above, (a) to the extent that one or more such
reimbursements and payments of Nonrecoverable Advances (and
such Advance Interest thereon) are made, such reimbursements
and payments shall be made, first, from the aggregate amount
in the Collection Account allocable to principal received or
advanced with respect to the Mortgage Loans for such
Collection Period contemplated by clause (I)(A) of the
definition of Principal Distribution Amount (but not including
any such amounts that constitute Advances, and prior to any
deduction for Workout-Delayed Reimbursement Amounts (and
Advance Interest thereon) that were reimbursed or paid during
the related Collection Period
124
from amounts allocable to principal received with respect to
the Mortgage Loans, as described by clause (II)(A) of the
definition of Principal Distribution Amount and pursuant to
subsection (iii) of Section 5.2(a)(II)), and then from other
collections (including interest) on the Mortgage Loans for
such Collection Period, provided, that if interest is used
to reimburse such Nonrecoverable Advances, the party
entitled to such reimbursement shall notify the Rating
Agencies at least fifteen (15) days prior to such
reimbursement, unless circumstances exist that are
extraordinary in the sole discretion of such party, and (b)
if and to the extent that the amount of such a
Nonrecoverable Advance (and Advance Interest thereon),
together with all Nonrecoverable Advances (and Advance
Interest thereon) theretofore reimbursed during such
Collection Period, would exceed such principal on the
Mortgage Loans for such Collection Period (and Advance
Interest thereon), the Master Servicer (and the Trustee or
the Fiscal Agent, as applicable, if it made the relevant
Advance) is hereby authorized (but shall not be construed to
have any obligation whatsoever), if it elects at its sole
option, to abstain from reimbursing itself (notwithstanding
that it is entitled to such reimbursement) during that
Collection Period for all or a portion of such
Nonrecoverable Advance (and Advance Interest thereon),
provided that the aggregate amount that is deferred with
respect to all Nonrecoverable Advances (and Advance Interest
thereon) with respect to all Mortgage Loans for any
particular Collection Period is less than or equal to such
excess described above in this clause (b). If the Master
Servicer (or the Trustee or the Fiscal Agent, as applicable)
makes such an election at its sole option to defer
reimbursement with respect to all or a portion of a
Nonrecoverable Advance (and Advance Interest thereon), then
such Nonrecoverable Advance (and Advance Interest thereon)
or portion thereof shall continue to be fully reimbursable
in any subsequent Collection Period to the same extent as
set forth above. In connection with a potential election by
the Master Servicer to abstain from the reimbursement of a
particular Nonrecoverable Advance or portion thereof during
the Collection Period for any Distribution Date, the Master
Servicer (or the Trustee or the Fiscal Agent, as applicable)
shall further be authorized to wait for principal
collections to be received before making its determination
of whether to abstain from the reimbursement of a particular
Nonrecoverable Advance or portion thereof until the end of
the Collection Period.
The reimbursements of Nonrecoverable Advances and
Workout-Delayed Reimbursement Amounts set forth in clauses (iii) and (iv)
above shall take into account the allocation of amounts described in the
last sentence of the definition of "Liquidation Realized Loss."
None of the Master Servicer, the Trustee or the Fiscal Agent
shall have any liability whatsoever for making an election, or refraining
from making an election, that is authorized under this subsection
(II)(iv). The foregoing shall not, however, be construed to limit any
liability that may otherwise be imposed on such Person for any failure by
such Person to comply with the conditions to making such an election under
this subsection (II)(iv) or to comply with the terms of this subsection
(II)(iv) and the other provisions of this Agreement that apply once such
an election, if any, has been made.
125
Any election by the Master Servicer (or the Trustee or the
Fiscal Agent, as applicable) to abstain from reimbursing itself for any
Nonrecoverable Advance (and Advance Interest thereon) or portion thereof
with respect to any Collection Period shall not be construed to impose on
the Master Servicer (or the Trustee or the Fiscal Agent, as applicable)
any obligation to make such an election (or any entitlement in favor of
any Certificateholder or any other Person to such an election) with
respect to any subsequent Collection Period or to constitute a waiver or
limitation on the right of the Master Servicer (or the Trustee or the
Fiscal Agent, as applicable) to otherwise be reimbursed for such
Nonrecoverable Advance (and Advance Interest thereon). Any election by the
Master Servicer, the Trustee or the Fiscal Agent to abstain from
reimbursing itself for any Nonrecoverable Advance or portion thereof with
respect to any one or more Collection Periods shall not limit the accrual
of Advance Interest on the unreimbursed portion of such Nonrecoverable
Advance for the period prior to the actual reimbursement of such
Nonrecoverable Advance. None of the Master Servicer, the Trustee, the
Fiscal Agent or the other parties to this Agreement shall have any
liability to one another or to any of the Certificateholders or any holder
of a B Note or Serviced Companion Mortgage Loan for any such election that
such party makes as contemplated by this subsection or for any losses,
damages or other adverse economic or other effects that may arise from
such an election. The foregoing statements in this paragraph shall not
limit the generality of the statements made in the immediately preceding
paragraph. Notwithstanding the foregoing, none of the Master Servicer, the
Trustee or the Fiscal Agent shall have the right to abstain from
reimbursing itself for any Nonrecoverable Advance to the extent of the
amount described in clause (I)(A) of the definition of Principal
Distribution Amount.
(v) Reimbursement Rights of the Master Servicer, Special
Servicer, Trustee and Fiscal Agent Are Senior. Nothing in this
Agreement shall be deemed to create in any Certificateholder a
right to prior payment of distributions over the Master
Servicer's, the Special Servicer's, the Trustee's or the
Fiscal Agent's right to reimbursement for Advances plus
Advance Interest (whether those that constitute
Workout-Delayed Reimbursement Amounts, those that have been
the subject of the Master Servicer's election authorized in
subsection (iv) or otherwise).
(b) Scheduled Payments due in a Collection Period succeeding
the Collection Period relating to such Master Servicer Remittance Date,
Principal Prepayments received after the related Collection Period, or other
amounts not distributable on the related Distribution Date, shall be held in the
Certificate Account (or sub-account thereof) and shall be distributed on the
Master Servicer Remittance Date or Dates to which such succeeding Collection
Period or Periods relate, provided, however, that as to the Mortgage Loans set
forth on Schedule XI, for which the Scheduled Payment due each month is due on a
Due Date (including any grace period) that may occur after the end of the
Collection Period in such month, sums received by the Master Servicer with
respect to such Scheduled Payment but after the end of such Collection Period
shall be applied by the Master Servicer to reimburse any related P&I Advance
made pursuant to Section 5.1(h), and the Master Servicer shall remit to the
Distribution Account on any Master Servicer Remittance Date for a Collection
Period any Principal Prepayments and Balloon Payments received after the end of
such Collection Period but no later than the second Business Day immediately
preceding such Master Servicer Remittance Date on the Mortgage Loans set forth
on Schedule XI. The Master Servicer shall use its best efforts to remit to the
Distribution
126
Account on any Master Servicer Remittance Date for a Collection Period any
Balloon Payments received after the date that is two Business Days immediately
preceding the related Master Servicer Remittance Date and prior to the
Distribution Date. In connection with the deposit of any Balloon Payments to the
Distribution Account in accordance with the immediately preceding sentence, the
Master Servicer shall promptly notify the Paying Agent and the Paying Agent
shall, if it has already reported anticipated distributions to the Depository,
use commercially reasonable efforts to cause the Depository to make the revised
distribution on a timely basis on such Distribution Date. Neither the Master
Servicer nor the Paying Agent shall be liable or held responsible for any
resulting delay or failure in the making of such distribution to
Certificateholders. For purposes of the definition of "Available Distribution
Amount" and "Principal Distribution Amount," (i) the Scheduled Payments relating
to the Mortgage Loans set forth on Schedule XI that are collected after the end
of the related Collection Period and (ii) Principal Prepayments and Balloon
Payments relating to the Mortgage Loans set forth on Schedule XI received after
the end of the related Collection Period but prior to the Master Servicer
Remittance Date shall each be deemed to have been collected in the prior
Collection Period.
(c) On each Master Servicer Remittance Date in March of every
year commencing in March 2005, the Master Servicer shall withdraw all amounts
then in the Interest Reserve Account and deposit such amounts into the
Distribution Account.
SECTION 5.3 DISTRIBUTION ACCOUNT AND RESERVE ACCOUNT.
(a) The Paying Agent, on behalf of the Trustee shall establish
(with respect to clause (i), on or prior to the Closing Date, and with respect
to clause (ii), on or prior to the date the Paying Agent determines is
necessary) and maintain in its name, on behalf of the Trustee, (i) an account
(the "Distribution Account"), to be held in trust for the benefit of the Holders
until disbursed pursuant to the terms of this Agreement, titled: "Xxxxx Fargo
Bank, National Association, as Paying Agent on behalf of LaSalle Bank National
Association, as Trustee, in trust for the benefit of the Holders of Bear Xxxxxxx
Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through
Certificates, Series 2004-TOP16, Distribution Account" and (ii) an account (the
"Reserve Account") to be held in trust for the benefit of the holders of
interests in the Trust until disbursed pursuant to the terms of this Agreement,
titled: "Xxxxx Fargo Bank, National Association, as Paying Agent on behalf of
LaSalle Bank National Association, as Trustee, in trust for the benefit of the
Holders of Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16, Reserve Account." The Distribution
Account and the Reserve Account shall be Eligible Accounts. Funds in the Reserve
Account shall not be invested. The Distribution Account and Reserve Account
shall be held separate and apart from and shall not be commingled with any other
monies including, without limitation, other monies of the Paying Agent held
under this Agreement.
Funds in the Distribution Account may be invested and, if
invested, shall be invested by, and at the risk of, the Paying Agent in Eligible
Investments selected by the Paying Agent which shall mature, unless payable on
demand, not later than such time on the Distribution Date which will allow the
Paying Agent to make withdrawals from the Distribution Account under Section
5.3(b), and any such Eligible Investment shall not be sold or disposed of prior
to its maturity unless payable on demand. All such Eligible Investments shall be
made in
127
the name of "LaSalle Bank National Association, as Trustee for the Holders of
the Bear Xxxxxxx Commercial Mortgage Securities Inc., Commercial Mortgage
Pass-Through Certificates, Series 2004-TOP16 and the holder of any related B
Note as their interests may appear." None of the Depositor, the Mortgagors, the
Special Servicer, the Master Servicer, the Primary Servicer or the Trustee shall
be liable for any loss incurred on such Eligible Investments.
An amount equal to all income and gain realized from any such
investment shall be paid to the Paying Agent as additional compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Paying Agent which shall deposit the amount of such loss (to the extent
not offset by income from other investments) in the Distribution Account, as the
case may be, out of its own funds immediately as realized. If the Paying Agent
deposits in or transfers to the Distribution Account, as the case may be, any
amount not required to be deposited therein or transferred thereto, it may at
any time withdraw such amount or retransfer such amount from the Distribution
Account, as the case may be, any provision herein to the contrary
notwithstanding.
(b) The Paying Agent shall deposit into the Distribution
Account or the Reserve Account, as applicable, on the Business Day received all
moneys remitted by the Master Servicer pursuant to this Agreement, including P&I
Advances made by the Master Servicer, the Trustee and the Fiscal Agent and all
Excess Liquidation Proceeds. The Paying Agent shall deposit amounts constituting
collections of Excess Interest on the Mortgage Loans into the Excess Interest
Sub-account. On any Master Servicer Remittance Date, the Master Servicer shall
have no duty to remit to the Distribution Account any amounts other than amounts
held in the Certificate Account and collected during the related Collection
Period as provided in clauses (v) and (xi) of Section 5.2(a) and the P&I Advance
Amount and, on the Master Servicer Remittance Date occurring in March of any
year, commencing in March 2005, amounts held in the Interest Reserve Account.
The Paying Agent shall make withdrawals from the Distribution Account (including
the Excess Interest Sub-account) and the Reserve Account only for the following
purposes:
(i) to withdraw amounts deposited in the Distribution Account
and the Reserve Account in error and pay such amounts to the Persons entitled
thereto;
(ii) to pay any amounts payable to the Master Servicer, the
Primary Servicer, the Special Servicer, the Fiscal Agent and the Trustee
(including the Trustee's Fee (other than that portion thereof, that constitutes
the Paying Agent's Fee)) and the Paying Agent (including the Paying Agent Fee),
or other expenses or other amounts permitted to be paid hereunder and not
previously paid to such Persons pursuant to Section 5.2;
(iii) to make distributions to the Certificateholders pursuant
to Sections 6.5 and 6.11; and
(iv) to clear and terminate the Distribution Account and the
Reserve Account pursuant to Section 10.2.
SECTION 5.4 PAYING AGENT REPORTS.
128
(a) On or prior to each Distribution Date, based on
information provided in monthly reports prepared by the Master Servicer and the
Special Servicer and delivered to the Paying Agent by the Master Servicer (no
later than 1:00 p.m., New York time on the Report Date), the Paying Agent shall
make available to any interested party via its internet website initially
located at "xxx.xxxxxxx.xxx/xxxx" (the "Paying Agent's Website"), (i) the
Monthly Certificateholders Report (substantially in the form of Exhibit M), (ii)
a report containing information regarding the Mortgage Loans as of the end of
the related Collection Period, which report shall contain substantially the
categories of information regarding the Mortgage Loans set forth in Appendix I
to the Final Prospectus Supplement and shall be presented in tabular format
substantially similar to the format utilized in such Appendix I which report may
be included as part of the Monthly Certificateholders Report, (iii) the Loan
Periodic Update File, Loan Setup File, Bond Level File and the Collateral
Summary File, (iv) the Monthly Additional Report on Recoveries and
Reimbursements, (v) the supplemental reports set forth in paragraph (b) of the
definition of Unrestricted Servicer Reports and (vi) as a convenience for
interested parties (and not in furtherance of the distribution thereof under the
securities laws), the Final Prospectus Supplement and this Agreement.
In addition, on or prior to each Distribution Date, based on
information provided in monthly reports prepared by the Master Servicer and the
Special Servicer and delivered to the Paying Agent in accordance herewith, the
Paying Agent shall make available via the Paying Agent's Website, on a
restricted basis, the Restricted Servicer Reports (including the Property File
on or prior to each Distribution Date, commencing in December 2004). The Paying
Agent shall provide access to the Restricted Servicer Reports, upon request, to
each Certificateholder, each of the parties to this Agreement, each of the
Rating Agencies, each of the Financial Market Publishers, each of the
Underwriters, the Operating Adviser, the Placement Agents, any prospective
purchaser of the Certificates and any Certificate Owner upon receipt (which may
be in electronic form) from such person of an Investor Certificate in the form
of Exhibit Y, and any other person upon the direction of the Depositor, the
Placement Agents or any Underwriter. For assistance with the above-mentioned
Paying Agent services, Certificateholders or any party hereto may initially call
000-000-0000.
The Paying Agent makes no representations or warranties as to
the accuracy or completeness of any report, document or other information made
available on the Paying Agent's Website and assumes no responsibility therefor.
The Paying Agent shall be entitled to conclusively rely on any information
provided to it by the Master Servicer or the Special Servicer and shall have no
obligation to verify such information and the Paying Agent may disclaim
responsibility for any information distributed by the Paying Agent for which it
is not the original source. In connection with providing access to the Paying
Agent's Website, the Paying Agent, may require registration and the acceptance
of a disclaimer. None of the Master Servicer, the Special Servicer, the Primary
Servicer or the Paying Agent shall be liable for the dissemination of
information in accordance with this Agreement; provided that this sentence shall
not in any way limit the liability the Paying Agent may otherwise have in the
performance of its duties hereunder.
(b) Subject to Section 8.15, upon advance written request, if
required by federal regulation, of any Certificateholder (or holder of a
Serviced Companion Mortgage Loan or B Note) that is a savings association, bank,
or insurance company, the Paying Agent shall provide (to the extent in its
possession) to each such Certificateholder (or such holder of a
129
Serviced Companion Mortgage Loan or B Note) such reports and access to
non-privileged information and documentation regarding the Mortgage Loans and
the Certificates as such Certificateholder (or such holder of a Serviced
Companion Mortgage Loan or B Note) may reasonably deem necessary to comply with
applicable regulations of the Office of Thrift Supervision or successor or other
regulatory authorities with respect to investment in the Certificates; provided
that the Paying Agent shall be entitled to be reimbursed by such
Certificateholder (or such holder of a Serviced Companion Mortgage Loan or B
Note) for the Paying Agent's actual expenses incurred in providing such reports
and access. The holder of a B Note shall be entitled to receive information and
documentation only with respect to its related A/B Mortgage Loan and the holder
of a Serviced Companion Mortgage Loan shall be entitled to receive information
and documentation only with respect to its related Loan Pair, pursuant hereto.
(c) Upon written request, the Paying Agent shall send to each
Person who at any time during the calendar year was a Certificateholder of
record, customary information as the Paying Agent deems necessary or desirable
for such Holders to prepare their federal income tax returns.
(d) Reserved
(e) The Paying Agent shall afford the Rating Agencies, the
Financial Market Publishers, the Depositor, the Master Servicer, the Special
Servicer, the Primary Servicer, the Trustee, the Fiscal Agent, the Operating
Adviser, any Certificateholder, the Luxembourg Paying Agent, prospective
Certificate Owner or any Person reasonably designated by any Placement Agent, or
any Underwriter upon reasonable notice and during normal business hours,
reasonable access to all relevant, non-attorney privileged records and
documentation regarding the applicable Mortgage Loans, REO Property and all
other relevant matters relating to this Agreement, and access to Responsible
Officers of the Paying Agent.
(f) Copies (or computer diskettes or other digital or
electronic formats of such information if reasonably available in lieu of paper
copies) of any and all of the foregoing items of this Section 5.4 shall be made
available by the Paying Agent upon request; provided, however, that the Paying
Agent shall be permitted to require payment by the requesting party (other than
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent, the Operating Adviser, any Placement Agent or any Underwriter or
any Rating Agency) of a sum sufficient to cover the reasonable expenses actually
incurred by the Paying Agent of providing access or copies (including electronic
or digital copies) of any such information requested in accordance with the
preceding sentence.
(g) The Paying Agent shall make available at its Corporate
Trust Office (either in physical or electronic form), during normal business
hours, upon reasonable advance written notice for review by any
Certificateholder, any Certificate Owner, any prospective Certificate Owner, the
Placement Agents, the Underwriters, each Rating Agency, the Special Servicer,
the Depositor, and solely as with respect to any A/B Mortgage Loan, the holder
of the B Note and solely as with respect to any Loan Pair, the holder of the
Serviced Companion Mortgage Loan, originals or copies of, among other things,
any Phase I Environmental Report or engineering report prepared or appraisals
performed in respect of each Mortgaged Property provided, however, that the
Paying Agent shall be permitted to require payment by the
130
requesting party (other than either Rating Agency or the Operating Adviser) of a
sum sufficient to cover the reasonable expenses actually incurred by the Paying
Agent or the Trustee of providing access or copies (including electronic or
digital copies) of any such information reasonably requested in accordance with
the preceding sentence.
SECTION 5.5 PAYING AGENT TAX REPORTS. The Paying Agent shall
perform all reporting and other tax compliance duties that are the
responsibility of each REMIC Pool and the Class P Grantor Trust under the Code,
REMIC Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Consistent with this Pooling and
Servicing Agreement, the Paying Agent shall provide or cause to be provided (i)
to the United States Treasury or other Persons (including, but not limited to,
the Transferor of a Class R-I, Class R-II or Class R-III Certificate, to a
Disqualified Organization or to an agent that has acquired a Class R-I, Class
R-II or Class R-III Certificate on behalf of a Disqualified Organization) such
information as is necessary for the application of any tax relating to the
transfer of a Class R-I, Class R-II or Class R-III Certificate to any
Disqualified Organization and (ii) to the Certificateholders such information or
reports as are required by the Code or REMIC Provisions; in the case of (i),
subject to reimbursement of expenses relating thereto in accordance with Section
7.12. The Master Servicer shall on a timely basis provide the Paying Agent with
such information concerning the Mortgage Loans as is necessary for the
preparation of the tax or information returns or receipts of each REMIC Pool and
the Class P Grantor Trust as the Paying Agent may reasonably request from time
to time. The Special Servicer is required to provide to the Master Servicer all
information in its possession with respect to the Specially Serviced Mortgage
Loans in order for the Master Servicer to comply with its obligations under this
Section 5.5. The Paying Agent shall be entitled to conclusively rely on any such
information provided to it by the Master Servicer or the Special Servicer and
shall have no obligation to verify any such information.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS GENERALLY. Subject to Section
10.2(a), respecting the final distribution on the Certificates, on each
Distribution Date, the Paying Agent shall (1) first, withdraw from the
Distribution Account and pay to the Fiscal Agent and Trustee any unpaid fees,
expenses and other amounts then required to be paid pursuant to this Agreement,
and then, to the Paying Agent, any unpaid fees, expenses and other amounts then
required to be paid pursuant to this Agreement, and then at the written
direction of the Master Servicer, withdraw from the Distribution Account and pay
to the Master Servicer, the Primary Servicer and Special Servicer any unpaid
servicing compensation or other amounts currently required to be paid pursuant
to this Agreement (to the extent not previously retained or withdrawn by the
Master Servicer from the Certificate Account), and (2) second, make
distributions in the manner and amounts set forth below.
Each distribution to Holders of Certificates shall be made by
check mailed to such Holder's address as it appears on the Certificate Register
of the Certificate Registrar or, upon written request to the Paying Agent on or
prior to the related Record Date (or upon standing instructions given to the
Paying Agent on the Closing Date prior to any Record Date, which instructions
may be revoked at any time thereafter upon written notice to the Paying Agent
five
131
days prior to the related Record Date) made by a Certificateholder by wire
transfer in immediately available funds to an account specified in the request
of such Certificateholder; provided, that (i) remittances to the Paying Agent
shall be made by wire transfer of immediately available funds to the
Distribution Account and the Reserve Account; and (ii) the final distribution in
respect of any Certificate shall be made only upon presentation and surrender of
such Certificate at such location specified by the Paying Agent in a notice
delivered to Certificateholders pursuant to Section 10.2(a). If any payment
required to be made on the Certificates is to be made on a day that is not a
Business Day, then such payment will be made on the next succeeding Business Day
without compensation for such delay. All distributions or allocations made with
respect to Holders of Certificates of a Class on each Distribution Date shall be
made or allocated among the outstanding Interests in such Class in proportion to
their respective initial Certificate Balances or Percentage Interests for the
Class X Certificates.
SECTION 6.2 REMIC I.
(a) On each Distribution Date, the Paying Agent shall be
deemed to distribute to itself on behalf of the Trustee, as holder of the REMIC
I Regular Interests, for the following purposes and in the following order of
priority:
(i) from the portion of the Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to each Mortgage Loan or related REO Property,
Distributable Certificate Interest to each Corresponding REMIC I Regular
Interest;
(ii) from the portion of the Available Distribution
Amount attributable to principal collected or deemed collected on or with
respect to each Mortgage Loan or related REO Property, principal to the
Corresponding REMIC I Regular Interest, until the Certificate Balance thereof is
reduced to zero;
(iii) any remaining funds with respect to each Mortgage
Loan (other than Excess Interest) or related REO Property, to reimburse any
Realized Losses previously allocated to the REMIC I Regular Interests, plus
interest on such Realized Losses at the related REMIC I Net Mortgage Rate
previously allocated thereto; and
(iv) thereafter, to the Class R-I Certificateholders at
such time as the Certificate Balance of all Classes of REMIC I Regular Interests
have been reduced to zero, and Realized Losses previously allocated thereto have
been reimbursed to the Holders of the REMIC I Regular Interests, any amounts
remaining with respect to each Mortgage Loan (other than Excess Interest) or
related REO Property, to the extent of the Trust's interest therein.
SECTION 6.3 REMIC II.
(a) On each Distribution Date, the Paying Agent shall be
deemed to distribute to itself on behalf of the Trustee, as holder of the REMIC
II Regular Interests, amounts distributable to any Class of Principal Balance
Certificates pursuant to Section 6.5 or Section 10.1 to its Corresponding REMIC
II Regular Interest set forth in the Preliminary Statement hereto; provided that
interest shall be deemed to have been distributed pro rata among two or more
Corresponding REMIC II Regular Interests that correspond to a Class of Principal
Balance Certificates; and provided, further, that distributions of principal:
132
(i) with respect to the Class A-2 Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest A-2A; and second, to REMIC II Regular Interest A-2B;
in each case, until their respective Certificate Balances are reduced to zero;
(ii) with respect to the Class A-3 Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest A-3A; second, to REMIC II Regular Interest A-3B; and
third, to REMIC II Regular Interest A-3C; in each case, until their respective
Certificate Balances are reduced to zero;
(iii) with respect to the Class A-4 Certificates, shall
be deemed to have first been distributed from REMIC II to REMIC III in respect
of REMIC II Regular Interest A-4A; and second, to REMIC II Regular Interest
A-4B; in each case, until their respective Certificate Balances are reduced to
zero;
(iv) with respect to the Class A-5 Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest A-5A; second, to REMIC II Regular Interest A-5B; and
third, to REMIC II Regular Interest A-5C; in each case, until their respective
Certificate Balances are reduced to zero;
(v) with respect to the Class A-6 Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest A-6A; second, to REMIC II Regular Interest A-6B; and
third, to REMIC II Regular Interest A-6C; in each case, until their respective
Certificate Balances are reduced to zero;
(vi) with respect to the Class B Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest B-1; and second, to REMIC II Regular Interest B-2; in
each case, until their respective Certificate Balances are reduced to zero;
(vii) with respect to the Class C Certificates, shall be deemed to have first
been distributed from REMIC II to REMIC III in respect of REMIC II Regular
Interest C-1; and second, to REMIC II Regular Interest C-2; in each case, until
their respective Certificate Balances are reduced to zero;
(viii) with respect to the Class D Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest D-1; and second, to REMIC II Regular Interest D-2; in
each case, until their respective Certificate Balances are reduced to zero;
(ix) with respect to the Class F Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest F-1; and second, to REMIC II Regular Interest F-2; in
each case, until their respective Certificate Balances are reduced to zero; and
(x) with respect to the Class H Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III in respect of
REMIC II Regular Interest H-1; and second, to REMIC II Regular Interest H-2; in
each case, until their respective Certificate Balances are reduced to zero.
133
All distributions made in respect of the Class X-1 and Class X-2 Certificates on
each Distribution Date pursuant to Section 6.5 or Section 10.1, and allocable to
any particular Component of such Class of Certificates in accordance with the
last paragraph of Section 6.5(a), shall be deemed to have first been distributed
from REMIC II to REMIC III in respect of such Component's Corresponding REMIC II
Regular Interest. All distributions of reimbursements of Realized Losses made in
respect of any Class of Principal Balance Certificates on each Distribution Date
pursuant to Section 6.5 shall be deemed to have first been distributed from
REMIC II to REMIC III in respect of its Corresponding REMIC II Regular Interest
set forth in the Preliminary Statement hereto; provided, however, that
distributions of reimbursements of Realized Losses shall be deemed to have been
distributed among two or more Corresponding REMIC II Regular Interests that
correspond to a Class of Principal Balance Certificates in the reverse order of
the priority set forth in Section 6.6(d) for allocation for Realized Losses, up
to the amount of Realized Losses previously allocated to such REMIC II Regular
Interest. Any amounts remaining in the Distribution Account with respect to
REMIC II on any Distribution Date after the foregoing distributions shall be
distributed to the holders of the Class R-II Certificates.
SECTION 6.4 RESERVED.
SECTION 6.5 REMIC III.
(a) On each Distribution Date, the Paying Agent shall withdraw
from the Distribution Account an amount equal to the Available Distribution
Amount and shall distribute such amount (other than the amount attributable to
any Excess Interest, which shall be distributed in accordance with Section
6.5(c), and Excess Liquidation Proceeds) in the following amounts and order of
priority:
(i) to the Holders of the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5
Certificates, Class A-6 Certificates, Class X-1 Certificates and Class X-2
Certificates, Distributable Certificate Interest for such Distribution Date, pro
rata in proportion to the Distributable Certificate Interest payable to each
such Class;
(ii) to the Holders of the Class A-1, Class A-2, Class
A-3, Class A-4 Certificates, Class A-5 Certificates and Class A-6 Certificates,
in reduction of the Certificate Balances thereof, in an amount up to the
Principal Distribution Amount for such Distribution Date: first, to the Holders
of the Class A-1 Certificates, the Principal Distribution Amount for such
Distribution Date until the Certificate Balance thereof is reduced to zero;
second, upon payment in full of the aggregate Certificate Balance of the Class
A-1 Certificates, to the holders of the Class A-2 Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder) until the aggregate
134
Certificate Balance of the Class A-2 Certificates has been reduced to zero;
third, upon payment in full of the aggregate Certificate Balance of the Class
A-2 Certificates, to the holders of the Class A-3 Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder) until the aggregate Certificate Balance of the
Class A-3 Certificates has been reduced to zero, fourth, upon payment in full of
the aggregate Certificate Balance of the Class A-3 Certificates, to the holders
of the Class A-4 Certificates, the Principal Distribution Amount for such
Distribution Date (reduced by any prior distributions thereof hereunder) until
the aggregate Certificate Balance of the Class A-4 Certificates has been reduced
to zero, fifth, upon payment in full of the aggregate Certificate Balance of the
Class A-4 Certificates, to the holders of the Class A-5 Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder) until the aggregate Certificate Balance of the
Class A-5 Certificates has been reduced to zero, and sixth, upon payment in full
of the aggregate Certificate Balance of the Class A-5 Certificates, to the
holders of the Class A-6 Certificates, the Principal Distribution Amount for
such Distribution Date (reduced by any prior distributions thereof hereunder)
until the aggregate Certificate Balance of the Class A-6 Certificates has been
reduced to zero;
(iii) to the Holders of the Class A Certificates, Class
X-1 Certificates and Class X-2 Certificates, pro rata (treating principal and
interest losses separately), to reimburse any Realized Losses previously
allocated thereto and not previously fully reimbursed, plus one month's interest
at the applicable Pass-Through Rate on such Realized Losses;
(iv) to the Holders of the Class B Certificates,
Distributable Certificate Interest for such Distribution Date;
(v) upon payment in full of the Certificate Balance of
the Class A-6 Certificates, to the Holders of the Class B Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class B
Certificates has been reduced to zero;
(vi) to the Holders of the Class B Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(vii) to the Holders of the Class C Certificates,
Distributable Certificate Interest for such Distribution Date;
(viii) upon payment in full of the Certificate Balance of
the Class B Certificates, to the Holders of the Class C Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class C
Certificates has been reduced to zero;
(ix) to the Holders of the Class C Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(x) to the Holders of the Class D Certificates,
Distributable Certificate Interest for such Distribution Date;
(xi) upon payment in full of the Certificate Balance of
the Class C Certificates, to the Holders of the Class D Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class D
Certificates has been reduced to zero;
135
(xii) to the Holders of the Class D Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xiii) to the Holders of the Class E Certificates,
Distributable Certificate Interest for such Distribution Date;
(xiv) upon payment in full of the Certificate Balance of
the Class D Certificates, to the Holders of the Class E Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class E
Certificates has been reduced to zero;
(xv) to the Holders of the Class E Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xvi) to the Holders of the Class F Certificates,
Distributable Certificate Interest for such Distribution Date;
(xvii) upon payment in full of the Certificate Balance of
the Class E Certificates, to the Holders of the Class F Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class F
Certificates has been reduced to zero;
(xviii) to the Holders of the Class F Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xix) to the Holders of the Class G Certificates,
Distributable Certificate Interest for such Distribution Date;
(xx) upon payment in full of the Certificate Balance of
the Class F Certificates, to the Holders of the Class G Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class G
Certificates has been reduced to zero;
(xxi) to the Holders of the Class G Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxii) to the Holders of the Class H Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxiii) upon payment in full of the Certificate Balance
of the Class G Certificates, to the Holders of the Class H Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class H
Certificates has been reduced to zero;
136
(xxiv) to the Holders of the Class H Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxv) to the Holders of the Class J Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxvi) upon payment in full of the Certificate Balance of
the Class H Certificates, to the Holders of the Class J Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class J
Certificates has been reduced to zero;
(xxvii) to the Holders of the Class J Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxviii) to the Holders of the Class K Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxix) upon payment in full of the Certificate Balance of
the Class J Certificates, to the Holders of the Class K Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class K
Certificates has been reduced to zero;
(xxx) to the Holders of the Class K Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxxi) to the Holders of the Class L Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxxii) upon payment in full of the Certificate Balance
of the Class K Certificates, to the Holders of the Class L Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class L
Certificates has been reduced to zero;
(xxxiii) to the Holders of the Class L Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxxiv) to the Holders of the Class M Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxxv) upon payment in full of the Certificate Balance of
the Class L Certificates, to the Holders of the Class M Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class M
Certificates has been reduced to zero;
137
(xxxvi) to the Holders of the Class M Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xxxvii) to the Holders of the Class N Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxxviii) upon payment in full of the Certificate Balance
of the Class M Certificates, to the Holders of the Class N Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class N
Certificates has been reduced to zero;
(xxxix) to the Holders of the Class N Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xl) to the Holders of the Class O Certificates,
Distributable Certificate Interest for such Distribution Date;
(xli) upon payment in full of the Certificate Balance of
the Class N Certificates, to the Holders of the Class O Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class O
Certificates has been reduced to zero;
(xlii) to the Holders of the Class O Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses;
(xliii) to the Holders of the Class P Certificates,
Distributable Certificate Interest for such Distribution Date;
(xliv) upon payment in full of the Certificate Balance of
the Class O Certificates, to the Holders of the Class P Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class P
Certificates has been reduced to zero;
(xlv) to the Holders of the Class P Certificates, to
reimburse any Realized Losses previously allocated thereto and not previously
fully reimbursed, plus one month's interest at the applicable Pass-Through Rate
on such Realized Losses; and
(xlvi) to the Holders of the Class R-III Certificates at
such time as the Certificate Balances of all Classes of REMIC Regular
Certificates have been reduced to zero, and Realized Losses previously allocated
to each Holder have been reimbursed to the Holders of the REMIC Regular
Certificates, any amounts remaining on deposit in the Distribution Account.
Notwithstanding the foregoing, on each Distribution Date
occurring on or after the earliest date, if any, upon which the Certificate
Balances of all the Classes of Subordinate Certificates have been reduced to
zero or the aggregate Appraisal Reduction in effect is greater than or equal to
the Certificate Balances of all the Classes of Subordinate Certificates, the
138
Principal Distribution Amount will be distributed, first, to the Holders of the
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6
Certificates, pro rata, based on their respective Certificate Balances, in
reduction of their respective Certificate Balances, until the Certificate
Balance of each such Class is reduced to zero; and, second, to the Holders of
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6, pro
rata, based on the respective amounts of unreimbursed Realized Losses previously
allocated to each such Class, plus one month's interest on such Realized Losses
at the applicable Pass-Through Rate. A similar rule shall apply to the
distribution of the Principal Distribution Amount to REMIC II Regular Interests
X-0, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X, X-0X and
A-6C; provided that sequential payments shall be made to the REMIC II Regular
Interests as set forth in clauses (i) through (v) of Section 6.3(a).
(b) On each Distribution Date, the Paying Agent shall withdraw
amounts in the Reserve Account and shall pay the Certificateholders on such
Distribution Date such amounts in the following priority:
(i) first, to reimburse the Holders of the Principal
Balance Certificates (in order of alphabetical Class designation) for any, and
to the extent of, Realized Losses previously allocated to them; and
(ii) second, upon the reduction of the Aggregate
Certificate Balance of the Principal Balance Certificates to zero, to pay any
amounts remaining on deposit in such account to the Special Servicer as
additional Special Servicer Compensation.
This Section 6.5(b) shall apply mutatis mutandis to
reimbursement of Realized Losses previously allocated to the REMIC II Regular
Interests. (c) On each Distribution Date, the Paying Agent shall withdraw from
the Excess Interest Sub-account any Excess Interest on deposit therein, and the
Paying Agent shall pay such Excess Interest on such Distribution Date to the
Class P Certificates (even if the Certificate Balance of the Class P
Certificates has been reduced to zero for any reason).
SECTION 6.6 ALLOCATION OF REALIZED LOSSES, EXPENSE LOSSES AND
SHORTFALLS DUE TO NONRECOVERABILITY.
(a) REMIC I. On each Distribution Date, except as provided in
subsection (b) below,
(i) Realized Principal Losses on each Mortgage Loan
realized during the related Collection Period shall reduce the Certificate
Balance of the Corresponding REMIC I Regular Interest;
(ii) Realized Interest Losses on each Mortgage Loan shall
be allocated to reduce first, Distributable Certificate Interest for such
Distribution Date, and then Unpaid Interest in each case owing on the
Corresponding REMIC I Regular Interest; and
139
to the extent that such Realized Interest Loss exceeds such amount, shall be
treated as an Expense Loss; and
(iii) Expense Losses (not otherwise applied above)
realized during the related Collection Period shall be allocated among the REMIC
I Regular Interests in proportion to their Certificate Balances and treated as
Realized Principal Losses to the extent so allocated (and shall proportionately
reduce the Certificate Balance of each REMIC I Regular Interest) after making
all other allocations for such Distribution Date.
(b) If the Master Servicer, the Special Servicer, the Trustee
or the Fiscal Agent, determines that an Advance previously made by it (whether
such Advance (together with Advance Interest thereon) was in respect of
principal or interest on the related Mortgage Loan or a Servicing Advance) is a
Nonrecoverable Advance and the Master Servicer withdraws the amount of such
Advance from the Certificate Account pursuant to Section 5.2(a) hereof (which
amount shall be treated as an Available Advance Reimbursement Amount pursuant to
Section 4.6) or if the Master Servicer determines that any Unliquidated Advance
has become a Nonrecoverable Advance, the Master Servicer (after consultation
with the Special Servicer) shall compute the Realized Loss with respect to such
Mortgage Loan (and the Paying Agent shall allocate the Realized Loss) as
follows:
(i) the amount withdrawn from the Certificate Account
shall be treated as Realized Principal Losses up to the amount of the aggregate
amount in the Collection Account allocable to principal received with respect to
the Mortgage Loans for such Collection Period contemplated by clause (I)(A) of
the definition of Principal Distribution Amount, and shall be allocated to the
Corresponding REMIC I Regular Interest in accordance with Section 6.6(a)(i) (and
to the extent that any Realized Principal Loss exceeds the Certificate Balance
of the Corresponding REMIC I Regular Interest, such Realized Principal Loss
shall be allocated to the other Corresponding REMIC I Regular Interests in
accordance with Section 6.6(a)(iii)), and such withdrawal shall reduce the
principal paid on each such REMIC I Regular Interest on which principal would
otherwise be paid on such Distribution Date, in proportion to such principal
payments; and
(ii) if the amount that the Master Servicer withdraws
from the Certificate Account as referenced in clause (b)(i) above exceeds such
amount allocable to principal received with respect to the Mortgage Loans for
such Collection Period, then such additional amounts shall constitute Unpaid
Interest, and shall be allocated to the REMIC I Regular Interests on a pro rata
basis based upon the amount of accrued and unpaid interest thereon.
(c) If (x) a Final Recovery Determination is made with
respect to any Mortgage Loan with respect to which the Master Servicer
previously had withdrawn amounts from the Certificate Account following a
determination that Advances previously made were Nonrecoverable Advances and
Realized Losses were computed and allocated pursuant to clauses (a) and (b)
above, and (y) amounts are recovered thereafter:
(i) the portion of the amount of collections recovered on
the Mortgage Loan that is identified and applied by the Master Servicer as
recoveries of principal shall be applied by the Paying Agent first, to make
payments of principal on the Corresponding REMIC I Regular Interest up to an
amount equal to the Realized Principal Losses previously allocated thereto as a
result of the reimbursement of Nonrecoverable Advances or Advance Interest (and
the Principal Balance of the Mortgage Loan and the related Certificate Balance
of
140
the Corresponding REMIC I Regular Interest shall be correspondingly increased),
and thereafter to make payments of principal to the Corresponding REMIC I
Regular Interests with respect to which principal distributions were reduced
pursuant to Section 6.6(b)(i) above, in proportion to the amount of such
reductions; and
(ii) the portion of the amount recovered on the Mortgage
Loan that is identified and applied by the Master Servicer as recoveries of
interest shall be applied by the Paying Agent to make payments of Unpaid
Interest on the REMIC I Regular Interests with respect to which Unpaid Interest
was allocated pursuant to Section 6.6(b)(ii).
(d) REMIC II. On each Distribution Date, all Realized
Losses on the REMIC I Interests for such Distribution Date (or for prior
Distribution Dates, to the extent not previously allocated) shall be allocated
to the Corresponding REMIC II Regular Interests in the amounts and in the manner
as will be allocated to the REMIC Regular Certificates relating thereto pursuant
to Section 6.6(f); provided, however, that Realized Losses shall be allocated
among two or more Corresponding REMIC II Regular Interests that correspond to a
Class of Principal Balance Certificates sequentially in alphabetical and
numerical order. Realized Losses allocated to the Class X Certificates shall
reduce the amount of interest payable on the REMIC II Regular Interest A-1,
REMIC II Regular Interest A-2A, REMIC II Regular Interest A-2B, REMIC II Regular
Interest A-3A, REMIC II Regular Interest A-3B, REMIC II Regular Interest A-3C,
REMIC II Regular Interest A-4A, REMIC II Regular Interest A-4B, REMIC II Regular
Interest A-5A, REMIC II Regular Interest A-5B, REMIC II Regular Interest A-5C,
REMIC II Regular Interest A-6A, REMIC II Regular Interest A-6B, REMIC II Regular
Interest A-6C, REMIC II Regular Interest B-1, REMIC II Regular Interest B-2,
REMIC II Regular Interest C-1, REMIC II Regular Interest C-2, REMIC II Regular
Interest D-1, REMIC II Regular Interest D-2, REMIC II Regular Interest E, REMIC
II Regular Interest F-1, REMIC II Regular Interest F-2, REMIC II Regular
Interest G, REMIC II Regular Interest H-1, REMIC II Regular Interest H-2, REMIC
II Regular Interest J, REMIC II Regular Interest K, REMIC II Regular Interest L,
REMIC II Regular Interest M, REMIC II Regular Interest N, REMIC II Regular
Interest O and REMIC II Regular Interest P, which reduction shall be allocated
pro rata based on the product of the Certificate Balance of such REMIC II
Regular Interest and the sum of the Class X-1 Strip Rate and the Class X-2 Strip
Rate (if any) applicable to the Class of Certificates relating to such REMIC II
Regular Interest.
(e) Reserved
(f) REMIC III. On each Distribution Date, all Realized
Losses on the REMIC II Regular Interests for such Distribution Date (or for
prior Distribution Dates, to the extent not previously allocated) shall be
allocated to the REMIC Regular Certificates in Reverse Sequential Order, in each
case reducing (A) first, the Certificate Balance of such Class until such
Certificate Balance is reduced to zero (in the case of the Principal Balance
Certificates); (B) second, Unpaid Interest owing to such Class to the extent
thereof and (C) third, Distributable Certificate Interest owing to such Class,
provided, that such reductions shall be allocated among the Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4
Certificates, Class A-5 Certificates, Class A-6 Certificates, and, in the case
of interest, Class X-1 Certificates and Class X-2 Certificates, pro rata, based
upon their outstanding Certificate Balances or accrued interest, as the case may
be, and provided further, that Realized Losses shall not reduce the
141
Aggregate Certificate Balance of the REMIC III Certificates below the sum of the
Aggregate Certificate Balances of the REMIC II Regular Interests.
SECTION 6.7 NET AGGREGATE PREPAYMENT INTEREST SHORTFALLS. On
each Distribution Date, any Net Aggregate Prepayment Interest Shortfalls in
REMIC I shall be allocated among the REMIC I Regular Interests, pro rata in
proportion to the Accrued Certificate Interest for each such REMIC I Regular
Interest for such Distribution Date and shall reduce Distributable Certificate
Interest for each such Interest. On each Distribution Date, any Net Aggregate
Prepayment Interest Shortfalls in REMIC II shall be allocated among the REMIC II
Regular Interests, pro rata in proportion to the Accrued Certificate Interest
for each such REMIC II Regular Interest for such Distribution Date and shall
reduce Distributable Certificate Interest for each such Interest. On each
Distribution Date, the amount of any Net Aggregate Prepayment Interest
Shortfalls on the REMIC III Regular Interests shall be allocated to each Class
of Certificates, pro rata, in proportion to the amount of Accrued Certificate
Interest payable to such Class of Certificates on such Distribution Date, in
each case reducing interest otherwise payable thereon. The amount of Net
Aggregate Prepayment Interest Shortfalls allocated to a Class of Certificates
pursuant to the preceding sentence shall reduce the Distributable Certificate
Interest for such Class for such Distribution Date. No Prepayment Interest
Shortfall with respect to a Serviced Companion Mortgage Loan or a B Note shall
be allocated to any Class of Certificates.
SECTION 6.8 ADJUSTMENT OF SERVICING FEES. The Master
Servicing Fee payable to the Master Servicer shall be adjusted as provided in
Section 8.10(c) herein. Any amount retained by REMIC I as a result of a
reduction of the Master Servicing Fee shall be treated as interest collected
with respect to the prepaid Mortgage Loans with respect to which the Master
Servicing Fee adjustment occurs.
SECTION 6.9 APPRAISAL REDUCTIONS. Not later than the date on
which an Appraisal Event occurs, the Special Servicer shall have obtained (A) an
Appraisal of the Mortgaged Property securing the related Mortgage Loan, Loan
Pair or A/B Mortgage Loan, if the Principal Balance of such Mortgage Loan, Loan
Pair or A/B Mortgage Loan exceeds $2,000,000 or (B) at the option of the Special
Servicer, if such Principal Balance is less than or equal to $2,000,000, either
an internal valuation prepared by the Special Servicer in accordance with MAI
standards or an Appraisal which in all cases shall be completed as of the date
that such Mortgage Loan, Loan Pair or A/B Mortgage Loan becomes a Required
Appraisal Loan; provided that if the Special Servicer had completed or obtained
an Appraisal or internal valuation within the immediately prior 12 months, the
Special Servicer may rely on such Appraisal or internal valuation and shall have
no duty to prepare a new Appraisal or internal valuation, unless such reliance
would not be in accordance with the Servicing Standard; provided, further, that
if the Special Servicer is required to obtain an Appraisal of a Mortgaged
Property after receipt of the notice described in clause (ii) of the definition
of Appraisal Event, such Appraisal will be obtained no later than 60 days after
receipt of such notice and an internal valuation will be obtained no later than
60 days after receipt of such notice. Notwithstanding the foregoing, an
Appraisal shall not be required so long as a guaranty or surety bond that is
rated at least "BBB-" (or its equivalent) by a nationally recognized statistical
rating organization, or debt service reserve or a letter of credit is available
and has the ability to pay off the then outstanding Principal Balance of the
Mortgage Loan in full, except to the extent that the Special Servicer, in
accordance with the Servicing Standard, determines that obtaining an Appraisal
is in the best
142
interests of the Certificateholders. Such Appraisal or valuation shall be
conducted in accordance with the definition of "market value" as set forth in 12
C.F.R. ss. 225.62 and shall be updated at least annually to the extent such
Mortgage Loan remains a Required Appraisal Loan. The cost of any such Appraisal
or valuation, if not performed by the Special Servicer, shall be an expense of
the Trust (and any related B Note) and may be paid from REO Income or, to the
extent collections from such related Mortgage Loan, B Note, Loan Pair or
Mortgaged Property does not cover the expense, such unpaid expense shall be,
subject to Section 4.4 hereof, advanced by the Master Servicer at the request of
the Special Servicer or by the Special Servicer pursuant to Section 4.2 in which
event it shall be treated as a Servicing Advance. The Master Servicer, based on
the Appraisal or internal valuation provided to it by the Special Servicer,
shall calculate any Appraisal Reduction. The Master Servicer shall calculate or
recalculate the Appraisal Reduction for any Mortgage Loan, B Note and Loan Pair
based on updated Appraisals or internal valuations provided from time to time to
it by the Special Servicer and report such amount to the Trustee annually.
Notwithstanding the foregoing, the terms of this Section 6.9 shall not be
applicable to any Non-Serviced Mortgage Loan if the applicable Non-Serviced
Mortgage Loan Special Servicer shall have performed such obligations with
respect to such Mortgage Loan pursuant to the terms of the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement.
SECTION 6.10 COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement to the contrary, the
Paying Agent on behalf of the Trustee shall comply with all federal withholding
requirements with respect to payments to Certificateholders of interest,
original issue discount, or other amounts that the Paying Agent reasonably
believes are applicable under the Code. The consent of Certificateholders shall
not be required for any such withholding and any amount so withheld shall be
regarded as distributed to the related Certificateholders for purposes of this
Agreement. In the event the Paying Agent withholds any amount from payments made
to any Certificateholder pursuant to federal withholding requirements, the
Paying Agent shall indicate to such Certificateholder the amount withheld. The
Trustee shall not be responsible for the Paying Agent's failure to comply with
any withholding requirements.
SECTION 6.11 PREPAYMENT PREMIUMS. Any Prepayment Premium
collected with respect to a Mortgage Loan (but not a B Note or Serviced
Companion Mortgage Loan, which Prepayment Premium is payable to the holder of
the related B Note or the holder of the related Serviced Companion Mortgage
Loan, as applicable) during any particular Collection Period will be deemed
distributed to the Trustee by the Paying Agent on the following Distribution
Date as follows: (i) first, the Paying Agent shall be deemed to distribute to
the Trustee, as holder of the REMIC I Regular Interest to which such Mortgage
Loan relates, any Prepayment Premiums collected on or with respect to such
Mortgage Loan; and (ii) second, the Paying Agent shall be deemed to distribute
to the Trustee, as holder of the REMIC II Regular Interests, any Prepayment
Premiums deemed distributed to the REMIC I Regular Interests, and shall be
deemed to distribute such Prepayment Premiums to the REMIC II Regular Interest
then entitled to distributions of principal from the Principal Distribution
Amount (or, if more than one Class of REMIC II Regular Interests is then
entitled to distributions of principal from the Principal Distribution Amount,
such Prepayment Premiums shall be deemed distributed among such Classes pro rata
in accordance with the relevant amounts of entitlements to distributions of
principal). Following such deemed distributions, the Holders of the respective
Classes of Principal Balance Certificates, other than the Class J, Class K,
Class L, Class M, Class N, Class
143
O and Class P Certificates, then entitled to distributions of principal from the
Principal Distribution Amount for such Distribution Date, will be entitled to,
and the Paying Agent on behalf of the Trustee will pay to such Holder(s), an
amount equal to, in the case of each such Class, the product of (a) a fraction,
the numerator of which is the amount distributed as principal to the holders of
that Class on that Distribution Date, and the denominator of which is the total
amount distributed as principal to the holders of all Classes of Certificates on
that Distribution Date, (b) the Base Interest Fraction for the related Principal
Prepayment and that Class of Certificates and (c) the aggregate amount of
Prepayment Premiums collected during the related Collection Period. Any portion
of such Prepayment Premium that is not so distributed to the Holders of such
Principal Balance Certificates will be distributed to the Holders of the Class X
Certificates. On any Distribution Date on or before the Distribution Date in
November 2009, 80% of the Prepayment Premium that is not so distributed to the
Holders of such Principal Balance Certificates will be distributed to the
Holders of the Class X-1 Certificates and 20% of the Prepayment Premium that is
not so distributed to the Holders of such Principal Balance Certificates will be
distributed to the Holders of the Class X-2 Certificates. After the Distribution
Date in November 2009, any portion of such Prepayment Premium that is not so
distributed to the Holders of such Principal Balance Certificates will be
distributed to the Holders of the Class X-1 Certificates.
ARTICLE VII
CONCERNING THE TRUSTEE, THE FISCAL AGENT, THE PAYING AGENT AND
THE LUXEMBOURG PAYING AGENT
SECTION 7.1 DUTIES OF THE TRUSTEE, THE FISCAL AGENT AND THE
PAYING AGENT.
(a) The Trustee, the Fiscal Agent and the Paying Agent each
shall undertake to perform only those duties as are specifically set forth in
this Agreement and no implied covenants or obligations shall be read into this
Agreement against the Trustee, the Fiscal Agent or the Paying Agent. Any
permissive right of the Trustee, the Fiscal Agent or the Paying Agent provided
for in this Agreement shall not be construed as a duty of the Trustee, the
Fiscal Agent or the Paying Agent. The Trustee, the Fiscal Agent and the Paying
Agent each shall exercise such of the rights and powers vested in it by this
Agreement and following the occurrence and during the continuation of any Event
of Default hereunder, the Trustee and Fiscal Agent and the Paying Agent each
shall use the same degree of care and skill in its exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) The Trustee, the Fiscal Agent or the Paying Agent, as
applicable, upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Trustee, the
Fiscal Agent or the Paying Agent , as the case may be, which are specifically
required to be furnished pursuant to any provision of this Agreement, shall
examine them to determine whether they on their face conform to the requirements
of this Agreement; provided that the Trustee, the Fiscal Agent or the Paying
Agent, as the case may be, shall not be responsible for the accuracy or content
of any such resolution, certificate, statement, opinion, report, document, order
or other instrument furnished by the Master Servicer or any other Person to it
pursuant to this Agreement. If any such instrument is found on its face not to
conform to the requirements of this Agreement, the Trustee or the Paying Agent
shall request the
144
providing party to correct the instrument and if not so
corrected, the Paying Agent shall inform the Certificateholders.
(c) Neither the Trustee, the Fiscal Agent nor the Paying
Agent nor any of their respective directors, officers, employees, agents or
Controlling Persons shall have any liability to the Trust or the
Certificateholders arising out of or in connection with this Agreement, except
for their respective negligence or willful misconduct. No provision of this
Agreement shall be construed to relieve the Trustee, the Fiscal Agent, the
Paying Agent or any of their respective directors, officers, employees, agents
or Controlling Persons from liability for their own negligent action, their own
negligent failure to act or their own willful misconduct or bad faith; provided
that:
(i) neither the Trustee, the Fiscal Agent nor the Paying Agent
nor any of their respective directors, officers, employees, agents or
Controlling Persons shall be personally liable with respect to any action taken,
suffered or omitted to be taken by it in its reasonable business judgment in
accordance with this Agreement or at the direction of Holders of Certificates
evidencing not less than a majority of the outstanding Certificate Balance of
the Certificates;
(ii) no provision of this Agreement shall require either the
Trustee, the Fiscal Agent or the Paying Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it;
(iii) neither the Trustee, the Fiscal Agent nor the Paying
Agent nor any of their respective directors, officers, employees, agents or
Controlling Persons shall be responsible for any act or omission of the Master
Servicer, the Special Servicer, the Depositor or either Seller, or for the acts
or omissions of each other, including, without limitation, in connection with
actions taken pursuant to this Agreement;
(iv) the execution by the Trustee or the Paying Agent of any
forms or plans of liquidation in connection with any REMIC Pool shall not
constitute a representation by the Trustee or the Paying Agent as to the
adequacy of such form or plan of liquidation;
(v) none of the Trustee, the Fiscal Agent nor the Paying Agent
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its duties as Trustee, the Fiscal Agent or the Paying
Agent, as applicable in accordance with this Agreement. In such event, all legal
expense and costs of such action shall be expenses and costs of the Trust, and
the Trustee, the Paying Agent and the Fiscal Agent shall be entitled to be
reimbursed therefor from the Certificate Account pursuant to Section 5.2(a)(vi);
and
(vi) neither the Trustee, the Fiscal Agent nor the Paying
Agent shall be charged with knowledge of any failure by the Master Servicer or
the Special Servicer or by each other to comply with its obligations under this
Agreement or any act, failure, or breach of any Person upon the occurrence of
which the Trustee, the Fiscal Agent or the Paying Agent may be required to act,
unless a Responsible Officer of the Trustee, the Fiscal Agent or the Paying
Agent, as the case may be, obtains actual knowledge of such failure.
145
(d) For so long as the Certificates are listed on the
Luxembourg Stock Exchange, the Depositor shall cause the continuing obligations
under the listing rules for the Luxembourg Stock Exchange to be complied with in
respect of the Certificates. The Trustee, the Fiscal Agent and the Paying Agent
shall not be liable for a failure in compliance with such continuing obligations
under the listing rules of the Luxembourg Stock Exchange if such failure is
caused by the negligence or willful misconduct of the Luxembourg Paying Agent.
SECTION 7.2 CERTAIN MATTERS AFFECTING THE TRUSTEE, THE FISCAL
AGENT AND THE PAYING AGENT.
(a) Except as otherwise provided in Section 7.1:
(i) the Trustee, the Fiscal Agent and the Paying Agent each
may request, and may rely and shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(ii) the Trustee, the Fiscal Agent and the Paying Agent each
may consult with counsel and the advice of such counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) neither the Trustee nor the Fiscal Agent nor the Paying
Agent nor any of their respective directors, officers, employees, agents or
Controlling Persons shall be personally liable for any action taken, suffered or
omitted by such Person in its reasonable business judgment and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) the Trustee and the Paying Agent shall not be under any
obligation to exercise any remedies after default as specified in this Agreement
or to institute, conduct or defend any litigation hereunder or relating hereto
or make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document (provided the same appears
regular on its face), unless requested in writing to do so by Holders of at
least 25% of the Aggregate Certificate Balance of the Certificates then
outstanding provided that, if the payment within a reasonable time to the
Trustee or the Paying Agent, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in connection with the foregoing is, in
the opinion of such Person not reasonably assured to such Person by the security
afforded to it by the terms of this Agreement, such Person may require
reasonable indemnity against such expense or liability or payment of such
estimated expenses as a condition to proceeding. The reasonable expenses of the
Trustee or the Paying Agent, as applicable, shall be paid by the
Certificateholders requesting such examination;
(v) the Trustee, the Fiscal Agent and the Paying Agent each
may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys, which agents or
attorneys shall have any or all of the rights,
146
powers, duties and obligations of the Trustee, the Fiscal Agent and the Paying
Agent conferred on them by such appointment; provided that each of the Trustee,
the Fiscal Agent and the Paying Agent, as the case may be, shall continue to be
responsible for its duties and obligations hereunder and shall not be liable for
the actions or omissions of the Master Servicer, the Special Servicer, the
Depositor or the actions or omissions of each other;
(vi) neither the Trustee nor the Fiscal Agent nor the Paying
Agent shall be required to obtain a deficiency judgment against a Mortgagor;
(vii) neither the Trustee nor the Fiscal Agent nor the Paying
Agent shall be required to expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such liability is not assured to it;
(viii) neither the Trustee nor the Fiscal Agent nor the Paying
Agent shall be liable for any loss on any investment of funds pursuant to this
Agreement;
(ix) unless otherwise specifically required by law, neither
the Trustee nor the Fiscal Agent nor the Paying Agent shall be required to post
any surety or bond of any kind in connection with the execution or performance
of its duties hereunder; and
(x) except as specifically provided hereunder in connection
with the performance of its specific duties, neither the Trustee nor the Fiscal
Agent nor the Paying Agent shall be responsible for any act or omission of the
Master Servicer, the Special Servicer, the Depositor or of each other.
(b) Following the Closing Date, the Trustee shall not accept
any contribution of assets to the Trust not specifically contemplated by this
Agreement unless the Trustee shall have received a Nondisqualification Opinion
at the expense of the Person desiring to contribute such assets with respect to
such contribution.
(c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
any proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(d) The Trustee shall timely pay, from its own funds, the
amount of any and all federal, state and local taxes imposed on the Trust or its
assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the Code, if, when and
as the same shall be due and payable, (B) any tax on contributions to a REMIC
after the Closing Date imposed by Section 860G(d) of the Code and (C) any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, but only if such taxes arise out of a breach by the Trustee of its
obligations hereunder, which breach constitutes negligence or willful misconduct
of the Trustee.
(e) The Paying Agent shall timely pay, from its own funds, the
amount of any and all federal, state and local taxes imposed on the Trust or its
assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the
147
Code, if, when and as the same shall be due and payable, (B) any tax on
contributions to a REMIC after the Closing Date imposed by Section 860G(d) of
the Code and (C) any tax on "net income from foreclosure property" as defined in
Section 860G(c) of the Code, but only if such taxes arise out of a breach by the
Paying Agent of its obligations hereunder, which breach constitutes negligence
or willful misconduct of the Paying Agent.
SECTION 7.3 THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT
NOT LIABLE FOR CERTIFICATES OR INTERESTS OR MORTGAGE LOANS. The Trustee, the
Fiscal Agent and the Paying Agent each makes no representations as to the
validity or sufficiency of this Agreement, the information contained in the
Private Placement Memorandum, the Preliminary Prospectus Supplement, the Final
Prospectus Supplement or Prospectus for the REMIC III Certificates or Residual
Certificates (other than the Certificate of Authentication on the Certificates
if the Paying Agent is the Authenticating Agent) or of any Mortgage Loan,
Assignment of Mortgage or related document save that (i) each of the Trustee,
the Fiscal Agent and the Paying Agent represents that, assuming due execution
and delivery by the other parties hereto, this Agreement has been duly
authorized, executed and delivered by it and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms except that such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally, and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law and (ii) the
Trustee represents that, assuming due execution and delivery by the other
parties hereto, this Agreement has been duly authorized, executed and delivered
by it and constitutes its valid and binding obligation, enforceable against it
in accordance with its terms except that such enforceability may be subject to
(A) applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally, and (B) general principles
of equity regardless of whether such enforcement is considered in a proceeding
in equity or at law. None of the Trustee, the Fiscal Agent or the Paying Agent
shall be accountable for the use or application by the Depositor or the Master
Servicer or the Special Servicer or by each other of any of the Certificates or
any of the proceeds of such Certificates, or for the use or application by the
Depositor or the Master Servicer or the Special Servicer or by each other of
funds paid in consideration of the assignment of the Mortgage Loans to the Trust
or deposited into the Distribution Account or any other fund or account
maintained with respect to the Certificates or any account maintained pursuant
to this Agreement or for investment of any such amounts. No recourse shall be
had for any claim based on any provisions of this Agreement, the Private
Placement Memorandum, the Preliminary Prospectus Supplement, the Final
Prospectus Supplement, the Prospectus or the Certificates (except with respect
to the Trustee and Fiscal Agent to the extent of information furnished by the
Trustee and the Fiscal Agent under the caption entitled "DESCRIPTION OF THE
OFFERED CERTIFICATES-- The Trustee and the Fiscal Agent" and with respect to the
Paying Agent, to the extent of information furnished by the Paying Agent under
the caption "DESCRIPTION OF THE OFFERED CERTIFICATES-- The Paying Agent,
Certificate Registrar and Authenticating Agent" each in the Preliminary
Prospectus Supplement and the Final Prospectus Supplement), the Mortgage Loans
or the assignment thereof against the Trustee, the Fiscal Agent or the Paying
Agent in such Person's individual capacity and any such claim shall be asserted
solely against the Trust or any indemnitor who shall furnish indemnity as
provided herein. Neither the Trustee nor the Fiscal Agent nor the Paying Agent
shall be liable for any action or failure of any action by the Depositor or the
Master Servicer or the Special Servicer or by each other hereunder. Neither the
Trustee nor the Fiscal Agent nor the Paying Agent shall at any time have any
responsibility or liability for
148
or with respect to the legality, validity or enforceability of the Mortgages or
the Mortgage Loans, or the perfection and priority of the Mortgages or the
maintenance of any such perfection and priority, or for or with respect to the
efficacy of the Trust or its ability to generate the payments to be distributed
to Certificateholders under this Agreement, including, without limitation, the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon; the validity of the assignment
of the Mortgage Loans to the Trust or of any intervening assignment; the
completeness of the Mortgage Loans; the performance or enforcement of the
Mortgage Loans (other than if the Trustee shall assume the duties of the Master
Servicer); the compliance by the Depositor, each Seller, the Mortgagor or the
Master Servicer or the Special Servicer or by each other with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation made under this Agreement or in
any related document prior to the receipt by a Responsible Officer of the
Trustee of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Master
Servicer or the Special Servicer or any loss resulting therefrom; the failure of
the Master Servicer or any Sub-Servicer or the Special Servicer to act or
perform any duties required of it on behalf of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Master Servicer or the
Special Servicer.
SECTION 7.4 THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT
MAY OWN CERTIFICATES. Each of the Trustee, the Fiscal Agent and the Paying Agent
in its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Trustee, the
Fiscal Agent or the Paying Agent, as the case may be.
SECTION 7.5 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE, THE
FISCAL AGENT AND THE PAYING AGENT. The Trustee hereunder shall at all times be
(i) an institution insured by the FDIC, (ii) a corporation, national bank or
national banking association authorized to exercise corporate trust powers,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority, and (iii) an
institution whose short-term debt obligations are at all times rated not less
than "A-1" by S&P and whose long-term senior unsecured debt is at all times
rated not less than "AA-" by Fitch (or "A+" by Fitch if the Trustee's short-term
unsecured debt is rated at least "F-1" by Fitch) and "A+" by S&P, provided, that
if the Fiscal Agent is rated at "AA-" by Fitch (or "A+" by Fitch if the Fiscal
Agent's short-term unsecured debt is rated at least "F-1" by Fitch), and "AA-"
by S&P (or "A+" by S&P if the Fiscal Agent's short-term unsecured debt is rated
at least "A-1" by S&P), then the Trustee must be rated not less than "A-" by
Fitch and "A-" by S&P, or otherwise acceptable to the Rating Agencies as
evidenced by a Rating Agency Confirmation. If such corporation, national bank or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section, the combined capital and
surplus of such corporation, national bank or national banking association shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with provisions of this Section, the Trustee or the
Fiscal Agent shall resign immediately in the manner and with the effect
specified in Section 7.6.
149
(b) The Paying Agent shall be either a bank or trust company
or otherwise authorized under law to exercise corporate trust powers and shall
be rated at least "A" by Fitch and "A" by S&P, unless and to the extent Rating
Agency Confirmation is obtained.
SECTION 7.6 RESIGNATION AND REMOVAL OF THE TRUSTEE, THE FISCAL
AGENT OR THE PAYING AGENT.
(a) The Trustee, the Fiscal Agent or the Paying Agent may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor, the Master Servicer and the Rating
Agencies; provided that such resignation shall not be effective until its
successor shall have accepted the appointment. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee, fiscal
agent or paying agent, as the case may be, except in the case of the initial
Trustee or Fiscal Agent, in which case both shall be so replaced but may be
replaced under this paragraph sequentially, by written instrument, one copy of
which instrument shall be delivered to the resigning Trustee or the Fiscal
Agent, one copy to the successor trustee and one copy to each of the Master
Servicer, the Paying Agent and the Rating Agencies. If no successor trustee,
fiscal agent or paying agent shall have been so appointed, as the case may be,
and shall have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee, the Fiscal Agent or the Paying
Agent, as the case may be, may petition any court of competent jurisdiction for
the appointment of a successor trustee, fiscal agent or paying agent, as the
case may be. It shall be a condition to the appointment of a successor trustee
or fiscal agent that such entity satisfies the eligibility requirements set
forth in Section 7.5.
(b) If at any time (i) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust or any REMIC Pool by any state
in which the Trustee or the Trust held by the Trustee is located solely because
of the location of the Trustee in such state; provided, however, that, if the
Trustee agrees to indemnify the Trust for such taxes, it shall not be removed
pursuant to this clause (iii), (iv) the continuation of the Trustee as such
would result in a downgrade, qualification or withdrawal of the rating by the
Rating Agencies of any Class of Certificates with a rating as evidenced in
writing by the Rating Agencies or (v) with respect with the initial Trustee, a
Fiscal Agent Termination Event has occurred unless the Trustee has satisfied the
ratings required by clause (iii) of Section 7.5, then the Depositor may remove
such Trustee and appoint a successor trustee by written instrument, one copy of
which instrument shall be delivered to the Trustee so removed, one copy to the
successor trustee and one copy to each of the Master Servicer and the Rating
Agencies. In the case of removal under clauses (i), (ii), (iii) and (iv) above,
the Trustee shall bear all such costs of transfer. Such succession shall take
effect after a successor trustee has been appointed. In the case of the removal
of the initial Trustee, the Depositor shall also remove the Fiscal Agent. In
this case, the procedures and liability for costs of such removal shall be the
same as they are stated in subsection (c) with respect to the Fiscal Agent.
150
(c) If at any time (i) the Fiscal Agent shall cease to be
eligible in accordance with the provisions of Section 7.5 and shall fail to
resign after written request therefor by the Depositor, or (ii) a Fiscal Agent
Termination Event has occurred, then the Depositor shall send a written notice
of termination to the Fiscal Agent (which notice shall specify the reason for
such termination) and remove such Fiscal Agent and appoint a successor Fiscal
Agent by written instrument, one copy of which instrument shall be delivered to
the Fiscal Agent so removed, one copy to the successor Fiscal Agent, and one
copy to each of the Trustee, the Master Servicer and the Rating Agencies. In all
such cases, the Fiscal Agent shall bear all costs of transfer to a successor
Fiscal Agent, such succession only to take effect after a successor Fiscal Agent
has been appointed. In the case of the initial Fiscal Agent, the Depositor may,
but is not required to, also remove the Trustee. In this case, the procedures
and liability for costs of such removal shall be the same as they are stated in
subsection (b) with respect to the Trustee.
(d) If at any time (i) the Paying Agent shall cease to be
eligible in accordance with the provisions of Section 7.5(b) and shall fail to
resign after written request therefor by the Depositor, (ii) the Paying Agent
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Paying Agent or of its property shall be appointed, or any
public officer shall take charge or control of the Paying Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii) a tax is imposed or threatened with respect to the Trust or
any REMIC Pool by any state in which the Paying Agent is located solely because
of the location of the Paying Agent in such state; provided, however, that, if
the Paying Agent agrees to indemnify the Trust for such taxes, it shall not be
removed pursuant to this clause (iii), or (iv) the continuation of the Paying
Agent as such would result in a downgrade, qualification or withdrawal, as
applicable, of the rating by any Rating Agency of any Class of Certificates with
a rating as evidenced in writing by the Rating Agencies, then the Depositor or
the Trustee shall send a written notice of termination to the Paying Agent
(which notice shall specify the reason for such termination) and remove such
Paying Agent and the Depositor shall appoint a successor Paying Agent by written
instrument, one copy of which instrument shall be delivered to the Paying Agent
so removed, one copy to the successor Paying Agent, and one copy to each of the
Trustee, the Master Servicer and the Rating Agencies. In all such cases, the
Paying Agent shall bear all costs of transfer to a successor Paying Agent, such
succession only to take effect after a successor Paying Agent has been
appointed.
(e) The Holders of more than 50% of the Aggregate Certificate
Balance of the Certificates then outstanding may for cause upon 30 days' written
notice to the Trustee, the Fiscal Agent or the Paying Agent, as the case may be,
and to the Depositor remove the Trustee, the Fiscal Agent or the Paying Agent,
as the case may be, by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor and one copy to the Trustee, the Fiscal Agent or the
Paying Agent, as the case may be, so removed; the Depositor shall thereupon use
its best efforts to appoint a successor Trustee, Fiscal Agent or Paying Agent,
as the case may be, in accordance with this Section.
(f) Any resignation or removal of the Trustee, the Fiscal
Agent or the Paying Agent, as the case may be, and appointment of a successor
trustee, fiscal agent or paying agent pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee, fiscal agent or paying agent, as the case may be, as provided in
Section 7.7. Upon any succession of the Trustee, the Fiscal Agent or the Paying
151
Agent under this Agreement, the predecessor Trustee, Fiscal Agent or Paying
Agent, as the case may be, shall be entitled to the payment of compensation and
reimbursement agreed to under this Agreement for services rendered and expenses
incurred. The Trustee, the Fiscal Agent or the Paying Agent shall not be liable
for any action or omission of any successor Trustee, Fiscal Agent or Paying
Agent, as the case may be.
SECTION 7.7 SUCCESSOR TRUSTEE, FISCAL AGENT OR PAYING AGENT.
(a) Any successor Trustee, Fiscal Agent or Paying Agent
appointed as provided in Section 7.6 shall execute, acknowledge and deliver to
the Depositor and to its predecessor Trustee, Fiscal Agent or Paying Agent, as
the case may be, an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee, Fiscal Agent or
Paying Agent, as the case may be, shall become effective and such successor
Trustee, Fiscal Agent or Paying Agent, as the case may be, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee, Fiscal Agent or Paying Agent herein. The
predecessor Trustee, Fiscal Agent or Paying Agent shall deliver (at such
predecessor's own expense) to the successor Trustee, Fiscal Agent or Paying
Agent all Mortgage Files and documents and statements related to the Mortgage
Files held by it hereunder, and the predecessor Trustee shall duly assign,
transfer, deliver and pay over (at such predecessor's own expense) to the
successor Trustee, the entire Trust, together with all instruments of transfer
and assignment or other documents properly executed necessary to effect such
transfer. The predecessor Trustee, Fiscal Agent or Paying Agent, as the case may
be, shall also deliver all records or copies thereof maintained by the
predecessor Trustee, Fiscal Agent or Paying Agent in the administration hereof
as may be reasonably requested by the successor Trustee, Fiscal Agent or Paying
Agent, as applicable, and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor Trustee, Fiscal Agent or Paying Agent shall execute and deliver such
other instruments and do such other things as may reasonably be required to more
fully and certainly vest and confirm in the successor Trustee, Fiscal Agent or
Paying Agent, as the case may be, all such rights, powers, duties and
obligations. Anything herein to the contrary notwithstanding, in no event shall
the combined fees payable to a successor Trustee exceed the Trustee Fee.
(b) No successor Trustee, Fiscal Agent or Paying Agent shall
accept appointment as provided in this Section unless at the time of such
appointment such successor Trustee, Fiscal Agent or Paying Agent, as the case
may be, shall be eligible under the provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee,
Fiscal Agent or Paying Agent as provided in this Section, the successor Trustee,
Fiscal Agent or Paying Agent shall mail notice of the succession of such
Trustee, Fiscal Agent or Paying Agent hereunder to all Holders of Certificates
at their addresses as shown in the Certificate Register and to the Rating
Agencies. The expenses of such mailing shall be borne by the successor Trustee,
Fiscal Agent or Paying Agent. If the successor Trustee, Fiscal Agent or Paying
Agent fails to mail such notice within 10 days after acceptance of appointment
by the successor Trustee, Fiscal Agent or Paying Agent, the Master Servicer
shall cause such notice to be mailed at the expense of the successor Trustee,
Fiscal Agent or Paying Agent, as applicable.
152
SECTION 7.8 MERGER OR CONSOLIDATION OF TRUSTEE, FISCAL AGENT
OR PAYING AGENT. Any Person into which the Trustee, Fiscal Agent or Paying Agent
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee,
Fiscal Agent or Paying Agent shall be a party, or any Persons succeeding to the
business of such Trustee, Fiscal Agent or Paying Agent, shall be the successor
of such Trustee, Fiscal Agent or Paying Agent, as the case may be, hereunder, as
applicable, provided that such Person shall be eligible under the provisions of
Section 7.5, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 7.9 APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE,
AGENTS OR CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time,
the Trustee, the Depositor or, in the case of the Trust, the Certificateholders
evidencing more than 50% of the Aggregate Certificate Balance of the
Certificates then outstanding shall each have the power from time to time to
appoint one or more Persons to act either as co-trustees jointly with the
Trustee or as separate trustees, or as custodians, for the purpose of holding
title to, foreclosing or otherwise taking action with respect to any Mortgage
Loan outside the state where the Trustee has its principal place of business
where such separate trustee or co-trustee is necessary or advisable (or the
Trustee is advised by the Master Servicer or Special Servicer that such separate
trustee or co-trustee is necessary or advisable) under the laws of any state in
which a property securing a Mortgage Loan is located or for the purpose of
otherwise conforming to any legal requirement, restriction or condition in any
state in which a property securing a Mortgage Loan is located or in any state in
which any portion of the Trust is located. The separate trustees, co-trustees,
or custodians so appointed shall be trustees or custodians for the benefit of
all the Certificateholders, shall have such powers, rights and remedies as shall
be specified in the instrument of appointment and shall be deemed to have
accepted the provisions of this Agreement; provided that no such appointment
shall, or shall be deemed to, constitute the appointee an agent of the Trustee;
provided, further that the Trustee shall be liable for the actions of any
co-trustee or separate trustee appointed by it and shall have no liability for
the actions of any co-trustee or separate trustee appointed by the Depositor or
the Certificateholders pursuant to this paragraph.
(b) The Trustee or the Paying Agent, as the case may be, may
from time to time appoint one or more independent third-party agents to perform
all or any portion of its administrative duties hereunder (i.e., collection and
distribution of funds, preparation and dissemination of reports, monitoring
compliance, etc.). The Trustee or the Paying Agent, as the case may be, shall
supervise and oversee such agents appointed by it. The terms of any arrangement
or agreement between the Trustee or the Paying Agent, as the case may be, and
such agent, may be terminated, without cause and without the payment of any
termination fees in the event the Trustee or the Paying Agent, as the case may
be, is terminated in accordance with this Agreement. In addition, neither the
Trust nor the Certificateholders shall have any liability or direct obligation
to such agent. Notwithstanding the terms of any such agreement, the Trustee or
the Paying Agent, as the case may be, shall remain at all times obligated and
liable to the Trust and the Certificateholders for performing its duties
hereunder.
153
(c) Every separate trustee, co-trustee, and custodian shall,
to the extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of moneys shall
be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder) the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations, including the holding of title to the
Trust or any portion thereof in any such jurisdiction, shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other trustee or
custodian hereunder; and
(iv) the Trustee or, in the case of the Trust, the
Certificateholders evidencing more than 50% of the Aggregate Principal Amount of
the Certificates then outstanding may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so appointed by it or
them, if such resignation or removal does not violate the other terms of this
Agreement.
(d) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
(e) Any separate trustee, co-trustee or custodian may, at any
time, constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
(f) No separate trustee, co-trustee or custodian hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
154
(g) The Trustee agrees to instruct the co-trustees, if any, to
the extent necessary to fulfill the Trustee's obligations hereunder.
(h) The Trustee shall pay the reasonable compensation of the
co-trustees, separate trustees or custodians appointed by the Trustee pursuant
to this Section 7.9 to the extent, and in accordance with the standards,
specified in Section 7.12 hereof.
(i) Subject to the consent of the Depositor, which consent
shall not be unreasonably withheld, the Trustee, at its sole cost and expense,
may appoint at any time a successor Custodian. Until such time as the Trustee
appoints a successor Custodian, the Trustee shall be the Custodian hereunder.
Upon the appointment of a successor custodian, the Trustee and the Custodian
shall enter into a custodial agreement.
SECTION 7.10 AUTHENTICATING AGENTS.
(a) The Paying Agent shall serve as the initial Authenticating
Agent hereunder for the purpose of executing and authenticating Certificates.
Any successor Authenticating Agent must be acceptable to the Depositor and must
be a corporation or national bank organized and doing business under the laws of
the United States of America or of any state and having a principal office and
place of business in the Borough of Manhattan in the City and State of New York,
having a combined capital and surplus of at least $50,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities.
(b) Any Person into which the Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the
Authenticating Agent shall be a party, or any Person succeeding to the corporate
agency business of the Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) The Authenticating Agent may at any time resign by giving
at least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of the
Authenticating Agent by giving written notice of termination to the
Authenticating Agent and the Depositor; provided that the Trustee may not
terminate the Paying Agent as Authenticating Agent unless the Paying Agent shall
be removed as Paying Agent hereunder. Upon receiving a notice of resignation or
upon such a termination, or in case at any time the Authenticating Agent shall
cease to be eligible in accordance with the provisions of Section 7.10(a), the
Trustee may appoint a successor Authenticating Agent, shall give written notice
of such appointment to the Depositor and shall mail notice of such appointment
to all Holders of Certificates. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. No such Authenticating
Agent shall be appointed unless eligible under the provisions of Section
7.10(a). No Authenticating Agent shall have responsibility or liability for any
action taken by it as such at the direction of the Trustee.
155
SECTION 7.11 INDEMNIFICATION OF TRUSTEE, THE FISCAL AGENT AND
THE PAYING AGENT.
(a) The Trustee, the Fiscal Agent, the Certificate Registrar
and the Paying Agent and each of its respective directors, officers, employees,
agents and Controlling Persons shall be entitled to indemnification from the
Trust for any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, liabilities, fees and expenses
incurred in connection with any legal action incurred without negligence or
willful misconduct on their respective part, arising out of, or in connection
with this Agreement, the Certificates and the acceptance or administration of
the trusts or duties created hereunder (including, without limitation, any
unanticipated loss, liability or expense incurred in connection with any action
or inaction of the Master Servicer, the Special Servicer or the Depositor or of
each other such Person hereunder but only to the extent the Trustee, the Fiscal
Agent, the Certificate Registrar or the Paying Agent, as the case may be, is
unable to recover within a reasonable period of time such amount from such third
party pursuant to this Agreement) including the costs and expenses of defending
themselves against any claim in connection with the exercise or performance of
any of their powers or duties hereunder and the Trustee, the Fiscal Agent, the
Certificate Registrar and the Paying Agent and each of their respective
directors, officers, employees, agents and Controlling Persons shall be entitled
to indemnification from the Trust for any unanticipated loss, liability or
expense incurred in connection with the provision by the Trustee, the Fiscal
Agent, the Certificate Registrar and the Paying Agent of the reports required to
be provided by it pursuant to this Agreement; provided that:
(i) with respect to any such claim, the Trustee, the
Fiscal Agent, the Certificate Registrar or the Paying Agent, as the case may be,
shall have given the Depositor, the Master Servicer, the Sellers, each other and
the Holders of the Certificates written notice thereof promptly after a
Responsible Officer of the Trustee, the Fiscal Agent, the Certificate Registrar
or the Paying Agent, as the case may be, shall have knowledge thereof; provided,
however, that failure to give such notice to the Depositor, Master Servicer, the
Sellers, each other and the Holders of Certificates shall not affect the
Trustee's, Fiscal Agent's, Certificate Registrar's or Paying Agent's, as the
case may be, rights to indemnification herein unless the Depositor's defense of
such claim on behalf of the Trust is materially prejudiced thereby;
(ii) while maintaining control over its own defense, the
Trustee, the Fiscal Agent, the Certificate Registrar or the Paying Agent, as the
case may be, shall cooperate and consult fully with the Depositor in preparing
such defense; and
(iii) notwithstanding anything to the contrary in this
Section 7.11, the Trust shall not be liable for settlement of any such claim by
the Trustee, the Fiscal Agent, the Certificate Registrar or the Paying Agent, as
the case may be, entered into without the prior consent of the Depositor, which
consent shall not be unreasonably withheld.
(b) The provisions of this Section 7.11 shall survive any
termination of this Agreement and the resignation or removal of the Trustee, the
Fiscal Agent, the Certificate Registrar or the Paying Agent, as the case may be.
-156-
(c) The Depositor shall indemnify and hold harmless the
Trustee, the Fiscal Agent, the Certificate Registrar or the Paying Agent, as the
case may be, their respective directors, officers, employees or agents and
Controlling Persons from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which the Trustee, the Fiscal
Agent, the Certificate Registrar or the Paying Agent, as the case may be, their
respective directors, officers, employees or agents or Controlling Person may
become subject under the 1933 Act, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Private Placement
Memorandum, the Preliminary Prospectus Supplement, the Final Prospectus
Supplement or the Prospectus, or arises out of, or is based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made, not misleading and shall reimburse the Trustee, the Fiscal
Agent, the Certificate Registrar or the Paying Agent, as the case may be, their
respective directors, officers, employees, agents or Controlling Person for any
legal and other expenses reasonably incurred by the Trustee, the Fiscal Agent,
the Certificate Registrar or the Paying Agent, as the case may be, or any such
director, officer, employee, agent or Controlling Person in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action; provided, that the Depositor shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
made in any such Private Placement Memorandum, Preliminary Prospectus
Supplement, Final Prospectus Supplement or Prospectus in reliance upon and in
conformity with written information concerning the Trustee, the Fiscal Agent,
the Certificate Registrar or the Paying Agent, as the case may be, furnished to
the Depositor by or on behalf of such person specifically for inclusion therein.
It is hereby expressly agreed that the only written information provided by the
Trustee, the Fiscal Agent, the Certificate Registrar or the Paying Agent, as the
case may be, for inclusion in the Preliminary Prospectus Supplement and Final
Prospectus Supplement is set forth in the case of the Trustee in the second,
fourth and fifth sentences and in the case of the Fiscal Agent in the
penultimate sentence under the caption entitled "DESCRIPTION OF THE OFFERED
CERTIFICATES--The Trustee and the Fiscal Agent" and in the case of the Paying
Agent, the third and fourth sentences under the "DESCRIPTION OF THE OFFERED
CERTIFICATES--The Paying Agent, Certificate Registrar and the Authenticating
Agent". The Trustee, the Fiscal Agent, the Certificate Registrar or the Paying
Agent, as the case may be, shall immediately notify the Depositor and the
Sellers if a claim is made by a third party with respect to this Section 7.11(c)
entitling such person, its directors, officers, employees, agents or Controlling
Person to indemnification hereunder, whereupon the Depositor shall assume the
defense of any such claim (with counsel reasonably satisfactory to such person)
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or them in respect of such claim. Any failure to so notify the
Depositor shall not affect any rights the Trustee, the Fiscal Agent, the
Certificate Registrar or the Paying Agent, as the case may be, their respective
directors, officers, employees, agents or Controlling Person may have to
indemnification under this Section 7.11(c), unless the Depositor's defense of
such claim is materially prejudiced thereby. The indemnification provided herein
shall survive the termination of this Agreement and the resignation or removal
of the Trustee, the Fiscal Agent or the Paying Agent. The Depositor shall not be
indemnified by the Trust for any expenses incurred by the Depositor arising from
any violation or alleged violation of the 1933 Act or 1934 Act by the Depositor.
-157-
SECTION 7.12 FEES AND EXPENSES OF TRUSTEE, THE FISCAL AGENT
AND THE PAYING AGENT. The Trustee shall be entitled to receive the Trustee Fee
(other than the portion thereof constituting the Paying Agent Fee) and the
Paying Agent shall be entitled to receive the Paying Agent Fee, pursuant to
Section 5.3(b)(ii) (which shall not be limited by any provision of law with
respect to the compensation of a trustee of an express trust), for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties respectively, hereunder of the
Trustee and the Paying Agent. The Trustee, the Fiscal Agent and the Paying Agent
shall also be entitled to recover from the Trust all reasonable unanticipated
expenses and disbursements incurred or made by the Trustee, the Fiscal Agent and
the Paying Agent in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and other Persons not regularly in its employ), not
including expenses incurred in the ordinary course of performing its duties as
Trustee, Fiscal Agent or Paying Agent, respectively hereunder, and except any
such expense, disbursement or advance as may arise from the negligence or bad
faith of such Person or which is the responsibility of the Holders of the
Certificates hereunder. The provisions of this Section 7.12 shall survive any
termination of this Agreement and the resignation or removal of the Trustee, the
Fiscal Agent or the Paying Agent.
SECTION 7.13 COLLECTION OF MONEYS. Except as otherwise
expressly provided in this Agreement, the Trustee and the Paying Agent may
demand payment or delivery of, and shall receive and collect, all money and
other property payable to or receivable by the Trustee or the Paying Agent, as
the case may be, pursuant to this Agreement. The Trustee or the Paying Agent, as
the case may be, shall hold all such money and property received by it as part
of the Trust and shall distribute it as provided in this Agreement. If the
Trustee or the Paying Agent, as the case may be, shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee or the Paying Agent, as the case may be, shall request the
Master Servicer to make such distribution as promptly as practicable or legally
permitted. If the Trustee or the Paying Agent, as the case may be, shall
subsequently receive any such amount, it may withdraw such request.
SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Master Servicer is terminated
pursuant to this Agreement, the Trustee shall be the successor in all respects
to the Master Servicer in its capacity under this Agreement and the transactions
set forth or provided for therein and shall have all the rights and powers and
be subject to all the responsibilities, duties and liabilities relating thereto
and arising thereafter placed on the Master Servicer by the terms and provisions
of this Agreement; provided that, any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide required
information shall not be considered a default by the Trustee hereunder. In
addition, the Trustee shall have no liability relating to (i) the
representations and warranties of the Master Servicer contained in this
Agreement or (ii) any obligation incurred by the Master Servicer prior to its
termination or resignation (including, without limitation, the Master Servicer's
obligation to repay losses resulting from the investment of funds in any account
established under this Agreement), except any ongoing obligations to the Primary
Servicer arising after the termination of the Master Servicer from their
servicing rights and obligations under the Primary Servicing Agreement. In the
Trustee's capacity as such successor, the Trustee shall have the same
limitations on liability granted to the Master Servicer
-158-
in this Agreement. As compensation therefor, the Trustee shall be entitled to
receive all the compensation payable to the Master Servicer set forth in this
Agreement, including, without limitation, the Master Servicing Fee.
(b) Notwithstanding the above, the Trustee (A) may, if the
Trustee is unwilling to so act, or (B) shall, if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint any
established commercial or multifamily mortgage finance institution, servicer or
special servicer or mortgage servicing institution having a net worth of not
less than $15,000,000, meeting such other standards for a successor servicer as
are set forth in this Agreement and with respect to which Rating Agency
Confirmation is obtained, as the successor to the Master Servicer hereunder in
the assumption of all of the responsibilities, duties or liabilities of a
servicer as Master Servicer hereunder. Pending any such appointment, the Trustee
shall act as the Master Servicer as hereinabove provided. Any entity designated
by the Trustee as successor Master Servicer may be an Affiliate of the Trustee;
provided that, such Affiliate must meet the standards for the Master Servicer as
set forth herein. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree subject to
Section 8.10. The Trustee and such successor shall take such actions, consistent
with this Agreement as shall be necessary to effectuate any such succession. The
Master Servicer shall cooperate with the Trustee and any successor servicer in
effecting the termination of the Master Servicer's responsibilities and rights
under this Agreement, including, without limitation, notifying Mortgagors of the
assignment of the servicing function and providing the Trustee and successor
servicer all documents and records in its possession in electronic or other form
reasonably requested by the successor servicer to enable the successor servicer
to assume the Master Servicer's functions hereunder and the transfer to the
Trustee or such successor servicer of all amounts which shall at the time be or
should have been deposited by the Master Servicer in the Certificate Account and
any other account or fund maintained with respect to the Certificates or
thereafter be received by the Master Servicer with respect to the Mortgage
Loans. Neither the Trustee nor any other successor servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Master Servicer to deliver, or any delay in delivering, cash,
documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer. The Trustee shall be
reimbursed for all of its out-of-pocket expenses incurred in connection with
obtaining such successor Master Servicer by the Trust within 30 days of the
Trustee's submission of an invoice with respect thereto, to the extent such
expenses have not been reimbursed by the Master Servicer as provided herein;
such expenses paid by the Trust shall be deemed to be an Additional Trust
Expense.
(c) On and after the time the Special Servicer is terminated
pursuant to this Agreement, in accordance with Section 9.30, the Trustee shall
be the successor in all respects to the Special Servicer in its capacity under
this Agreement and the transactions set forth or provided for therein and shall
have all the rights and powers and be subject to all the responsibilities,
duties and liabilities relating thereto and arising thereafter placed on the
Special Servicer by the terms and provisions of this Agreement; provided that,
any failure to perform such duties or responsibilities caused by the Special
Servicer's failure to provide required information shall not be considered a
default by the Trustee hereunder. In addition, the Trustee shall have no
liability relating to (i) the representations and warranties of the Special
Servicer contained in this Agreement or (ii) any obligation incurred by the
Special Servicer prior to its
-159-
termination or resignation. In the Trustee's capacity as such successor, the
Trustee shall have the same limitations on liability granted to the Special
Servicer in this Agreement. As compensation therefor, the Trustee shall be
entitled to receive all the compensation payable to the Special Servicer set
forth in this Agreement, including, without limitation the Special Servicer
Compensation (other than any Work-Out Fee payable pursuant to Section 9.11).
(d) Notwithstanding the above, the Trustee may, if the Trustee
shall be unwilling to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
commercial or multifamily mortgage finance institution, special servicer or
mortgage servicing institution having a net worth of not less than $15,000,000,
and meeting such other standards for a successor Special Servicer as are set
forth in Section 9.21, and with respect to which Rating Agency Confirmation is
obtained, as the successor to the Special Servicer hereunder in the assumption
of all of the responsibilities, duties or liabilities of a special servicer as
Special Servicer hereunder. Pending any such appointment, the Trustee shall act
as the Special Servicer as hereinabove provided. Any entity designated by the
Trustee as successor Special Servicer may be an Affiliate of the Trustee;
provided that, such Affiliate must meet the standards for a successor Special
Servicer set forth herein. In connection with such appointment and assumption,
the Trustee may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree; provided
that no such compensation shall be in excess of that permitted to the Special
Servicer under this Agreement. The Trustee and such successor shall take such
actions, consistent with this Agreement as shall be necessary to effectuate any
such succession. The Special Servicer shall cooperate with the Trustee and any
successor Special Servicer in effecting the termination of the Special
Servicer's responsibilities and rights under this Agreement, including, without
limitation, notifying Mortgagors of Specially Serviced Mortgage Loans of the
assignment of the special servicing function and providing the Trustee and
successor Special Servicer all documents and records in its possession in
electronic or other form reasonably requested by the successor Special Servicer
to enable the successor Special Servicer to assume the Special Servicer's
functions hereunder and the transfer to the Trustee or such successor Special
Servicer of all amounts which shall at the time be or should have been deposited
by the Special Servicer in the Certificate Account and any other account or fund
maintained with respect to the Certificates or thereafter be received by the
Special Servicer with respect to the Mortgage Loans. Neither the Trustee nor any
other successor Special Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Special
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Special Servicer. The Trustee shall be reimbursed for all of its
out-of-pocket expenses incurred in connection with obtaining such successor
Special Servicer by the Trust within 30 days of submission of an invoice with
respect thereto but only to the extent such expenses have not been reimbursed by
the Special Servicer as provided herein; and such expenses paid by the Trust
shall be deemed to be an Additional Trust Expense.
SECTION 7.15 NOTIFICATION TO HOLDERS. Upon termination of the
Master Servicer, the Paying Agent or the Special Servicer, or appointment of a
successor to the Master Servicer, the Paying Agent or the Special Servicer, the
Trustee shall promptly mail notice thereof by first class mail to the Rating
Agencies, the Operating Adviser, the Sellers and the Certificateholders at their
respective addresses appearing on the Certificate Register.
-160-
SECTION 7.16 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE,
THE FISCAL AGENT AND THE PAYING AGENT.
(a) The Trustee hereby represents and warrants as of the date
hereof that:
(i) the Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws governing its
creation and existence and has full power and authority to own its property, to
carry on its business as presently conducted, and to enter into and perform its
obligations under this Agreement;
(ii) the execution and delivery by the Trustee of this
Agreement have been duly authorized by all necessary action on the part of the
Trustee; neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor compliance
with the provisions of this Agreement, will conflict with or result in a breach
of, or constitute a default under, (i) any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Trustee
or its properties that would materially and adversely affect the Trustee's
ability to perform its obligations under this Agreement, (ii) the organizational
documents of the Trustee, or
(iii) the terms of any material agreement or instrument to
which the Trustee is a party or by which it is bound; the Trustee is not in
default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
agency, which default would materially and adversely affect its performance
under this Agreement; (iii) the execution, delivery and performance by the
Trustee of this Agreement and the consummation of the transactions contemplated
by this Agreement do not require the consent, approval, authorization or order
of, the giving of notice to or the registration with any state, federal or other
governmental authority or agency, except such as has been or will be obtained,
given, effected or taken in order for the Trustee to perform its obligations
under this Agreement;
(iv) this Agreement has been duly executed and delivered by
the Trustee and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting creditors' rights generally as from
time to time in effect, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
and
(v) no litigation is pending or, to the Trustee's knowledge,
threatened, against the Trustee that, either in one instance or in the
aggregate, would draw into question the validity of this Agreement, or which
would be likely to impair materially the ability of the Trustee to perform under
the terms of this Agreement.
(b) The Fiscal Agent hereby represents and warrants as of the date
hereof that:
(i) the Fiscal Agent is a foreign banking corporation duly
organized, validly existing and in good standing under the laws governing its
creation and existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, and to enter into and
perform its obligations under this Agreement;
-161-
(ii) the execution and delivery by the Fiscal Agent of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Fiscal Agent; neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated in this Agreement, nor
compliance with the provisions of this Agreement, will conflict with or result
in a breach of, or constitute a default under, (i) any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding on the
Fiscal Agent or its properties that would materially and adversely affect the
Fiscal Agent's ability to perform its obligations under this Agreement, (ii) the
organizational documents of the Fiscal Agent, or
(iii) the terms of any material agreement or instrument to
which the Fiscal Agent is a party or by which it is bound; the Fiscal Agent is
not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
agency, which default would materially and adversely affect its performance
under this Agreement; (iii) the execution, delivery and performance by the
Fiscal Agent of this Agreement and the consummation of the transactions
contemplated by this Agreement do not require the consent, approval,
authorization or order of, the giving of notice to, or the registration with,
any state, federal or other governmental authority or agency, except such as has
been obtained, given, effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by
the Fiscal Agent and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the Fiscal
Agent, enforceable against the Fiscal Agent in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and
(v) no litigation is pending or, to the Fiscal Agent's
knowledge, threatened, against the Fiscal Agent that, either in any one instance
or in the aggregate, would draw into question the validity of this Agreement, or
which would be likely to impair materially the ability of the Fiscal Agent to
perform under the terms of this Agreement.
(c) The Paying Agent hereby represents and warrants as of the
date hereof that:
(i) the Paying Agent is a national banking association, duly
organized, validly existing and in good standing under the laws governing its
creation and existence and has full power and authority to own its property, to
carry on its business as presently conducted, and to enter into and perform its
obligations under this Agreement;
(ii) the execution and delivery by the Paying Agent of this
Agreement have been duly authorized by all necessary action on the part of the
Paying Agent; neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor compliance
with the provisions of this Agreement, will conflict with or result in a breach
of, or constitute a default under, (i) any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Paying
Agent or its properties that would materially and adversely affect the Paying
Agent's ability to perform its
-162-
obligations under this Agreement, (ii) the organizational documents of the
Paying Agent, or (iii) the terms of any material agreement or instrument to
which the Paying Agent is a party or by which it is bound; the Paying Agent is
not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
agency, which default would materially and adversely affect its performance
under this Agreement;
(iii) the execution, delivery and performance by the Paying
Agent of this Agreement and the consummation of the transactions contemplated by
this Agreement do not require the consent, approval, authorization or order of,
the giving of notice to or the registration with any state, federal or other
governmental authority or agency, except such as has been or will be obtained,
given, effected or taken in order for the Paying Agent to perform its
obligations under this Agreement;
(iv) this Agreement has been duly executed and delivered by
the Paying Agent and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the Paying
Agent, enforceable against the Paying Agent in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting
creditors' rights generally as from time to time in effect, and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and
(v) there are no actions, suits or proceeding pending or, to
the best of the Paying Agent's knowledge, threatened, against the Paying Agent
that, either in one instance or in the aggregate, would draw into question the
validity of this Agreement, or which would be likely to impair materially the
ability of the Paying Agent to perform under the terms of this Agreement.
SECTION 7.17 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE
POLICY MAINTAINED BY THE TRUSTEE, THE FISCAL AGENT AND THE PAYING AGENT. Each of
the Trustee, the Fiscal Agent and the Paying Agent, at its own respective
expense, shall maintain in effect a Fidelity Bond and a Errors and Omissions
Insurance Policy. The Errors and Omissions Insurance Policy and Fidelity Bond
shall be issued by a Qualified Insurer in form and in amount customary for
trustees, fiscal agents or paying agents in similar transactions (unless the
Trustee, the Fiscal Agent or the Paying Agent, as the case may be, self insures
as provided below). In the event that any such Errors and Omissions Insurance
Policy or Fidelity Bond ceases to be in effect, the Trustee, the Fiscal Agent or
the Paying Agent, as the case may be, shall obtain a comparable replacement
policy or bond from an insurer or issuer meeting the requirements set forth
above as of the date of such replacement. So long as the long-term debt rating
of the Trustee, the Fiscal Agent or the Paying Agent, as the case may be, is not
less than "A" as rated by Fitch, if rated by Fitch and "A" as rated by S&P, if
rated by S&P, respectively, the Trustee, the Fiscal Agent or the Paying Agent,
as the case may be, may self-insure for the Fidelity Bond and the Errors and
Omissions Insurance Policy.
SECTION 7.18 APPOINTMENT OF LUXEMBOURG PAYING AGENT;
NOTIFICATION TO CERTIFICATEHOLDERS.
-163-
(a) The Depositor shall maintain a paying agent in Luxembourg (the
"Luxembourg Paying Agent") for payments on the Certificates as well as a
transfer agent in Luxembourg (the "Luxembourg Transfer Agent") for so long as
such Certificates are listed on the Luxembourg Stock Exchange and the rules of
such exchange so require and the Depositor shall pay the reasonable fees of such
Luxembourg Paying Agent and Luxembourg Transfer Agent. The Depositor shall
appoint a successor Luxembourg Paying Agent if necessary. Except as set forth in
this Section 7.18(a), neither the Trustee nor the Paying Agent shall have any
responsibility for the actions or inactions of the Luxembourg Paying Agent,
including any failure of the Luxembourg Paying Agent to make timely
distributions to Certificateholders or beneficial owners (other than any such
failure resulting from the failure of the Paying Agent to timely remit funds but
only to the extent such failure is caused by the Paying Agent's negligence or
willful misconduct). The Certificate Registrar shall not be responsible for
transfers or exchanges requested at the office of the Luxembourg Transfer Agent
in Luxembourg until it receives written notice from such transfer agent,
together with the Certificates to be transferred or exchanged. The Luxembourg
Paying Agent shall each month download copies of all information made available
on the Paying Agent's internet website, print such information and make it
available to the Certificateholders upon request. The Luxembourg Paying Agent
shall not be the Paying Agent and the duties of the Luxembourg Paying Agent
hereunder shall be distinct from the duties of the Paying Agent.
(b) For so long as the Certificates are listed on the Luxembourg
Stock Exchange and the rules of the Luxembourg Stock Exchange so require, the
Depositor undertakes to cause the Luxembourg Paying Agent to publish all notices
to Certificateholders in a daily newspaper of general circulation in Luxembourg.
(c) For so long as any of the Certificates are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, the Paying Agent shall make available or provide the following
information on the Paying Agent's internet website:
(i) to Clearstream Bank, Euroclear Bank and the Luxembourg
Paying Agent promptly upon determination, the Pass-Through Rates for the related
Interest Accrual Period, the amount of principal and interest distributable on
the related Distribution Date for each Class of Certificates, per $1,000 initial
Certificate Balance or Notional Amount and the date each distribution will be
made;
(ii) to the Luxembourg Paying Agent on each Distribution Date,
the Certificate Balance or Notional Amount of the Certificates;
(iii) to the Luxembourg Paying Agent promptly following
availability, each report, certificate or statement required to be delivered to
the Luxembourg Paying Agent pursuant to Section 5.4;
(iv) to the Luxembourg Paying Agent promptly following receipt
thereof, all notices and reports regarding any termination of the Trustee or
Paying Agent or appointment of a successor to the Trustee or Paying Agent; and
(v) to the Luxembourg Paying Agent promptly following receipt
thereof, all notices and reports regarding any occurrence of an Event of
Default.
-164-
Information provided, as set forth above, by the Paying Agent
to the Luxembourg Paying Agent shall be supplied by the Luxembourg Paying Agent
to the Luxembourg Stock Exchange. Such information shall be made available to
the Certificateholders at the main office of the Luxembourg Paying Agent.
None of the Certificates will be listed on the Luxembourg
Stock Exchange or any other stock exchange.
ARTICLE VIII
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 8.1 SERVICING STANDARD; SERVICING DUTIES.
(a) Subject to the express provisions of this Agreement, for
and on behalf of the Trust and for the benefit of the Certificateholders as a
whole, and, solely as it relates to any A/B Mortgage Loan, for the benefit of
the holder of the related B Note and, solely as it relates to any Loan Pair, for
the benefit of the holder of the related Serviced Companion Mortgage Loan, the
Master Servicer shall service and administer the Mortgage Loans, any B Note and
any Serviced Companion Mortgage Loan in accordance with the Servicing Standard
and the terms of this Agreement (subject to the servicing of any Non-Serviced
Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master Servicer and
the applicable Non-Serviced Mortgage Loan Special Servicer in accordance with
the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement). Certain
of the provisions of this Article VIII make explicit reference to their
applicability to Mortgage Loans, any B Note and any Serviced Companion Mortgage
Loan; notwithstanding such explicit references, references to "Mortgage Loans"
contained in this Article VIII, unless otherwise specified, shall be construed
to refer also to such B Note and Serviced Companion Mortgage Loan (but any other
terms that are defined in Article I and used in this Article VIII shall be
construed according to such definitions without regard to this sentence).
In connection with such servicing and administration, the
Master Servicer shall seek to maximize the timely recovery of principal and
interest on the Mortgage Notes in the best economic interests of the
Certificateholders as a whole (or, in the case of any A/B Mortgage Loan or Loan
Pair, the Certificateholders and the holder of the related B Note and Serviced
Companion Mortgage Loan, all taken as a collective whole); provided, however,
that nothing herein contained shall be construed as an express or implied
guarantee by the Master Servicer of the collectability of payments on the
Mortgage Loans or shall be construed as impairing or adversely affecting any
rights or benefits specifically provided by this Agreement to the Master
Servicer, including with respect to Master Servicing Fees or the right to be
reimbursed for Advances.
(b) The Master Servicer, in the case of an event specified in
clause (x) of this subclause (b), and the Special Servicer, in the case of an
event specified in clause (y) of this subclause (b), shall each send a written
notice to the other and to the Trustee and the Paying Agent, the Operating
Adviser, each Seller and, in the case of an A/B Mortgage Loan, the holder of the
related B Note and, in the case of a Loan Pair, the holder of the related
Serviced Companion Mortgage Loan, within two Business Days after becoming aware
(x) that a Servicing
-165-
Transfer Event has occurred with respect to a Mortgage Loan
or (y) that a Mortgage Loan has become a Rehabilitated Mortgage Loan, which
notice shall identify the applicable Mortgage Loan and, in the case of an event
specified in clause (x) of this subclause (b) above, the Servicing Transfer
Event that occurred.
(c) With respect to each Mortgage Loan that is subject to an
Environmental Insurance Policy, for as long as it is not a Specially Serviced
Mortgage Loan, if the Master Servicer has actual knowledge of any event giving
rise to a claim under an Environmental Insurance Policy, the Master Servicer or
the Primary Servicer shall notify the Special Servicer to such effect and the
Master Servicer shall take reasonable actions as are in accordance with the
Servicing Standard and the terms and conditions of such Environmental Insurance
Policy to make a claim thereunder and achieve the payment of all amounts to
which the Trust is entitled thereunder. Any legal fees or other out-of-pocket
costs incurred in accordance with the Servicing Standard in connection with any
such claim shall be paid by, and reimbursable to, the Master Servicer or the
Special Servicer as a Servicing Advance.
(d) In connection with any extension of the Maturity Date of a
Mortgage Loan, the Master Servicer shall give prompt written notice of such
extension to the insurer under the Environmental Insurance Policy and shall
execute such documents as are reasonably required by such insurer to procure an
extension of such policy (if available).
(e) The parties hereto acknowledge that each Serviced Pari
Passu Mortgage Loan and Serviced Companion Mortgage Loan is subject to the terms
and conditions of the related Loan Pair Intercreditor Agreement. With respect to
each Serviced Pari Passu Mortgage Loan and Serviced Companion Mortgage Loan, the
Trustee, the Fiscal Agent, the Master Servicer and the Special Servicer
recognize the respective rights and obligations of the Trust and the holders of
each Serviced Companion Mortgage Loan under the related Loan Pair Intercreditor
Agreement, including, with respect to the allocation of collections on or in
respect of any Serviced Pari Passu Mortgage Loan and Serviced Companion Mortgage
Loan in accordance with the related Loan Pair Intercreditor Agreement. The
Master Servicer shall comply with the applicable provisions of each Loan Pair
Intercreditor Agreement, and if any Serviced Pari Passu Mortgage Loan and
Serviced Companion Mortgage Loan are then Specially Serviced Mortgage Loans, the
Special Servicer shall comply with the applicable provisions of the related Loan
Pair Intercreditor Agreement.
(f) Promptly following the Closing Date, the Trustee shall
send written notice to each Non-Serviced Mortgage Loan Master Servicer, stating
that, as of the Closing Date, the Trustee is the holder of the applicable
Non-Serviced Mortgage Loan, and directing such Non-Serviced Mortgage Loan Master
Servicer to remit to the Master Servicer all amounts payable to, and directing
such Non-Serviced Mortgage Loan Master Servicer to forward, deliver or otherwise
make available, as the case may be, to, the Master Servicer all reports,
statements, documents, communications and other information that are to be
forwarded, delivered or otherwise made available to, such holder of the
applicable Non-Serviced Mortgage Loan under the related Non-Serviced Mortgage
Loan Pooling and Servicing Agreement and Non-Serviced Mortgage Loan
Intercreditor Agreement.
(g) Each Non-Serviced Mortgage Loan shall be serviced and
administered by the applicable Non-Serviced Mortgage Loan Master Servicer and
Non-Serviced Mortgage Loan
-166-
Special Servicer pursuant to the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement and Non-Serviced Mortgage Loan Intercreditor Agreement,
except as otherwise specifically provided in this Agreement. If any Non-Serviced
Companion Mortgage Loan that is an asset under the trust created by the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement is removed from the
pool of mortgage loans created under such Non-Serviced Mortgage Loan Pooling and
Servicing Agreement, or if such Non-Serviced Mortgage Loan Pooling and Servicing
Agreement is otherwise terminated, the servicing of the Non-Serviced Mortgage
Loan shall be transferred, pursuant to the related Non-Serviced Mortgage Loan
Intercreditor Agreement, and shall be serviced and administered by a successor
servicing agreement, which shall have similar provisions to such Non-Serviced
Mortgage Loan Pooling and Servicing Agreement to the extent set forth in the
related Non-Serviced Mortgage Loan Intercreditor Agreement, and such transfer
shall be subject to the receipt of a Rating Agency Confirmation.
SECTION 8.2 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE
POLICY MAINTAINED BY THE MASTER SERVICER. The Master Servicer, at its expense,
shall maintain in effect a Servicer Fidelity Bond and a Servicer Errors and
Omissions Insurance Policy. The Servicer Errors and Omissions Insurance Policy
and Servicer Fidelity Bond shall be issued by a Qualified Insurer (unless the
Master Servicer self insures as provided below) and be in form and amount
consistent with the Servicing Standard. In the event that any such Servicer
Errors and Omissions Insurance Policy or Servicer Fidelity Bond ceases to be in
effect, the Master Servicer shall obtain a comparable replacement policy or bond
from an insurer or issuer meeting the requirements set forth above as of the
date of such replacement. So long as the long-term rating of the Master Servicer
is not in any event less than "A" as rated by Fitch and "BBB" as rated by S&P,
respectively, the Master Servicer may self-insure for the Servicer Fidelity Bond
and the Servicer Errors and Omissions Insurance Policy.
SECTION 8.3 MASTER SERVICER'S GENERAL POWER AND DUTIES.
(a) The Master Servicer shall service and administer the Mortgage
Loans and shall, subject to Sections 8.7, 8.18, 8.19, 8.27 and Article XII
hereof and as otherwise provided herein and by the Code, have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such servicing and administration in accordance with the
Servicing Standard. To the extent consistent with the foregoing and subject to
any express limitations and provisions set forth in this Agreement (and, in the
case of any A/B Mortgage Loan and any Loan Pair, subject to the applicable
Intercreditor Agreement or Loan Pair Intercreditor Agreement and, in the case of
any Non-Serviced Mortgage Loan, subject to the servicing of such Non-Serviced
Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master Servicer and
the applicable Non-Serviced Mortgage Loan Special Servicer, as applicable), such
power and authority shall include, without limitation, the right, subject to the
terms hereof, (A) to execute and deliver, on behalf of the Certificateholders
(and in connection with any B Note, the holder of the B Note and, in connection
with any Loan Pair, the holder of the Serviced Companion Mortgage Loan) and the
Trustee, customary consents or waivers and other instruments and documents
(including, without limitation, estoppel certificates, financing statements,
continuation statements, title endorsements and reports and other documents and
instruments necessary to preserve and maintain the lien on the related Mortgaged
Property and related collateral), (B) to consent to assignments and assumptions
or substitutions, and transfers of interest of any Mortgagor, in each case
subject to and in accordance with the terms of the
-167-
related Mortgage Loan and Section 8.7, (C) to collect any Insurance Proceeds,
(D) subject to Section 8.7, to consent to any subordinate financings to be
secured by any related Mortgaged Property to the extent that such consent is
required pursuant to the terms of the related Mortgage or which otherwise is
required, and, subject to Section 8.7, to consent to any mezzanine debt to the
extent such consent is required pursuant to the terms of the related Mortgage;
(E) to consent to the application of any proceeds of insurance policies or
condemnation awards to the restoration of the related Mortgaged Property or
otherwise and to administer and monitor the application of such proceeds and
awards in accordance with the terms of the Mortgage Loan as the Master Servicer
deems reasonable under the circumstances, (F) to execute and deliver, on behalf
of the Certificateholders (and, if applicable, the holders of the B Note and
Serviced Companion Mortgage Loan) and the Trustee, documents relating to the
management, operation, maintenance, repair, leasing and marketing of the related
Mortgaged Properties, including agreements and requests by the Mortgagor with
respect to modifications of the standards of operation and management of the
Mortgaged Properties or the replacement of asset managers, (G) to consent to any
operation or action under a Mortgage Loan that is contemplated or permitted
under a Mortgage or other documents evidencing or securing the applicable
Mortgage Loan (either as a matter of right or upon satisfaction of specified
conditions), (H) to obtain, release, waive or modify any term other than a Money
Term of a Mortgage Loan and related documents subject to and to the extent
permitted by Section 8.18, (I) to exercise all rights, powers and privileges
granted or provided to the holder of the Mortgage Notes, any Serviced Companion
Mortgage Loan and any B Note under the terms of the Mortgage, including all
rights of consent or approval thereunder, subject to Sections 8.7 and 8.18 of
this Agreement, (J) to enter into lease subordination agreements,
non-disturbance and attornment agreements or other leasing or rental
arrangements which may be requested by the Mortgagor or the Mortgagor's tenants,
(K) to join the Mortgagor in granting, modifying or releasing any easements,
covenants, conditions, restrictions, equitable servitudes, or land use or zoning
requirements with respect to the Mortgaged Properties to the extent such does
not adversely affect the value of the related Mortgage Loan or Mortgaged
Property, (L) to execute and deliver, on behalf of itself, the Trustee, the
Trust (and, if applicable, the holders of the B Note and Serviced Companion
Mortgage Loan) or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties, and (M) hold in accordance with the terms of any
Mortgage Loan and this Agreement, Defeasance Collateral. The foregoing clauses
(A) through (M) are referred to collectively as "Master Servicer Consent
Matters." Notwithstanding the above, the Master Servicer shall have no power to
(i) waive any Prepayment Premiums or (ii) consent to any modification of a Money
Term of a Mortgage Loan. Nothing contained in this Agreement shall limit the
ability of the Master Servicer to lend money to (to the extent not secured, in
whole or in part, by any Mortgaged Property), accept deposits from and otherwise
generally engage in any kind of business or dealings with any Mortgagor as
though the Master Servicer was not a party to this Agreement or to the
transactions contemplated hereby; provided, however, that this sentence shall
not modify the Servicing Standard.
(b) The Master Servicer shall not be obligated to service and
administer the Mortgage Loans which have become and continue to be Specially
Serviced Mortgage Loans, except as specifically provided herein. The Master
Servicer shall be required to make all calculations and prepare all reports
required hereunder with respect to such Specially Serviced Mortgage Loans (other
than calculations and reports expressly required to be made by the Special
Servicer hereunder) as if no Servicing Transfer Event had occurred and shall
continue to
-168-
collect all Scheduled Payments, make Servicing Advances as set forth herein,
make P&I Advances as set forth herein and render such incidental services with
respect to such Specially Serviced Mortgage Loans, all as are specifically
provided for herein, but shall have no other servicing or other duties with
respect to such Specially Serviced Mortgage Loans. The Master Servicer shall
give notice within three Business Days to the Special Servicer of any
collections it receives from any Specially Serviced Mortgage Loans, subject to
changes agreed upon from time to time by the Special Servicer and the Master
Servicer. The Special Servicer shall instruct within one Business Day after
receiving such notice the Master Servicer on how to apply such funds. The Master
Servicer within one Business Day after receiving such instructions shall apply
such funds in accordance with the Special Servicer's instructions. Each Mortgage
Loan that becomes a Specially Serviced Mortgage Loan shall continue as such
until such Mortgage Loan becomes a Rehabilitated Mortgage Loan. The Master
Servicer shall not be required to initiate extraordinary collection procedures
or legal proceedings with respect to any Mortgage Loan or to undertake any
pre-foreclosure procedures.
(c) Concurrently with the execution of this Agreement, the Trustee
shall sign the Power of Attorney attached hereto as Exhibit S-1. The Master
Servicer, shall promptly notify the Trustee of the execution and delivery of any
document on behalf of the Trustee under such Power-of-Attorney. From time to
time until the termination of the Trust, upon receipt of additional unexecuted
powers of attorney from the Master Servicer or the Special Servicer, the Trustee
shall execute and return to the Master Servicer, the Special Servicer or the
Primary Servicer any additional powers of attorney and other documents necessary
or appropriate to enable the Master Servicer and the Special Servicer to service
and administer the Mortgage Loans including, without limitation, documents
relating to the management, operation, maintenance, repair, leasing or marketing
of the Mortgaged Properties. The Master Servicer shall indemnify the Trustee for
any costs, liabilities and expenses (including attorneys' fees) incurred by the
Trustee in connection with the intentional or negligent misuse of such power of
attorney by the Master Servicer. Notwithstanding anything contained herein to
the contrary, neither the Master Servicer nor the Special Servicer shall without
the Trustee's written consent: (i) initiate any action, suit or proceeding
solely under the Trustee's name without indicating the Master Servicer's or
Special Servicer's, as applicable, representative capacity, or (ii) knowingly
take any action that causes the Trustee to be registered to do business in any
state, provided, however, that the preceding clause (i) shall not apply to the
initiation of actions relating to a Mortgage Loan that the Master Servicer or
the Special Servicer, as the case may be, is servicing pursuant to its
respective duties herein (in which case the Master Servicer or the Special
Servicer, as the case may be, shall give three (3) Business Days prior notice to
the Trustee of the initiation of such action). The limitations of the preceding
clause shall not be construed to limit any duty or obligation imposed on the
Trustee under any other provision of this Agreement.
(d) The Master Servicer shall make efforts consistent with the
Servicing Standard and the terms of this Agreement to collect all payments
called for under the terms and provisions of the applicable Mortgage Loans
(other than Specially Serviced Mortgage Loans or REO Properties).
(e) The Master Servicer (or the Primary Servicer on its behalf) shall
segregate and hold all funds collected and received pursuant to any Mortgage
Loan (other than any Non-Serviced Mortgage Loan) constituting Escrow Amounts
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more segregated custodial
-169-
accounts (each, an "Escrow Account") into which all Escrow Amounts shall be
deposited within one (1) Business Day after receipt. Each Escrow Account shall
be an Eligible Account, except with respect to Mortgage Loans identified on
Schedule VI for which Escrow Accounts shall be transferred to Eligible Accounts
at the earliest date permitted under the related Mortgage Loan documents. The
Master Servicer shall also deposit into each Escrow Account any amounts
representing losses on Eligible Investments pursuant to the immediately
succeeding paragraph and any Insurance Proceeds or Liquidation Proceeds which
are required to be applied to the restoration or repair of any Mortgaged
Property pursuant to the related Mortgage Loan. Each Escrow Account shall be
maintained in accordance with the requirements of the related Mortgage Loan and
in accordance with the Servicing Standard. Withdrawals from an Escrow Account
may be made only:
(i) to effect timely payments of items constituting Escrow
Amounts for the related Mortgage Loan;
(ii) to transfer funds to the Certificate Account (or any
sub-account thereof) to reimburse the Master Servicer for any Advance (or the
Trust for any Unliquidated Advance) relating to Escrow Amounts, but only from
amounts received with respect to the related Mortgage Loan which represent late
collections of Escrow Amounts thereunder;
(iii) for application to the restoration or repair of the
related Mortgaged Property in accordance with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the
termination of this Agreement or pay-off of the related Mortgage Loan;
(v) to pay from time to time to the related Mortgagor any
interest or investment income earned on funds deposited in the Escrow Account if
such income is required to be paid to the related Mortgagor under applicable law
or by the terms of the Mortgage Loan, or otherwise to the Master Servicer; and
(vi) to remove any funds deposited in a Escrow Account that
were not required to be deposited therein or to refund amounts to the Mortgagors
determined to be overages.
Subject to the immediately succeeding sentence, (i) the Master
Servicer may direct any depository institution or trust company in which the
Escrow Accounts are maintained to invest the funds held therein in one or more
Eligible Investments; provided, however, that such funds shall be either (x)
immediately available or (y) available in accordance with a schedule which will
permit the Master Servicer to meet the payment obligations for which the Escrow
Account was established; (ii) the Master Servicer shall be entitled to all
income and gain realized from any such investment of funds as additional
servicing compensation; and (iii) the Master Servicer shall deposit from its own
funds in the applicable Escrow Account the amount of any loss incurred in
respect of any such investment of funds immediately upon the realization of such
loss. The Master Servicer shall not direct the investment of funds held in any
Escrow Account and retain the income and gain realized therefrom if the terms of
the related Mortgage Loan or applicable law permit the Mortgagor to be entitled
to the income and gain realized from the investment of funds deposited therein,
and the Master Servicer shall not be required to invest
-170-
amounts on deposit in Escrow Accounts in Eligible Investments or Eligible
Accounts to the extent that the Master Servicer is required by either law or
under the terms of any related Mortgage Loan to deposit or invest (or the
Mortgagor is entitled to direct the deposit or investment of) such amounts in
another type of investments or accounts. In the event the Master Servicer is not
entitled to direct the investment of such funds, (1) the Master Servicer shall
direct the depository institution or trust company in which such Escrow Accounts
are maintained to invest the funds held therein in accordance with the
Mortgagor's written investment instructions, if the terms of the related
Mortgage Loan or applicable law require the Master Servicer to invest such funds
in accordance with the Mortgagor's directions; and (2) in the absence of
appropriate written instructions from the Mortgagor, the Master Servicer shall
have no obligation to, but may be entitled to, direct the investment of such
funds; provided, however, that in either event (i) such funds shall be either
(y) immediately available or (z) available in accordance with a schedule which
will permit the Master Servicer to meet the payment obligations for which the
Escrow Account was established, and (ii) the Master Servicer shall have no
liability for any loss in investments of such funds that are invested pursuant
to written instructions from the Mortgagor.
(f) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee and the Paying Agent and to each other under this
Agreement is intended by the parties to be that of an independent contractor and
not of a joint venturer, partner or agent.
(g) With respect to each Mortgage Loan, if required by the terms of
the related Mortgage Loan, any Lock-Box Agreement or similar agreement, the
Master Servicer shall establish and maintain, in accordance with the Servicing
Standard, one or more lock-box, cash management or similar accounts ("Lock-Box
Accounts") to be held outside the Trust and maintained by the Master Servicer in
accordance with the terms of the related Mortgage. No Lock-Box Account is
required to be an Eligible Account, unless otherwise required pursuant to the
related Mortgage Loan documents. The Master Servicer shall apply the funds
deposited in such accounts in accordance with terms of the related Mortgage Loan
documents, any Lock-Box Agreement and in accordance with the Servicing Standard.
(h) The Master Servicer or the Primary Servicer on its behalf shall
process all defeasances of Mortgage Loans in accordance with the terms of the
Mortgage Loan documents, and shall be entitled to any fees paid relating
thereto. The Master Servicer shall not permit defeasance (or partial defeasance
if permitted under the Mortgage Loan) of any Mortgage Loan on or before the
second anniversary of the Closing Date unless such defeasance will not result in
an Adverse REMIC Event and the Master Servicer has received an opinion of
counsel to such effect and all items in the following sentence have been
satisfied. Subsequent to the second anniversary of the Closing Date, the Master
Servicer, in connection with the defeasance of a Mortgage Loan shall require (to
the extent it is not inconsistent with the Servicing Standard) that: (i) the
defeasance collateral consists of Qualifying Government Securities as defined in
Section 2(a)(16) of the Investment Company Act of 1940, as amended, that are
acceptable as defeasance collateral under the current guidelines of the Rating
Agencies, (ii) the Master Servicer has determined that the defeasance will not
result in an Adverse REMIC Event, (iii) either (A) the related Mortgagor
designates a Single-Purpose Entity (if the Mortgagor no longer complies) to own
the Defeasance Collateral (subject to customary qualifications) or (B) the
Master Servicer has established a Single-Purpose Entity to hold all Defeasance
Collateral relating to the Defeasance Loans, (iv) the Master Servicer has
requested and received from the Mortgagor (A)
-171-
an opinion of counsel that the Trustee will have a perfected, first priority
security interest in such Defeasance Collateral and (B) written confirmation
from a firm of independent accountants stating that payments made on such
Defeasance Collateral in accordance with the terms thereof will be sufficient to
pay the subject Mortgage Loan (or the defeased portion thereof in connection
with a partial defeasance) in full on or before its Maturity Date (or, in the
case of an ARD Loan, on or before its Anticipated Repayment Date) and to timely
pay each subsequent Scheduled Payment, (v) (A) a Rating Agency Confirmation is
received if the Mortgage Loan (together with any other Mortgage Loan with which
it is cross-collateralized) has a Principal Balance greater than the lesser of
$20,000,000 and 5% of the Aggregate Certificate Balance, unless such Rating
Agency has waived in writing such Rating Agency Confirmation requirement (or
such higher threshold, if any, as shall be published by the Rating Agencies) or
(B) if the Mortgage Loan is less than or equal to both of the amounts set forth
in clause (A) and the successor Mortgagor with respect to the subject Mortgage
Loan and its affiliates collectively have assumed Mortgage Loans comprising an
aggregate principal amount at least equal to the lesser of $20,000,000 and 5% of
the Aggregate Certificate Balance, either a Notice and Certification in the form
attached hereto as Exhibit Z (or such less restrictive forms, if any, as shall
be adopted by the Rating Agencies) or a Rating Agency Confirmation is received
from S&P and (vi) a Rating Agency Confirmation is received if the Mortgage Loan
is one of the ten largest Mortgage Loans, by Principal Balance. Any customary
and reasonable out-of-pocket expense incurred by the Master Servicer pursuant to
this Section 8.3(h) shall be paid by the Mortgagor of the Defeasance Loan
pursuant to the related Mortgage, Mortgage Note or other pertinent document, if
so allowed by the terms of such documents.
The parties hereto acknowledge that if the payments described
in paragraph 39 of Exhibit 2 to the Mortgage Loan Purchase Agreements regarding
the obligation of a Mortgagor to pay the reasonable costs and expenses
associated with a defeasance of the related Mortgage Loan are insufficient to
reimburse the Trust, including, but not limited to, rating agency fees, then the
sole obligation of the related Seller shall be to pay an amount equal to such
insufficiency or expense to the extent the related Mortgagor is not required to
pay such amount. Promptly upon receipt of notice of such insufficiency or unpaid
expense, the Master Servicer shall request the related Seller to make such
payment by deposit to the Certificate Account.
In the case of a Specially Serviced Mortgage Loan, the Master
Servicer shall process any defeasance of such Specially Serviced Mortgage Loan
in accordance with the original terms of the respective Mortgage Loan documents
following a request by the Special Servicer that the Master Servicer do so,
which request shall be accompanied by a waiver of any condition of defeasance
that an "event of default" under such Specially Serviced Mortgage Loan not have
occurred or be continuing, and the Master Servicer shall be entitled to any fees
paid relating to such defeasance. If such "event of default" is on account of an
uncured payment default, the Special Servicer will process the defeasance of
such Specially Serviced Mortgage Loan, and the Special Servicer shall be
entitled to any fees paid relating to such defeasance.
(i) The Master Servicer shall, as to each Mortgage Loan which is
secured by the interest of the related Mortgagor under a ground lease, confirm
whether or not on or prior to the date that is thirty (30) days after the
Closing Date, the Seller has notified the related ground lessor of the transfer
of such Mortgage Loan to the Trust pursuant to this Agreement and informed such
ground lessor that any notices of default under the related Ground Lease should
thereafter be forwarded to the Master Servicer (as evidenced by delivery of a
copy thereof to the
-172-
Master Servicer). The Master Servicer shall promptly notify the ground lessor if
the Seller has failed to do so by the thirtieth day after the Closing Date.
(j) Pursuant to the related Intercreditor Agreement, the owner of any
B Note has agreed that the Master Servicer and the Special Servicer are
authorized and obligated to service and administer the B Note pursuant to this
Agreement. The Master Servicer shall be entitled, during any period when the A
Note and B Note under any A/B Mortgage Loan do not constitute Specially Serviced
Mortgage Loans, to exercise the rights and powers granted under the related
Intercreditor Agreement to the "Note A Holder" and/or the "Servicer" referred to
therein. For the avoidance of doubt, the parties acknowledge that neither the
Master Servicer nor the Special Servicer shall be entitled or required to
exercise the rights and powers granted to any "Note B Holder" as defined under
the related Intercreditor Agreement. To the extent there is any conflict between
the provisions of this Agreement with respect to the servicing and
administration of the Congress Center B Note and the provisions of the related
Intercreditor Agreement, the related Intercreditor Agreement shall control.
(k) Pursuant to the applicable Non-Serviced Mortgage Loan
Intercreditor Agreement, the owner of any Non-Serviced Mortgage Loan has agreed
that such owner's rights in, to and under such Non-Serviced Mortgage Loan are
subject to the servicing and all other rights of the applicable Non-Serviced
Mortgage Loan Master Servicer and the applicable Non-Serviced Mortgage Loan
Special Servicer, and the applicable Non-Serviced Mortgage Loan Master Servicer
and the applicable Non-Serviced Mortgage Loan Special Servicer are authorized
and obligated to service and administer such Non-Serviced Mortgage Loan pursuant
to the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
Notwithstanding anything herein to the contrary, the parties hereto acknowledge
and agree that the Master Servicer's obligations and responsibilities hereunder
and the Master Servicer's authority with respect to any Non-Serviced Mortgage
Loan are limited by and subject to the terms of the related Non-Serviced
Mortgage Loan Intercreditor Agreement and the rights of the applicable
Non-Serviced Mortgage Loan Master Servicer and the applicable Non-Serviced
Mortgage Loan Special Servicer with respect thereto under the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement. The Master Servicer
shall use reasonable best efforts consistent with the Servicing Standard to
monitor the servicing of any Non-Serviced Mortgage Loan by the applicable
Non-Serviced Mortgage Loan Master Servicer and the applicable Non-Serviced
Mortgage Loan Special Servicer pursuant to the related Non-Serviced Mortgage
Loan Pooling and Servicing Agreement and shall enforce the rights of the Trustee
(as holder of the Non-Serviced Mortgage Loans) under the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement and the related Non-Serviced
Mortgage Loan Intercreditor Agreement. The Master Servicer shall take such
actions as it shall deem reasonably necessary to facilitate the servicing of any
Non-Serviced Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master
Servicer and the applicable Non-Serviced Mortgage Loan Special Servicer
including, but not limited to, delivering appropriate Requests for Release to
the Trustee and Custodian (if any) in order to deliver any portion of the
related Mortgage File to the applicable Non-Serviced Mortgage Loan Master
Servicer or applicable Non-Serviced Mortgage Loan Special Servicer under the
related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
(l) Pursuant to each Loan Pair Intercreditor Agreement, the owner of
the related Serviced Companion Mortgage Loan has agreed that the Master Servicer
and the Special Servicer are authorized and obligated to service and administer
the Serviced Companion
-173-
Mortgage Loan pursuant to this Agreement. The Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent are, to the extent applicable,
authorized and directed to execute and deliver to the owner or owners of the
Serviced Companion Mortgage Loan a letter agreement dated as of the Closing Date
setting forth provisions as to, among other things, the timing of remittances,
advances and reports relating to the Serviced Companion Mortgage Loan, and
references herein to the related Loan Pair Intercreditor Agreement shall be
construed to refer to such Loan Pair Intercreditor Agreement and such letter
agreement taken together, as applicable. To the extent that the Master Servicer,
the Special Servicer, the Trustee and/or the Fiscal Agent have duties and
obligations under any such letter agreement, each successor master servicer,
successor special servicer, successor trustee and/or successor fiscal agent,
respectively, under this Agreement shall perform such duties and satisfy such
obligations.
SECTION 8.4 PRIMARY SERVICING AND SUB-SERVICING.
(a) The parties hereto (A) acknowledge that the Master Servicer has
delegated certain of its obligations and assigned certain of its rights under
this Agreement to the Primary Servicer pursuant to the Primary Servicing
Agreement; and (B) agree: (1) in addition to those obligations specifically
delegated by the Master Servicer to the Primary Servicer under the Primary
Servicing Agreement, the Primary Servicer shall also perform the Master
Servicer's obligations set forth in Section 2.1(d) of this Agreement as such
Section relates to the Mortgage Loans serviced by it; (2) in addition to those
rights specifically granted by the Master Servicer to the Primary Servicer under
the Primary Servicing Agreement, those rights set forth in Section 8.24 hereof
accruing to the benefit of the Master Servicer shall also accrue to the benefit
of the Primary Servicer; (3) any indemnification or release from liability set
forth in this Agreement accruing to the benefit of the Master Servicer shall
also, to the extent applicable, benefit the Primary Servicer; and (4) for each
notice, certification, report, schedule, statement or other type of writing that
a party hereto is obligated to deliver to the Master Servicer, such party shall
deliver to the Primary Servicer a copy of such notice, certification, report,
schedule, statement or other type of writing at the time and in the same manner
that any of the foregoing is required to be delivered to the Master Servicer.
Notwithstanding the provisions of the Primary Servicing Agreement or any other
provisions of this Agreement, the Master Servicer shall remain obligated and
liable to the Trustee, the Paying Agent, the Special Servicer, the
Certificateholders, the holder of any Serviced Companion Mortgage Loan and the
holder of any B Note for servicing and administering of the Mortgage Loans and
any Serviced Companion Mortgage Loan in accordance with the provisions of this
Agreement to the same extent as if the Master Servicer was alone servicing and
administering the Mortgage Loans and the Serviced Companion Mortgage Loans. The
Master Servicer or the Primary Servicer shall supervise, administer, monitor,
enforce and oversee the servicing of the applicable Mortgage Loans by any
Sub-Servicer appointed by it. The terms of any arrangement or agreement between
the Master Servicer or the Primary Servicer and a Sub-Servicer shall provide
that such agreement or arrangement may be terminated, without cause and without
the payment of any termination fees, by the Trustee in the event such Master
Servicer or the Primary Servicer is terminated in accordance with this Agreement
or the Primary Servicing Agreement. In addition, none of the Trustee, the Paying
Agent, the Certificateholders, the holder of any Serviced Companion Mortgage
Loan or the holder of any B Note shall have any direct obligation or liability
(including, without limitation, indemnification obligations) with respect to any
Sub-Servicer. The Master Servicer or the Primary Servicer shall pay the costs of
enforcement against any of its Sub-Servicers at its own expense, but shall be
reimbursed therefor only (i) from a general
-174-
recovery resulting from such enforcement only to the extent that such recovery
exceeds all amounts due in respect of the related Mortgage Loans or (ii) from a
specific recovery of costs, expenses or attorneys fees against the party against
whom such enforcement is directed. Notwithstanding the provisions of any primary
servicing agreement or sub-servicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
the Primary Servicer or a Sub-Servicer, or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer or the Primary Servicer shall
remain obligated and liable to the Trustee, the Paying Agent, the Special
Servicer and the Certificateholders for the servicing and administering of the
applicable Mortgage Loans and the Serviced Companion Mortgage Loans in
accordance with (and subject to the limitations contained within) the provisions
of this Agreement or the Primary Servicing Agreement without diminution of such
obligation or liability by virtue of indemnification from a Sub-Servicer and to
the same extent and under the same terms and conditions as if the Master
Servicer or the Primary Servicer alone were servicing and administering the
Mortgage Loans.
(b) Subject to the limitations of subsection (a), the Master Servicer
and the Primary Servicer may appoint one or more sub-servicers (each, a
"Sub-Servicer") to perform all or any portion of its duties hereunder for the
benefit of the Trustee and the Certificateholders, provided, however, that any
decision or recommendation involving the exercise of the Primary Servicer's
discretion as a "lender" under any loan document with respect to a Mortgage Loan
shall be exercised only by the Primary Servicer and may not be delegated to a
Sub-Servicer.
The Master Servicer shall enter into the Primary Servicing Agreement
with the Primary Servicer and shall not terminate such agreements except in
accordance with the terms thereof. To the extent consistent with the rights of
the Primary Servicer under this Agreement and the Primary Servicing Agreement,
but not in limitation of any other rights granted to the Primary Servicer in
this Agreement and/or in the Primary Servicing Agreement, the Primary Servicer
shall have all of the rights and obligations of a Sub-Servicer set forth herein.
Notwithstanding any other provision set forth in this Agreement to
the contrary, (i) the Primary Servicer's rights and obligations under the
Primary Servicing Agreement shall expressly survive a termination of the Master
Servicer's servicing rights under this Agreement; provided that the Primary
Servicing Agreement has not been terminated in accordance with its provisions;
(ii) any successor Master Servicer, including, without limitation, the Trustee
(if it assumes the servicing obligations of the Master Servicer) shall be deemed
to automatically assume and agree to the then current Primary Servicing
Agreement without further action upon becoming the successor Master Servicer and
(iii) this Agreement may not be modified in any manner which would increase the
obligations or limit the rights of the Primary Servicer hereunder and/or under
the Primary Servicing Agreement, without the prior written consent of the
Primary Servicer (which consent shall not be unreasonably withheld).
If a task, right or obligation of Master Servicer is delegated to the
Primary Servicer under the Primary Servicing Agreement, and such task, right or
obligation involves or requires the consent of the Special Servicer, then the
Special Servicer shall accept the performance of such task, right or obligation
by the Primary Servicer in accordance with the terms of this Agreement
(including without limitation any time periods for consent or deemed consent to
be observed by the Special Servicer) as if Master Servicer were performing it.
-175-
Notwithstanding any provision of this Agreement, each of the
parties hereto acknowledges and agrees that the Special Servicer is neither a
party to the Primary Servicing Agreement, nor is it bound by any provision of
the Primary Servicing Agreement. The Special Servicer hereby acknowledges the
delegation of rights and duties hereunder by the Master Servicer pursuant to the
provisions of the Primary Servicing Agreement.
SECTION 8.5 SERVICERS MAY OWN CERTIFICATES. The Master Servicer and
the Primary Servicer and any agent of the Master Servicer or Primary Servicer in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Master
Servicer or such agent. Any such interest of the Master Servicer or the Primary
Servicer or such agent in the Certificates shall not be taken into account when
evaluating whether actions of the Master Servicer are consistent with its
obligations in accordance with the Servicing Standard regardless of whether such
actions may have the effect of benefiting the Class or Classes of Certificates
owned by the Master Servicer.
SECTION 8.6 MAINTENANCE OF HAZARD INSURANCE, OTHER INSURANCE, TAXES
AND OTHER. Subject to the limitations set forth below, the Master Servicer shall
use reasonable efforts consistent with the Servicing Standard to cause the
related Mortgagor to maintain for each Mortgage Loan (other than any REO
Mortgage Loan) (A) a Standard Hazard Insurance Policy (that, if the terms of the
related Mortgage Loan documents and the related Mortgage so require or so permit
the holder of the Mortgage Loan to require, contains no exclusion for damages
due to any Act or Acts of Terrorism, as defined in the Terrorism Risk Insurance
Act of 2002) and which does not provide for reduction due to depreciation in an
amount that is at least equal to the lesser of (i) the full replacement cost of
improvements securing such Mortgage Loan or (ii) the outstanding Principal
Balance of such Mortgage Loan and any related B Note or Serviced Companion
Mortgage Loan, but, in any event, in an amount sufficient to avoid the
application of any co-insurance clause and (B) any other insurance coverage for
a Mortgage Loan which the related Mortgagor is required to maintain under the
related Mortgage, provided the Master Servicer shall not be required to maintain
earthquake insurance on any Mortgaged Property unless such insurance was
required at origination and is available at commercially reasonable rates;
provided, however, that the Special Servicer shall have the right, but not the
duty, to obtain, at the Trust's expense, earthquake insurance on any Mortgaged
Property securing a Specially Serviced Mortgage Loan or an REO Property so long
as such insurance is available at commercially reasonable rates. If the related
Mortgagor does not maintain the insurance set forth in clauses (A) and (B)
above, then the Master Servicer shall cause such insurance to be maintained with
a Qualified Insurer. The Master Servicer shall be deemed to have satisfied its
obligations with respect to clause (A) above if the Mortgagor maintains, or the
Master Servicer shall have otherwise caused to be obtained, a Standard Hazard
Insurance Policy that is in compliance with the related Mortgage Loan documents,
and, if required by such Mortgage Loan documents or if such Mortgage Loan
documents permit the holder of the Mortgage Loan to require, the Mortgagor pays,
or the Master Servicer shall have otherwise caused to be paid, the premium
required by the related insurance provider that is necessary to avoid an
exclusion in such policy against "acts of terrorism" as defined by the Terrorism
Risk Insurance Act of 2002.
Each Standard Hazard Insurance Policy maintained with respect to any
Mortgaged Property that is not an REO Property shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. If the
improvements on the Mortgaged
-176-
Property are located in a designated special flood hazard area by the Federal
Emergency Management Agency in the Federal Register, as amended from time to
time (to the extent permitted under the related Mortgage Loan or as required by
law), the Master Servicer (with respect to any Mortgaged Property that is not an
REO Property) shall cause flood insurance to be maintained. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan or (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program,
if the area in which the improvements on the Mortgaged Property are located is
participating in such program. Any amounts collected by the Master Servicer
under any such policies (other than amounts to be applied to the restoration or
repair of the related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with the terms of the applicable
Mortgage Loan) shall be deposited in the Certificate Account.
Any cost (such as insurance premiums and insurance broker fees but
not internal costs and expenses of obtaining such insurance) incurred by the
Master Servicer in maintaining any insurance pursuant to this Section 8.6 shall
not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Paying Agent for their benefit, be
added to the Principal Balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan permit such cost to be added to the outstanding
Principal Balance thereof. Such costs shall be paid as a Servicing Advance by
the Master Servicer, subject to Section 4.4 hereof.
Notwithstanding the above, the Master Servicer shall have no
obligation beyond using its reasonable efforts consistent with the Servicing
Standard to enforce such insurance requirements. Furthermore, the Master
Servicer shall not be required in any event to cause the Mortgagor to maintain
or itself obtain insurance coverage beyond what is available on commercially
reasonable terms at a cost customarily acceptable (in each case, as determined
by the Master Servicer, which shall be entitled to rely, at its sole expense, on
insurance consultants in making such determination, consistent with the
Servicing Standard) and consistent with the Servicing Standard; provided, that
the Master Servicer shall be obligated to cause the Mortgagor to maintain or
itself obtain insurance against property damage resulting from terrorism or
similar acts if the terms of the related Mortgage Loan documents and the related
Mortgage so require unless the Master Servicer determines that (i) such
insurance is not available at any rate or (ii) such insurance is not available
at commercially reasonable rates and such hazards are not at the time commonly
insured against for properties similar to the related Mortgaged Property and
located in or around the region in which such related Mortgaged Property is
located; provided, that such determination must be made by the Master Servicer
not less frequently (but need not be made more frequently) than annually, but in
any event, shall be made on the approximate date on (but not later than sixty
(60) days thereafter) which the Master Servicer receives notice of the renewal,
replacement or cancellation of coverage (as evidenced by the related insurance
policy or insurance certificate). Notwithstanding the limitation set forth in
the preceding sentence, if the related Mortgage Loan documents and the related
Mortgage require the Mortgagor to maintain insurance against property damage
resulting from terrorism or similar acts, the Master Servicer shall prior to
availing itself of any limitation described in that sentence with respect to any
Mortgage Loan (or any component loan of an A/B Mortgage Loan) that has a
principal balance in excess of $2,500,000, obtain the approval or disapproval of
the Special Servicer and the Operating Adviser (subject to the penultimate
paragraph of Section 9.39). The Master Servicer shall be entitled to rely on the
determination of the Special Servicer made in connection with such approval or
disapproval. The Special Servicer shall decide whether to withhold or grant
-177-
such approval in accordance with the Servicing Standard. If any such approval
has not been expressly denied within seven (7) Business Days of receipt by the
Special Servicer and Operating Adviser from the Master Servicer of the Master
Servicer's determination and analysis and all information reasonably requested
by the Special Servicer and reasonably available to the Master Servicer in order
to make an informed decision, such approval shall be deemed to have been
granted. The Master Servicer shall notify the holder of the related Serviced
Companion Mortgage Loan of any determination that it makes pursuant to clauses
(i) and (ii) above with respect to any Serviced Pari Passu Mortgage Loan.
The Master Servicer shall conclusively be deemed to have satisfied
its obligations as set forth in this Section 8.6 either (i) if the Master
Servicer shall have obtained and maintained a master force placed or blanket
insurance policy insuring against hazard losses on all of the applicable
Mortgage Loans, any Serviced Companion Mortgage Loan and any B Note serviced by
it, it being understood and agreed that such policy may contain a deductible
clause on terms substantially equivalent to those commercially available and
maintained by comparable servicers consistent with the Servicing Standard, and
provided that such policy is issued by a Qualified Insurer or (ii) if the Master
Servicer, provided that its long-term rating is not less than "A" by Fitch and
"A-" by S&P, self-insures for its obligations as set forth in the first
paragraph of this Section 8.6. In the event that the Master Servicer shall cause
any Mortgage Loan to be covered by such a master force placed or blanket
insurance policy, the incremental cost of such insurance allocable to such
Mortgage Loan (i.e., other than any minimum or standby premium payable for such
policy whether or not any Mortgage Loan is then covered thereby), if not borne
by the related Mortgagor, shall be paid by the Master Servicer as a Servicing
Advance. If such policy contains a deductible clause, the Master Servicer shall,
if there shall not have been maintained on the related Mortgaged Property a
policy complying with this Section 8.6 and there shall have been a loss that
would have been covered by such policy, deposit in the Certificate Account the
amount not otherwise payable under such master force placed or blanket insurance
policy because of such deductible clause to the extent that such deductible
exceeds (i) the deductible under the related Mortgage Loan or (ii) if there is
no deductible limitation required under the Mortgage Loan, the deductible amount
with respect to insurance policies generally available on properties similar to
the related Mortgaged Property which is consistent with the Servicing Standard,
and deliver to the Trustee an Officer's Certificate describing the calculation
of such amount. In connection with its activities as administrator and servicer
of the Mortgage Loans, any Serviced Companion Mortgage Loan and any B Note, the
Master Servicer agrees to present, on its behalf and on behalf of the Trustee
and the holders of any Serviced Companion Mortgage Loan or any B Note, claims
under any such master force placed or blanket insurance policy.
With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records with respect to each related Mortgaged Property
reflecting the status of taxes, assessments and other similar items that are or
may become a lien on the related Mortgaged Property and the status of insurance
premiums payable with respect thereto. From time to time, the Master Servicer
(other than with respect to REO Mortgage Loans) shall (i) obtain all bills for
the payment of such items (including renewal premiums), and (ii) except in the
case of Mortgage Loans under which Escrow Amounts are not held by the Master
Servicer, effect payment of all such bills, taxes and other assessments with
respect to such Mortgaged Properties prior to the applicable penalty or
termination date, in each case employing for such purpose Escrow Amounts as
allowed under the terms of the related Mortgage Loan. If a Mortgagor fails to
make any such payment on a timely basis or collections from the Mortgagor are
insufficient to pay any
-178-
such item before the applicable penalty or termination date, the Master Servicer
in accordance with the Servicing Standard shall use its reasonable efforts to
pay as a Servicing Advance the amount necessary to effect the payment of any
such item prior to such penalty or termination date, subject to Section 4.4
hereof. No costs incurred by the Master Servicer, the Trustee or the Fiscal
Agent as the case may be, in effecting the payment of taxes and assessments on
the Mortgaged Properties and related insurance premiums and ground rents shall,
for the purpose of calculating distributions to Certificateholders, be added to
the Principal Balance of the Mortgage Loans, notwithstanding that the terms of
such Mortgage Loans permit such costs to be added to the outstanding Principal
Balances of such Mortgage Loans.
SECTION 8.7 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS; DUE-ON-ENCUMBRANCE CLAUSE.
(a) In the event the Master Servicer receives a request from a
Mortgagor (or other obligor) pursuant to the provisions of any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note (other than a Specially Serviced
Mortgage Loan or a Non-Serviced Mortgage Loan) that expressly permits, subject
to any conditions set forth in the Mortgage Loan documents, the assignment of
the related Mortgaged Property to, and assumption of such Mortgage Loan,
Serviced Companion Mortgage Loan or B Note by, another Person, the Master
Servicer shall obtain relevant information for purposes of evaluating such
request. For the purpose of the foregoing sentence, the term `expressly permits'
shall include outright permission to assign, permission to assign upon
satisfaction of certain conditions or prohibition against assignment except upon
the satisfaction of stated conditions. If the Master Servicer recommends to
approve such assignment, the Master Servicer shall provide to the Special
Servicer (and solely with respect to any A/B Mortgage Loan, the holder of the B
Note) a copy of such recommendation and the materials upon which such
recommendation is based (which information shall consist of the information to
be included in the Assignment and Assumption Submission to Special Servicer, in
the form attached hereto as Exhibit U) and (A) the Special Servicer shall have
the right hereunder to grant or withhold consent to any such request for such
assignment and assumption in accordance with the terms of the Mortgage Loan,
Serviced Companion Mortgage Loan or B Note and this Agreement, and the Special
Servicer shall not unreasonably withhold such consent and any such decision of
the Special Servicer shall be in accordance with the Servicing Standard, (B)
failure of the Special Servicer to notify the Master Servicer in writing, within
five (5) Business Days following the Master Servicer's delivery of the
recommendation described above and the complete Assignment and Assumption
Submission to Special Servicer on which the recommendation is based, of its
determination to grant or withhold such consent shall be deemed to constitute a
grant of such consent and (C) the Master Servicer shall not permit any such
assignment or assumption unless (i) it has received the written consent of the
Special Servicer or such consent has been deemed to have been granted as
described in the preceding sentence and (ii) with respect to any A/B Mortgage
Loan, the Master Servicer has obtained the approval of the holder of the related
B Note, to the extent provided for in the related Intercreditor Agreement, and
in accordance with any procedures therefor set forth in Section 9.40. The
Special Servicer hereby acknowledges the delegation of rights and duties
hereunder by the Master Servicer pursuant to the provisions of the Primary
Servicing Agreement. If the Special Servicer withholds consent pursuant to the
provisions of this Agreement, it shall provide the Master Servicer or the
Primary Servicer with a written statement and a verbal explanation as to its
reasoning and analysis. Upon consent or deemed consent by the Special Servicer
to such
-179-
proposed assignment and assumption, the Master Servicer shall process such
request of the related Mortgagor (or other obligor) and shall be authorized to
enter into an assignment and assumption or substitution agreement with the
Person to whom the related Mortgaged Property has been or is proposed to be
conveyed, and/or release the original Mortgagor from liability under the related
Mortgage Loan, Serviced Companion Mortgage Loan or B Note and substitute as
obligor thereunder the Person to whom the related Mortgaged Property has been or
is proposed to be conveyed; provided, however, that the Master Servicer shall
not enter into any such agreement to the extent that any terms thereof would
result in an Adverse REMIC Event or create any lien on a Mortgaged Property that
is senior to, or on parity with, the lien of the related Mortgage. To the extent
permitted by applicable law, the Master Servicer shall not enter into such an
assumption or substitution agreement unless the credit status of the prospective
new Mortgagor (or other obligor) is in conformity to the terms of the related
Mortgage Loan and, if applicable, B Note or Serviced Companion Mortgage Loan
documents. In making its recommendation, the Master Servicer shall evaluate such
conformity in accordance with the Servicing Standard. The Master Servicer shall
notify the Trustee, the Paying Agent and the Special Servicer of any assignment
and assumption or substitution agreement executed pursuant to this Section
8.7(a). The Master Servicer shall be entitled to (as additional servicing
compensation) 50% of any assumption fee collected from a Mortgagor in connection
with an assignment and assumption or substitution of a non-Specially Serviced
Mortgage Loan executed pursuant to this Section 8.7(a) and the Special Servicer
shall be entitled to (as additional special servicing compensation) the other
50% of such fee.
Notwithstanding the foregoing, the Special Servicer
acknowledges that the Master Servicer has delegated certain tasks, rights and
obligations to the Primary Servicer with respect to Post Closing Requests (as
defined in the Primary Servicing Agreement) pursuant to Section 8.4 of this
Agreement. The Primary Servicing Agreement classifies certain Post Closing
Requests as Category 1 Requests and grants the Primary Servicer certain
authority to evaluate and process such requests in accordance with this
Agreement, the Primary Servicing Agreement and applicable Mortgage Loan
documents.
With respect to a Category 1 Request that involves a
condition, term or provision that requires, or specifies a standard of, consent
or approval of the applicable Mortgagee under the Mortgage Loan documents, the
Primary Servicing Agreement provides for the determination of materiality of
such condition, term or provision requiring approval or consent by the Master
Servicer or the Primary Servicer and the referral of such condition, term or
provision to a Special Servicer for consent in accordance with the terms of the
Primary Servicing Agreement upon a determination of materiality. The Special
Servicer acknowledges such provisions. Nothing in this Agreement, however, shall
grant the Primary Servicer greater authority, discretion or delegated rights
over Post Closing Requests than are set forth in the Primary Servicing
Agreement.
Neither the Master Servicer nor the Special Servicer shall
have any liability, and each of them shall be indemnified by the Trust for any
liability to the Mortgagor or the proposed assignee, for any delay in responding
to requests for assumption, if the same shall occur as a result of the failure
of the Rating Agencies, or any of them, to respond to such request in a
reasonable period of time.
-180-
(b) Other than with respect to the assignment and assumptions
referred to in subsection (a) above, if any Mortgage Loan that is not a
Specially Serviced Mortgage Loan or a Non-Serviced Mortgage Loan contains a
provision in the nature of a "due-on-sale" clause, which by its terms (i)
provides that such Mortgage Loan shall (or may at the mortgagee's option) become
due and payable upon the sale or other transfer of an interest in the related
Mortgaged Property or ownership interest in the related Mortgagor, or (ii)
provides that such Mortgage Loan may not be assumed, or ownership interests in
the related Mortgagor may not be transferred, without the consent of the related
mortgagee in connection with any such sale or other transfer, then, the Master
Servicer shall review and make a determination to either (i) enforce such
due-on-sale clause or (ii) if in the best economic interest of the Trust, waive
the effect of such provision, such waiver to be processed in the same manner as
in Section 8.7(a) (including the Special Servicer consent provisions); provided,
however, that if the Principal Balance of such Mortgage Loan (together with any
other Mortgage Loan with which it is cross-collateralized) at such time equals
or exceeds 5% of the Aggregate Certificate Balance or exceeds $35,000,000 or is
one of the then current top 10 loans (by Principal Balance) in the pool, then
prior to waiving the effect of such provision, the Master Servicer shall obtain
Rating Agency Confirmation (including with respect to any securities which are
rated by a Rating Agency evidencing direct beneficial interests in the A Notes
and any B Note) regarding such waiver. In connection with the request for such
Rating Agency Confirmation, the Master Servicer shall prepare and deliver to
Fitch and S&P a memorandum outlining its analysis and recommendation in
accordance with the Servicing Standard, together with copies of all relevant
documentation. The Master Servicer shall promptly forward copies of the
assignment and assumption documents relating to any Mortgage Loan to the Special
Servicer, the Paying Agent and the Trustee, and the Master Servicer shall
promptly thereafter forward such documents to the Rating Agencies. The Special
Servicer and the Master Servicer shall each be entitled to (as additional
compensation) 50% of any fee collected from a Mortgagor in connection with
granting or withholding such consent (other than any such fee payable in
connection with any Non-Serviced Mortgage Loan).
The parties hereto acknowledge that, if the payments described in
paragraph 39 of Exhibit 2 to the Mortgage Loan Purchase Agreements regarding the
obligation of a Mortgagor to pay the reasonable costs and expenses of obtaining
any Rating Agency Confirmation in connection with an assumption of the related
Mortgage Loan are insufficient to reimburse the Trust, then it shall be the sole
obligation of the related Seller to pay an amount equal to such insufficiency to
the extent the related Mortgagor is not required to pay them. Promptly upon
receipt of notice of such insufficiency, the Master Servicer or the Special
Servicer, as applicable, shall request the related Seller to make such payment
by deposit to the Certificate Account. The Master Servicer may not waive such
payment by the Mortgagor and shall use its reasonable efforts to collect such
amounts from the Mortgagor to the extent the related mortgage loan documents
require the related Mortgagor to pay such amounts.
(c) The Master Servicer shall have the right to consent to any
transfers of an interest of a Mortgagor, to the extent such transfer is to a
party or entity specifically named or described under the terms of the related
Mortgage Loan, including any consent to transfer to any subsidiary or affiliate
of Mortgagor or to a person acquiring less than a majority interest in the
Mortgagor; provided, however, that if (i) the Principal Balance of such Mortgage
Loan (together with any other Mortgage Loan with which it is
cross-collateralized) at such time equals or exceeds 5% of the Aggregate
Certificate Balance or is one of the then current top 10 loans (by Principal
Balance) in the pool, and (ii) the transfer is of an interest in the Mortgagor
greater than
-181-
49%, then prior to consenting, the Master Servicer shall obtain a Rating Agency
Confirmation regarding such consent, the costs of which to be payable by the
related Mortgagor to the extent provided for in the Mortgage Loan documents. The
Master Servicer shall be entitled to collect and receive from Mortgagors any
customary fees in connection with such transfers of interest as additional
servicing compensation.
(d) The Trustee for the benefit of the Certificateholders, the holder
of any Serviced Companion Mortgage Loan and the holder of any B Note shall
execute any necessary instruments in the form presented to it by the Master
Servicer (pursuant to subsection (b)) for such assignments and assumptions
agreements. Upon the closing of the transactions contemplated by such documents,
the Master Servicer or the Special Servicer, as the case may be, shall cause the
originals of the assignment and assumption agreement, the release (if any), or
the modification or supplement to the Mortgage Loan to be delivered to the
Trustee except to the extent such documents have been submitted to the recording
office, in which event the Master Servicer shall promptly deliver copies of such
documents to the Trustee and the Special Servicer.
(e) If any Mortgage Loan (other than a Specially Serviced Mortgage
Loan or a Non-Serviced Mortgage Loan) which contains a provision in the nature
of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the creation of
any additional lien or other encumbrance on the related Mortgaged
Property or a lien on an ownership interest in the Mortgagor; or
(ii) requires the consent of the Mortgagee to the creation
of any such additional lien or other encumbrance on the related
Mortgaged Property or a lien on an ownership interest in the
Mortgagor,
then, as long as such Mortgage Loan is included in the Trust, the Master
Servicer, on behalf of the Trustee as the Mortgagee of record, shall exercise
(or, subject to Section 8.18, waive its right to exercise) any right it may have
with respect to such Mortgage Loan (x) to accelerate the payments thereon, or
(y) to withhold its consent to the creation of any such additional lien or other
encumbrance, in a manner consistent with the Servicing Standard, the following
paragraph and Section 8.18 hereof. The Master Servicer shall not waive the
effect of such provision without first obtaining Rating Agency Confirmation
(including with respect to any securities which are rated by a Rating Agency
evidencing direct beneficial interests in the A Notes and any B Note) regarding
such waiver and complying with the provisions of the next succeeding paragraph;
provided, however, that such Rating Agency Confirmation shall only be required
if the applicable Mortgage Loan (x) represents 2% or more of the Principal
Balance of all of the Mortgage Loans held by the Trust, has a Principal Balance
of more than $20,000,000 or is one of the 10 largest Mortgage Loans based on
Principal Balance or (y) has a Loan-to-Value Ratio (which includes the
indebtedness to be secured by such additional lien or other encumbrance and any
other loans secured by the related Mortgaged Property or interests in the
related Mortgagor) that is greater than or equal to 85% or a Debt Service
Coverage Ratio (which includes debt service on the indebtedness to be secured by
such additional lien or other encumbrance and any other loans secured by the
related Mortgaged Property or interests in the related Mortgagor) that is less
than 1.2x.
-182-
Without limiting the generality of the preceding paragraph, in the
event that the Master Servicer receives a request for a waiver of any
"due-on-encumbrance" clause, the Master Servicer shall obtain relevant
information for purposes of evaluating such request for a waiver. If the Master
Servicer recommends to waive such clause, the Master Servicer shall provide to
the Special Servicer a copy of such recommendation and the materials upon which
such recommendation is based (which information shall consist of the information
to be included in the Additional Lien, Monetary Encumbrance and Mezzanine
Financing Submission Package to the Special Servicer, in the form attached
hereto as Exhibit V) and (A) the Special Servicer shall have the right hereunder
to grant or withhold consent to any such request in accordance with the terms of
the Mortgage Loan and this Agreement, and the Special Servicer shall not
unreasonably withhold such consent and any such decision of the Special Servicer
shall be in accordance with the Servicing Standard, (B) failure of the Special
Servicer to notify the Master Servicer in writing, within five (5) Business Days
following the Master Servicer's delivery of the recommendation described above
and the complete Additional Lien, Monetary Encumbrance and Mezzanine Financing
Submission Package to the Special Servicer on which the recommendation is based,
of its determination to grant or withhold such consent shall be deemed to
constitute a grant of such consent and (C) the Master Servicer shall not permit
any such waiver unless it has received the written consent of the Special
Servicer or such consent has been deemed to have been granted as described in
the preceding sentence. If the Special Servicer withholds consent pursuant to
the foregoing provisions, it shall provide the Master Servicer with a written
statement and a verbal explanation as to its reasoning and analysis. Upon
consent or deemed consent by the Special Servicer to such proposed waiver, the
Master Servicer shall process such request of the related Mortgagor subject to
the other requirements set forth above.
(f) Notwithstanding anything to the contrary contained in this
Section 8.7 that requires the consent of the Master Servicer or the Special
Servicer, as applicable, any such consent with respect to the Congress Center
A/B Mortgage Loan shall be obtained in accordance with the related Intercreditor
Agreement and within the time periods specified therein.
SECTION 8.8 TRUSTEE TO COOPERATE; RELEASE OF TRUSTEE MORTGAGE FILES.
Upon the payment in full of any Mortgage Loan, the complete defeasance of a
Mortgage Loan, satisfaction or discharge in full of any Specially Serviced
Mortgage Loan, the purchase of an A Note by the holder of a B Note pursuant to
the related Intercreditor Agreement, or the receipt by the Master Servicer of a
notification that payment in full (or such payment, if any, in connection with
the satisfaction and discharge in full of any Specially Serviced Mortgage Loan)
will be escrowed in a manner customary for such purposes, and upon notification
by the Master Servicer in the form of a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Certificate Account have been or will be so deposited) of a Servicing Officer
and a request for release of the Trustee Mortgage File in the form of Exhibit C
hereto the Trustee shall promptly release the related Trustee Mortgage File to
the Master Servicer and the Trustee shall execute and deliver to the Master
Servicer the deed of reconveyance or release, satisfaction or assignment of
mortgage or such instrument releasing the lien of the Mortgage, as directed by
the Master Servicer together with the Mortgage Note with written evidence of
cancellation thereon and, if the related Mortgage has been recorded in the name
of MERS or its designee, the Master Servicer shall take all necessary action to
reflect the release of such Mortgage on the records of MERS. The provisions of
the immediately preceding sentence shall not, in any manner, limit or impair the
right of the Master Servicer to execute and deliver, on behalf of the
-183-
Trustee, the Certificateholders, the holder of any Serviced Companion Mortgage
Loan, the holder of any B Note or any of them, any and all instruments of
satisfaction, cancellation or assignment without recourse, representation or
warranty, or of partial or full release or discharge and all other comparable
instruments, with respect to the Mortgage Loans, any Serviced Companion Mortgage
Loan or any B Note, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders, the holder of any Serviced Companion Mortgage
Loan and the holder of any B Note. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Distribution Account but shall be paid by the Master Servicer except to the
extent that such expenses are paid by the related Mortgagor in a manner
consistent with the terms of the related Mortgage and applicable law. From time
to time and as shall be appropriate for the servicing of any Mortgage Loan,
including for such purpose, collection under any policy of flood insurance, any
Servicer Fidelity Bond or Errors and Omissions Policy, or for the purposes of
effecting a partial or total release of any Mortgaged Property from the lien of
the Mortgage or the making of any corrections to the Mortgage Note or the
Mortgage or any of the other documents included in the Trustee Mortgage File,
the Trustee shall, upon request of the Master Servicer and the delivery to the
Trustee of a Request for Release signed by a Servicing Officer, in the form of
Exhibit C hereto, release the Trustee Mortgage File to the Master Servicer or
the Special Servicer, as the case may be.
SECTION 8.9 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER TO BE HELD FOR THE TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee, to the extent required by this
Agreement, all documents and instruments coming into the possession of the
Master Servicer from time to time and shall account fully to the Trustee and the
Paying Agent for any funds received or otherwise collected thereby, including
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All
Servicer Mortgage Files and funds collected or held by, or under the control of,
the Master Servicer in respect of any Mortgage Loans (or any B Note or Serviced
Companion Mortgage Loan), whether from the collection of principal and interest
payments or from Liquidation Proceeds or Insurance Proceeds, including any funds
on deposit in the Certificate Account (or any A/B Loan Custodial Account or any
Serviced Companion Mortgage Loan Custodial Account), shall be held by the Master
Servicer for and on behalf of the Trustee and the Certificateholders (or the
holder of any B Note or Serviced Companion Mortgage Loan, as applicable) and
shall be and remain the sole and exclusive property of the Trustee, subject to
the applicable provisions of this Agreement. The Master Servicer agrees that it
shall not create, incur or subject any Servicer Mortgage Files or Trustee
Mortgage File or any funds that are deposited in the Certificate Account or any
Escrow Account, or any funds that otherwise are or may become due or payable to
the Trustee or the Paying Agent, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Servicer Mortgage
Files or Trustee Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Master Servicer shall be entitled to
receive from any such funds any amounts that are properly due and payable to the
Master Servicer under this Agreement.
SECTION 8.10 SERVICING COMPENSATION.
-184-
(a) As compensation for its activities hereunder, the Master Servicer
shall be entitled to the Master Servicing Fee, which shall be payable by the
Trust from amounts held in the Certificate Account (and from the related A/B
Loan Custodial Account to the extent related solely to a B Note and from the
related Serviced Companion Mortgage Loan Custodial Account to the extent related
solely to a Serviced Companion Mortgage Loan) or otherwise collected from the
Mortgage Loans as provided in Section 5.2. The Master Servicer shall be required
to pay to the Primary Servicer its Primary Servicing Fees, which shall be
payable by the Trust from amounts as provided in Section 5.1(c), unless retained
by the Primary Servicer from amounts transferred to the Master Servicer in
accordance with the terms of the Primary Servicing Agreement. The Master
Servicer shall be required to pay to the holders of the rights to the Excess
Servicing Fees, the Excess Servicing Fees, which shall be payable by the Trust
as provided in Section 5.1(c), unless otherwise retained by the holders of such
rights. Notwithstanding anything herein to the contrary, if any of the holders
of the right to receive Excess Servicing Fees resigns or is no longer Master
Servicer or Primary Servicer, as applicable, for any reason, it will continue to
have the right to receive its portion of the Excess Servicing Fee, and any of
the holders of the right to receive Excess Servicing Fees shall have the right
to assign its portion of the Excess Servicing Fee, whether or not it is then
acting as Master Servicer or Primary Servicer hereunder. The Master Servicer
shall also be entitled to the Primary Servicing Fee, which shall be payable by
the Trust from amounts held in the Certificate Account (or a sub-account
thereof) or otherwise collected from the Mortgage Loans as provided in Section
5.2, provided that the Primary Servicing Fee payable to the Master Servicer
shall only be collected from the Mortgage Loans set forth on Schedule III,
except as provided in Section 8.28(b).
(b) Additional servicing compensation in the form of assumption fees,
extension fees, servicing fees, default interest (excluding default interest
allocable to any B Note if the holder of the B Note has cured the related
default pursuant to the terms of the related Intercreditor Agreement) payable at
a rate above the Mortgage Rate (net of any amount used to pay Advance Interest),
Modification Fees, forbearance fees, Late Fees (net of Advance Interest)
(excluding Late Fees allocable to any B Note if the holder of the B Note has
cured the related default pursuant to the terms of the related Intercreditor
Agreement) or other usual and customary charges and fees actually received from
Mortgagors shall be retained by the Master Servicer, provided that the Master
Servicer shall be entitled to (i) receive 50% of assumption fees collected on
Mortgage Loans as provided in Section 8.7(a), (ii) Modification Fees as provided
in Section 8.18 hereof, and (iii) 100% of any extension fees collected from the
related Mortgagor in connection with the extension of the Maturity Date of any
Mortgage Loan as provided in Section 8.18; provided, however, that the Master
Servicer shall not be entitled to any such fees in connection with any Specially
Serviced Mortgage Loans or any Non-Serviced Mortgage Loan. If the Master
Servicer collects any amount payable to the Special Servicer hereunder in
connection with an REO Mortgage Loan or Specially Serviced Mortgage Loan, the
Master Servicer shall promptly remit such amount to the Special Servicer as
provided in Section 5.2. The Master Servicer shall be required to pay all
applicable expenses incurred by it in connection with its servicing activities
hereunder.
(c) Notwithstanding any other provision herein, with respect to any
Distribution Date, the Master Servicing Fee for the monthly period relating to
such Distribution Date (together with any investment income earned prior to such
Distribution Date on Principal Prepayments as to which Prepayment Interest
Shortfalls were incurred with respect to such
-185-
Distribution Date) shall be reduced by an amount equal to the Compensating
Interest (if any) relating to Mortgage Loans which are not Specially Serviced
Mortgage Loans for such Determination Date.
(d) The Master Servicer shall also be entitled to additional
servicing compensation of (i) an amount equal to the excess, if any, of the
aggregate Prepayment Interest Excess relating to Mortgage Loans which are not
Specially Serviced Mortgage Loans for each Distribution Date over the aggregate
Prepayment Interest Shortfalls for such Mortgage Loans for such Distribution
Date, (ii) interest or other income earned on deposits in the Certificate
Account and the Distribution Account (but only to the extent of the net
investment earnings, if any, with respect to each such account), and, (iii) to
the extent not required to be paid to any Mortgagor under applicable law, any
interest or other income earned on deposits in the Escrow Accounts.
SECTION 8.11 MASTER SERVICER REPORTS; ACCOUNT STATEMENTS.
(a) For each Distribution Date, (i) the Master Servicer shall deliver
to the Paying Agent, (or with respect to a Serviced Companion Mortgage Loan, to
the holder thereof or its servicer), no later than 1:00 p.m., New York City
time, on the related Report Date, the Master Servicer Remittance Report with
respect to such Distribution Date including any information regarding
prepayments made pursuant to Section 5.2(b) and (ii) the Master Servicer shall
report to the Paying Agent on the related Advance Report Date, the amount of the
P&I Advance, if any, to be made by the Master Servicer on the related Master
Servicer Remittance Date. The Special Servicer is required to provide all
applicable information relating to Specially Serviced Mortgage Loans in order
for the Master Servicer to satisfy its duties in this Section 8.11. The Master
Servicer Remittance Report shall be updated no later than 2:00 p.m. on the
second Business Day prior to the Distribution Date to reflect any payment on a
Mortgage Loan, a Serviced Companion Mortgage Loan or a B Note for which the
Scheduled Payment is paid on a Due Date (or within its grace period) that occurs
after the end of the related Collection Period.
(b) The Master Servicer shall deliver to the Trustee, the Paying
Agent and the Special Servicer within 30 days following each Distribution Date a
statement setting forth the status of the Certificate Account as of the close of
business on such Distribution Date showing, for the period covered by such
statement, the aggregate of deposits in or withdrawals from the Certificate
Account, and shall deliver to each holder of a B Note and Serviced Companion
Mortgage Loan within 30 days following each Distribution Date a statement
setting forth the status of the related A/B Loan Custodial Account and Serviced
Companion Mortgage Loan Custodial Account, as of the close of business on such
Distribution Date showing, for the period covered by such statement, the
aggregate of transfers in and transfers from or deposits in or withdrawals from
such A/B Loan Custodial Account or Serviced Companion Mortgage Loan Custodial
Account, as applicable.
(c) The Master Servicer shall promptly inform the Special Servicer of
the name, account number, location and other necessary information concerning
the Certificate Account in order to permit the Special Servicer to make deposits
therein.
(d) Reserved
-186-
(e) The Master Servicer shall deliver a copy of any reports or
information delivered to the Trustee or the Paying Agent pursuant to subsection
(a) or subsection (b) of this Section 8.11 to the Depositor, the Special
Servicer, the Operating Adviser and each Rating Agency, in each case upon
request by such Person and only to the extent such reports and information are
not otherwise required to be delivered to such Person under any provision of
this Agreement.
(f) Notwithstanding any provision of this Agreement to the contrary,
the Master Servicer shall not have any obligation (other than to the Special
Servicer and, to the extent provided in the last sentence of Section 8.14, the
Operating Adviser) to deliver any statement, notice or report that is then made
available on the Master Servicer's or the Paying Agent's internet website,
provided that it has notified all parties entitled to delivery of such reports,
by electronic mail or other notice provided in this Agreement, to the effect
that such statements, notices or reports shall thereafter be made available on
such website from time to time.
(g) The Master Servicer shall deliver or cause to be delivered to the
Paying Agent, and the holder of any Serviced Companion Mortgage Loan (in respect
of such Serviced Companion Mortgage Loan) the following CMSA Reports with
respect to the Mortgage Loans (and, if applicable, the related REO Properties
and, to the extent received from the applicable Non-Serviced Mortgage Loan
Master Servicer, any Non-Serviced Mortgage Loan) providing the required
information as of the related Determination Date upon the following schedule:
(i) a Comparative Financial Status Report and the CMSA Financial File (it being
understood that the Primary Servicer is required to deliver the CMSA Financial
File only quarterly) not later than each Report Date, commencing in January
2005; (ii) a CMSA Operating Statement Analysis Report and an NOI Adjustment
Worksheet in accordance with Section 8.14 of this Agreement; (iii) a CMSA Watch
List in accordance with and subject to the terms of Section 8.11(h) on each
Report Date, commencing in January 2005; (iv) a Loan Set-Up File (with respect
to the initial Distribution Date only) not later than the Report Date in
December 2004; (v) a Loan Periodic Update File not later than each Report Date
commencing in December 2004 (which Loan Periodic Update File shall be
accompanied by a Monthly Additional Report on Recoveries and Reimbursements);
(vi) a Property File not later than each Report Date, commencing in December
2004; (vii) a Delinquent Loan Status Report on each Report Date, commencing in
January 2005; (viii) an Historical Loan Modification Report not later than each
Report Date, commencing in January 2005, (ix) an Historical Liquidation Report
not later than each Report Date, commencing in January 2005; and (x) an REO
Status Report on each Report Date, commencing in January 2005. The information
that pertains to Specially Serviced Mortgage Loans and REO Properties reflected
in such reports shall be based solely upon the reports delivered by the Special
Servicer to the Master Servicer in writing and on a computer readable medium
reasonably acceptable to the Master Servicer and the Special Servicer one (1)
Business Day after the Determination Date prior to the related Master Servicer
Remittance Date in the form required under Section 9.32. The Master Servicer's
responsibilities under this Section 8.11(g) with respect to REO Mortgage Loans
and Specially Serviced Mortgage Loans shall be subject to the satisfaction of
the Special Servicer's obligations under Section 9.32. The reporting obligations
of the Master Servicer in connection with any A/B Mortgage Loan shall be
construed to refer only to such information regarding the A/B Mortgage Loan (and
its related Mortgaged Property) and by reference to the related A Note only, but
whenever the Master Servicer remits funds to the holder of the related B
-187-
Note, it shall thereupon deliver to such holder a remittance report identifying
the amounts in such remittance.
(h) For each Distribution Date, the Master Servicer shall deliver to
the Paying Agent (and solely with respect to any A/B Mortgage Loan, the holder
of the related B Note and solely with respect to any Loan Pair, the holder of
the related Serviced Companion Mortgage Loan), not later than the related Report
Date, a CMSA Watch List. The Master Servicer shall list any Mortgage Loan on the
CMSA Watch List as to which any of the events specified in the CMSA Watch List
published by the CMSA for industry use has occurred.
(i) If the Master Servicer delivers a notice of drawing to effect a
drawing on any letter of credit or debt service reserve account under which the
Trust has rights as the holder of any Mortgage Loan for purposes other than
payment or reimbursement of amounts contemplated in and by a reserve or escrow
agreement (other than after a default under an applicable Mortgage Loan or B
Note), the Master Servicer shall, within five (5) Business Days following its
receipt of the proceeds of such drawing, deliver notice thereof to the Special
Servicer, the Operating Adviser and the Paying Agent, which notice shall set
forth (i) the unpaid Principal Balance of such Mortgage Loan or B Note
immediately before and immediately after the drawing, and (ii) a brief
description of the circumstances that in the Master Servicer's good faith and
reasonable judgment entitled the Master Servicer to make such drawing.
(j) The Master Servicer, the Special Servicer, the Trustee and the
Paying Agent, as applicable, but not the Primary Servicer, shall prepare and
deliver (or make available on their respective websites) to the Operating
Adviser the reports and information described in Exhibit BB (to the extent not
otherwise delivered pursuant to this Agreement) in the form and format and
within the time frame set forth therein.
(k) If the Operating Adviser and the Special Servicer are Affiliates
of one another, a report delivered to one of them by the Master Servicer need
not also be delivered to the other of them.
SECTION 8.12 ANNUAL STATEMENT AS TO COMPLIANCE. The Master Servicer
shall deliver to the Depositor, the Paying Agent, the Luxembourg Paying Agent
and the Trustee on or before March 15 of each year (or March 14 if a leap year),
commencing in March 2005, an Officer's Certificate stating, as to the signer
thereof, that (A) a review of the activities of the Master Servicer during the
preceding calendar year or portion thereof and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision and
(B) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement in all material
respects throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. The Master Servicer shall forward a
copy of each such statement to the Rating Agencies and the Operating Adviser.
Promptly after receipt of such Officer's Certificate, the Depositor shall review
the Officer's Certificate and, if applicable, consult with the Master Servicer
as to the nature of any defaults by the Master Servicer in the fulfillment of
any of the Master Servicer's obligations hereunder.
SECTION 8.13 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before noon (Eastern Time) on March 15 of each year (or March 14 if a leap
year),
-188-
commencing in March 2005, the Master Servicer at its expense shall cause a firm
of nationally recognized independent public accountants (which may also render
other services to the Master Servicer) and that is a member of the American
Institute of Certified Public Accountants to furnish a statement to the Trustee,
the Paying Agent, the Luxembourg Paying Agent and the Depositor, with a copy to
the Rating Agencies, to the effect that (i) it has obtained a letter of
representation regarding certain matters from the management of the Master
Servicer, which includes an assertion that the Master Servicer has complied with
certain minimum mortgage loan servicing standards (to the extent applicable to
commercial and multifamily mortgage loans), identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of commercial and
multifamily mortgage loans during the most recently completed calendar year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
commercial and multifamily mortgage loans by the Primary Servicer or
Sub-Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to the
Primary Servicer or Sub-Servicers. Promptly after receipt of such report, the
Depositor shall review the report and, if applicable, consult with the Master
Servicer as to the nature of any defaults by the Master Servicer in the
fulfillment of any of the Master Servicer's obligations hereunder.
SECTION 8.14 CMSA OPERATING STATEMENT ANALYSIS REPORTS REGARDING THE
MORTGAGED PROPERTIES. Within 105 calendar days after the end of each of the
first three calendar quarters (in each year), commencing in the quarter ending
on September 30, 2004, in each case for the trailing or quarterly information
received, the Master Servicer (in the case of Mortgage Loans that are not
Specially Serviced Mortgage Loans) or the Special Servicer (in the case of
Specially Serviced Mortgage Loans) shall deliver to the Paying Agent and the
Operating Adviser a CMSA Operating Statement Analysis Report and a CMSA
Financial File for each Mortgaged Property (in electronic format), prepared
using the non-normalized quarterly and normalized year-end operating statements
and rent rolls received from the related Mortgagor. Not later than the Report
Date occurring in June of each year, beginning in 2005 for year-end 2004, the
Master Servicer (in the case of Mortgage Loans that are not Specially Serviced
Mortgage Loans) or the Special Servicer (in the case of Specially Serviced
Mortgage Loans) shall deliver to the Paying Agent and the Operating Adviser a
CMSA Operating Statement Analysis Report, a CMSA Financial File and an NOI
Adjustment Worksheet for each Mortgage Loan (in electronic format), based on the
most recently available year-end financial statements and most recently
available rent rolls of each applicable Mortgagor (to the extent provided to the
Master Servicer by or on behalf of each Mortgagor, or, in the case of Specially
Serviced Mortgaged Loans, as provided to the Special Servicer, which Special
Servicer shall forward to the Master Servicer on or before May 31 of each such
year), containing such information and analyses for each Mortgage Loan provided
for in the respective forms of CMSA Operating Statement Analysis Report, CMSA
Financial File and an NOI Adjustment Worksheet as would customarily be included
in accordance with the Servicing Standard including, without limitation, Debt
Service Coverage Ratios and income, subject, in the case of any Non-Serviced
Mortgage Loan, to the receipt of such report from the applicable Non-Serviced
Mortgage Loan Master
-189-
Servicer or the applicable Non-Serviced Mortgage Loan Special Servicer. The
Master Servicer shall make reasonable efforts, consistent with the Servicing
Standard, to obtain such reports from the applicable Non-Serviced Mortgage Loan
Master Servicer or the applicable Non-Serviced Mortgage Loan Special Servicer.
In addition, the Master Servicer shall deliver to the Operating Adviser, and
upon request the Master Servicer shall make available to the Rating Agencies,
the Special Servicer, the Paying Agent, the Trustee and the holder of any
Serviced Companion Mortgage Loan, within 30 days following receipt thereof by
the Master Servicer, copies of any annual, monthly or quarterly financial
statements and rent rolls collected with respect to the Mortgaged Properties. As
and to the extent reasonably requested by the Special Servicer, the Master
Servicer shall make inquiry of any Mortgagor with respect to such information or
as regards the performance of the related Mortgaged Property in general. The
Paying Agent shall provide or make available electronically at no cost to the
Certificateholders or Certificate Owners, the Rating Agencies, the Operating
Adviser, the Depositor, the Placement Agents, the Underwriters, and solely as it
relates to any A/B Mortgage Loan, to the holder of the related B Note and solely
as it relates to any Loan Pair, to the holder of the related Serviced Companion
Mortgage Loan, the CMSA Operating Statement Analysis Reports, CMSA Financial
Files and NOI Adjustment Worksheets described above pursuant to Section 5.4(a).
The Master Servicer (but not the Primary Servicer under the Primary Servicing
Agreement) shall electronically deliver the CMSA Operating Statement Analysis
Report, the operating statements, rent rolls, property inspections and NOI
Adjustment Worksheet for each Mortgage Loan to the Operating Adviser using the
ARCap Naming Convention.
SECTION 8.15 OTHER AVAILABLE INFORMATION AND CERTAIN RIGHTS OF THE
MASTER SERVICER.
(a) Subject to paragraphs (b), (c) and (d) below, the Paying Agent
shall make available at its Corporate Trust Office, during normal business
hours, upon reasonable advance written notice for review by any
Certificateholder, any Certificate Owner, any Seller, the Primary Servicer, any
Placement Agent, any Underwriter, each Rating Agency, the Paying Agent or the
Depositor (and the holder of a B Note, if it relates to a B Note and the holder
of a Serviced Companion Mortgage Loan, if it relates to a Serviced Companion
Mortgage Loan), originals or copies of, among other things, the following items:
(i) this Agreement and any amendments thereto, (ii) all final and released CMSA
Operating Statement Analysis Reports and the Master Servicer Remittance Reports,
(iii) all Officer's Certificates (including Officer's Certificates evidencing
any determination of Nonrecoverable Advances) delivered to the Trustee and the
Paying Agent since the Closing Date, (iv) all accountants' reports delivered to
the Trustee and the Paying Agent since the Closing Date, (v) any and all
modifications, waivers and amendments of the terms of a Mortgage Loan entered
into by the Master Servicer and/or the Special Servicer and (vi) any and all
Officers' Certificates (and attachments thereto) delivered to the Trustee and
the Paying Agent to support the Master Servicer's determination that any Advance
was not or, if made, would not be, recoverable. The Trustee and the Paying Agent
will be permitted to require payment of a sum to be paid by the requesting party
(other than the Rating Agencies, the Trustee, the Paying Agent, any Placement
Agent or any Underwriter) sufficient to cover the reasonable costs and expenses
of making such information available.
(b) Subject to the restrictions described below, the Master Servicer
shall afford the Rating Agencies, the Depositor, the Trustee, the Paying Agent,
the Special Servicer,
-190-
the Primary Servicer, the Sellers, the Placement Agents, the Underwriters, the
Operating Adviser, any Certificateholder, any holder of a Serviced Companion
Mortgage Loan, any holder of a B Note or any Certificate Owner, upon reasonable
notice and during normal business hours, reasonable access to all information
referred to in Section 8.15(a) and any additional relevant,
non-attorney-client-privileged records and documentation regarding the
applicable Mortgage Loans, REO Property and all accounts, insurance policies and
other relevant matters relating to this Agreement (which access may occur by
means of the availability of information on the Master Servicer's or the Paying
Agent's internet website), and access to Servicing Officers of the Master
Servicer responsible for its obligations hereunder. Copies of information or
access will be provided to Certificateholders and each Certificate Owner
providing satisfactory evidence of ownership of Certificates or beneficial
ownership of a Certificate, as the case may be, which may include a
certification. Copies (or computer diskettes or other digital or electronic
copies of such information if reasonably available in lieu of paper copies) of
any and all of the foregoing items shall be made available by the Master
Servicer upon request; provided, however, that the Master Servicer shall be
permitted to require payment by the requesting party (other than the Depositor,
the Trustee, the Paying Agent, the Special Servicer, the Operating Adviser, any
Placement Agent, any Underwriter, or any Rating Agency) of a sum sufficient to
cover the reasonable expenses actually incurred by the Master Servicer of
providing access or copies (including electronic or digital copies) of any such
information requested in accordance with the preceding sentence.
(c) Nothing herein shall be deemed to require the Master Servicer to
confirm, represent or warrant the accuracy of (or to be liable or responsible
for) any other Person's information or report. Notwithstanding the above, the
Master Servicer shall not have any liability to the Depositor, the Trustee, the
Fiscal Agent, the Paying Agent, the Special Servicer, any Non-Serviced Mortgage
Loan Master Servicer, any Non-Serviced Mortgage Loan Special Servicer, any
Certificateholder, any Certificate Owner, any holder of a Serviced Companion
Mortgage Loan, any holder of a B Note, any Placement Agent, any Underwriter, any
Rating Agency or any other Person to whom it delivers information pursuant to
this Section 8.15 or any other provision of this Agreement for federal, state or
other applicable securities law violations relating to the disclosure of such
information. In the event any Person brings any claims relating to or arising
from the foregoing against the Master Servicer (or any employee, attorney,
officer, director or agent thereof), the Trust (from amounts held in any account
(including (x) with respect to any such claims relating to a Serviced Companion
Mortgage Loan, from amounts held in the related Serviced Companion Mortgage Loan
Custodial Account and (y) with respect to any such claims relating to a B Note,
from amounts held in the related A/B Loan Custodial Account) or otherwise) shall
hold harmless and indemnify the Master Servicer from any loss or expense
(including attorney fees) relating to or arising from such claims.
(d) The Master Servicer shall produce the reports required of it
under this Agreement; provided, however, that the Master Servicer shall not be
required to produce any ad hoc non-standard written reports with respect to such
Mortgage Loans. In the event the Master Servicer elects to provide such
non-standard reports, it may require the Person requesting such report (other
than a Rating Agency) to pay a reasonable fee to cover the costs of the
preparation thereof. Notwithstanding anything to the contrary herein, as a
condition to the Master Servicer making any report or information available upon
request to any Person other than the parties hereto, the Master Servicer may
require that the recipient of such information acknowledge that the Master
Servicer may contemporaneously provide such information to the Depositor, the
-191-
Trustee, the Fiscal Agent, the Paying Agent, the Special Servicer, the Primary
Servicer, the Sellers, any Placement Agent, any Underwriter, any Rating Agency
and/or the Certificateholders, the holder of a Serviced Companion Mortgage Loan,
the holder of a B Note or Certificate Owners. Any transmittal of information by
the Master Servicer to any Person other than the Trustee, the Paying Agent, the
Master Servicer, the Special Servicer, the Rating Agencies, the Operating
Adviser or the Depositor may be accompanied by a letter from the Master Servicer
containing the following provision:
"By receiving the information set forth herein, you hereby
acknowledge and agree that the United States securities laws restrict
any person who possesses material, non-public information regarding the
Trust which issued Bear Xxxxxxx Commercial Mortgage Securities Inc.,
Commercial Mortgage Pass-Through Certificates, Series 2004-TOP16 from
purchasing or selling such Certificates in circumstances where the
other party to the transaction is not also in possession of such
information. You also acknowledge and agree that such information is
being provided to you for the purpose of, and such information may be
used only in connection with, evaluation by you or another
Certificateholder, Certificate Owner or prospective purchaser of such
Certificates or beneficial interest therein."
(e) The Master Servicer may, at its discretion, make available by
electronic media and bulletin board service certain information and may make
available by electronic media or bulletin board service (in addition to making
such information available as provided herein) any reports or information
required by this Agreement that the Master Servicer is required to provide to
any of the Rating Agencies, the Depositor and anyone the Depositor reasonably
designates.
(f) The Master Servicer shall cooperate in providing the Rating
Agencies with such other pertinent information relating to the Mortgage Loans as
is or should be in their respective possession as the Rating Agencies may
reasonably request.
SECTION 8.16 RULE 144A INFORMATION. For as long as any of the
Certificates are "restricted securities" within the meaning of Rule 144A under
the Securities Act, the Master Servicer agrees to provide to the Paying Agent or
the Luxembourg Paying Agent, as applicable, for delivery to any Holder thereof,
any Certificate Owner therein and to any prospective purchaser of the
Certificates or beneficial interest therein reasonably designated by the Paying
Agent or the Luxembourg Paying Agent, as applicable, upon the request of such
Certificateholder, such Certificate Owner, the Paying Agent or the Luxembourg
Paying Agent, as applicable, subject to this Section 8.16 and the provisions of
Sections 5.4 and 8.15, any information prepared by the Master Servicer that is
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act, including,
without limitation, copies of the reports and information described in Sections
8.15(a) and (b).
Any recipient of information provided pursuant to this Section
8.16 shall agree that such information shall not be disclosed or used for any
purpose other than the evaluation of the Certificates by such Person and the
Master Servicer shall be permitted to use the letter referred to in Section
8.15(d). Unless the Master Servicer chooses to deliver the information
-192-
directly, the Depositor, the Placement Agents, the Underwriters, the Paying
Agent or the Luxembourg Paying Agent shall be responsible for the physical
delivery of the information requested pursuant to this Section 8.16. As a
condition to the Master Servicer making any report or information available upon
request to any Person other than the parties hereto, the Master Servicer may
require that the recipient of such information acknowledge that the Master
Servicer may contemporaneously provide such information to the Depositor, the
Trustee, the Paying Agent, the Luxembourg Paying Agent, the Placement Agents,
the Underwriters, any Rating Agency and/or the Certificateholders and
Certificate Owners. The Master Servicer will be permitted to require payment of
a sum to be paid by the requesting party (other than the Rating Agencies, the
Trustee, the Paying Agent, the Placement Agents or the Underwriters) sufficient
to cover the reasonable costs and expenses of making such information available.
SECTION 8.17 INSPECTIONS. The Master Servicer shall, at its own
expense, inspect or cause to be inspected each Mortgaged Property other than
Mortgaged Properties related to Specially Serviced Mortgage Loans and
Non-Serviced Mortgage Loans, every calendar year beginning in 2005, or every
second calendar year beginning in 2005 if the Principal Balance of the related
Mortgage Loan or Loan Pair is less than $2,000,000; provided that the Master
Servicer shall, at the expense of the Trust, inspect or cause to be inspected
each Mortgaged Property related to a Mortgage Loan that has a Debt Service
Coverage Ratio that falls below 1.0x and provided further, that with respect to
any Mortgage Loan or Loan Pair that has a Principal Balance of less than
$2,000,000 and has been placed on the CMSA Watch List, the Master Servicer
shall, at the expense of the Trust and at the request of the Controlling Class,
inspect or cause to be inspected the related Mortgaged Property every calendar
year beginning in 2005 so long as such Mortgage Loan or Loan Pair continues to
be on the CMSA Watch List; provided, if such Mortgage Loan or Loan Pair is no
longer on the CMSA Watch List at the time the inspection was scheduled, no such
inspection shall be required. The Master Servicer shall prepare an Inspection
Report relating to each inspection. The Master Servicer shall promptly forward
the applicable Inspection Report to the Rating Agencies, the Placement Agents,
the Underwriters, the Depositor, the Trustee, the Paying Agent, the Operating
Adviser, the Special Servicer, solely as it relates to any Loan Pair, to the
holder of the related Serviced Companion Mortgage Loan, and solely as it relates
to any A/B Mortgage Loan, to the holder of the related B Note, and upon request,
to any Certificateholder, any Certificate Owner, any Seller and the Primary
Servicer. The Special Servicer shall have the right to inspect or cause to be
inspected (at its own expense) every calendar year any Mortgaged Property
related to a Mortgage Loan that is not a Specially Serviced Mortgage Loan,
provided that the Special Servicer notifies the Master Servicer prior to such
inspection.
SECTION 8.18 MODIFICATIONS, WAIVERS, AMENDMENTS, EXTENSIONS AND
CONSENTS.
Subject to the limitations of Section 12.3 hereof, the Master
Servicer shall have the following powers:
(a) (i) The Master Servicer in accordance with the Servicing Standard
may agree to any modification, waiver, amendment or consent of or relating to
any term other than a Money Term of a Mortgage Loan, a Serviced Companion
Mortgage Loan or a B Note that is not a Specially Serviced Mortgage Loan (such
terms to include, without limitation, Master Servicer Consent Matters set forth
in Section 8.3(a) hereof), provided that such amendment
-193-
would not result in an Adverse REMIC Event; and provided, further that if any
consent relates to a release of a letter of credit relating to any Mortgage Loan
(other than letters of credit or portions thereof released upon satisfaction of
conditions specified in the related agreements), then (i) the Master Servicer
shall notify the Special Servicer of any Mortgagor's request to release such
letter of credit which the Master Servicer recommends to release, and (ii) if
the terms of the related Mortgage Loan do not require the Master Servicer to
approve such release, then the Special Servicer shall within five Business Days
provide notice to the Master Servicer as to whether the Master Servicer should
approve the release (and the failure of the Special Servicer to give the Master
Servicer such notice shall automatically be deemed to be an approval by the
Special Servicer that the Master Servicer should grant such release).
Notwithstanding the preceding sentence, if the Master Servicer recommends to
approve such modification, waiver, amendment or consent which is not a Master
Servicer Consent Matter (including, without limitation, any waiver of any
requirement that the Mortgagor post additional reserves or a letter of credit
upon the failure of the Mortgagor to satisfy conditions specified in the
Mortgage Loan documents), the Master Servicer shall provide to the Special
Servicer a copy of the Master Servicer's recommendation and the relevant
information obtained or prepared by the Master Servicer in connection therewith;
provided, that (A) the Special Servicer shall have the right hereunder to grant
or withhold consent to any such proposed modification, waiver, amendment or
consent, and such consent of the Special Servicer shall not be unreasonably
withheld, consistent with the Servicing Standard, (B) failure of the Special
Servicer to notify the Master Servicer, within five Business Days following the
Master Servicer's delivery of the recommendation described above, of its
determination to grant or withhold such consent shall be deemed to constitute a
grant of such consent and (C) the Master Servicer shall not enter into any such
proposed modification, waiver, amendment or consent unless it has received the
written consent of the Special Servicer or such consent has been deemed to have
been granted as described above. Notwithstanding anything in this Agreement to
the contrary, the Master Servicer shall not be required to obtain or request the
consent of the Special Servicer in connection with any modification, waiver or
amendment, or granting its consent to transactions, under one or more of the
Mortgage Loans that in each case the Master Servicer has determined (in
accordance with the Servicing Standard) is immaterial. In any event, the Master
Servicer shall promptly notify the Special Servicer of any material
modification, waiver, amendment or consent executed by the Master Servicer
pursuant to this Section 8.18(a)(i) and provide to the Special Servicer a copy
thereof. Notwithstanding the foregoing provisions of this Section 8.18, if the
Mortgage Loan documents require a Mortgagor to pay a fee for an assumption,
modification, waiver, amendment or consent that would be due or partially due to
the Special Servicer, then the Master Servicer shall not waive the portion of
such fee due to the Special Servicer without the Special Servicer's approval.
Notwithstanding the foregoing, the Special Servicer acknowledges that
the Master Servicer has delegated certain tasks, rights and obligations to the
Primary Servicer with respects to Post Closing Requests (as defined in the
Primary Servicing Agreement) pursuant to Section 8.4 of this Agreement. The
Primary Servicing Agreement classifies certain Post Closing Requests as Category
1 Requests and grants the Primary Servicer certain authority to evaluate and
process such requests in accordance with this Agreement, the Primary Servicing
Agreement and applicable Mortgage Loan documents.
With respect to a Category 1 Request that involves a condition, term
or provision that requires, or specifies a standard of, consent or approval of
the applicable Mortgagee under
-194-
the Mortgage Loan documents, the Primary Servicing Agreement provides for
determination of materiality of such condition, term or provision requiring
approval or consent by the Master Servicer or the Primary Servicer and the
referral of such condition, term or provision to the Special Servicer for
consent in accordance with the terms of the Primary Servicing Agreement upon a
determination of materiality. The Special Servicer acknowledges such provisions.
Nothing in this Agreement, however, shall grant the Primary Servicer greater
authority, discretion or delegated rights over Post Closing Requests than are
set forth in the Primary Servicing Agreement.
(ii) The Master Servicer may, without the consent of the Special
Servicer, extend the maturity date of any Balloon Mortgage Loan that is not a
Specially Serviced Mortgage Loan to a date that is not more than 60 days
following the original Maturity Date, if in the Master Servicer's sole judgment
exercised in good faith (and evidenced by an Officer's Certificate), a default
in the payment of the Balloon Payment is reasonably foreseeable and such
extension is reasonably likely to produce a greater recovery to the Holders and
the holders of the related B Note and Serviced Companion Mortgage Loan (as a
collective whole) on a net present value basis than liquidation of such Mortgage
Loan and the Mortgagor has obtained an executed written commitment (subject only
to satisfaction of conditions set forth therein) for refinancing of the Mortgage
Loan or purchase of the related Mortgaged Property. The Master Servicer shall
process all such extensions and shall be entitled to (as additional servicing
compensation) 100% of any extension fees collected from a Mortgagor with respect
to any such extension.
(b) The Master Servicer may require, in its discretion (unless
prohibited or otherwise provided in the Mortgage Loan documents), as a condition
to granting any request by a Mortgagor for any consent, modification, waiver or
amendment, that such Mortgagor pay to the Master Servicer a reasonable and
customary modification fee to the extent permitted by law; provided that the
collection of such fee shall not be permitted if collection of such fee would
cause a "significant modification" (within the meaning of Treasury Regulation
Section 1.860G-2(b) of the Mortgage Loan). The Master Servicer shall be entitled
to (as additional servicing compensation) 100% of any Modification Fees
collected from a Mortgagor in connection with a consent, waiver, modification or
amendment of a non-Specially Serviced Mortgage Loan executed or granted pursuant
to Section 8.3 or this Section 8.18. The Master Servicer may charge the
Mortgagor for any costs and expenses (including attorneys' fees and rating
agency fees) incurred by the Master Servicer or the Special Servicer (and any
amounts incurred by the Special Servicer shall be reimbursed to the Special
Servicer) in connection with any request for a modification, waiver or
amendment. The Master Servicer agrees to use its best reasonable efforts in
accordance with the Servicing Standard to collect such costs, expenses and fees
from the Mortgagor, provided that the failure or inability of the Mortgagor to
pay any such costs and expenses shall not impair the right of the Master
Servicer to cause such costs and expenses (but not including any modification
fee), and interest thereon at the Advance Rate, to be paid or reimbursed by the
Trust as a Servicing Advance (to the extent not paid by the Mortgagor). If the
Master Servicer believes that the costs and expenses (including attorneys' fees)
to be incurred by the Master Servicer in connection with any request for a
modification, waiver or amendment will result in a payment or reimbursement by
the Trust, then the Master Servicer shall notify the Special Servicer.
(c) The Master Servicer shall notify the Trustee, the Paying Agent,
the Operating Adviser and the Special Servicer of any modification, waiver or
amendment of any
-195-
term of any Mortgage Loan permitted by it under this Section and the date
thereof, and shall deliver to the Trustee for deposit in the related Mortgage
File, an original counterpart of the agreement relating to such modification,
waiver or amendment, promptly following the execution thereof except to the
extent such documents have been submitted to the applicable recording office, in
which event the Master Servicer shall promptly deliver copies of such documents
to the Trustee. The Master Servicer shall not agree to any modification, waiver,
or amendment of any Money Term of a Mortgage Loan or any term of a Specially
Serviced Mortgage Loan. The Master Servicer shall notify the holder of the B
Note and the Serviced Companion Mortgage Loan of any modification of the monthly
payments of an A/B Mortgage Loan or a Loan Pair, as the case may be, and such
monthly payments shall be allocated in accordance with the related Intercreditor
Agreement or Loan Pair Intercreditor Agreement, as applicable.
(d) If the Mortgage Loan documents relating to a Mortgage Loan
provide for certain conditions to be satisfied prior to the Master Servicer
releasing additional collateral for the Mortgage Loan (e.g., the release,
reduction or termination of reserves or letters of credit or the establishment
of reserves), then the Master Servicer shall be permitted to waive any such
condition without obtaining the consent of the Special Servicer, provided that
(1) the aggregate amount of the related releases or establishments is no greater
than the smaller of 10% of the outstanding unpaid Principal Balance or $75,000
or (2) the condition to be waived is deemed to be non-material in accordance
with the Servicing Standard. Notwithstanding the foregoing, without the Special
Servicer's consent or except as provided in the specific Mortgage Loan
documents, the Master Servicer shall not waive: (1) a requirement for any such
additional collateral to exist, or (2) a lock box requirement.
(e) Neither the Master Servicer nor the Primary Servicer will be
required to obtain a Rating Agency Confirmation in connection with this
Agreement unless the terms of this Agreement specifically requires the Master
Servicer to do so, and if so required by the terms of this Agreement, the Master
Servicer and the Primary Servicer shall not be permitted to waive (i) the Rating
Agency Confirmation requirement or (ii) the obligation of a Mortgagor to pay all
or any portion of any fee payable in connection with obtaining the Rating Agency
Confirmation.
SECTION 8.19 SPECIALLY SERVICED MORTGAGE LOANS.
(a) The Master Servicer shall send a written notice to the Special
Servicer, the Operating Adviser, the Rating Agencies, the Paying Agent, the
Trustee and solely as it relates to any A/B Mortgage Loan, to the holder of the
related B Note and solely as it relates to any Loan Pair, to the holder of the
related Serviced Companion Mortgage Loan, within two Business Days after
becoming aware of a Servicing Transfer Event with respect to a Mortgage Loan,
which notice shall identify the related Mortgage Loan and set forth in
reasonable detail the nature and relevant facts of such Servicing Transfer Event
and whether such Mortgage Loan is covered by an Environmental Insurance Policy
(and for purposes of stating whether such Mortgage Loan is covered by an
Environmental Insurance Policy the Master Servicer may rely on Schedule X
attached hereto) and, except for the Rating Agencies, the Paying Agent and the
Trustee, shall be accompanied by a copy of the Servicer Mortgage File. The
Special Servicer shall not be liable for its failure to deliver the notice set
forth in Section 9.36(a) if such failure is caused by its failure to receive the
written notice set forth above.
-196-
(b) Prior to the transfer of the servicing of any Specially Serviced
Mortgage Loan to the Special Servicer, the Master Servicer shall notify the
related Mortgagor of such transfer in accordance with the Servicing Standard
(the form and substance of such notice shall be reasonably satisfactory to the
Special Servicer).
(c) Any calculations or reports prepared by the Master Servicer to
the extent they relate to Specially Serviced Mortgage Loans shall be based on
information supplied to the Master Servicer in writing by the Special Servicer
as provided hereby. The Master Servicer shall have no duty to investigate or
confirm the accuracy of any information provided to it by the Special Servicer
and shall have no liability for the inaccuracy of any of its reports due to the
inaccuracy of the information provided by the Special Servicer.
(d) On or prior to each Distribution Date, the Master Servicer shall
provide to the Special Servicer, in order for the Special Servicer to comply
with its obligations under this Agreement, such information (and in the form and
medium) as the Special Servicer may reasonably request in writing from time to
time, provided that (i) the Master Servicer shall not be required to produce any
ad hoc reports or incur any unusual expense or effort in connection therewith
and (ii) if the Master Servicer elects to provide such ad hoc reports, it may
require the Special Servicer to pay a reasonable fee to cover the costs of the
preparation thereof.
SECTION 8.20 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER.
(a) The Master Servicer hereby represents and warrants to and
covenants with the Trustee and the Paying Agent, as of the date hereof:
(i) the Master Servicer is duly organized, validly existing
and in good standing as a national banking association under the laws of the
United States, and shall be and thereafter remain, in compliance with the laws
of each State in which any Mortgaged Property is located to the extent necessary
to perform its obligations under this Agreement, except where the failure to so
qualify or comply would not adversely affect the Master Servicer's ability to
perform its obligations hereunder in accordance with the terms of this
Agreement;
(ii) the Master Servicer has the full power and authority to
execute, deliver, perform, and to enter into and consummate all transactions and
obligations contemplated by this Agreement. The Master Servicer has duly and
validly authorized the execution, delivery and performance of this Agreement and
this Agreement has been duly executed and delivered by the Master Servicer; and
this Agreement, assuming the due authorization, execution and delivery thereof
by the Depositor, the Trustee, the Fiscal Agent, the Paying Agent and the
Special Servicer, evidences the valid and binding obligation of the Master
Servicer enforceable against the Master Servicer in accordance with its terms
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium, receivership and other similar laws
affecting creditors' rights generally as from time to time in effect, and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iii) the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, and the fulfillment of or
compliance
-197-
with the terms and conditions of this Agreement will not (1) result in a breach
of any term or provision of its charter or by-laws or (2) conflict with, result
in a breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which it is a party or by
which it may be bound, or any law, governmental rule, regulation, or judgment,
decree or order applicable to it of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially and
adversely affects its ability to perform its obligations under this Agreement;
(iv) no litigation is pending or, to the Master Servicer's
knowledge, threatened, against it, that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or its ability to
service the Mortgage Loans or to perform any of its other obligations hereunder
in accordance with the terms hereof;
(v) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by it of, or compliance by it with, this Agreement, or the
consummation of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, it has obtained the same or will
obtain the same prior to the time necessary to perform its obligations under
this Agreement, and, except to the extent in the case of performance, that its
failure to be qualified as a foreign corporation or licensed in one or more
states is not necessary for the performance by it of its obligations hereunder;
and
(vi) the performance of the services by the Master Servicer
contemplated by this Agreement are in the ordinary course of business of the
Master Servicer and the Master Servicer possesses all licenses, permits and
other authorizations necessary to perform its duties hereunder.
(b) It is understood that the representations and warranties set
forth in this Section 8.20 shall survive the execution and delivery of this
Agreement.
(c) Any cause of action against the Master Servicer arising out of
the breach of any representations and warranties made in this Section shall
accrue upon the giving of written notice to the Master Servicer by any of the
Trustee or the Master Servicer. The Master Servicer shall give prompt notice to
the Trustee, the Depositor, the Primary Servicer and the Special Servicer of the
occurrence, or the failure to occur, of any event that, with notice or the
passage of time or both, would cause any representation or warranty in this
Section to be untrue or inaccurate in any respect.
SECTION 8.21 MERGER OR CONSOLIDATION. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that each of the Rating Agencies
provides a Rating Agency Confirmation (including with respect to any securities
rated by a Rating Agency evidencing direct beneficial ownership interests in any
Serviced Companion Mortgage Loan or B Note). If the conditions to the provisions
in the foregoing sentence are not met, the Trustee may
-198-
terminate the Master Servicer's servicing of the Mortgage Loans pursuant hereto,
such termination to be effected in the manner set forth in Sections 8.28 and
8.29.
SECTION 8.22 RESIGNATION OF MASTER SERVICER.
(a) Except as otherwise provided in Section 8.22(b) hereof, the
Master Servicer shall not resign from the obligations and duties hereby imposed
on it unless it determines that the Master Servicer's duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it. Any such
determination permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until a successor servicer designated by
the Trustee, with the consent of the Depositor and the Paying Agent, shall have
assumed the Master Servicer's responsibilities and obligations under this
Agreement and Rating Agency Confirmation (including with respect to any
securities rated by a Rating Agency evidencing interests in the A Notes and any
B Note) shall have been obtained. Notice of such resignation shall be given
promptly by the Master Servicer to the Trustee.
(b) The Master Servicer may resign from the obligations and duties
imposed on it, upon 30 days notice to the Trustee and the Paying Agent, provided
that (i) a successor servicer (w) is available, (x) has assets of at least
$15,000,000, (y) is willing to assume the obligations, responsibilities, and
covenants to be performed hereunder by the Master Servicer on substantially the
same terms and conditions, and for not more than equivalent compensation to that
herein provided and (z) assumes all obligations under the Primary Servicing
Agreement; (ii) the Master Servicer bears all costs associated with its
resignation and the transfer of servicing; and (iii) Rating Agency Confirmation
is obtained with respect to such servicing transfer, as evidenced by a letter
delivered to the Trustee by each Rating Agency.
SECTION 8.23 ASSIGNMENT OR DELEGATION OF DUTIES BY MASTER SERVICER.
The Master Servicer shall have the right without the prior written consent of
the Trustee to (A) delegate or subcontract with or authorize or appoint anyone,
or delegate certain duties to other professionals such as attorneys and
appraisers, as an agent of the Master Servicer (as provided in Section 8.4) to
perform and carry out any duties, covenants or obligations to be performed and
carried out by the Master Servicer hereunder or (B) assign and delegate all of
its duties hereunder; provided, however, that with respect to clause (B), (i)
the Master Servicer gives the Depositor, the Special Servicer, the Primary
Servicer, the holder of the B Note (only if such assignment/delegation relates
to the related A/B Mortgage Loan), the holder of the Serviced Companion Mortgage
Loan (only if such assignment/delegation relates to the related Loan Pair) and
the Trustee notice of such assignment and delegation; (ii) such purchaser or
transferee accepting such assignment and delegation executes and delivers to the
Depositor and the Trustee an agreement accepting such assignment, which contains
an assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer, with like effect as if
originally named as a party to this Agreement and the Primary Servicing
Agreement; (iii) the purchaser or transferee has assets in excess of
$15,000,000; (iv) such assignment and delegation is the subject of a Rating
Agency Confirmation; and (v) the Depositor consents to such assignment and
delegation, such consent not be unreasonably withheld. In the case of any such
assignment and delegation in accordance with the requirements of subclause (B)
of this Section, the Master Servicer shall be released from its obligations
under this Agreement, except
-199-
that the Master Servicer shall remain liable for all liabilities and obligations
incurred by it as the Master Servicer hereunder prior to the satisfaction of the
conditions to such assignment set forth in the preceding sentence.
Notwithstanding the above, the Master Servicer may appoint the Primary Servicer
and Sub-Servicers in accordance with Section 8.4 hereof.
SECTION 8.24 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS.
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
holders of the Certificates, the Depositor, the Trustee, the Fiscal Agent, the
Paying Agent, the Placement Agents, the Underwriters, the holder of any Serviced
Companion Mortgage Loan, the holder of any B Note or the Special Servicer for
any action taken or for refraining from the taking of any action in good faith,
or using reasonable business judgment, consistent with the Servicing Standard;
provided that this provision shall not protect the Master Servicer or any such
person against any breach of a representation or warranty contained herein or
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in its performance of duties under the Agreement or by
reason of negligent disregard of obligations and duties hereunder. The Master
Servicer and any director, officer, employee or agent of the Master Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person (including, without limitation, the Special Servicer)
respecting any matters arising hereunder. The Master Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement; provided that the Master Servicer may in its sole discretion
undertake any such action which it may reasonably deem necessary or desirable in
order to protect the interests of the Certificateholders and the Trustee in the
Mortgage Loans, the interests of the holder of any B Note or the interests of
the holder of any Serviced Companion Mortgage Loan (subject to the Special
Servicer's servicing of Specially Serviced Mortgage Loans as contemplated
herein), or shall undertake any such action if instructed to do so by the
Trustee. In such event, all legal expenses and costs of such action shall be
expenses and costs of the Trust, and the Master Servicer shall be entitled to be
reimbursed therefor as Servicing Advances as provided by Section 5.2, subject to
the provisions of Section 4.4 hereof.
(b) In addition, the Master Servicer shall have no liability with
respect to, and shall be entitled to conclusively rely on as to the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the Master Servicer and conforming to the requirements of
this Agreement. Subject to the Servicing Standard, the Master Servicer shall
have the right to rely on information provided to it by the Special Servicer and
Mortgagors, and will have no duty to investigate or verify the accuracy thereof.
Neither the Master Servicer, nor any director, officer, employee, agent or
Affiliate, shall be personally liable for any error of judgment made in good
faith by any officer, unless it shall be proved that the Master Servicer or such
officer was negligent in ascertaining the pertinent facts. Neither the Master
Servicer nor any director, officer, employee, agent or Affiliate, shall be
personally liable for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Agreement.
(c) The Master Servicer shall not be obligated to incur any
liabilities, costs, charges, fees or other expenses which relate to or arise
from any breach of any representation, warranty or covenant made by the
Depositor, the Special Servicer, the Paying Agent, Trustee or
-200-
the Fiscal Agent in this Agreement. The Trust shall indemnify and hold harmless
the Master Servicer from any and all claims, liabilities, costs, charges, fees
or other expenses which relate to or arise from any such breach of
representation, warranty or covenant to the extent the Master Servicer is unable
to recover such amounts from the Person in breach.
(d) Except as otherwise specifically provided herein:
(i) the Master Servicer may rely, and shall be protected in
acting or refraining from acting upon, any resolution, officer's certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, financial statement,
agreement, appraisal, bond or other document (in electronic or paper format)
reasonably believed or in good faith believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Master Servicer may consult with counsel, and any
written advice or Opinion of Counsel shall be full and complete authorization
and protection with respect to any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(iii) the Master Servicer shall not be personally liable for
any action taken, suffered or omitted by it in good faith and believed by it to
be authorized or within the discretion, rights or powers conferred upon it by
this Agreement; and
(iv) the Master Servicer, in preparing any reports hereunder,
may rely, and shall be protected in acting or refraining from acting upon any
information (financial or other), statement, certificate, document, agreement,
covenant, notice, request or other paper reasonably believed by it to be genuine
and provided by any Mortgagor or manager of a Mortgaged Property.
(e) The Master Servicer and any director, officer, employee or agent
of the Master Servicer shall be indemnified by the Trustee, the Fiscal Agent,
the Paying Agent and the Special Servicer, as the case may be, and held harmless
against any loss, liability or expense including reasonable attorneys' fees
incurred in connection with any legal action relating to the Trustee's, Fiscal
Agent's, the Paying Agent's or the Special Servicer's, as the case may be,
respective willful misfeasance, bad faith or negligence in the performance of
its respective duties hereunder or by reason of negligent disregard of its
respective duties hereunder, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
any of the Master Servicer's duties hereunder or by reason of negligent
disregard of the Master Servicer's obligations and duties hereunder. The Master
Servicer shall immediately notify the Trustee, the Paying Agent and the Special
Servicer if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans entitling the Master Servicer to indemnification hereunder,
whereupon the Trustee, the Paying Agent, or the Special Servicer, in each case,
to the extent the claim is related to its respective willful misfeasance, bad
faith or negligence, may assume the defense of any such claim (with counsel
reasonably satisfactory to the Master Servicer) and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Trustee, the Paying Agent
and the Special Servicer shall not affect any rights that the Master Servicer
may have to indemnification
-201-
under this Agreement or otherwise, unless the Trustee's, the Paying Agent's or
the Special Servicer's defense of such claim is materially prejudiced thereby.
Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Master Servicer hereunder. Any payment hereunder
made by the Trustee, the Paying Agent, the Fiscal Agent or the Special Servicer
pursuant to this paragraph to the Master Servicer shall be paid from the
Trustee's, the Paying Agent's, Fiscal Agent's or Special Servicer's own funds,
without reimbursement from the Trust therefor except to the extent achieved
through subrogation as provided in this Agreement. Any expenses incurred or
indemnification payments made by the Trustee, the Paying Agent, the Fiscal Agent
or the Special Servicer shall be reimbursed by the party so paid, if a court of
competent jurisdiction makes a final judgment that the conduct of the Trustee,
the Paying Agent, the Fiscal Agent or the Special Servicer, as the case may be,
was (x) not culpable or (y) found to not have acted with willful misfeasance,
bad faith or negligence.
SECTION 8.25 INDEMNIFICATION; THIRD-PARTY CLAIMS.
(a) The Master Servicer and any director, officer, employee or agent
of the Master Servicer (the "Master Servicer Indemnified Parties") shall be
indemnified and held harmless by the Trust out of collections on, and other
proceeds of, the Mortgage Loans, any Serviced Companion Mortgage Loans and any B
Notes, as provided in the following paragraph, against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, judgments
and any other costs, liabilities, fees and expenses (collectively, "Master
Servicer Losses") incurred in connection with any legal action relating to this
Agreement, any Mortgage Loans, any Serviced Companion Mortgage Loans, any B
Notes, any REO Property or the Certificates or any exercise of any right under
this Agreement reasonably requiring the use of counsel or the incurring of
expenses other than any loss, liability or expense incurred by reason of the
Master Servicer's willful misfeasance, bad faith or negligence in the
performance of duties hereunder.
Except as provided in the following sentence, indemnification for
Master Servicer Losses described in the preceding paragraph (including in the
case of such Master Servicer Losses that relate primarily to the administration
of the Trust, to any REMIC Pool or to any determination respecting the amount,
payment or avoidance of any tax under the REMIC provisions of the Code or the
actual payment of any REMIC tax or expense) shall be paid out of collections on,
and other proceeds of, the Mortgage Loans as a whole but not out of collections
on, or other proceeds of, any Serviced Companion Mortgage Loan or any B Note. In
the case of any such Master Servicer Losses that do not relate primarily to the
administration of the Trust, to any REMIC Pool or to any determination
respecting the amount, payment or avoidance of any tax under the REMIC
provisions of the Code or the actual payment of any REMIC tax or expense:
(1) if such Master Servicer Losses relate to a Loan Pair, then such
indemnification shall be paid (x) first, out of collections on, and other
proceeds of, such Serviced Pari Passu Mortgage Loan and Serviced Companion
Mortgage Loan, in the relative proportions provided for in the applicable
Intercreditor Agreement and (y) if the collections and proceeds described in
subclause (x) of this clause (1) are not sufficient to so indemnify the Master
Servicer Indemnified Parties on a current basis, then the balance of such
indemnification shall be paid out of collections on, and other proceeds of, the
Mortgage Loans as a whole; and
-202-
(2) if such Master Servicer Losses relate to any A/B Mortgage Loan,
then such indemnification shall be paid (x) first, if and to the extent
permitted under the applicable Intercreditor Agreement, out of collections on,
and other proceeds of, the B Note or B Notes related to such A/B Mortgage Loan,
(y) if the collections and proceeds described in subclause (x) of this clause
(2) are not sufficient to so indemnify the Master Servicer Indemnified Parties
on a current basis, then the balance of such indemnification shall be paid out
of collections on, and other proceeds of, the Serviced Pari Passu Mortgage Loan
and the Serviced Companion Mortgage Loan, in the relative proportions provided
for in the related Loan Pair Intercreditor Agreement and (z) if the aggregate
collections and proceeds described in subclauses (x) and (y) of this clause (2)
are not sufficient to so indemnify the Master Servicer Indemnified Parties on a
current basis, then the balance of such indemnification shall be paid out of
collections on, and other proceeds of, the Mortgage Loans as a whole.
The Master Servicer shall assume the defense of any such claim (with
counsel reasonably satisfactory to the Master Servicer) and out of the Trust pay
all expenses in connection therewith, including counsel fees, and out of the
Trust promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim. The indemnification
provided herein shall survive the termination of this Agreement. The Trustee,
the Paying Agent or the Master Servicer shall promptly make from the Certificate
Account (and, if and to the extent that the amount due shall be paid from
collections on, and other proceeds of, any Serviced Companion Mortgage Loan or
any B Note, as described above, out of the related Serviced Companion Mortgage
Loan Custodial Account or the related A/B Loan Custodial Account) any payments
certified by the Master Servicer to the Trustee and the Paying Agent as required
to be made to the Master Servicer pursuant to this Section 8.25.
(b) The Master Servicer agrees to indemnify the Trustee, the Fiscal
Agent, the Special Servicer, the Trust, the Depositor, the Paying Agent, and any
director, officer, employee, agent or Controlling Person thereof, and hold them
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liabilities, fees
and expenses that the Trustee, the Fiscal Agent, the Special Servicer, the
Depositor, the Paying Agent and the Trust may sustain arising from or as a
result of the willful misfeasance, bad faith or negligence in the performance of
any of the Master Servicer's duties hereunder or by reason of negligent
disregard of the Master Servicer's obligations and duties hereunder (including a
breach of such obligations a substantial motive of which is to obtain an
economic advantage from being released from such obligations), and if in any
such situation the Master Servicer is replaced, the parties hereto agree that
the amount of such claims, losses, penalties, fines, legal fees and related
costs, judgments, and other costs, liabilities, fees and expenses shall at least
equal the incremental costs, if any, of retaining a successor servicer. The
Trustee, the Fiscal Agent, the Special Servicer, the Paying Agent or the
Depositor, as applicable, shall immediately notify the Master Servicer if a
claim is made by any Person with respect to this Agreement or the Mortgage Loans
entitling the Trustee, the Fiscal Agent, the Depositor, the Special Servicer,
the Paying Agent or the Trust to indemnification under this Section 8.25(b),
whereupon the Master Servicer shall assume the defense of any such claim (with
counsel reasonably satisfactory to the Trustee, the Fiscal Agent, the Special
Servicer, the Paying Agent or the Depositor, as applicable) and pay all expenses
in connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Master Servicer shall not
affect any rights the Trustee, the Fiscal Agent, the Special Servicer, the
Depositor, the Paying
-203-
Agent or the Trust may have to indemnification under this Agreement or
otherwise, unless the Master Servicer's defense of such claim is materially
prejudiced thereby. The indemnification provided herein shall survive the
termination of this Agreement and the resignation or termination of the Master
Servicer, the Fiscal Agent, the Special Servicer, the Paying Agent and the
Trustee. Any expenses incurred or indemnification payments made by the Master
Servicer shall be reimbursed by the party so paid, if a court of competent
jurisdiction makes a final, non-appealable judgment that the conduct of the
Master Servicer was not culpable or that the Master Servicer did not act with
willful misfeasance, bad faith or negligence.
(c) The Primary Servicer and any director, officer, employee or agent
thereof shall be indemnified by the Trust and held harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, liabilities, fees and expenses incurred in
connection with any legal action relating to this Agreement, the Primary
Servicing Agreement (but only if, and to the extent that, the Master Servicer
would have been entitled to indemnification therefor under this Agreement if it
were directly servicing the Mortgage Loan), any Mortgage Loans, any REO Property
or the Certificates or any exercise of any right under this Agreement or the
Primary Servicing Agreement (limited as set forth above) reasonably requiring
the use of counsel or the incurring of expenses other than any loss, liability
or expense incurred by reason of the Primary Servicer's willful misfeasance, bad
faith or negligence in the performance of duties thereunder. The Primary
Servicer shall assume the defense of any such claim (with counsel reasonably
satisfactory to the Primary Servicer) and out of the Trust pay all expenses in
connection therewith, including counsel fees, and out of the Trust promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. The indemnification provided herein shall survive
the termination of this Agreement and the Primary Servicing Agreement. The
Trustee, the Paying Agent or the Master Servicer shall promptly make from the
Certificate Account any payments certified by the Primary Servicer to the
Trustee and the Paying Agent as required to be made to the Primary Servicer
pursuant to this Section 8.25.
(d) Any Non-Serviced Mortgage Loan Master Servicer and any director,
officer, employee or agent of such Non-Serviced Mortgage Loan Master Servicer
shall be indemnified by the Trust and held harmless against the Trust's pro rata
share of any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, liabilities, fees and expenses
incurred in connection with any legal action relating to any Non-Serviced
Mortgage Loan Pooling and Servicing Agreement and this Agreement, and relating
to any Non-Serviced Mortgage Loan (but excluding any such losses allocable to
the related Non-Serviced Companion Mortgage Loans), reasonably requiring the use
of counsel or the incurring of expenses other than any losses incurred by reason
of any Non-Serviced Mortgage Loan Master Servicer's willful misfeasance, bad
faith or negligence in the performance of its duties under the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
(e) The Primary Servicer agrees to indemnify the Trustee, the Fiscal
Agent, the Special Servicer, the Trust, the Depositor, the Paying Agent, and any
director, officer, employee, agent or Controlling Person thereof, and hold them
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liabilities, fees
and expenses that the Trustee, the Fiscal Agent, the Special Servicer, the
Depositor, the Paying Agent and the Trust may sustain arising from or as a
result of the willful
-204-
misfeasance, bad faith or negligence in the performance of any of the Primary
Servicer's duties under this Agreement, the Primary Servicing Agreement or by
reason of negligent disregard of the Primary Servicer's obligations and duties
thereunder (including a breach of such obligations a substantial motive of which
is to obtain an economic advantage from being released from such obligations),
and if in any such situation the Primary Servicer is replaced, the parties
hereto agree that the amount of such claims, losses, penalties, fines, legal
fees and related costs, judgments, and other costs, liabilities, fees and
expenses shall at least equal the incremental costs, if any, of retaining a
successor primary servicer. The Trustee, the Fiscal Agent, the Special Servicer,
the Paying Agent or the Depositor, as applicable, shall immediately notify the
Primary Servicer if a claim is made by any Person with respect to this
Agreement, the Primary Servicing Agreement or the Mortgage Loans entitling the
Trustee, the Fiscal Agent, the Depositor, the Special Servicer, the Paying Agent
or the Trust to indemnification under this Section 8.25(d), whereupon the
Primary Servicer shall assume the defense of any such claim (with counsel
reasonably satisfactory to the Trustee, the Fiscal Agent, the Special Servicer,
the Paying Agent or the Depositor, as applicable) and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Primary Servicer shall not
affect any rights the Trustee, the Fiscal Agent, the Special Servicer, the
Depositor, the Paying Agent or the Trust may have to indemnification under this
Agreement, the Primary Servicing Agreement or otherwise, unless the Primary
Servicer's defense of such claim is materially prejudiced thereby. The
indemnification provided herein shall survive the termination of this Agreement
and the Primary Servicing Agreement and the resignation or termination of the
Master Servicer, the Fiscal Agent, the Special Servicer, the Paying Agent and
the Trustee. Any expenses incurred or indemnification payments made by the
Primary Servicer shall be reimbursed by the party so paid, if a court of
competent jurisdiction makes a final, non-appealable judgment that the conduct
of the Primary Servicer was not culpable or that the Primary Servicer did not
act with willful misfeasance, bad faith or negligence.
SECTION 8.26 EXCHANGE ACT REPORTING
(a) The Master Servicer, the Special Servicer, the Paying Agent, the
Trustee and the Fiscal Agent shall reasonably cooperate with the Depositor in
connection with the Trust's satisfaction of its reporting requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Within 15 days
after each Distribution Date, the Paying Agent shall prepare, execute and file
on behalf of the Trust any Forms 8-K customary for similar securities as
required by the Exchange Act and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder; provided that the Depositor
shall file the initial Form 8-K in connection with the issuance of the
Certificates. The Paying Agent shall file each Form 8-K with a copy of the
related Monthly Certificateholders Report attached thereto. If the Depositor
directs that any other attachments are to be filed with any Form 8-K, such
attachments shall be delivered to the Paying Agent in XXXXX-compatible form or
as otherwise agreed upon by the Paying Agent and the Depositor, at the
Depositor's expense, and any necessary conversion to XXXXX-compatible format
will be at the Depositor's expense. Prior to March 30th of each year (or such
earlier date as may be required by the Exchange Act and the rules and
regulations of the Commission), the Paying Agent shall prepare and file on
behalf of the Trust a Form 10-K, in substance as required by applicable law or
applicable interpretations thereof of the staff of the Commission. Such Form
10-K shall include as exhibits each annual statement of compliance described
under Sections 8.12 and 9.18 and each accountant's report
-205-
described under Sections 8.13 and 9.19, in each case to the extent they have
been timely delivered to the Paying Agent. If they are not so timely delivered,
the Paying Agent shall file an amended Form 10-K including such documents as
exhibits reasonably promptly after they are delivered to the Paying Agent. Each
Form 10-K shall also include any Xxxxxxxx-Xxxxx Certification required to be
included therewith, as described in paragraph (b) of this Section 8.26. Neither
the Paying Agent nor the Master Servicer shall have any liability with respect
to any failure to properly prepare, execute or file such periodic reports
resulting from the Master Servicer's or the Paying Agent's inability or failure
to obtain any information not resulting from its own negligence, bad faith or
willful misconduct. Prior to January 30 of the first year in which the Paying
Agent is able to do so under applicable law, the Paying Agent shall file a Form
15 relating to the automatic suspension of reporting in respect of the Trust
under the Exchange Act.
(b) The Form 10-K shall include any certification (the
"Xxxxxxxx-Xxxxx Certification") required to be included therewith pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations thereof by the
Commission's staff) and a copy of such Xxxxxxxx-Xxxxx Certification shall be
provided to the Rating Agencies. The Special Servicer and the Paying Agent
(each, a "Performing Party") shall provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the "Certifying Person") a certification (each, a
"Performance Certification"), in the form attached hereto as Exhibit CC, on
which the Certifying Person, the entity for which the Certifying Person acts as
an officer (if the Certifying Person is an individual), and such entity's
officers, directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can rely. In addition, in the event that any Serviced
Companion Mortgage Loan is deposited into a commercial mortgage securitization,
each Performing Party shall provide to the Person who signs the Xxxxxxxx-Xxxxx
Certification with respect to such commercial mortgage securitization a
Performance Certification (which shall address the matters contained in the
Performance Certification, but solely with respect to the related Serviced
Companion Mortgage Loan) on which such Person, the entity for which the Person
acts as an officer (if the Person is an individual), and such entity's officers,
directors and Affiliates can rely. The Master Servicer shall serve as the
Certifying Person on behalf of the Trust. In addition, if the Performing Party
is the Special Servicer, such Performing Party shall execute a reasonable
reliance certificate to enable the Certification Parties to rely upon each
annual statement of compliance provided pursuant to Section 9.18, and shall
include a certification that each such annual statement of compliance discloses
any deficiencies or defaults described to the certified public accountants of
such Performing Party to enable such accountants to render the certificate
provided for in Section 9.19. In the event any Performing Party is terminated or
resigns pursuant to the terms of this Agreement, such Performing Party shall
provide a Performance Certification to the Certifying Person pursuant to this
Section 8.26(b) with respect to the period of time it was subject to this
Agreement.
(c) Each Performing Party shall indemnify and hold harmless each
Certification Party from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses incurred by such Certification Party arising out of
(i) an actual breach by the applicable Performing Party of its obligations under
this Section 8.26 or (ii) negligence, bad faith or willful misconduct on the
part of the Performing Party in the performance of such obligations.
-206-
(d) Nothing contained in this Section 8.26 shall be construed to
require any party to this Agreement other than the Master Servicer, or any of
such party's officers, to execute any Form 10-K or any Xxxxxxxx-Xxxxx
Certification. The failure of any party to this Agreement other than the Master
Servicer, or any of such party's officers, to execute any Form 10-K or any
Xxxxxxxx-Xxxxx Certification shall not be regarded as a breach by such party of
any of its obligations under this Agreement. This Section 8.26 may be amended by
the parties hereto pursuant to Section 13.3 for purposes of complying with the
Xxxxxxxx-Xxxxx Act of 2002 or for purposes of designating the Certifying Person
without any Opinions of Counsel, Officer's Certificates, Rating Agency
Confirmations or the consent of any Certificateholder, notwithstanding anything
to the contrary contained in this Agreement.
SECTION 8.27 COMPLIANCE WITH REMIC PROVISIONS AND GRANTOR TRUST
PROVISIONS. The Master Servicer shall act in accordance with this Agreement and
the REMIC Provisions and related provisions of the Code in order to create or
maintain the status of the REMIC Pools created hereby as REMICs and the Class P
Grantor Trust created hereby as a grantor trust under the Code. The Master
Servicer shall not take any action or (A) cause any REMIC Pool to take any
action that could (i) endanger the status of any REMIC Pool as a REMIC under the
Code or (ii) result in the imposition of a tax upon any REMIC Pool (including,
but not limited to, the tax on prohibited transactions as defined in Code
Section 860F(a)(2) or on prohibited contributions pursuant to Section 860G(d))
or (B) cause the Class P Grantor Trust to take any action that could (i)
endanger its status as a grantor trust or (ii) result in the imposition of any
tax upon the Class P Grantor Trust unless the Trustee shall have received a
Nondisqualification Opinion (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such tax. The Master Servicer shall comply with
the provisions of Article XII hereof.
SECTION 8.28 TERMINATION. The obligations and responsibilities of the
Master Servicer created hereby (other than the obligation of the Master Servicer
to make payments to the Paying Agent as set forth in Section 8.29 and the
obligations of the Master Servicer to the Trustee, the Paying Agent, the Fiscal
Agent, the Special Servicer and the Trust) shall terminate (i) on the date which
is the later of (A) the final payment or other liquidation of the last Mortgage
Loan remaining outstanding (and final distribution to the Certificateholders) or
(B) the disposition of all REO Property (and final distribution to the
Certificateholders), (ii) if an Event of Default described in clauses
8.28(a)(iii), (iv), (v) or (vi) has occurred, 60 days following the date on
which the Trustee or Depositor gives written notice to the Master Servicer that
the Master Servicer is terminated or (iii) if an Event of Default described in
clauses 8.28(a)(i), (ii), (vii), (viii), (ix) or (x) has occurred, immediately
upon the date on which the Trustee or the Depositor gives written notice to the
Master Servicer that the Master Servicer is terminated. After any Event of
Default, the Trustee (i) may elect to terminate the Master Servicer by providing
such notice, and (ii) shall provide such notice if holders of Certificates
representing more than 25% of the Aggregate Certificate Balance of all
Certificates so direct the Trustee.
(a) "Event of Default," wherever used herein, means any one of the
following events:
-207-
(i) any failure by the Master Servicer to remit to the Paying
Agent or otherwise make any payment required to be remitted by the Master
Servicer under the terms of this Agreement, including any required Advances; or
(ii) any failure by the Master Servicer to make a required
deposit to the Certificate Account which continues unremedied for one Business
Day following the date on which such deposit was first required to be made; or
(iii) any failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the duties, covenants or
agreements on the part of the Master Servicer contained in this Agreement which
continues unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor or the Trustee; provided, however, that
if the Master Servicer certifies to the Trustee and the Depositor that the
Master Servicer is in good faith attempting to remedy such failure, such cure
period will be extended to the extent necessary to permit the Master Servicer to
cure such failure; provided, further that such cure period may not exceed 90
days; or
(iv) any breach of the representations and warranties
contained in Section 8.20 hereof that materially and adversely affects the
interest of any holder of any Class of Certificates and that continues
unremedied for a period of 30 days after the date on which notice of such
breach, requiring the same to be remedied, shall have been given to the Master
Servicer by the Depositor or the Trustee, provided, however, that if the Master
Servicer certifies to the Trustee and the Depositor that the Master Servicer is
in good faith attempting to remedy such breach, such cure period will be
extended to the extent necessary to permit the Master Servicer to cure such
breach; provided, further that such cure period may not exceed 90 days; or
(v) the Trustee shall receive notice from Fitch to the effect
that the continuation of the Master Servicer in such capacity would result in
the downgrade, qualification or withdrawal of any rating then assigned by Fitch
to any Class of Certificates; or
(vi) the Master Servicer has been downgraded to a servicer
rating level below "CMS3" (or its equivalent) by Fitch; or
(vii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law for the
appointment of a conservator, receiver, liquidator, trustee or similar official
in any bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 60
days; or
(viii) the Master Servicer shall consent to the appointment of
a conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Master Servicer or of
or relating to all or substantially all of its property; or
(ix) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of any applicable
-208-
bankruptcy, insolvency or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its obligations, or
take any corporate action in furtherance of the foregoing; or
(x) the Master Servicer is removed from S&P's approved master
servicer list and is not reinstated within 60 days and the ratings then assigned
by S&P to any Classes of Certificates are downgraded, qualified or withdrawn
(including, without limitation, being placed on "negative credit watch") in
connection with such removal; or
(b) Notwithstanding the foregoing, if the Event of Default of the
Master Servicer occurs primarily by reason of the occurrence of a "Primary
Servicing Default" (as hereinafter defined) (that is, it would not have occurred
but for (a) the occurrence of such Primary Servicing Default and (b) the Master
Servicer failure to cause the cure of such event) and the Trustee (or the
Trustee at the direction of the Certificateholders pursuant to Section 8.28
hereof) elects to terminate the Master Servicer, then Xxxxx Fargo Bank, National
Association shall have the right to elect that the successor Master Servicer,
upon its succession, enter into a primary servicing agreement with Xxxxx Fargo
Bank, National Association with respect to all Mortgage Loans as to which that
Primary Servicing Default occurred, so long as the initial Master Servicer is on
the approved list of commercial mortgage loan servicers maintained by S&P and
the initial Master Servicer has a commercial loan master servicer rating of at
least "CMS3" (or its equivalent) by Fitch or a commercial loan primary servicer
rating of at least "CPS3" (or its equivalent) by Fitch, and such agreement shall
be substantially in the form of Exhibit G-1 hereto (but as if Xxxxx Fargo Bank,
National Association were the Primary Servicer or Sub-Servicer thereunder and
with applicable servicing fees and excess fees as specified on the Mortgage Loan
Schedule); and, in the case of an agreement in the form of Exhibit G-1,
thereupon Xxxxx Fargo Bank, National Association shall be deemed to have been
granted the rights and deemed to have assumed the obligations granted to or
imposed on the "Primary Servicer" hereunder as to such Mortgage Loans (and under
the Primary Servicing Agreement). For purposes of the preceding sentence, a
"Primary Servicing Default" means an "event of default" of the Primary Servicer
under the Primary Servicing Agreement of Principal Global Investors, LLC. If the
Master Servicer is terminated based upon an Event of Default set forth in clause
(i) (as to the obligation to make P&I Advances), (v), (vi) or (x) of Section
8.28(a), then the Master Servicer shall have the right to enter into a primary
servicing agreement with the successor Master Servicer with respect to all
Mortgage Loans that are not then subject to the Primary Servicing Agreement, so
long as the terminated Master Servicer is on the approved list of commercial
mortgage loan servicers maintained by S&P.
(c) Notwithstanding the other provisions of this Section 8.28, (A) if
any Event of Default on the part of the Master Servicer occurs that affects a
Serviced Companion Mortgage Loan or (B) for so long as any Serviced Companion
Mortgage Loan is serviced hereunder and is included in a securitization that is
rated by Xxxxx'x, if (x) the Trustee shall receive notice from Xxxxx'x to the
effect that the continuation of the Master Servicer in such capacity would
result in the downgrade, qualification or withdrawal of any rating then assigned
by Xxxxx'x to any class of certificates issued in such securitization or (y)
Xxxxx'x has placed one or more Classes of Certificates on "watch status" in
contemplation of a rating downgrade or withdrawal (and such "watch status"
placement shall not have been withdrawn by Xxxxx'x within 60 days of the date
that the Trustee obtained such actual knowledge) and, in the case of either of
clauses (x) or (y), citing servicing concerns with the Master Servicer as the
sole or material factor in such rating
-209-
action, and in either case, the Master Servicer is not otherwise terminated in
accordance with this Section 8.28, then, at the request of the holder of such
affected Serviced Companion Mortgage Loan, the Trustee shall require the Master
Servicer to appoint, within 30 days of the Trustee's request, a Sub-Servicer
(or, if the related Mortgage Loan is currently being sub-serviced, to replace,
within 30 days of the Trustee's request, the then-current Sub-Servicer with a
new Sub-Servicer) with respect to the related Mortgage Loan only, but as to no
other Mortgage Loan. In connection with the Master Servicer's appointment of a
Sub-Servicer at the request of the Trustee in accordance with this Section
8.28(c), the Master Servicer shall obtain a Rating Agency Confirmation (such
Rating Agency Confirmation to be an expense of the requesting Serviced Companion
Mortgage Loan holder). The related Sub-Servicing Agreement shall provide that
any Sub-Servicer appointed by the Master Servicer at the request of the Trustee
in accordance with this Section 8.28(c) shall be responsible for all duties, and
shall be entitled to all compensation, of the Master Servicer under this
Agreement with respect to the subject Loan Pair.
SECTION 8.29 PROCEDURE UPON TERMINATION.
(a) Notice of any termination pursuant to clause (i) of Section
8.28(a), specifying the Master Servicer Remittance Date upon which the final
transfer by the Master Servicer to the Paying Agent shall be made, shall be
given promptly in writing by the Master Servicer to the Paying Agent no later
than the later of (i) five Business Days after the final payment or other
liquidation of the last Mortgage Loan or (ii) the sixth day of the month of such
final distribution. Upon any such termination, the duties of the Master Servicer
(other than the obligation of the Master Servicer to pay to the Paying Agent the
amounts remaining in the Certificate Account as set forth below and the
obligations of the Master Servicer to the Trustee and the Trust and the Fiscal
Agent as provided herein) shall terminate and the Master Servicer shall transfer
to the Paying Agent the amounts remaining in the Certificate Account (and any
sub-account) after making the withdrawals permitted to be made pursuant to
Section 5.2 and shall thereafter terminate the Certificate Account and any other
account or fund maintained with respect to the Mortgage Loans.
(b) On the date specified in a written notice of termination given to
the Master Servicer pursuant to clause (ii) of Section 8.28(a), or on the date
on which a written notice of termination is given to the Master Servicer
pursuant to clause (iii) of Section 8.28(a) all authority, power and rights of
the Master Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall terminate (except for any rights relating to unpaid
servicing compensation or unreimbursed Advances or, if the terminated Master
Servicer is Xxxxx Fargo Bank, National Association, its rights to the Excess
Servicing Fee); provided that in no event shall the termination of the Master
Servicer be effective until a successor servicer shall have succeeded the Master
Servicer as successor servicer, subject to approval by the Rating Agencies,
notified the Master Servicer of such designation and such successor servicer
shall have assumed the Master Servicer's obligations and responsibilities
hereunder and under the Primary Servicing Agreement, as set forth in an
agreement substantially in the form hereof, with respect to the Mortgage Loans
and, in the circumstances set forth in the last sentence of Section 8.28(b),
entered into a new primary servicing agreement with the predecessor Master
Servicer in substantially the same form as Exhibit AA attached hereto. Except as
provided in the next sentence, the Trustee may not succeed the Master Servicer
as servicer until and unless it has satisfied the provisions that would apply to
a Person succeeding to the business of the Master Servicer pursuant to Section
8.22(b) hereof. Notwithstanding the foregoing sentence, in the
-210-
event that the Master Servicer is terminated as a result of an event described
in Section 8.28(a)(v), 8.28(a)(vi) or 8.28(a)(vii), the Trustee shall act as
successor servicer immediately upon delivery of a notice of termination to the
Master Servicer and shall use commercially reasonable efforts within 90 days of
assuming the duties of the Master Servicer, either to satisfy the conditions of
Section 8.22(b) hereof or to transfer the duties of the Master Servicer to a
successor servicer who has satisfied such conditions. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents or otherwise. The Master Servicer agrees to cooperate with the
Trustee, the Paying Agent and the Fiscal Agent in effecting the termination of
the Master Servicer's responsibilities and rights hereunder as Master Servicer
including, without limitation, notifying Mortgagors of the assignment of the
servicing function and providing the Trustee all documents and records in
electronic or other form reasonably requested by it to enable the successor
servicer designated by the Trustee to assume the Master Servicer's functions
hereunder and to effect the transfer to such successor for administration by it
of all amounts which shall at the time be or should have been deposited by the
Master Servicer in the Certificate Account and any other account or fund
maintained or thereafter received with respect to the Mortgage Loans.
(c) If the Master Servicer receives a written notice of termination
pursuant to clause (ii) of Section 8.28(a) relating solely to an Event of
Default set forth in clause (viii) or (ix) of Section 8.28(a), and if the Master
Servicer provides the Trustee with the appropriate "request for proposal"
materials within five Business Days after receipt of such written notice of
termination, then the Trustee shall promptly thereafter (using such "request for
proposal" materials provided by the Master Servicer) solicit good faith bids for
the rights to service the Mortgage Loans under this Agreement from at least
three but no more than five Qualified Bidders or, if three Qualified Bidders
cannot be located, then from as many persons as the Trustee can determine are
Qualified Bidders. At the Trustee's request, the Master Servicer shall supply
the Trustee with the names of Persons from whom to solicit such bids. In no
event shall the Trustee be responsible if less than three Qualified Bidders
submit bids for the right to service the Mortgage Loans under this Agreement.
(d) Each bid proposal shall require any Successful Bidder, as a
condition of its bid, to enter into this Agreement as successor Master Servicer,
and to agree to be bound by the terms hereof and the terms of the Primary
Servicing Agreement, not later than 30 days after termination of the Master
Servicer hereunder. The Trustee shall select the Qualified Bidder with the
highest cash bid (or such other Qualified Bidder as the Master Servicer may
direct) (the "Successful Bidder") to act as successor Master Servicer hereunder.
The Trustee shall direct the Successful Bidder to enter into this Agreement as
successor Master Servicer pursuant to the terms hereof, and in connection
therewith to deliver the amount of the Successful Bidder's cash bid to the
Trustee by wire transfer of immediately available funds to an account specified
by the Trustee no later than 10:00 a.m. New York City time on the date specified
for the assignment and assumption of the servicing rights hereunder.
(e) Upon the assignment and acceptance of the servicing rights
hereunder to and by the Successful Bidder and receipt of such cash bid, the
Trustee shall remit or cause to be remitted to the terminated Master Servicer
the amount of such cash bid received from the
-211-
Successful Bidder (net of all out-of-pocket expenses incurred in connection with
obtaining such bid and transferring servicing) by wire transfer of immediately
available funds to an account specified by the terminated Master Servicer no
later than 1:00 p.m. New York City time on the date specified for the assignment
and assumption of the servicing rights hereunder.
(f) If the Successful Bidder has not entered into this Agreement as
successor Master Servicer within 30 days after the termination of the Master
Servicer hereunder or no Successful Bidder was identified within such 30-day
period, the Trustee shall have no further obligations under Section 8.29(c) and
may act or may select another successor to act as Master Servicer hereunder in
accordance with Section 8.29(b).
(g) Notwithstanding anything to the contrary in this Section 8.29,
the successor master servicer must assume all of the obligations of the
terminated Master Servicer under the Primary Servicing Agreement as a condition
precedent to its becoming Master Servicer hereunder.
For purposes of the foregoing provisions of Section 8.29(c), the
phrase "rights to service" shall be construed to exclude those servicing rights
and duties as to which Xxxxx Fargo Bank, National Association has made an
election for the execution of a primary servicing agreement as contemplated by
Section 8.28(b).
SECTION 8.30 OPERATING ADVISER CONTACT WITH MASTER SERVICER AND
SPECIAL SERVICER.
No less often than on a monthly basis or as agreed upon by the Master
Servicer and the Operating Adviser, each of the Master Servicer and the Special
Servicer shall, without charge, make a Servicing Officer available to answer
questions from the Operating Adviser regarding the performance and servicing of
the Mortgage Loans and/or REO Properties for which the Master Servicer or the
Special Servicer, as the case may be, is responsible. The Primary Servicer shall
make a Servicing Officer available on any such call to answer questions from the
Operating Adviser regarding the Mortgage Loans and/or REO Properties that it
services.
ARTICLE IX
ADMINISTRATION AND SERVICING OF SPECIALLY SERVICED MORTGAGE
LOANS BY SPECIAL SERVICER
SECTION 9.1 DUTIES OF SPECIAL SERVICER.
(a) Subject to the express provisions of this Agreement, for and on
behalf of the Trust and for the benefit of the Certificateholders as a whole,
and, solely as it relates to any A/B Mortgage Loan, for the benefit of the
holder of the related B Note and, solely as it relates to any Loan Pair, for the
benefit of the holder of the related Serviced Companion Mortgage Loan, the
Special Servicer shall service the Specially Serviced Mortgage Loans and manage
the related REO Properties in accordance with the Servicing Standard and the
terms of this Agreement. Certain of the provisions of this Article IX make
explicit reference to their applicability to Mortgage Loans, any Serviced
Companion Mortgage Loan and any B Note; notwithstanding
-212-
such explicit references, references in this Article IX to "Mortgage Loans"
shall be construed, unless otherwise specified, to refer also to such B Note and
such Serviced Companion Mortgage Loan (but any other terms that are defined in
Article I and used in this Article IX shall be construed according to such
definitions without regard to this sentence).
(b) The Special Servicer shall cooperate with the Master Servicer and
provide the Master Servicer with the information reasonably requested by the
Master Servicer, in writing, to the extent required to allow the Master Servicer
to perform its servicing obligations with respect to the Specially Serviced
Mortgage Loans hereunder; provided, however, that (i) the Special Servicer shall
not be required to produce any ad hoc reports or incur any unusual expense or
effort in connection therewith and (ii) if the Special Servicer elects to
provide such ad hoc reports, the Special Servicer may require the Master
Servicer to pay a reasonable fee to cover the costs of the preparation thereof.
The Special Servicer's obligations with respect to the servicing of any
Specially Serviced Mortgage Loan and any related REO Properties shall terminate
when such Specially Serviced Mortgage Loan has become a Rehabilitated Mortgage
Loan, unless and until another Servicing Transfer Event with respect to such
Rehabilitated Mortgage Loan occurs.
(c) The Special Servicer shall send a written notice to the Master
Servicer, the Operating Adviser and the Paying Agent within two Business Days
after becoming aware that a Mortgage Loan has become a Rehabilitated Mortgage
Loan, which notice shall identify the applicable Mortgage Loan. Upon the receipt
of such notice by the Master Servicer and the Paying Agent, such Mortgage Loan
shall become a Rehabilitated Mortgage Loan and will be serviced by the Master
Servicer.
(d) Upon the occurrence of a Servicing Transfer Event with respect to
a Mortgage Loan and upon the reasonable request of the Special Servicer, the
Master Servicer shall xxxx its records for such Mortgage Loan to cause any
monthly statements for amounts due on such Mortgage Loan to be sent thereafter
to the Special Servicer rather than the related Mortgagor. Upon receipt of any
such monthly statement, the Special Servicer shall, within two Business Days,
advise the Master Servicer of any changes to be made, and return the monthly
statement to the Master Servicer. The Master Servicer shall thereafter promptly
send the corrected monthly statement to the Mortgagor. If a Mortgage Loan
becomes a Rehabilitated Mortgage Loan, the Master Servicer shall send the
monthly statement to the Mortgagor as it did before such Mortgage Loan became a
Specially Serviced Mortgage Loan.
(e) All amounts collected by the Master Servicer with respect to a
Specially Serviced Mortgage Loan (other than a Mortgage Loan that has become an
REO Mortgage Loan and a Specially Serviced Mortgage Loan that is a B Note or
Serviced Companion Mortgage Loan) shall be deposited in the Certificate Account,
and all amounts collected by the Master Servicer with respect to a Specially
Serviced Mortgage Loan that is a B Note shall be deposited in the related A/B
Loan Custodial Account and all amounts collected by the Master Servicer with
respect to a Specially Serviced Mortgage Loan that is a Serviced Companion
Mortgage Loan shall be deposited in the related Serviced Companion Mortgage Loan
Custodial Account. The Master Servicer shall within three Business Days after
receipt of any such payment, notify the Special Servicer of the receipt of such
payment and the amount thereof. The Special Servicer shall, within one Business
Day thereafter, instruct the Master Servicer in writing how to apply such
payment (with the application of such payments to be made in accordance with the
related
-213-
Mortgage Loan documents (including the related Intercreditor Agreement, if any)
or in accordance with this Agreement, as applicable).
(f) After the occurrence of any Servicing Transfer Event with respect
to any one or more Mortgage Loans that are the subject of any Environmental
Insurance Policy, (i) the Special Servicer shall monitor the dates by which any
claim must be made or action must be taken under such Environmental Insurance
Policy to achieve the payment of all amounts thereunder to which the Trust is
entitled in the event the Special Servicer has actual knowledge of any event
giving rise to a claim under such Environmental Insurance Policy (an "Insured
Environmental Event") and (ii) if the Special Servicer has actual knowledge of
an Insured Environmental Event with respect to such Mortgage Loan, the Special
Servicer shall take reasonable actions as are in accordance with the Servicing
Standard and the terms and conditions of the related Environmental Insurance
Policy to make a claim thereunder and achieve the payment of all amounts to
which the Trust is entitled thereunder. Any legal fees or other out-of-pocket
costs incurred in accordance with the Servicing Standard in connection with any
such claim shall be paid by, and reimbursable to, the Master Servicer (of if
applicable, the Special Servicer) as a Servicing Advance. All extraordinary
expenses (but not ordinary and routine or anticipated expenses) incurred by the
Special Servicer in fulfilling its obligations under this Section 9.1 shall be
paid by the Trust.
SECTION 9.2 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY
OF SPECIAL SERVICER. The Special Servicer, at its expense, shall maintain in
effect a Servicer Fidelity Bond and a Servicer Errors and Omissions Insurance
Policy. The Servicer Errors and Omissions Insurance Policy and Servicer Fidelity
Bond shall be issued by a Qualified Insurer (unless the Special Servicer self
insures as provided below) and be in form and amount consistent with the
Servicing Standard. In the event that any such Servicer Errors and Omissions
Insurance Policy or Servicer Fidelity Bond ceases to be in effect, the Special
Servicer shall obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement. So long as the long-term rating of the Special Servicer is not less
than two rating categories (ignoring pluses or minuses) lower than the highest
rating of the Certificates, but in any event not less than "A" as rated by Fitch
and "A" as rated by S&P, the Special Servicer may self-insure for the Servicer
Fidelity Bond and the Servicer Errors and Omissions Insurance Policy. Section
9.3 SUB-SERVICERS. The Special Servicer shall have the right to use a
Sub-Servicer on the same terms and conditions as those set forth in Section 8.4
for a Sub-Servicer of the Master Servicer. The Special Servicer shall notify the
Master Servicer, Trustee and solely as it relates to any A/B Mortgage Loan, the
holder of the related B Note, and solely as it relates to any Loan Pair, the
holder of the related Serviced Companion Mortgage Loan, of the appointment of
any Sub-Servicer of the Special Servicer.
SECTION 9.4 SPECIAL SERVICER GENERAL POWERS AND DUTIES.
(a) Subject to the other terms and provisions of this Agreement (and,
in the case of any Non-Serviced Mortgage Loan, subject to the servicing of such
Non-Serviced Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master
Servicer and the applicable Non-Serviced Mortgage Loan Special Servicer), the
Special Servicer is hereby
-214-
authorized and empowered when the Special Servicer believes it appropriate in
accordance with the Servicing Standard, to take any and all the actions with
respect to Specially Serviced Mortgage Loans which the Master Servicer may
perform as set forth in Section 8.3(a), including (i) to execute and deliver, on
behalf of itself or the Trust (or holder of a B Note or Serviced Companion
Mortgage Loan, as applicable), any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Specially Serviced Mortgage Loans
and with respect to the related REO Properties and (ii) to effectuate
foreclosure or other conversion of the ownership of any REO Property securing a
Mortgage Loan. The Trustee shall execute on the Closing Date a Power of Attorney
in the form of Exhibit S-2 hereto and shall furnish the Special Servicer from
time to time, upon request, with any additional powers of attorney of the Trust,
empowering the Special Servicer to take such actions as it determines to be
reasonably necessary to comply with its servicing, administrative and management
duties hereunder, and the Trustee shall execute and deliver or cause to be
executed and delivered such other documents as a Special Servicing Officer may
request, that are necessary or appropriate to enable the Special Servicer to
service, administer and manage the Specially Serviced Mortgage Loans and carry
out its duties hereunder, in each case as the Special Servicer determines is in
accordance with the Servicing Standard and the terms of this Agreement;
provided, that, prior to initiating any proceedings in any court of law or
equity (but not defending any proceedings in any court of law or equity) or
instituting any proceeding to foreclose on any Mortgaged Property in the name of
the Trust in any state, the Special Servicer shall notify the Trustee in writing
and not institute or initiate any such proceedings for a period of five Business
Days from the date of its delivery of such notice to the Trustee, unless the
Special Servicer reasonably believes that such action should be taken in less
than five Business Days to preserve the property of the Trust for the benefit of
Certificateholders, and the Trustee may within five Business Days of its receipt
of such notice advise the Special Servicer that it has received an Opinion of
Counsel (the cost of which shall be an expense of the Trust) from an attorney
duly licensed to practice law in the state where the related Mortgaged Property
or REO Property is located, that it is likely that the laws of the state in
which said action is to be taken either prohibit such action if taken in the
name of the Trust or that the Trust would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name;
provided, further, that the Special Servicer shall not be liable to the extent
that it relies on the advice provided in such Opinion of Counsel. Upon receipt
of any such advice from the Trustee, the Special Servicer shall take such action
in the name of such Person or Persons, in trust for the Trust (or holder of a B
Note or Serviced Companion Mortgage Loan, if applicable), as shall be consistent
with the Opinion of Counsel obtained by the Trustee. Such Person or Persons
shall acknowledge in writing that such action is being taken by the Special
Servicer in the name of the Trust (or holder of a B Note or the Serviced
Companion Mortgage Loan, if applicable). In the performance of its duties
hereunder, the Special Servicer shall be an independent contractor and shall
not, except in those instances where it is, after notice to the Trustee as
provided above, taking action in the name of the Trust (or holder of a B Note or
the Serviced Companion Mortgage Loan, if applicable), be deemed to be the agent
of the Trust (or holder of a B Note or the Serviced Companion Mortgage Loan, as
applicable). The Special Servicer shall indemnify the Trustee for any loss,
liability or reasonable expense (including attorneys' fees) incurred by the
Trustee or any director, officer, employee, agent or Controlling Person of it or
its affiliates in connection with any negligent or intentional misuse of the
foregoing powers of attorney furnished to the Special Servicer by the Trustee.
Such indemnification shall survive the resignation or termination of the Special
Servicer hereunder, the resignation or termination of the Trustee and the
termination of this Agreement. The Special
-215-
Servicer shall not have any responsibility or liability for any act or omission
of the Trustee, the Master Servicer or the Depositor that is not attributable to
the failure of the Special Servicer to perform its obligations hereunder. The
Special Servicer may conclusively rely on any advice of counsel rendered in a
Nondisqualification Opinion.
(b) In servicing and administering the Specially Serviced Mortgage
Loans and managing any related REO Properties, the Special Servicer shall employ
procedures consistent with the Servicing Standard. The Special Servicer shall
conduct, or cause to be conducted, inspections, at its own expense, of the
Mortgaged Properties relating to Specially Serviced Mortgage Loans at such times
and in such manner as shall be consistent with the Servicing Standard; provided,
that the Special Servicer shall conduct, or cause to be conducted, inspections
of the Mortgaged Properties relating to Specially Serviced Mortgage Loans at
least once during each twelve-month period that ends on June 30 of any calendar
year (commencing with the twelve-month period ending June 30, 2005); provided
further that the Special Servicer shall, at the expense of the Trust, inspect or
cause to be inspected each Mortgaged Property related to a Mortgage Loan that is
delinquent for sixty (60) days in the payment of any amounts due under such
Mortgage Loan. The Special Servicer shall provide to the Master Servicer (who
shall provide, solely as it relates to any A/B Mortgage Loan, to the holder of
the related B Note, and solely as it relates to any Loan Pair, to the holder of
the related Serviced Companion Mortgage Loan) and the Operating Adviser copies
of the Inspection Reports relating to such inspections as soon as practicable
after the completion of any inspection.
(c) Pursuant to the related Loan Pair Intercreditor Agreement, each
owner of a Serviced Companion Mortgage Loan has agreed that the Master Servicer
and the Special Servicer are authorized and obligated to service and administer
such Serviced Companion Mortgage Loan pursuant to this Agreement.
(d) Pursuant to the related Loan Pair Intercreditor Agreement, each
owner of a Serviced Companion Mortgage Loan has agreed that the Master Servicer
and the Special Servicer are authorized and obligated to service and administer
such Serviced Companion Mortgage Loan pursuant to this Agreement.
Notwithstanding anything herein to the contrary, the parties hereto acknowledge
and agree that the Special Servicer's obligations and responsibilities hereunder
and the Special Servicer's authority with respect to a Serviced Pari Passu
Mortgage Loan are limited by and subject to the terms of the related Loan Pair
Intercreditor Agreement. At such time when the related Serviced Companion
Mortgage Loan is deposited into a different commercial mortgage securitization
(the "Other Securitization"), the Special Servicer shall be required to consult
with the special servicer of the Other Securitization (the "Other Special
Servicer") in respect thereof, and shall provide the Other Special Servicer with
an opportunity to review any proposed action to be taken in respect thereof. The
Other Special Servicer and the operating adviser of the Other Securitization
(the "Other Operating Adviser") shall have such opportunity to consult with the
Special Servicer for a period from the date of receipt of the Special Servicer's
written description of its proposed action through (but excluding) the fifth
Business Day following the date of receipt (the "Initial Review Period"). The
Special Servicer shall implement its written proposal if the Other Special
Servicer (in consultation with the Other Operating Adviser) does not disapprove
the proposed action within the Initial Review Period, unless the Special
Servicer has been directed to do otherwise by the Operating Adviser (in which
event the Special Servicer shall advise the Other Special Servicer of such
alternate course of action). If the Other Special Servicer (in consultation with
the Other
-216-
Operating Adviser) disagrees with any aspect of the written proposal and, after
consulting with the Special Servicer during the Initial Review Period, is unable
to reach agreement on the proper course of action and notifies the Special
Servicer of its disagreement in writing, then the Other Special Servicer shall
be entitled to an additional period of five Business Days (the "Additional
Review Period") to continue its discussions with the Special Servicer and the
Operating Adviser. If the Other Special Servicer and the Special Servicer agree
on a revised course of action within the Initial Review Period or the Additional
Review Period, then the Special Servicer shall revise the written proposal to
reflect the agreed upon revised course of action and shall implement that course
of action. If the Other Special Servicer and the Special Servicer are unable to
agree on the appropriate course of action by the end of the Additional Review
Period, then the Special Servicer shall decide, in accordance with the Servicing
Standard set forth in this Agreement, what course of action to follow. If an
Event of Default has occurred and is continuing with respect to the Special
Servicer under this Agreement, which Event of Default does not relate to any
Mortgage Loan other than the related Loan Pair, then the trustee under the
pooling and servicing agreement relating to the Other Securitization (the "Other
Pooling and Servicing Agreement") shall be entitled to direct the Trustee to (a)
terminate the defaulting Special Servicer solely with respect to the related
Loan Pair and (b) appoint a successor Special Servicer that meets the
eligibility requirements of the Other Pooling and Servicing Agreement and this
Agreement. In such event, the trustee under the Other Pooling and Servicing
Agreement shall exercise its rights set forth in the preceding sentence at the
direction of the certificateholders holding at least 25% of the certificate
balance of the certificates issued under the Other Securitization or the Other
Operating Adviser. The replacement of the Special Servicer with respect to a
Loan Pair, as contemplated above, will in any event be subject to obtaining
Rating Agency Confirmation hereunder and any required Rating Agency Confirmation
with respect to the certificates by the trustee under the Other Pooling and
Servicing Agreement.
(e) Pursuant to the applicable Non-Serviced Mortgage Loan
Intercreditor Agreement, the owners of a Non-Serviced Mortgage Loan have agreed
that such owner's rights in, to and under such Non-Serviced Mortgage Loan are
subject to the servicing and all other rights of the applicable Non-Serviced
Mortgage Loan Master Servicer and the applicable Non-Serviced Mortgage Loan
Special Servicer and such Non-Serviced Mortgage Loan Master Servicer and
Non-Serviced Mortgage Loan Special Servicer are authorized and obligated to
service and administer such Non-Serviced Mortgage Loan pursuant to the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement. Notwithstanding
anything herein to the contrary, the parties hereto acknowledge and agree that
the Special Servicer's obligations and responsibilities hereunder and the
Special Servicer's authority with respect to any Non-Serviced Mortgage Loan are
limited by and subject to the terms of the applicable Non-Serviced Mortgage Loan
Intercreditor Agreement and the rights of the applicable Non-Serviced Mortgage
Loan Master Servicer and the applicable Non-Serviced Mortgage Loan Special
Servicer with respect thereto under the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement. The Special Servicer shall take such actions as
it shall deem reasonably necessary to facilitate the servicing of any
Non-Serviced Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master
Servicer and the applicable Non-Serviced Mortgage Loan Special Servicer
including, but not limited to, delivering appropriate Requests for Release to
the Trustee and Custodian (if any) in order to deliver any portion of the
related Mortgage File to the applicable Non-Serviced Mortgage Loan Master
Servicer or applicable Non-Serviced Mortgage Loan Special Servicer under the
related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
-217-
SECTION 9.5 "DUE-ON-SALE" CLAUSES; ASSIGNMENT AND ASSUMPTION
AGREEMENTS; MODIFICATIONS OF SPECIALLY SERVICED MORTGAGE LOANS;
DUE-ON-ENCUMBRANCE CLAUSES.
Subject to the limitations of Section 12.3, the Special Servicer
shall have the following duties and rights:
(a) If any Specially Serviced Mortgage Loan contains a provision in
the nature of a "due-on-sale" clause, which by its terms:
(i) provides that such Specially Serviced Mortgage Loan shall
(or may at the Mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property or ownership interest
in the related Mortgagor, or
(ii) provides that such Specially Serviced Mortgage Loan may
not be assumed, or ownership interests in the related Mortgagor may not be
transferred, without the consent of the related mortgagee in connection with any
such sale or other transfer,
then, the Special Servicer, on behalf of the Trust, shall, after consultation
with the Operating Adviser and in accordance with the REMIC Provisions, take
such actions as it deems to be in the best economic interest of the Trust in
accordance with the Servicing Standard, and may waive or enforce any due-on-sale
clause contained in the related Mortgage Note or Mortgage; provided, however,
that if the Principal Balance of such Mortgage Loan at such time equals or
exceeds 5% of the Aggregate Certificate Balance or exceeds $35,000,000 or is one
of the then current top 10 loans (by Principal Balance) in the pool, then prior
to waiving the effect of such provision, the Special Servicer shall obtain
Rating Agency Confirmation regarding such waiver. In connection with the request
for such consent, the Special Servicer shall prepare and deliver to Fitch and
S&P a memorandum outlining its analysis and recommendation in accordance with
the Servicing Standard, together with copies of all relevant documentation. The
Special Servicer shall also prepare and provide Fitch and S&P with such
memorandum and documentation for all transfer and assumption consents granted
for Mortgage Loans below the threshold set forth above (and, in the case of
encumbrances, the threshold set forth in Section 9.5(i)), but for which the
Special Servicer's decision will be sufficient and a Rating Agency Confirmation
is not required. As to any Mortgage Loan that is not a Specially Serviced
Mortgage Loan and contains a provision in the nature of a "due-on-sale" clause,
the Special Servicer shall have the rights and duties set forth in Section
8.7(b). The Special Servicer shall be entitled to 100% of all assumption fees in
connection with Specially Serviced Mortgage Loans.
After notice to the Operating Adviser, the Special Servicer is
also authorized to take or enter into an assignment and assumption agreement
from or with the Person to whom such property has been or is about to be
conveyed, and/or to release the original Mortgagor from liability upon the
Specially Serviced Mortgage Loan and substitute the new Mortgagor as obligor
thereon; provided, that except as otherwise permitted by Section 9.5(c), any
such assignment and assumption or substitution agreement shall contain no terms
that could result in an Adverse REMIC Event. To the extent permitted by law, the
Special Servicer shall enter into an assumption or substitution agreement that
is required under the related Mortgage Loan documents (either as a matter of
right or upon satisfaction of specified conditions) and shall
-218-
otherwise enter into any assumption or substitution agreement only if the credit
status of the prospective new mortgagor and the underwriting of the new
mortgagor is in compliance with the Special Servicer's regular commercial
mortgage origination or servicing standards and criteria. The Special Servicer
shall notify the Master Servicer of any such assignment and assumption or
substitution agreement and the Special Servicer shall forward to the Trustee the
original of such agreement, which original shall be added by the Trustee to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
(b) In connection with any assignment and assumption of a Specially
Serviced Mortgage Loan, in no event shall the Special Servicer consent to the
creation of any lien on a Mortgaged Property that is senior to, or on a parity
with, the lien of the related Mortgage. Nothing in this Section 9.5 shall
constitute a waiver of the Trustee's right, as the mortgagee of record, to
receive notice of any assignment and assumption of a Specially Serviced Mortgage
Loan, any sale or other transfer of the related Mortgaged Property or the
creation of any lien or other encumbrance with respect to such Mortgaged
Property.
(c) Subject to the Servicing Standard and Sections 9.39 and 9.40, and
the rights and duties of the Master Servicer under Section 8.18, the Special
Servicer may enter into any modification, waiver or amendment (including,
without limitation, the substitution or release of collateral or the pledge of
additional collateral) of the terms of any Specially Serviced Mortgage Loan,
including any modification, waiver or amendment to (i) reduce the amounts owing
under any Specially Serviced Mortgage Loan by forgiving principal, accrued
interest and/or any Prepayment Premium, (ii) reduce the amount of the Scheduled
Payment on any Specially Serviced Mortgage Loan, including by way of a reduction
in the related Mortgage Rate, (iii) forbear in the enforcement of any right
granted under any Mortgage Note or Mortgage relating to a Specially Serviced
Mortgage Loan, (iv) extend the Maturity Date of any Specially Serviced Mortgage
Loan and/or (v) accept a principal prepayment on any Specially Serviced Mortgage
Loan during any period during which voluntary Principal Prepayments are
prohibited, provided, in the case of any such modification, waiver or amendment,
that (A) the related Mortgagor is in default with respect to the Specially
Serviced Mortgage Loan or, in the reasonable judgment of the Special Servicer,
such default is reasonably foreseeable, (B) in the reasonable judgment of the
Special Servicer, such modification, waiver or amendment would result in a
recovery that would equal or exceed the recovery, from liquidation, on the
Specially Serviced Mortgage Loan to Certificateholders, the holder of the
related Serviced Companion Mortgage Loan and the holder of the related B Note
(as a collective whole) on a net present value basis (the relevant discounting
of amounts that will be distributable to Certificateholders, the holder of the
related Serviced Companion Mortgage Loan and the holder of the related B Note
(as a collective whole) to be performed at the related Mortgage Rate or such
other discount rate reasonably assigned by the Special Servicer in accordance
with the Servicing Standard that is no less than the Mortgage Rate (or, in the
case of an A/B Mortgage Loan, such discounting to be performed at a rate no less
than the weighted average of the Mortgage Rate and the stated mortgage rate on
the B Note)), (C) such modification, waiver or amendment would not cause an
Adverse REMIC Event (including with respect to any securities evidencing
interests in any A Note or any B Note) to occur or adversely affect the tax
status of the B Note Trust, and (D) if notice to the Operating Adviser of such
modification, waiver or amendment is required pursuant to Section 9.39, the
Special Servicer has made such notice. The Special Servicer, with respect to any
B Note and any Serviced Companion Mortgage Loan that is a Specially Serviced
-219-
Mortgage Loan, shall notify the holder of the B Note and the Serviced Companion
Mortgage Loan, as applicable, of any modification of the monthly payments of an
A/B Mortgage Loan or a Loan Pair, as the case may be, and such monthly payments
shall be allocated in accordance with the related Intercreditor Agreement or
Loan Pair Intercreditor Agreement, as applicable.
In no event, however, shall the Special Servicer (i) extend the
Maturity Date of a Specially Serviced Mortgage Loan beyond a date that is two
years prior to the Rated Final Distribution Date or (ii) if the Specially
Serviced Mortgage Loan is secured by a ground lease, extend the Maturity Date of
such Specially Serviced Mortgage Loan unless the Special Servicer gives due
consideration to the remaining term of such ground lease. The Special Servicer
shall not extend the Maturity Date of any Mortgage Loan secured by a Mortgaged
Property covered by a group secured creditor impaired property environmental
insurance policy for more than five years beyond such Mortgage Loan's Maturity
Date unless a new Phase I Environmental Report indicates that there is no
environmental condition or the Mortgagor obtains, at its expense, an extension
of such policy on the same terms and conditions to cover the period through five
years past the extended Maturity Date, provided that, (i) if such Mortgage Loan
is secured by a ground lease, the Special Servicer shall give due consideration
to the remaining term of the ground lease and (ii) in no case shall the Maturity
Date of any such Mortgage Loan be extended past a date that is two years prior
to the Rated Final Distribution Date.
The determination of the Special Servicer contemplated by clause (B)
of the proviso to the first paragraph of this Section 9.5(c) shall be evidenced
by an Officer's Certificate certifying the information in the proviso to the
first paragraph under this subsection (c).
(d) In the event the Special Servicer intends to permit a Mortgagor
to substitute collateral for all or any portion of a Mortgaged Property pursuant
to Section 9.5(c) or pledge additional collateral for the Mortgage Loan pursuant
to Section 9.5(c), if the security interest of the Trust, the holder of any
Serviced Companion Mortgage Loan or the holder of any B Note in such collateral
would be perfected by possession, or if such collateral requires special care or
protection, then prior to agreeing to such substitution or addition of
collateral, the Special Servicer shall make arrangements for such possession,
care or protection, and prior to agreeing to such substitution or addition of
collateral (or such arrangement for possession, care or protection) shall obtain
the prior written consent of the Trustee with respect thereto (which consent
shall not be unreasonably withheld, delayed or conditioned); provided, however,
that the Trustee shall not be required (but has the option) to consent to any
substitution or addition of collateral or to hold any such collateral which will
require the Trustee to undertake any additional duties or obligations or incur
any additional expense. Notwithstanding the foregoing, the Special Servicer will
not permit a Mortgagor to substitute collateral for any portion of the Mortgaged
Property pursuant to Section 9.5(c) unless it shall have received a Rating
Agency Confirmation in connection therewith, the costs of which to be payable by
the related Mortgagor to the extent provided for in the Mortgage Loan documents.
If the Mortgagor is not required to pay for the Rating Agency Confirmation, then
such expense will be paid by the Trust. The parties hereto acknowledge that if
the Trust incurs any Additional Trust Expense associated solely with the release
of collateral that is not required to be paid by a Mortgagor pursuant to the
related Mortgage Loan documents (and such Additional Trust Expense is not paid
by the Mortgagor), including, but not limited to, rating agency fees, then the
sole obligation of the related Seller shall be to pay an amount equal to such
expense to the extent the related Mortgagor is not required to pay them.
Promptly upon receipt of notice of such unpaid expense, regarding a
-220-
Specially Serviced Mortgage Loan, the Special Servicer shall request the related
Seller to make such payment by deposit to the Certificate Account.
(e) The Special Servicer will promptly deliver to the Master
Servicer, the Operating Adviser, the Trustee, the Paying Agent, the Rating
Agencies (and, solely with respect to an A/B Mortgage Loan, the related B Note
Holder) a notice, specifying any assignments and assumptions, modifications,
waivers or amendments executed pursuant to this Section 9.5, such notice
identifying the affected Specially Serviced Mortgage Loan. Such notice shall set
forth the reasons for such waiver, modification, or amendment (including, but
not limited to, information such as related income and expense statements, rent
rolls, occupancy status, property inspections, and an internal or external
appraisal performed in accordance with MAI standards and methodologies (and, if
done externally, the cost of such appraisal shall be recoverable as a Servicing
Advance subject to the provisions of Section 4.4 hereof)). The Special Servicer
shall also deliver to the Trustee (or the Custodian), for deposit in the related
Mortgage File, an original counterpart of the agreement relating to such
modification, waiver or amendment promptly following the execution thereof.
(f) No fee described in this Section shall be collected by the
Special Servicer from the Mortgagor (or on behalf of the Mortgagor) in
conjunction with any consent or any modification, waiver or amendment of the
Mortgage Loan if the collection of such fee would cause such consent,
modification, waiver or amendment to be a "significant modification" of the
Mortgage Note within the meaning of Treasury Regulation Section 1.860G-2(b).
Subject to the foregoing, the Special Servicer shall use its reasonable efforts,
in accordance with the Servicing Standard, to collect any modification fees and
other expenses connected with a permitted modification of a Mortgage Loan from
the Mortgagor. The inability of the Mortgagor to pay any costs and expenses of a
proposed modification shall not impair the right of the Special Servicer, the
Master Servicer or the Trustee to be reimbursed by the Trust for such expenses
(including any cost and expense associated with the Opinion of Counsel referred
to in this Section).
(g) The Special Servicer shall cooperate with the Master Servicer (as
provided in Section 8.7) in connection with assignments and assumptions of
Mortgage Loans that are not Specially Serviced Mortgage Loans, and shall be
entitled to receive 50% of any assumption fee paid by the related Mortgagor in
connection with an assignment and assumption executed pursuant to Section 8.7(a)
and 50% of any assumption fee paid by the related Mortgagor in connection with
an assignment and assumption executed pursuant to Section 8.7(b). The Special
Servicer shall be entitled to 100% of any assumption fee received in connection
with a Specially Serviced Mortgage Loan.
(h) Notwithstanding anything herein to the contrary, (i) the Special
Servicer shall not have any right or obligation to consult with or to seek
and/or obtain consent or approval from the Operating Adviser prior to acting,
and provisions of this Agreement requiring such shall be of no effect, if the
Operating Adviser resigns or is removed, during the period following such
resignation or removal until a replacement is elected and (ii) no advice,
direction or objection from or by the Operating Adviser, as contemplated by this
Agreement, may (and the Special Servicer shall ignore and act without regard to
any such advice, direction or objection that the Special Servicer has
determined, in its reasonable good faith judgment would) (A) require or cause
the Special Servicer to violate applicable law, the terms of any Mortgage Loan,
any provision of this Agreement or the REMIC Provisions, including the Special
Servicer's
-221-
obligation to act in accordance with the Servicing Standard, (B) result in an
Adverse REMIC Event with respect to any REMIC Pool, (C) expose the Trust, the
Depositor, the Master Servicer, the Special Servicer, the Fiscal Agent, the
Paying Agent or the Trustee, or any of their respective Affiliates, officers,
directors, employees or agents, to any material claim, suit or liability, or (D)
materially expand the scope of the Special Servicer's responsibilities under
this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Special Servicer be required to take direction
or obtain consent from the Operating Adviser with respect to (i) the Congress
Center A/B Mortgage Loan, so long as the holder of the related B Note is the
Directing Lender (as such term is defined in the related Intercreditor
Agreement) pursuant to the terms of the related Intercreditor Agreement or (ii)
the Huntington Square Mortgage Loan, so long as BSCMI or any of its affiliates
is the Controlling Holder (as such term is defined in the related Intercreditor
Agreement) pursuant to the terms of the related Intercreditor Agreement.
(i) If any Specially Serviced Mortgage Loan which contains a
provision in the nature of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the creation of any
additional lien or other encumbrance on the related Mortgaged Property
or a lien on an ownership interest in the Mortgagor; or
(ii) requires the consent of the mortgagee to the creation of
any such additional lien or other encumbrance on the related Mortgaged
Property or a lien on an ownership interest in the Mortgagor,
then, for so long as such Mortgage Loan is included in the Trust, the Special
Servicer, on behalf of the Trustee as the mortgagee of record, shall exercise
(or, subject to Section 9.5, waive its right to exercise) any right it may have
with respect to such Mortgage Loan (x) to accelerate the payments thereon, or
(y) to withhold its consent to the creation of any such additional lien or other
encumbrance, in a manner consistent with the Servicing Standard. Prior to
waiving the effect of such provision with respect to a Mortgage Loan, the
Special Servicer shall obtain Rating Agency Confirmation regarding such waiver;
provided, however, that such Rating Agency Confirmation shall only be required
if the applicable Mortgage Loan (x) represents 2% or more of the Principal
Balance of all of the Mortgage Loans held by the Trust, has a Principal Balance
of more than $20,000,000 or is one of the 10 largest Mortgage Loans based on
Principal Balance or (y) has a Loan-to-Value Ratio (which includes the
indebtedness to be secured by such additional lien or other encumbrance and any
other loans secured by the related Mortgaged Property or interests in the
related Mortgagor) that is greater than or equal to 85% or a Debt Service
Coverage Ratio (which includes debt service on the indebtedness to be secured by
such additional lien or other encumbrance and any other loans secured by the
related Mortgaged Property or interests in the related Mortgagor) that is less
than 1.2x.
Section 9.6 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any
Specially Serviced Mortgage Loan, or the receipt by the Special Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, or the complete defeasance of a Mortgage Loan, the Special
Servicer will immediately notify the Master Servicer. The Special Servicer
-222-
shall determine, in accordance with the Servicing Standard, whether an
instrument of satisfaction shall be delivered and, if the Special Servicer
determines that such instrument should be delivered, the Special Servicer shall
deliver written approval of such delivery to the Master Servicer.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Specially Serviced Mortgage Loan or the management of the
related REO Property and in accordance with the Servicing Standard, the Trustee
shall execute or cause to be executed such documents as shall be prepared and
furnished to the Trustee by a Special Servicing Officer (in form reasonably
acceptable to the Trustee) and as are necessary for such purposes. The Trustee
or Custodian shall, upon request of the Special Servicer and delivery to the
Trustee or Custodian of a request for release signed by a Special Servicing
Officer substantially in the form of Exhibit C, release the related Mortgage
File to the Special Servicer. After the transfer of servicing with respect to
any Specially Serviced Mortgage Loan to the Special Servicer, in accordance with
the Servicing Standard, the Master Servicer shall notify, in writing, the
Mortgagor under each Specially Serviced Mortgage Loan transferred to the Special
Servicer, of such transfer.
(c) The Special Servicer shall send notification in writing,
to the Master Servicer to request any documents and instruments in the
possession of the Master Servicer related to any Specially Serviced Mortgage
Loan.
(d) The Special Servicer shall, with respect to any
Rehabilitated Mortgage Loan, release to the Master Servicer all documents and
instruments in the possession of the Special Servicer related to such
Rehabilitated Mortgage Loan. Prior to the transfer of servicing with respect to
any Rehabilitated Mortgage Loan to the Master Servicer in accordance with the
Servicing Standard, the Special Servicer shall notify, in writing, each
Mortgagor under such Rehabilitated Mortgage Loan of such transfer.
SECTION 9.7 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
SPECIAL SERVICER TO BE HELD FOR THE TRUSTEE.
(a) The Special Servicer shall transmit to the Trustee or Custodian
such documents and instruments coming into the possession of the Special
Servicer as from time to time are required by the terms hereof to be delivered
to the Trustee. Any funds received by the Special Servicer in respect of any
Specially Serviced Mortgage Loan or any REO Property or which otherwise are
collected by the Special Servicer as Liquidation Proceeds, Condemnation Proceeds
or Insurance Proceeds in respect of any Specially Serviced Mortgage Loan or any
REO Property shall be transmitted to the Master Servicer within one Business Day
of receipt to the Certificate Account, except that if such amounts relate to REO
Income, they shall be deposited in the REO Account. The Special Servicer shall
provide access to information and documentation regarding the Specially Serviced
Mortgage Loans to the Trustee, the Master Servicer, the Fiscal Agent, the Paying
Agent, the Operating Adviser and their respective agents and accountants at any
time upon reasonable written request and during normal business hours, provided
that the Special Servicer shall not be required to take any action or provide
any information that the Special Servicer determines will result in any material
cost or expense to which it is not entitled to reimbursement hereunder or will
result in any material liability for which it is not indemnified hereunder;
provided further that the Trustee and the Paying Agent shall be entitled to
receive
-223-
from the Special Servicer all such information as the Trustee and the
Paying Agent shall reasonably require to perform their respective duties
hereunder. In fulfilling such a request, the Special Servicer shall not be
responsible for determining whether such information is sufficient for the
Trustee's, the Master Servicer's, the Fiscal Agent's, the Paying Agent's or the
Operating Adviser's purposes.
(b) The Special Servicer hereby acknowledges that the Trust (and/or
the holder of the related B Note, if an A/B Mortgage Loan is involved and/or the
holder of the related Serviced Companion Mortgage Loan, if a Loan Pair is
involved) owns the Specially Serviced Mortgage Loans and all Mortgage Files
representing such Specially Serviced Mortgage Loans and all funds now or
hereafter held by, or under the control of, the Special Servicer that are
collected by the Special Servicer in connection with the Specially Serviced
Mortgage Loans (but excluding any Special Servicer Compensation and all other
amounts to which the Special Servicer is entitled hereunder); and the Special
Servicer agrees that all documents or instruments constituting part of the
Mortgage Files, and such funds relating to the Specially Serviced Mortgage Loans
which come into the possession or custody of, or which are subject to the
control of, the Special Servicer, shall be held by the Special Servicer for and
on behalf of the Trust (or the holder of the related B Note, if an A/B Mortgage
Loan is involved or the holder of the related Serviced Companion Mortgage Loan,
if a Loan Pair is involved).
(c) The Special Servicer also agrees that it shall not create, incur
or subject any Specially Serviced Mortgage Loans, or any funds that are required
to be deposited in any REO Account to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, nor assert by legal
action or otherwise any claim or right of setoff against any Specially Serviced
Mortgage Loan or any funds, collected on, or in connection with, a Specially
Serviced Mortgage Loan.
SECTION 9.8 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SPECIAL
SERVICER.
(a) The Special Servicer hereby represents and warrants to and
covenants with the Trustee, as of the Closing Date:
(i) the Special Servicer is duly organized, validly existing
and in good standing as a corporation under the laws of the State of Delaware,
and shall be in compliance with the laws of each State in which any Mortgaged
Property (including any REO Property) which is, or is related to a Specially
Serviced Mortgage Loan is located to the extent necessary to perform its
obligations under this Agreement, except where the failure to so qualify or
comply would not adversely affect the Special Servicer's ability to perform its
obligations hereunder in accordance with the terms of this Agreement;
(ii) the Special Servicer has the full power and authority to
execute, deliver, perform, and to enter into and consummate all transactions and
obligations contemplated by this Agreement. The Special Servicer has duly and
validly authorized the execution, delivery and performance by it of this
Agreement and this Agreement has been duly executed and delivered by the Special
Servicer; and this Agreement, assuming the due authorization, execution and
delivery thereof by the Depositor, the Trustee, the Fiscal Agent, the Paying
Agent and the
-224-
Master Servicer, evidences the valid and binding obligation of the Special
Servicer enforceable against the Special Servicer in accordance with its terms
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium, receivership and other similar laws
affecting creditors' rights generally as from time to time in effect, and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iii) the execution and delivery of this Agreement by the
Special Servicer, the consummation by the Special Servicer of the transactions
contemplated hereby, and the fulfillment of or compliance by the Special
Servicer with the terms and conditions of this Agreement will not (1) result in
a breach of any term or provision of its charter or by-laws or (2) conflict
with, result in a breach, violation or acceleration of, or result in a default
under, the terms of any other material agreement or instrument to which it is a
party or by which it may be bound, or any law, governmental rule, regulation, or
judgment, decree or order applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects its ability to perform its obligations under
this Agreement;
(iv) no litigation is pending or, to the best of the Special
Servicer's knowledge, threatened, against it, the outcome of which, in the
Special Servicer's reasonable judgment, could reasonably be expected to
materially and adversely affect the execution, delivery or enforceability of
this Agreement or its ability to service the Mortgage Loans or to perform any of
its other obligations hereunder in accordance with the terms hereof; and
(v) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by it of, or compliance by it with, this Agreement, or the
consummation of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, it has obtained the same or will
obtain the same prior to the time necessary to perform its obligations under
this Agreement, and, except to the extent in the case of performance, that its
failure to be qualified as a foreign corporation or licensed in one or more
states is not necessary for the performance by it of its obligations hereunder.
(b) It is understood that the representations and warranties set
forth in this Section 9.8 shall survive the execution and delivery of this
Agreement.
(c) Any cause of action against the Special Servicer arising out of
the breach of any representations and warranties made in this Section shall
accrue upon the giving of written notice to the Special Servicer by any of the
Trustee, the Master Servicer, the Paying Agent or the Fiscal Agent. The Special
Servicer shall give prompt notice to the Trustee, the Fiscal Agent, the Paying
Agent, the Depositor, the Operating Adviser and the Master Servicer of the
occurrence, or the failure to occur, of any event that, with notice, or the
passage of time or both, would cause any representation or warranty in this
Section to be untrue or inaccurate in any respect.
SECTION 9.9 STANDARD HAZARD, FLOOD AND COMPREHENSIVE GENERAL
LIABILITY INSURANCE POLICIES.
-225-
(a) For all REO Properties (other than REO Properties relating to
Non-Serviced Mortgage Loans), the Special Servicer shall use reasonable efforts,
consistent with the Servicing Standard, to maintain with a Qualified Insurer (A)
a Standard Hazard Insurance Policy (that, if the terms of the related Mortgage
Loan documents and the related Mortgage so require, contains no exclusion as to
any Act or Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of
2002) which does not provide for reduction due to depreciation in an amount
which is not less than the full replacement cost of the improvements of such REO
Property or in an amount not less than the unpaid Principal Balance plus all
unpaid interest and the cumulative amount of Servicing Advances (plus Advance
Interest) made with respect to such Mortgage Loan, any related B Note and
Serviced Companion Mortgage Loan, whichever is less, but, in any event, in an
amount sufficient to avoid the application of any co-insurance clause and (B)
any other insurance coverage for such REO Property which the related Mortgagor
was required to maintain for the related Mortgaged Property under the related
Mortgage, subject, as to earthquake insurance, to the second sentence following
this sentence. If the improvements to the Mortgaged Property are in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and flood insurance has been made available), the
Special Servicer shall maintain a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
in an amount representing coverage equal to the lesser of the then outstanding
Principal Balance of the Specially Serviced Mortgage Loan and unpaid Advances
(plus Advance Interest) and the maximum insurance coverage required under such
current guidelines. It is understood and agreed that the Special Servicer has no
obligation to obtain earthquake or other additional insurance on REO Property,
except as required by law or, with respect to insurance other than earthquake
insurance, as set forth in clause (B) of the first sentence of this Section
9.9(a) and, nevertheless, at its sole option and at the Trust's expense, it (if
required at origination and is available at commercially reasonable rates) may
obtain such earthquake insurance. The Special Servicer shall use its reasonable
efforts, consistent with the Servicing Standard, to obtain a comprehensive
general liability insurance policy for all REO Properties. The Special Servicer
shall, to the extent available at commercially reasonable rates (as determined
by the Special Servicer in accordance with the Servicing Standard) and to the
extent consistent with the Servicing Standard, use its reasonable efforts to
maintain a Rent Loss Policy covering revenues for a period of at least twelve
months and a comprehensive general liability policy with coverage comparable to
prudent lending requirements in an amount not less than $1 million per
occurrence. All applicable policies required to be maintained by the Special
Servicer pursuant to this Section 9.9(a) shall name the Trustee as loss payee
and be endorsed with a standard mortgagee clause. The costs of such insurance
shall be a Servicing Advance, subject to the provisions of Section 4.4 hereof.
(b) Any amounts collected by the Special Servicer under any insurance
policies maintained pursuant to this Section 9.9 (other than amounts to be
applied to the restoration or repair of the REO Property) shall be deposited
into the applicable REO Account. Any cost incurred in maintaining the insurance
required hereby for any REO Property shall be a Servicing Advance, subject to
the provisions of Section 4.4 hereof.
(c) Notwithstanding the above, the Special Servicer shall not be
required in any event to maintain or obtain insurance coverage beyond what is
reasonably available at a cost customarily acceptable and consistent with the
Servicing Standard; provided that, the Special Servicer will be required to
maintain insurance against property damages resulting from terrorism or similar
acts if the terms of the related Mortgage Loan documents so require unless
-226-
the Special Servicer determines that (i) such insurance is not available at any
rate or (ii) such insurance is not available at commercially reasonable rates
and such hazards are not at the time commonly insured against for properties
similar to the related Mortgaged Property and located in or around the region in
which such related Mortgaged Property is located. The Special Servicer shall
notify the Trustee of any such determination.
(d) The Special Servicer shall conclusively be deemed to have
satisfied its obligations as set forth in this Section 9.9 either (i) if the
Special Servicer shall have obtained and maintained a master force placed or
blanket insurance policy insuring against hazard losses on all of the applicable
Mortgage Loans, any Serviced Companion Mortgage Loan and any B Note serviced by
it, it being understood and agreed that such policy may contain a deductible
clause on terms substantially equivalent to those commercially available and
maintained by comparable servicers consistent with the Servicing Standard, and
provided that such policy is issued by a Qualified Insurer with a minimum claims
paying ability rating of at least "A" by Fitch and "A" by S&P or otherwise
approved by the Rating Agencies or (ii) if the Special Servicer, provided that
the rating of such Person's long-term debt is not less than "A" by Fitch and "A"
by S&P, self-insures for its obligations as set forth in the first paragraph of
this Section 9.9. In the event that the Special Servicer shall cause any
Mortgage Loan, Serviced Companion Mortgage Loan and B Note to be covered by such
a master force placed or blanket insurance policy, the incremental cost of such
insurance allocable to such Mortgage Loan, Serviced Companion Mortgage Loan and
B Note (i.e., other than any minimum or standby premium payable for such policy
whether or not any Mortgage Loan is then covered thereby), if not borne by the
related Mortgagor, shall be paid by the Special Servicer as a Servicing Advance,
subject to the provisions of Section 4.4 hereof. If such policy contains a
deductible clause, the Special Servicer shall, if there shall not have been
maintained on the related Mortgaged Property a policy complying with this
Section 9.9 and there shall have been a loss that would have been covered by
such policy, deposit in the Certificate Account the amount not otherwise payable
under such master force placed or blanket insurance policy because of such
deductible clause to the extent that such deductible exceeds (i) the deductible
under the related Mortgage Loan, A/B Mortgage Loan or Serviced Companion
Mortgage Loan or (ii) if there is no deductible limitation required under the
Mortgage Loan, A/B Mortgage Loan or Serviced Companion Mortgage Loan, the
deductible amount with respect to insurance policies generally available on
properties similar to the related Mortgaged Property which is consistent with
the Servicing Standard, and deliver to the Trustee an Officer's Certificate
describing the calculation of such amount. In connection with its activities as
administrator and servicer of the Mortgage Loans, any Serviced Companion
Mortgage Loan and any B Note, the Special Servicer agrees to present, on its
behalf and on behalf of the Trustee, claims under any such master force placed
or blanket insurance policy.
SECTION 9.10 PRESENTMENT OF CLAIMS AND COLLECTION OF PROCEEDS. The
Special Servicer will prepare and present or cause to be prepared and presented
on behalf of the Trustee all claims under the Insurance Policies with respect to
REO Property, and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
recover under such policies. Any proceeds disbursed to the Special Servicer in
respect of such policies shall be promptly remitted to the Certificate Account,
upon receipt, except for any amounts realized that are to be applied to the
repair or restoration of the applicable REO Property in accordance with the
Servicing Standard. Any extraordinary expenses (but not ordinary and routine or
anticipated expenses) incurred by the Special Servicer in fulfilling its
obligations under this Section 9.10 shall be paid by the Trust.
-227-
SECTION 9.11 COMPENSATION TO THE SPECIAL SERVICER.
(a) As compensation for its activities hereunder, the Special
Servicer shall be entitled to (i) the Special Servicing Fee, (ii) the
Liquidation Fee and (iii) the Work-Out Fee. Such amounts, if any, collected by
the Special Servicer from the related Mortgagor shall be transferred by the
Special Servicer to the Master Servicer within one Business Day of receipt
thereof, and deposited by the Master Servicer in the Certificate Account. The
Special Servicer shall be entitled to receive a Liquidation Fee from the
Liquidation Proceeds received in connection with a Specially Serviced Mortgage
Loan or REO Property. With respect to each REO Mortgage Loan that is a successor
to a Mortgage Loan secured by two or more Mortgaged Properties, the reference to
"REO Property" in the preceding sentence shall be construed on a
property-by-property basis to refer separately to the acquired real property
that is a successor to each of such Mortgaged Properties, thereby entitling the
Special Servicer to a Liquidation Fee from the Liquidation Proceeds received in
connection with a final disposition of, and Condemnation Proceeds received in
connection with, each such acquired property as the Liquidation Proceeds related
to that property are received. The Special Servicer shall also be entitled to
additional special servicing compensation of an amount equal to the excess, if
any, of the aggregate Prepayment Interest Excess relating to Mortgage Loans
which are Specially Serviced Mortgage Loans which have received voluntary
Principal Prepayments not from Liquidation Proceeds or from modifications of
Specially Serviced Mortgage Loans for each Distribution Date over the aggregate
Prepayment Interest Shortfalls for such Mortgage Loans for such Distribution
Date. If the Special Servicer resigns or is terminated for any reason, it shall
retain the right to receive any Work-Out Fees payable on Mortgage Loans that
became Rehabilitated Mortgage Loans while it acted as Special Servicer and
remained Rehabilitated Mortgage Loans at the time of such resignation or
termination for so long as such Mortgage Loan remains a Rehabilitated Mortgage
Loan. No servicing compensation of any nature will be allocated to the Congress
Center B Note, or payable by the holder of the Congress Center B Note, except
for Work-Out Fees and Special Servicer Compensation payable during the period in
which the Congress Center A/B Mortgage Loan is a Specially Serviced Mortgage
Loan or, with respect to Work-Out Fees, a Rehabilitated Mortgage Loan.
(b) The Special Servicer shall be entitled to cause the Master
Servicer to withdraw (i) from the Certificate Account, the Special Servicer
Compensation in respect of each Mortgage Loan (but not a B Note), (ii) from any
Serviced Companion Mortgage Loan Custodial Account, the Special Servicer
Compensation to the extent related solely to the related Serviced Companion
Mortgage Loan and (iii) from any A/B Loan Custodial Account, the Special
Servicer Compensation to the extent related solely to the related B Note, in the
time and manner set forth in Section 5.2 of this Agreement. The Special Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as expressly provided in this Agreement.
(c) Additional Special Servicer Compensation in the form of net
interest or income on any REO Account, assumption fees, extension fees,
servicing fees, Modification Fees, forbearance fees, Late Fees and default
interest (net of amounts used to pay Advance Interest) or other usual and
customary charges and fees actually received from the Mortgagor in connection
with any Specially Serviced Mortgage Loan shall be retained by the Special
Servicer, to the extent not required to be deposited in the Certificate Account
pursuant to the terms of this Agreement (other than any such fees payable in
connection with any Non-Serviced Mortgage
-228-
Loan). The Special Servicer shall also be permitted to receive 50% of all
assumption fees collected with respect to Mortgage Loans that are not Specially
Serviced Mortgage Loans as provided in Section 8.7(a) and 8.7(b) and 100% of all
assumption fees collected with respect to Mortgage Loans that are Specially
Serviced Mortgage Loans as provided in Section 9.5(a) (other than any such fees
payable in connection with any Non-Serviced Mortgage Loan). To the extent any
component of Special Servicer Compensation is in respect of amounts usually and
customarily paid by Mortgagors, the Special Servicer shall use reasonable good
faith efforts to collect such amounts from the related Mortgagor, and to the
extent so collected, in full or in part, the Special Servicer shall not be
entitled to compensation for the portion so collected therefor hereunder out of
the Trust.
SECTION 9.12 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Special Servicer, in accordance with the Servicing Standard
and subject to Section 9.4(a) and Section 9.36, shall use its reasonable efforts
to foreclose upon, repossess or otherwise comparably convert the ownership of
Mortgaged Properties securing such of the Specially Serviced Mortgage Loans as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments of such Mortgage Loan, the
sale of such Mortgage Loan in accordance with this Agreement or the modification
of such Mortgage Loan in accordance with this Agreement. In connection with such
foreclosure or other conversion of ownership, the Special Servicer shall follow
the Servicing Standard. The foregoing is subject to the proviso that the Special
Servicer shall not request that the Master Servicer make a Servicing Advance for
Liquidation Expenses that would be a Nonrecoverable Advance unless the Special
Servicer determines that such Servicing Advance is in the best interest of the
Certificateholders (and in the case of any A/B Mortgage Loan, the holder of the
related B Note and the Trust as a collective whole and in the case of any Loan
Pair, the holder of the related Serviced Companion Mortgage Loan and the Trust
as a collective whole).
(b) The Special Servicer shall not acquire any personal property
relating to any Specially Serviced Mortgage Loan pursuant hereto unless either:
(i) such personal property is incidental to real property
(within the meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have received a
Nondisqualification Opinion (the cost of which shall be reimbursed by the Trust)
to the effect that the holding of such personal property by any REMIC Pool will
not cause the imposition of a tax on any REMIC Pool under the Code or cause any
REMIC Pool to fail to qualify as a REMIC.
(c) Notwithstanding anything to the contrary in this Agreement, the
Special Servicer shall not, on behalf of the Trust, obtain title to a Mortgaged
Property as a result of or in lieu of foreclosure or otherwise, and shall not
otherwise acquire possession of, or take any other action with respect to, any
Mortgaged Property, if, as a result of any such action the Trust, or any trust
that holds a Serviced Companion Mortgage Loan would be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of
such Mortgaged Property within the meaning of CERCLA, or any applicable
comparable federal, state or local law, or a "discharger" or "responsible party"
thereunder, unless the Special Servicer has also previously
-229-
determined in accordance with the Servicing Standard, based on a Phase I
Environmental Report prepared by a Person (who may be an employee or affiliate
of the Master Servicer or the Special Servicer) who regularly conducts
environmental site assessments in accordance with the standards of FNMA in the
case of multi-family mortgage loans and customary servicing practices in the
case of commercial loans for environmental assessments, which report shall be
delivered to the Trustee, that:
(i) such Mortgaged Property is in compliance with applicable
Environmental Laws or, if not, after consultation with an environmental expert
that taking such actions as are necessary to bring the Mortgaged Property in
compliance therewith is reasonably likely to produce a greater recovery on a net
present value basis than not taking such actions;
(ii) taking such actions as are necessary to bring the
Mortgaged Property in compliance with applicable Environmental Laws is
reasonably likely to produce a greater recovery on a net present value basis
than pursuing a claim under the Environmental Insurance Policy; and
(iii) there are no circumstances or conditions present or
threatened at such Mortgaged Property relating to the use, management, disposal
or release of any hazardous substances, hazardous materials, hazardous wastes,
or petroleum-based materials for which investigation, testing, monitoring,
removal, clean-up or remediation could be required under any federal, state or
local law or regulation, or that, if any such materials are present for which
such action could be required, after consultation with an environmental expert
taking such actions with respect to the affected Mortgaged Property is
reasonably likely to produce a greater recovery on a net present value basis
than not taking such actions (after taking into account the projected costs of
such actions); provided, however, that such compliance pursuant to clause (i)
and (ii) above or the taking of such action pursuant to this clause (iii) shall
only be required to the extent that the cost thereof is a Servicing Advance of
the Master Servicer or the Special Servicer pursuant to this Agreement, subject
to the provisions of Section 4.4 hereof.
(d) The cost of the Phase I Environmental Report contemplated
by Section 9.12(c) may be treated as a Liquidation Expense, or in the event the
related Specially Serviced Mortgage Loan is not liquidated and a Final Recovery
Determination has been made with respect to such Specially Serviced Mortgage
Loan, the Master Servicer shall treat such cost as a Servicing Advance subject
to the provisions of