EXHIBIT 99.1
================================================================================
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
as Depositor,
KEYCORP REAL ESTATE CAPITAL MARKETS, INC. d/b/a KEY COMMERCIAL MORTGAGE,
as General Master Servicer,
ARCAP SPECIAL SERVICING, INC.,
as General Special Servicer,
NCB, FSB
as Co-op Master Servicer,
NATIONAL CONSUMER COOPERATIVE BANK,
as Co-op Special Servicer,
and
XXXXX FARGO BANK MINNESOTA, N.A.,
as Trustee,
POOLING AND SERVICING AGREEMENT
Dated as of May 13, 2002
$918,137,952
Commercial Mortgage Pass-Through Certificates
Series 2002-CKN2
================================================================================
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES; CERTAIN CALCULATIONS IN
RESPECT OF THE MORTGAGE POOL
SECTION 1.01. Defined Terms.....................................................................3
SECTION 1.02. General Interpretive Principles..................................................71
SECTION 1.03. Certain Calculations in Respect of the Mortgage Pool.............................72
SECTION 1.04. Cross-Collateralized Mortgage Loans..............................................73
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES;
ORIGINAL ISSUANCE OF LOAN REMIC REGULAR INTEREST, REMIC I REGULAR
INTERESTS, REMIC II REGULAR INTERESTS, GROUP A-X REMIC III REGULAR INTERESTS,
GROUP A-SP REMIC III REGULAR INTERESTS, LOAN REMIC RESIDUAL INTEREST, REMIC
I RESIDUAL INTEREST, REMIC II RESIDUAL INTEREST, REMIC III RESIDUAL INTEREST
AND CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.....................................................75
SECTION 2.02. Acceptance of Mortgage Assets by Trustee.........................................79
SECTION 2.03. Certain Repurchases and Substitutions of Mortgage Loans by the
Mortgage Loan Sellers, the Column Performance Guarantor, the
NCBCC Performance Guarantor and the NCBFSB Performance
Guarantor......................................................................81
SECTION 2.04. Representations and Warranties of the Depositor..................................86
SECTION 2.05. Representations and Warranties of the General Master Servicer....................88
SECTION 2.06. Representations and Warranties of the General Special Servicer...................89
SECTION 2.07. Representations and Warranties of the Co-op Master Servicer......................91
SECTION 2.08. Representations and Warranties of the Co-op Special Servicer.....................93
SECTION 2.09. Representations, Warranties and Covenants of the Trustee.........................94
SECTION 2.10. Creation of the Loan REMIC; Issuance of the Loan REMIC Regular
Interest and the Loan REMIC Residual Interest; Certain Matters
Involving the Loan REMIC.......................................................96
SECTION 2.11. Conveyance of the Loan REMIC Regular Interest; Acceptance of the Loan
REMIC Regular Interest by Trustee..............................................99
SECTION 2.12. Creation of REMIC I; Issuance of the REMIC I Regular Interests and the
REMIC I Residual Interest; Certain Matters Involving REMIC I...................99
SECTION 2.13. Conveyance of the REMIC I Regular Interests; Acceptance of the REMIC I
Regular Interests by Trustee..................................................103
SECTION 2.14. Creation of REMIC II; Issuance of the REMIC II Regular Interests and the
REMIC II Residual Interest; Certain Matters Involving REMIC II................103
-i-
SECTION PAGE
------- ----
SECTION 2.15. Conveyance of the REMIC II Regular Interests; Acceptance of the
REMIC II Regular Interests by Trustee.........................................106
SECTION 2.16. Creation of REMIC III; Issuance of the REMIC III Regular Interest
Certificates, the Group A-X REMIC III Regular Interests, the Group A-
SP REMIC III Regular Interests and the REMIC III Residual Interest;
Certain Matters Involving REMIC III...........................................106
SECTION 2.17. Acceptance of Grantor Trusts and the Paradise Island Reserve Fund by
Trustee; Issuance of the Class V and Class R Certificates.....................112
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. General Provisions..............................................................114
SECTION 3.02. Collection of Mortgage Loan Payments............................................115
SECTION 3.03. Collection of Taxes, Assessments and Similar Items; Servicing Accounts;
Reserve Accounts..............................................................116
SECTION 3.04. Collection Accounts, Distribution Account, Interest Reserve Account and
Excess Liquidation Proceeds Account...........................................119
SECTION 3.05. Permitted Withdrawals From the Collection Accounts, the Distribution
Account, the Interest Reserve Account and the Excess Liquidation
Proceeds Account..............................................................123
SECTION 3.06. Investment of Funds in the Accounts.............................................128
SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions and Fidelity
Coverage......................................................................131
SECTION 3.08. Enforcement of Alienation Clauses...............................................134
SECTION 3.09. Realization Upon Defaulted Mortgage Loans.......................................136
SECTION 3.10. Trustee to Cooperate; Release of Mortgage Files.................................140
SECTION 3.11. Master Servicing and Special Servicing Compensation; Interest on and
Reimbursement of Servicing Advances; Payment of Certain Expenses;
Obligations of the Trustee and any Fiscal Agent Regarding Back-up
Servicing Advances............................................................141
SECTION 3.12. Property Inspections; Collection of Financial Statements; Delivery of
Certain Reports...............................................................147
SECTION 3.13. Annual Statement as to Compliance.............................................. 152
SECTION 3.14. Reports by Independent Public Accountants.......................................152
SECTION 3.15. Access to Certain Information...................................................153
SECTION 3.16. Title to REO Property; REO Account..............................................154
SECTION 3.17. Management of REO Property......................................................155
SECTION 3.18. Fair Value Option; Sale of REO Properties.......................................158
SECTION 3.19. Additional Obligations of Master Servicers and the Special Servicer.............163
SECTION 3.20. Modifications, Waivers, Amendments and Consents.................................170
SECTION 3.21. Transfer of Servicing Between Applicable Master Servicer and Applicable
Special Servicer; Record Keeping..............................................175
SECTION 3.22. Sub-Servicing Agreements........................................................176
SECTION 3.23. Controlling Class Representative................................................179
-ii-
SECTION PAGE
------- ----
SECTION 3.24. Certain Rights and Powers of the Controlling Class Representative...............181
SECTION 3.25. Replacement of Special Servicers................................................184
SECTION 3.26. Application of Default Charges..................................................186
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions...................................................................188
SECTION 4.02. Statements to Certificateholders; Certain Other Reports.........................196
SECTION 4.03. P&I Advances....................................................................199
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund Expenses................201
SECTION 4.05. Calculations....................................................................202
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates................................................................203
SECTION 5.02. Registration of Transfer and Exchange of Certificates...........................204
SECTION 5.03. Book-Entry Certificates.........................................................212
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates...............................213
SECTION 5.05. Persons Deemed Owners...........................................................213
SECTION 5.06. Certification by Certificateholders and Certificate Owners......................213
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICERS AND THE SPECIAL SERVICERS
SECTION 6.01. Liability of the Depositor, the Master Servicers and the Special Servicers......215
SECTION 6.02. Merger, Consolidation or Conversion of the Depositor, a Master Servicer
or a Special Servicer.........................................................215
SECTION 6.03. Limitation on Liability of the Depositor, the Master Servicers and the
Special Servicers.............................................................215
SECTION 6.04. Resignation of Master Servicers and Special Servicers...........................216
SECTION 6.05. Rights of the Depositor and the Trustee in Respect of the Master Servicers
and the Special Servicers.....................................................217
SECTION 6.06. Master Servicers and Special Servicers May Own Certificates.....................218
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default...............................................................220
SECTION 7.02. Trustee to Act; Appointment of Successor........................................223
SECTION 7.03. Notification to Certificateholders..............................................224
-iii-
SECTION PAGE
------- ----
SECTION 7.04. Waiver of Events of Default.....................................................224
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default............................225
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee...............................................................226
SECTION 8.02. Certain Matters Affecting the Trustee...........................................227
SECTION 8.03. Trustee and Fiscal Agent not Liable for Validity or Sufficiency of
Certificates or Mortgage Loans................................................229
SECTION 8.04. Trustee and Fiscal Agent May Own Certificates...................................229
SECTION 8.05. Fees and Expenses of Trustee; Indemnification of and by Trustee and
Fiscal Agent..................................................................229
SECTION 8.06. Eligibility Requirements for Trustee............................................231
SECTION 8.07. Resignation and Removal of Trustee..............................................231
SECTION 8.08. Successor Trustee...............................................................232
SECTION 8.09. Merger or Consolidation of Trustee..............................................233
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee...................................233
SECTION 8.11. Appointment of Custodians.......................................................234
SECTION 8.12. Access to Certain Information...................................................235
SECTION 8.13. Appointment of Fiscal Agent.....................................................236
SECTION 8.14. Filings with the Securities and Exchange Commission.............................238
ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All Mortgage Loans................240
SECTION 9.02. Additional Termination Requirements.............................................242
ARTICLE X
ADDITIONAL TAX PROVISIONS
SECTION 10.01. Tax Administration..............................................................244
SECTION 10.02. Depositor, Master Servicers, Special Servicers and Fiscal Agent to
Cooperate with Trustee........................................................247
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.......................................................................248
SECTION 11.02. Recordation of Agreement; Counterparts..........................................249
SECTION 11.03. Limitation on Rights of Certificateholders......................................250
-iv-
SECTION PAGE
------- ----
SECTION 11.04. Governing Law...................................................................250
SECTION 11.05. Notices.........................................................................251
SECTION 11.06. Severability of Provisions......................................................251
SECTION 11.07. Successors and Assigns; Beneficiaries...........................................252
SECTION 11.08. Article and Section Headings....................................................252
SECTION 11.09. Notices to and from the Rating Agencies and the Depositor.......................252
SECTION 11.10. Notices to Controlling Class Representative.....................................253
SECTION 11.11. Complete Agreement..............................................................254
-v-
EXHIBITS
EXHIBIT A-1 Form of Class A-SP, Class A-X and Class A-Y Certificates
EXHIBIT A-2 Form of Class A-1, Class A-2, Class A-3, Class B, Class C-1,
Class C-2 and Class D Certificates
EXHIBIT A-3 Form of Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N and Class O Certificates
EXHIBIT A-4 Form of Class V Certificates
EXHIBIT A-5 Form of Class R Certificates
EXHIBIT B-1A Schedule of Column Mortgage Loans
EXHIBIT B-1B Schedule of KeyBank Mortgage Loans
EXHIBIT B-1C Schedule of NCB Mortgage Loans
EXHIBIT B-1D Schedule of NCBCC Mortgage Loans
EXHIBIT B-1E Schedule of NCBFSB Mortgage Loans
EXHIBIT B-2 Schedule of Exceptions to Mortgage File Delivery
EXHIBIT B-3 Form of Custodial Certification
EXHIBIT B-4 Schedule of Mortgage Loans Covered by Environmental Insurance
EXHIBIT B-5 Schedule of Initial LTV Co-op Basis
EXHIBIT B-6 Schedule of Reference Rates
EXHIBIT C Letters of Representations Among Depositor, Trustee and
Initial Depositary
EXHIBIT D-1 Form of Master Servicer Request for Release
EXHIBIT D-2 Form of Special Servicer Request for Release
EXHIBIT E-1 Form of Trustee Report
EXHIBIT E-2A Form of CMSA Servicer Watch List Criteria for Non-Co-op
Mortgage Loans
EXHIBIT E-2B Form of CMSA Servicer Watch List Criteria for Co-op Mortgage
Loans
EXHIBIT E-3 Controlling Class Representative's Reports Checklist
EXHIBIT E-4 Form of Payments Received after Determination Date Report
EXHIBIT E-5 Form of Mortgage Loans Delinquent Report
EXHIBIT F-1A Form I of Transferor Certificate for Transfers of
Non-Registered Certificates Held in Physical Form
EXHIBIT F-1B Form II of Transferor Certificate for Transfers of
Non-Registered Certificates Held in Physical Form
EXHIBIT F-1C Form of Transferor Certificate for Certain Transfers of
Interests in Rule 144A Global Certificates
EXHIBIT F-1D Form of Transferor Certificate for Certain Transfers of
Interests in Regulation S Global Certificates
EXHIBIT F-2A Form I of Transferee Certificate for Transfers of
Non-Registered Certificates Held in Physical Form
EXHIBIT F-2B Form II of Transferee Certificate for Transfers of
Non-Registered Certificates Held in Physical Form
EXHIBIT F-2C Form of Transferee Certificate for Certain Transfers of
Interests in Rule 144A Global Certificates
EXHIBIT F-2D Form of Transferee Certificate for Certain Transfers of
Interests in Regulation S Global Certificates
EXHIBIT F-3A Form of Transferor Certificate for Transfer of the Excess
Servicing Fee Rights
EXHIBIT F-3B Form of Transferee Certificate for Transfer of the Excess
Servicing Fee Rights
EXHIBIT G-1 Form of Transferee Certificate in Connection with ERISA
(Non-Registered Certificates and Non-Investment Grade
Certificates Held in Physical Form)
-vi-
EXHIBIT G-2 Form of Transferee Certificate in Connection with ERISA
(Non-Registered Certificates Held in Book-Entry Form)
EXHIBIT H-1 Form of Transfer Affidavit and Agreement for Transfers of
Class R Certificates
EXHIBIT H-2 Form of Transferor Certificate for Transfers of Class R
Certificates
EXHIBIT I-1 Form of Notice and Acknowledgment Concerning Replacement of a
Special Servicer
EXHIBIT I-2 Form of Acknowledgment of a Proposed Special Servicer
EXHIBIT J Form of UCC-1 Financing Statement
EXHIBIT K-1 Information Request from Certificateholder or Certificate
Owner
EXHIBIT K-2 Information Request from Prospective Investor
EXHIBIT L Schedule of Designated Sub-Servicers
EXHIBIT M Form of Subordination Agreement for NCBFSB Subordinate Debt
EXHIBIT N Form of S&P Defeasance Certification
EXHIBIT O ARCap Naming Convention for Electronic File Delivery
-vii-
This
Pooling and Servicing Agreement is dated and effective as of May
13, 2002, among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. as
Depositor, KEYCORP REAL ESTATE CAPITAL MARKETS, INC. d/b/a KEY COMMERCIAL
MORTGAGE as General Master Servicer, ARCAP SPECIAL SERVICING, INC. as General
Special Servicer, NCB, FSB as Co-op Master Servicer, NATIONAL CONSUMER
COOPERATIVE BANK as Co-op Special Servicer and XXXXX FARGO BANK MINNESOTA, N.A.
as Trustee.
PRELIMINARY STATEMENT:
Column Financial, Inc. (together with its successors in interest,
"COLUMN") has sold to
Credit Suisse First Boston Mortgage Securities Corp.
(together with its successors in interest, the "DEPOSITOR"), pursuant to the
Mortgage Loan Purchase Agreement dated as of May 2, 2002 (as such may from time
to time hereafter be amended, modified, supplemented and/or restated, the
"COLUMN MORTGAGE LOAN PURCHASE AGREEMENT"), between Column as seller and the
Depositor as purchaser, those mortgage loans initially identified on the
schedule attached hereto as EXHIBIT B-1A (such mortgage loans, the "ORIGINAL
COLUMN MORTGAGE LOANS").
KeyBank National Association (together with its successors in
interest, "KEYBANK") has sold to the Depositor, pursuant to the Mortgage Loan
Purchase Agreement dated as of May 2, 2002 (as such may from time to time
hereafter be amended, modified, supplemented and/or restated, the "KEYBANK
MORTGAGE LOAN PURCHASE AGREEMENT"), between KeyBank as seller and the Depositor
as purchaser, those mortgage loans initially identified on the schedule attached
hereto as EXHIBIT B-1B (such mortgage loans, the "ORIGINAL KEYBANK MORTGAGE
LOANS").
National Consumer Cooperative Bank (together with its successors in
interest, "NCB") has sold to the Depositor, pursuant to the Mortgage Loan
Purchase Agreement dated as of May 2, 2002 (as such may from time to time
hereafter be amended, modified, supplemented and/or restated, the "NCB MORTGAGE
LOAN PURCHASE AGREEMENT"), between NCB as seller and the Depositor as purchaser,
those mortgage loans initially identified on the schedule attached hereto as
EXHIBIT B-1C (such mortgage loans, the "ORIGINAL NCB MORTGAGE LOANS").
NCB Capital Corporation (together with its successors in interest,
"NCBCC") has sold to the Depositor, pursuant to the Mortgage Loan Purchase
Agreement dated as of May 2, 2002 (as such may from time to time hereafter be
amended, modified, supplemented and/or restated, the "NCBCC MORTGAGE LOAN
PURCHASE AGREEMENT"), between NCBCC as seller and the Depositor as purchaser,
those mortgage loans initially identified on the schedule attached hereto as
EXHIBIT B-1D (such mortgage loans, the "ORIGINAL NCBCC MORTGAGE LOANS").
NCB, FSB (together with its successors in interest, "NCBFSB") has sold
to the Depositor, pursuant to the Mortgage Loan Purchase Agreement dated as of
May 2, 2002 (as such may from time to time hereafter be amended, modified,
supplemented and/or restated, the "NCBFSB MORTGAGE LOAN PURCHASE AGREEMENT"),
between NCBFSB as seller and the Depositor as purchaser, those mortgage loans
initially identified on the schedule attached hereto as EXHIBIT B-1E (such
mortgage loans, the "ORIGINAL NCBFSB MORTGAGE LOANS").
The Depositor desires, among other things, to: (i) establish a trust
fund, consisting primarily of the Original Column Mortgage Loans, the Original
KeyBank Mortgage Loans, the Original NCB Mortgage Loans, the Original NCBCC
Mortgage Loans and the Original NCBFSB Mortgage Loans (collectively, the
"ORIGINAL MORTGAGE LOANS") and certain related rights, funds and property; (ii)
cause the issuance of mortgage pass-through certificates in multiple classes,
which certificates will, in the aggregate, evidence the entire beneficial
ownership interest in such trust fund; and (iii) provide for the servicing and
administration of the mortgage loans, including the Original Mortgage Loans, and
the other assets that from time to time constitute part of such trust fund.
Xxxxx Fargo Bank Minnesota, N.A. (together with its successors in
interest, "XXXXX FARGO") desires to act as "Trustee" hereunder; KeyCorp Real
Estate Capital Markets, Inc. d/b/a Key Commercial Mortgage (together with its
successors in interest, "KRECM") desires to act as "General Master Servicer"
hereunder; ARCap Special Servicing, Inc. (together with its successors in
interest, "ARCAP") desires to act as "General Special Servicer" hereunder;
NCBFSB desires to act as "Co-op Master Servicer" hereunder; and NCB desires to
act as "Co-op Special Servicer" hereunder.
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
-2-
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES;
CERTAIN CALCULATIONS IN RESPECT
OF THE MORTGAGE POOL
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
SECTION 1.01, subject to modification in accordance with SECTION 1.04.
"30/360 BASIS" shall mean the accrual of interest calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"30/360 MORTGAGE LOAN" shall mean a Mortgage Loan that accrues
interest on a 30/360 Basis.
"80 XXXX XXX XXXXXX MORTGAGE LOAN" shall mean the Mortgage Loan
secured by a Mortgage on the 00 Xxxx Xxx Xxxxxx Property.
"80 WEST END AVENUE PROPERTY" shall mean the Mortgaged Property
identified on the Mortgage Loan Schedule as "80 W.E.T.H Corp." and located at 00
Xxxx Xxx Xxxxxx xx Xxx Xxxx, Xxx Xxxx.
"ACCEPTABLE INSURANCE DEFAULT" shall mean, with respect to any
Mortgage Loan, a default under the related Mortgage Loan Documents arising by
reason of any failure on the part of the related Borrower to maintain specific
insurance coverage with respect to, or an all-risk casualty insurance policy
that does not specifically exclude, terrorist or similar acts, and/or any
failure on the part of the related Borrower to maintain insurance coverage with
respect to terrorist or similar acts upon terms no less favorable than those in
place as of May 13, 2002, which default would be permitted to be waived by the
Master Servicer provided that each of the following relevant conditions are
satisfied: (a) the applicable Master Servicer has determined, in its reasonable
judgment, based on inquiry consistent with the Servicing Standard, that either
(i) such insurance is not available at commercially reasonable rates and that
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, or (ii) such insurance is not
available at any rate; and (b) if the Stated Principal Balance of such Mortgage
Loan is in excess of $2,500,000 (or any lesser amount that the applicable Master
Servicer deems appropriate), the applicable Master Servicer has obtained the
consent of the applicable Special Servicer to waive the subject default; and (c)
if the Cut-off Date Principal Balance of such Mortgage Loan is in excess of
$20,000,000, the applicable Special Servicer has determined, in its reasonable
judgment, based on information and analysis provided to it by the applicable
Master Servicer, that the waiver of the subject default clearly and convincingly
is in accordance with the Servicing Standard (it being understood and agreed
that in making such determination the applicable Special Servicer shall consider
as the primary factor the specific insurance terms of the Mortgage Loan
Documents). The applicable Special Servicer shall notify the Rating Agencies
upon making the determination described in CLAUSE (c) above with respect to any
Mortgage Loan.
-3-
"ACCOUNTS" shall mean, collectively, the Distribution Account, the
Excess Liquidation Proceeds Account, the Interest Reserve Account, the
Collection Accounts, the REO Accounts, the Servicing Accounts, the Reserve
Accounts and any Paradise Island Special Account.
"ACQUISITION DATE" shall mean, with respect to any REO Property, the
first day on which such REO Property is considered to be acquired by the Trust
within the meaning of Treasury regulation section 1.856-6(b)(1), which is the
first day on which the Trust is treated as the owner of such REO Property for
federal income tax purposes.
"ACTUAL/360 BASIS" shall mean the accrual of interest calculated on
the basis of the actual number of days elapsed during any calendar month (or
other applicable recurring accrual period) in a year assumed to consist of 360
days.
"ACTUAL/360 MORTGAGE LOAN" shall mean a Mortgage Loan that accrues
interest on an Actual/360 Basis.
"ADDITIONAL COLLATERAL" shall mean any non-real property collateral
(including any Letter of Credit) pledged and/or delivered by or on behalf of the
related Borrower and held by the related Mortgagee to secure payment on any
Mortgage Loan.
"ADDITIONAL MASTER SERVICING COMPENSATION" shall have the meaning
assigned thereto in SECTION 3.11(b).
"ADDITIONAL SPECIAL SERVICING COMPENSATION" shall have the meaning
assigned thereto in SECTION 3.11(d).
"ADDITIONAL TRUST FUND EXPENSE" shall mean any expense experienced
with respect to the Trust Fund and not otherwise included in the calculation of
a Realized Loss that would result in the Holders of any Class of REMIC III
Regular Interest Certificates receiving less than the total of their Current
Interest Distribution Amount, Carryforward Interest Distribution Amount and
Principal Distribution Amount for any Distribution Date.
"ADDITIONAL YIELD AMOUNT" shall have the meaning assigned thereto in
SECTION 4.01(d).
"ADJUSTED REMIC II REMITTANCE RATE" shall mean:
(a) with respect to REMIC II Regular Interest A-1, for any Interest
Accrual Period, 4.637% per annum;
(b) with respect to REMIC II Regular Interest A-2, for any Interest
Accrual Period, 5.939% per annum;
(c) with respect to REMIC II Regular Interest A-3-1, for any Interest
Accrual Period, 6.133% per annum;
(d) with respect to REMIC II Regular Interest A-3-2, for any Interest
Accrual Period, 6.133% per annum;
-4-
(e) with respect to REMIC II Regular Interest B, for any Interest
Accrual Period, 6.256% per annum;
(f) with respect to REMIC II Regular Interest C-1, for any Interest
Accrual Period, the lesser of (i) 6.376% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest C-1 for such
Interest Accrual Period;
(g) with respect to REMIC II Regular Interest C-2, for any Interest
Accrual Period, the lesser of (i) 6.816% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest C-2 for such
Interest Accrual Period;
(h) with respect to REMIC II Regular Interest D for any Interest
Accrual Period, the lesser of (i) 6.455% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest D for such Interest
Accrual Period;
(i) with respect to REMIC II Regular Interest E, for any Interest
Accrual Period, the lesser of (i) 6.671% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest E for such Interest
Accrual Period;
(j) with respect to REMIC II Regular Interest F, for any Interest
Accrual Period, the lesser of (i) 7.007% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest F for such Interest
Accrual Period;
(k) with respect to REMIC II Regular Interest G, for any Interest
Accrual Period, the lesser of (i) 7.341% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest G for such Interest
Accrual Period;
(l) with respect to REMIC II Regular Interest H, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest H for such Interest
Accrual Period;
(m) with respect to REMIC II Regular Interest J, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest J for such Interest
Accrual Period;
(n) with respect to REMIC II Regular Interest K, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest K for such Interest
Accrual Period;
(o) with respect to REMIC II Regular Interest L, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest L for such Interest
Accrual Period;
(p) with respect to REMIC II Regular Interest M, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest M for such Interest
Accrual Period;
-5-
(q) with respect to REMIC II Regular Interest N, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest N for such Interest
Accrual Period; and
(r) with respect to REMIC II Regular Interest O, for any Interest
Accrual Period, the lesser of (i) 6.122% per annum and (ii) the REMIC II
Remittance Rate in effect for REMIC II Regular Interest O for such Interest
Accrual Period.
"ADMINISTRATIVE FEE RATE" shall mean, with respect to each Mortgage
Loan (and any successor REO Loan), the sum of the related Master Servicing Fee
Rate, plus the Trustee Fee Rate.
"ADVANCE" shall mean any P&I Advance or Servicing Advance.
"ADVANCE INTEREST" shall mean the interest accrued on any Advance at
the Reimbursement Rate, which is payable to the party hereto that made that
Advance, all in accordance with SECTION 3.11(g) or SECTION 4.03(d), as
applicable.
"ADVERSE GRANTOR TRUST EVENT" shall mean either: (i) any impairment of
the status of either Grantor Trust Pool as a Grantor Trust; or (ii) the
imposition of a tax upon either Grantor Trust Pool or any of its assets or
transactions.
"ADVERSE RATING EVENT" shall mean, with respect to any Class of Rated
Certificates and each Rating Agency that has assigned a rating thereto, as of
any date of determination, the qualification, downgrade or withdrawal of the
rating then assigned to such Class of Rated Certificates by such Rating Agency
(or the placing of such Class of Rated Certificates on "negative credit watch"
status in contemplation of any such action with respect thereto).
"ADVERSE REMIC EVENT" shall mean either: (i) any impairment of the
status of any REMIC Pool as a REMIC; or (ii) except as permitted by
SECTION 3.17(a), the imposition of a tax upon any REMIC Pool or any of its
assets or transactions (including the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions set forth in
Section 860G(d) of the Code).
"AFFILIATE" shall mean, 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.
"AGREEMENT" shall mean this
Pooling and Servicing Agreement, as it may
be amended, modified, supplemented or restated following the Closing Date.
"A.M. BEST" shall mean A.M. Best Company or its successor in interest.
"ANNUAL ACCOUNTANTS' REPORT" shall have the meaning assigned thereto
in SECTION 3.14.
-6-
"ANNUAL PERFORMANCE CERTIFICATION" shall have the meaning assigned
thereto in SECTION 3.13.
"ANTICIPATED REPAYMENT DATE" shall mean, with respect to any ARD
Mortgage Loan, the date specified in the related Mortgage Note, as of which
Post-ARD Additional Interest shall begin to accrue on such Mortgage Loan, which
date is prior to the Stated Maturity Date for such Mortgage Loan.
"APPRAISAL" shall mean, with respect to any Mortgaged Property or REO
Property as to which an appraisal is required to be performed pursuant to the
terms of this Agreement, a narrative appraisal complying with USPAP (or, in the
case of a Mortgage Loan or an REO Loan with a Stated Principal Balance as of the
date of such appraisal of $2,000,000 or less, at the applicable Special
Servicer's option, either a limited appraisal and a summary report or an
internal valuation prepared by the applicable Special Servicer) that (i)
indicates the "market value" of the subject property (within the meaning of 12
CFR Section 225.62(g)) and (ii) is conducted by a Qualified Appraiser (except
that, in the case of a Mortgage Loan or an REO Loan with a Stated Principal
Balance as of the date of such appraisal of $2,000,000 or less, the appraiser
may be an employee of the applicable Special Servicer, which employee need not
be a Qualified Appraiser but shall have experience in commercial and/or
multifamily properties, as the case may be, and possess sufficient knowledge to
value such a property).
"APPRAISAL REDUCTION AMOUNT" shall mean, with respect to any Required
Appraisal Loan, an amount (calculated, in consultation with the Controlling
Class Representative, as of the Determination Date immediately following the
later of the date on which the most recent relevant Appraisal acceptable for
purposes of SECTION 3.19(c) hereof was obtained by the applicable Special
Servicer pursuant to this Agreement and the date of the most recent Appraisal
Trigger Event with respect to such Required Appraisal Loan) equal to the excess,
if any, of:
(1) the sum of (a) the Stated Principal Balance of such Required
Appraisal Loan as of such Determination Date, (b) to the extent not
previously advanced by or on behalf of the applicable Master Servicer, the
Trustee or any Fiscal Agent, all unpaid interest (other than any Default
Interest and, if applicable, Post-ARD Additional Interest) accrued on such
Required Appraisal Loan through the most recent Due Date prior to such
Determination Date, (c) all unpaid Special Servicing Fees accrued with
respect to such Required Appraisal Loan, (d) all related unreimbursed
Advances made by or on behalf of the applicable Master Servicer, the
applicable Special Servicer, the Trustee or any Fiscal Agent with respect
to such Required Appraisal Loan, together with all unpaid Advance Interest
accrued on such Advances, and (e) all currently due but unpaid real estate
taxes and assessments, insurance premiums and, if applicable, ground rents
in respect of the related Mortgaged Property or REO Property, as
applicable; over
(2) the sum of (x) the excess, if any, of (i) 90% of the Appraised
Value of the related Mortgaged Property or REO Property, as applicable, as
determined by the most recent relevant Appraisal acceptable for purposes of
SECTION 3.19(c) hereof, over (ii) the amount of any obligation(s) secured
by any liens on such Mortgaged Property or REO Property, as applicable,
that are prior to the lien of such Required Appraisal Loan, and (y) any
Escrow Payments, Reserve Funds and/or Letters of Credit held by the
applicable Master Servicer or the applicable Special Servicer with respect
to such Required Appraisal Loan, the related Mortgaged Property or any
related REO Property.
-7-
Notwithstanding the foregoing, if (i) an Appraisal Trigger Event
occurs with respect to any Mortgage Loan, (ii) either (A) no Appraisal has been
obtained or conducted, as applicable in accordance with SECTION 3.19(c), with
respect to the related Mortgaged Property during the 12-month period prior to
the date of such Appraisal Trigger Event or (B) there shall have occurred since
the date of the most recent Appraisal a material change in the circumstances
surrounding the related Mortgaged Property that would, in the applicable Special
Servicer's reasonable judgment, materially affect the value of the property as
reflected in such Appraisal, and (iii) no new Appraisal is obtained or
conducted, as applicable in accordance with SECTION 3.19(c), by the earlier of
the 60th day after such Appraisal Trigger Event and the date on which such
Mortgage Loan first becomes 120 days delinquent as to any Monthly Payment, then
(x) until such new Appraisal is obtained or conducted, as applicable in
accordance with SECTION 3.19(c), the Appraisal Reduction Amount shall equal 25%
of the Stated Principal Balance of such Required Appraisal Loan, and (y) upon
receipt or performance, as applicable in accordance with SECTION 3.19(c), of
such new Appraisal by the applicable Special Servicer, the Appraisal Reduction
Amount for such Required Appraisal Loan will be recalculated in accordance with
the preceding sentence of this definition.
Also notwithstanding the foregoing, if and when an Appraisal Trigger
Event occurs with respect to any Cross-Collateralized Mortgage Loan, an
Appraisal Reduction Amount shall be calculated for the entire
Cross-Collateralized Group to which that particular Cross-Collateralized
Mortgage Loan belongs as if such Cross-Collateralized Group was a single
Mortgage Loan secured by multiple properties, and any resulting Appraisal
Reduction Amount for such Cross-Collateralized Group shall be allocated among
the respective Cross-Collateralized Mortgage Loans forming that group on a PRO
RATA basis in accordance with the respective Stated Principal Balances of those
Mortgage Loans.
"APPRAISAL TRIGGER EVENT" shall mean, with respect to any Mortgage
Loan, any of the following events:
(i) such Mortgage Loan becomes a Modified Mortgage Loan (other
than solely as a result of an extension of the maturity date for less than
six (6) months);
(ii) any Monthly Payment (other than, if applicable, a Balloon
Payment) with respect to such Mortgage Loan remains unpaid for 60 days
beyond the Due Date for such payment;
(iii) in the case of a Balloon Mortgage Loan, the Balloon Payment
with respect to such Mortgage Loan remains unpaid for 90 days beyond the
related maturity date (or, if the related Borrower has delivered to the
applicable Master Servicer a refinancing commitment reasonably acceptable
to the applicable Special Servicer and continued to make monthly debt
service payments equal to the related Assumed Monthly Payment, for such
longer period, not to exceed 150 days beyond the related maturity date,
during which the refinancing would occur);
(iv) the passage of 60 days after the applicable Special Servicer
receives notice that the Borrower under such Mortgage Loan has become the
subject of bankruptcy, insolvency or similar proceedings, which proceedings
remain undischarged and undismissed at the end of such 60 days;
(v) the passage of 60 days after the applicable Special Servicer
receives notice that a receiver or similar official is appointed with
respect to the related Mortgaged Property, which receiver or similar
official continues in that capacity at the end of such 60 days; and
-8-
(vi) the related Mortgaged Property becomes an REO Property.
"APPRAISED VALUE" shall mean: (a) with respect to each Mortgaged
Property or REO Property (other than a residential cooperative property), the
appraised value thereof (as is) based upon the most recent Appraisal obtained or
conducted, as appropriate, pursuant to this Agreement; and (b) with respect to
each Mortgaged Property or, if applicable, REO Property that is a residential
cooperative property, the value of such property as shown in the applicable
Appraisal and determined as if such property were operated as a
cooperatively-owned multifamily residential building (rather than a multifamily
rental apartment building).
"ARCap" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"ARCap NAMING CONVENTION FOR ELECTRONIC FILE DELIVERY" shall mean the
naming convention for electronic file delivery set forth on EXHIBIT O hereto.
"ARD MORTGAGE LOAN" shall mean a Mortgage Loan that provides for the
accrual of Post-ARD Additional Interest thereon if such Mortgage Loan is not
paid in full on or prior to its Anticipated Repayment Date.
"ASSET STATUS REPORT" shall have the meaning assigned thereto in
SECTION 3.24(a).
"ASSIGNMENT OF LEASES" shall mean, with respect to any Mortgaged
Property, any assignment of leases, rents and profits or similar document or
instrument executed by the related Borrower in connection with the origination
of the related Mortgage Loan, as such assignment may be amended, modified,
renewed or extended through the date hereof and from time to time hereafter.
"ASSUMED MONTHLY PAYMENT" shall mean:
(a) with respect to any Balloon Mortgage Loan delinquent in respect
of its Balloon Payment beyond the Determination Date immediately following
its scheduled maturity date (as such date may be extended in connection
with a bankruptcy, insolvency or similar proceeding involving the related
Borrower or by reason of a modification, waiver or amendment granted or
agreed to by the applicable Master Servicer or Special Servicer pursuant to
SECTION 3.20), for that scheduled maturity date and for each subsequent Due
Date as of which such Mortgage Loan remains outstanding and part of the
Trust Fund, the scheduled monthly payment of principal and/or interest
deemed to be due with respect to such Mortgage Loan on such Due Date equal
to the amount (exclusive of Default Interest) that would have been due in
respect thereof on such Due Date if such Mortgage Loan had been required to
continue to accrue interest in accordance with its terms, and to pay
principal in accordance with the amortization schedule (if any), in effect
immediately prior to, and without regard to the occurrence of, such
maturity date; and
(b) with respect to any REO Loan, for any Due Date as of which the
related REO Property remains part of the Trust Fund, the scheduled monthly
payment of principal and/or interest deemed to be due in respect thereof on
such Due Date equal to the Monthly Payment (or, in the case of a Balloon
Mortgage Loan described in CLAUSE (a) of this definition, the Assumed
Monthly Payment) that was due (or deemed due) with respect to the related
Mortgage Loan on the last Due Date prior to its becoming an REO Loan.
-9-
"ASTM" shall mean the American Society for Testing and Materials.
"BALLOON MORTGAGE LOAN" shall mean any Mortgage Loan that by its
original terms or by virtue of any modification entered into as of the Closing
Date (or, in the case of a Replacement Mortgage Loan, as of the related date of
substitution) provides for an amortization schedule extending beyond its Stated
Maturity Date and as to which, in accordance with such terms, a Balloon Payment
is due on its Stated Maturity Date.
"BALLOON PAYMENT" shall mean any Monthly Payment payable on a Mortgage
Loan at scheduled maturity that is at least six times as large as the normal
Monthly Payment due on such Mortgage Loan.
"BANKRUPTCY CODE" shall mean the federal Bankruptcy Code, as amended
from time to time (Title 11 of the United States Code).
"BASE PROSPECTUS" shall mean that certain prospectus dated May 2,
2002, relating to trust funds established by the Depositor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"BOOK-ENTRY CERTIFICATE" shall mean any Certificate registered in the
name of the Depositary or its nominee.
"BOOK-ENTRY NON-REGISTERED CERTIFICATE" shall mean any Non-Registered
Certificate that constitutes a Book-Entry Certificate.
"BORROWER" shall mean, individually and collectively, as the context
may require, the obligor or obligors under a Mortgage Loan, including any Person
that has not signed the related Mortgage Note but owns an interest in the
related Mortgaged Property, which interest has been encumbered to secure such
Mortgage Loan.
"BREACH" shall mean, with respect to any Mortgage Loan, any breach of
representation or warranty made by a Mortgage Loan Seller pursuant to Section
4(b) or 4(d) of the related Mortgage Loan Purchase Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in
New York,
New York, Minneapolis, Minnesota,
the city in which the Primary Servicing Offices of any Master Servicer or
Special Servicer are located or the city in which the Corporate Trust Offices of
the Trustee are located, are authorized or obligated by law or executive order
to remain closed.
"CARRYFORWARD INTEREST DISTRIBUTION AMOUNT" shall have:
(a) with respect to the Loan REMIC Regular Interest for any
Distribution Date, the meaning assigned thereto in SECTION 2.10(g);
(b) with respect to any REMIC I Regular Interest for any Distribution
Date, the meaning assigned thereto in SECTION 2.12(g);
-10-
(c) with respect to any REMIC II Regular Interest for any
Distribution Date, the meaning assigned thereto in SECTION 2.14(g);
(d) with respect to any Group A-SP REMIC III Regular Interest or
Group A-X REMIC III Regular Interest for any Distribution Date, the meaning
assigned thereto in SECTION 2.16(g); and
(e) with respect to any Class of REMIC III Regular Interest
Certificates for any Distribution Date, the meaning assigned thereto in
SECTION 2.16(g).
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERTIFICATE" shall mean any one of the Depositor's Series 0000-XXX0
Xxxxxxxxxx Mortgage Pass-Through Certificates, as executed by the Trustee and
authenticated and delivered hereunder by the Certificate Registrar.
"CERTIFICATE FACTOR" shall mean, with respect to any Class of REMIC
III Regular Interest Certificates, as of any date of determination, a fraction,
expressed as a decimal carried to eight places, the numerator of which is the
related Class Principal Balance or Class Notional Amount, as the case may be,
then outstanding, and the denominator of which is the related Class Principal
Balance or Class Notional Amount, as the case may be, outstanding as of the
Closing Date.
"CERTIFICATEHOLDER" or "HOLDER" shall mean the Person in whose name a
Certificate is registered in the Certificate Register, PROVIDED, HOWEVER, that:
(i) neither a Disqualified Organization nor a Non-United States Tax Person shall
be a "Holder" of, or a "Certificateholder" with respect to, a Class R
Certificate for any purpose hereof; and (ii) solely for purposes of giving any
consent, approval, direction or waiver pursuant to this Agreement that
specifically relates to the rights, duties and/or obligations hereunder of the
Depositor, a Master Servicer, a Special Servicer, the Trustee or any Fiscal
Agent in its respective capacity as such (other than any consent, approval or
waiver contemplated by any of SECTIONS 3.23, 3.24 and 3.25), any Certificate
registered in the name of such party or in the name of any Affiliate thereof
shall be deemed not to be outstanding, and the Voting Rights to which it is
entitled shall not be taken into account in determining whether the requisite
percentage of Voting Rights necessary to effect any such consent, approval or
waiver that specifically relates to such party has been obtained. The
Certificate Registrar shall be entitled to request and conclusively rely upon a
certificate of the Depositor, a Master Servicer or a Special Servicer in
determining whether a Certificate is registered in the name of an Affiliate of
such Person. All references herein to "Certificateholders" or "Holders" shall
reflect the rights of Certificate Owners only insofar as they may indirectly
exercise such rights through the Depositary and the Depositary Participants
(except as otherwise specified herein), it being herein acknowledged and agreed
that the parties hereto shall be required to recognize as a "Certificateholder"
or "Holder" only the Person in whose name a Certificate is registered in the
Certificate Register.
"CERTIFICATEHOLDER REPORTS" shall mean, collectively, the Trustee
Report and the CMSA Investor Reporting Package.
"CERTIFICATE NOTIONAL AMOUNT" shall mean, with respect to any Interest
Only Certificate, as of any date of determination, the then notional principal
amount on which such Certificate accrues
-11-
interest, equal to the product of (a) the then Certificate Factor for the Class
of Interest Only Certificates to which such Certificate belongs, multiplied by
(b) the amount specified on the face of such Certificate as the initial
Certificate Notional Amount thereof.
"CERTIFICATE OWNER" shall mean, with respect to any Book-Entry
Certificate, the Person who is the beneficial owner of such Certificate as
reflected on the books of the Depositary or on the books of a Depositary
Participant or on the books of an indirect participating brokerage firm for
which a Depositary Participant acts as agent.
"CERTIFICATE PRINCIPAL BALANCE" shall mean, with respect to any
Principal Balance Certificate, as of any date of determination, the then
outstanding principal amount of such Certificate equal to the product of (a) the
then Certificate Factor for the Class of Principal Balance Certificates to which
such Certificate belongs, multiplied by (b) the amount specified on the face of
such Certificate as the initial Certificate Principal Balance thereof.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" shall mean the
register maintained and the registrar appointed pursuant to SECTION 5.02.
"CLASS" shall mean, collectively, all of the Certificates bearing the
same alphabetic or alphanumeric class designation and having the same payment
terms. The respective Classes of Certificates are designated in SECTION 5.01(a).
"CLASS A-1" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-1 Certificates.
"CLASS A-1 CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphanumeric class designation
"A-1".
"CLASS A-2" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-2 Certificates.
"CLASS A-2 CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphanumeric class designation
"A-2".
"CLASS A-3" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-3 Certificates.
"CLASS A-3 CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphanumeric class designation
"A-3".
"CLASS A-P&I CERTIFICATES" shall mean, collectively, the Class A-1,
Class A-2 and Class A-3 Certificates.
"CLASS A-SP" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-SP Certificates.
"CLASS A-SP CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation
"A-SP".
-12-
"CLASS A-X" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-X Certificates.
"CLASS A-X CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation
"A-X".
"CLASS A-Y" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class A-Y Certificates.
"CLASS A-Y CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation
"A-Y".
"CLASS A-Y STRIP RATE" shall mean, in the case of each Specially
Designated Co-op Mortgage Loan (or any successor REO Loan), an annual rate equal
to the excess of (i) the Net Mortgage Rate in effect for such Mortgage Loan as
of the Closing Date, over (ii) 6.35% per annum.
"CLASS B" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class B Certificates.
"CLASS B CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "B".
"CLASS C CERTIFICATES" shall mean, collectively, the Class C-1 and
Class C-2 Certificates.
"CLASS C-1" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class C-1 Certificates.
"CLASS C-1 CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphanumeric class designation
"C-1".
"CLASS C-2" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class C-2 Certificates.
"CLASS C-2 CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphanumeric class designation
"C-2".
"CLASS D" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class D Certificates.
"CLASS D CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "D".
"CLASS E" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class E Certificates.
"CLASS E CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "E".
-13-
"CLASS F" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class F Certificates.
"CLASS F CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "F".
"CLASS G" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class G Certificates.
"CLASS G CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "G".
"CLASS H" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class H Certificates.
"CLASS H CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "H".
"CLASS J" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class J Certificates.
"CLASS J CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "J".
"CLASS K" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class K Certificates.
"CLASS K CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "K".
"CLASS L" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class L Certificates.
"CLASS L CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "L".
"CLASS M" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class M Certificates.
"CLASS M CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "M".
"CLASS N" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class N Certificates.
"CLASS N CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "N".
-14-
"CLASS NOTIONAL AMOUNT" shall mean the aggregate hypothetical or
notional amount on which any Class of Interest Only Certificates accrues or is
deemed to accrue interest from time to time, as calculated in accordance with
SECTION 2.16(e).
"CLASS O" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class O Certificates.
"CLASS O CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "O".
"CLASS PRINCIPAL BALANCE" shall mean the aggregate principal balance
outstanding from time to time of any Class of Principal Balance Certificates, as
calculated in accordance with SECTION 2.16(e).
"CLASS R" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class R Certificates.
"CLASS R CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "R".
"CLASS V" shall mean, when combined with any other capitalized term
defined in this Agreement, of or relating to the Class V Certificates.
"CLASS V CERTIFICATE" shall mean any of the Certificates that
collectively constitute the Class bearing the alphabetic class designation "V".
"CLASS V SUB-ACCOUNT" shall mean a sub-account of the Distribution
Account established pursuant to SECTION 3.04(b), which sub-account shall
constitute an asset of the Trust Fund and Grantor Trust V, but not an asset of
any REMIC Pool.
"CLEARSTREAM" shall mean Clearstream International or any successor.
"CLOSING DATE" shall mean May 16, 2002.
"CMSA" shall mean 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, issuers, placement agents 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 one of whose principal
purposes is the establishment of industry standards for reporting
transaction-specific information relating to commercial mortgage-backed
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 General Master Servicer and reasonably acceptable to
the Trustee, the Co-op Master Servicer, the Special Servicers and the
Controlling Class Representative.
-15-
"CMSA BOND LEVEL FILE" shall mean, subject to SECTION 1.03(f), the
monthly report substantially in the form of, and containing the information
called for in, the downloadable form of the "Bond Level File" available as of
the Closing Date on the CMSA Website, or such other form for the presentation of
such information and containing such additional information as may from time to
time be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "Bond Level File"
available as of the Closing Date on the CMSA Website, is reasonably acceptable
to the Trustee.
"CMSA COLLATERAL SUMMARY FILE" shall mean, subject to SECTION 1.03(f),
the report substantially in the form of, and containing the information called
for in, the downloadable form of the "Collateral Summary File" available as of
the Closing Date on the CMSA Website, or such other form for the presentation of
such information and containing such additional information as may from time to
time be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "Collateral
Summary File" available as of the Closing Date on the CMSA Website, is
reasonably acceptable to the Trustee.
"CMSA COMPARATIVE FINANCIAL STATUS REPORT" shall mean, subject to
SECTION 1.03(f), report substantially in the form of, and containing the
information called for in, the downloadable form of the "Comparative Financial
Status Report" available as of the Closing Date on the CMSA Website, or such
other form for the presentation of such information as may from time to time be
recommended by the CMSA for commercial mortgage-backed securities transactions
generally and, insofar as it requires the presentation of information in
addition to that called for by the form of the "Comparative Financial Status
Report" available as of the Closing Date on the CMSA Website, is reasonably
acceptable to the Master Servicers or the Special Servicers, as applicable, and
in any event, setting forth, among other things, (A) the most recent property
inspection date for each Mortgaged Property to be covered thereby and (B) in
each instance based on (1) the most recent rent roll (or, in the case of a
residential cooperative property, the most recent maintenance schedule) in the
possession or under the control of the applicable Master Servicer and (2) to the
extent in the possession or under the control of the applicable Master Servicer
(in descending order of desirability), (a) trailing 12-months normalized
financial information, or (b) if the information in CLAUSE (a) is not available,
normalized financial information based on no less than nine months of operating
statements (annualized), or (c) if the information in CLAUSES (a) and (b) is not
available, the most recent current year-to-date financial information
(annualized): (x) the occupancy and debt service coverage ratio for each
Mortgage Loan or Mortgaged Property, as applicable, to be covered thereby; and
(y) the revenue, expense, net operating income and net cash flow for each
Mortgaged Property to be covered thereby. For the purposes of the production by
the applicable Master Servicer or the applicable Special Servicer of any such
report that is required to state information with respect to any Original
Mortgage Loan for any period prior to the related Due Date in May 2002, the
applicable Master Servicer or the applicable Special Servicer, as the case may
be, may conclusively rely (without independent verification), absent manifest
error, on information provided to it by the related Mortgage Loan Seller, by the
related Borrower or (x) in the case of such a report produced by a Master
Servicer, by the applicable Special Servicer (if other than such Master Servicer
or an Affiliate thereof) and (y) in the case of such a report produced by a
Special Servicer, by the applicable Master Servicer (if other than such Special
Servicer or an Affiliate thereof).
-16-
"CMSA DELINQUENT LOAN STATUS REPORT" shall mean, subject to
SECTION 1.03(f), a report substantially in the form of, and containing the
information called for in, the downloadable form of the "Delinquent Loan Status
Report" available as of the Closing Date on the CMSA Website, or such other form
for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally and, insofar as it requires
the presentation of information in addition to that called for by the form of
the "Delinquent Loan Status Report" available as of the Closing Date on the CMSA
Website, is reasonably acceptable to the Master Servicers or the Special
Servicers, as applicable.
"CMSA FINANCIAL FILE" shall mean, subject to SECTION 1.03(f), a report
substantially in the form of, and containing the information called for in, the
downloadable form of the "Financial File" available as of the Closing Date on
the CMSA Website, or such other form for the presentation of such information
and containing such additional information as may from time to time be
recommended by the CMSA for commercial mortgage-backed securities transactions
generally and, insofar as it requires the presentation of information in
addition to that called for by the form of the "Financial File" available as of
the Closing Date on the CMSA Website, is reasonably acceptable to the Master
Servicers or the Special Servicers, as applicable.
"CMSA HISTORICAL LIQUIDATION REPORT" shall mean, subject to
SECTION 1.03(f), a report substantially in the form of, and containing the
information called for in, the downloadable form of the "Historical Liquidation
Report" available as of the Closing Date on the CMSA Website, or such other form
for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally and, insofar as it requires
the presentation of information in addition to that called for by the form of
the "Historical Liquidation Report" available as of the Closing Date on the CMSA
Website, is reasonably acceptable to the Master Servicers or the Special
Servicers, as applicable.
"CMSA HISTORICAL LOAN MODIFICATION REPORT" shall mean, subject to
SECTION 1.03(f), a report substantially in the form of, and containing the
information called for in, the downloadable form of the "Historical Loan
Modification Report" available as of the Closing Date on the CMSA Website, or
such other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally and, insofar as it
requires the presentation of information in addition to that called for by the
form of the "Historical Loan Modification Report" available as of the Closing
Date on the CMSA Website, is reasonably acceptable to the Master Servicers or
the Special Servicers, as applicable.
"CMSA INVESTOR REPORTING PACKAGE" shall mean, collectively:
(a) the following six electronic files: (i) CMSA Loan Setup File,
(ii) CMSA Loan Periodic Update File, (iii) CMSA Property File, (iv) CMSA
Bond Level File, (v) CMSA Financial File and (vi) CMSA Collateral Summary
File; and
(b) the following eight supplemental reports: (i) CMSA Delinquent
Loan Status Report, (ii) CMSA Historical Loan Modification Report, (iii)
CMSA Historical Liquidation Report, (iv) CMSA REO Status Report, (v) CMSA
Operating Statement Analysis Report, (vi) CMSA Comparative Financial Status
Report, (vii) CMSA Servicer Watch List and (viii) CMSA NOI Adjustment
Worksheet.
-17-
"CMSA LOAN PERIODIC UPDATE FILE" shall mean, subject to
SECTION 1.03(f), the monthly report substantially in the form of, and containing
the information called for in, the downloadable form of the "Loan Periodic
Update File" available as of the Closing Date on the CMSA Website, or such other
form for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally and, insofar as it requires
the presentation of information in addition to that called for by the form of
the "Loan Periodic Update File" available as of the Closing Date on the CMSA
Website, is reasonably acceptable to the Master Servicers or the Special
Servicers, as applicable, and the Trustee.
"CMSA LOAN SETUP FILE" shall mean, subject to SECTION 1.03(f), the
report substantially in the form of, and containing the information called for
in, the downloadable form of the "Loan Setup File" available as of the Closing
Date on the CMSA Website, or such other form for the presentation of such
information and containing such additional information as may from time to time
be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "Loan Setup File"
available as of the Closing Date on the CMSA Website, is reasonably acceptable
to the Master Servicers or the Special Servicers, as applicable, and the
Trustee.
"CMSA NOI ADJUSTMENT WORKSHEET" shall mean, subject to
SECTION 1.03(f), a report (using the ARCap Naming Convention for Electronic File
Delivery) substantially in the form of, and containing the information called
for in, the downloadable form of the "NOI Adjustment Worksheet" available as of
the Closing Date on the CMSA Website, or such other form for the presentation of
such information and containing such additional information as may from time to
time be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "NOI Adjustment
Worksheet" available as of the Closing Date on the CMSA Website, is acceptable
to the Master Servicers or the Special Servicers, as applicable, and in any
event, shall present the computations made in accordance with the methodology
described in such form to "normalize" the full year net operating income, net
cash flow and debt service coverage numbers used in the other reports required
by this Agreement.
"CMSA OPERATING STATEMENT ANALYSIS REPORT" shall mean, subject to
SECTION 1.03(f), a report (using the ARCap Naming Convention for Electronic File
Delivery) substantially in the form of, and containing the information called
for in, the downloadable form of the "Operating Statement Analysis Report"
available as of the Closing Date on the CMSA Website or in such other form for
the presentation of such information and containing such additional information
as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally and, insofar as it requires
the presentation of information in addition to that called for by the form of
the "Operating Statement Analysis Report" available as of the Closing Date on
the CMSA Website, is reasonably acceptable to the Master Servicers.
"CMSA PROPERTY FILE" shall mean, subject to SECTION 1.03(f), a report
substantially in the form of, and containing the information called for in, the
downloadable form of the "Property File" available as of the Closing Date on the
CMSA Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally
and, insofar as it requires
-18-
the presentation of information in addition to that called for by the form of
the "Property File" available as of the Closing Date on the CMSA Website, is
reasonably acceptable to the Master Servicers or the Special Servicers, as
applicable.
"CMSA REO STATUS REPORT" shall mean, subject to SECTION 1.03(f), a
report substantially in the form of, and containing the information called for
in, the downloadable form of the "REO Status Report" available as of the Closing
Date on the CMSA Website, or in such other form for the presentation of such
information and containing such additional information as may from time to time
be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "REO Status
Report" available as of the Closing Date on the CMSA Website, is reasonably
acceptable to the Master Servicers or the Special Servicers, as applicable.
"CMSA SERVICER WATCH LIST" shall mean, for any Determination Date, a
report substantially in the form of, and containing the information called for
in, the downloadable form of the "Servicer Watch List" available as of the
Closing Date on the CMSA Website, or in such other form for the presentation of
such information and containing such additional information as may from time to
time be recommended by the CMSA for commercial mortgage-backed securities
transactions generally and, insofar as it requires the presentation of
information in addition to that called for by the form of the "Servicer Watch
List" available as of the Closing Date on the CMSA Website, is reasonably
acceptable to the Master Servicers or the Special Servicers, as applicable, and
in any event, which report shall identify all Performing Mortgage Loans that are
required by the criteria set forth on EXHIBIT E-2A hereto, in the case of
Mortgage Loans other than Co-op Mortgage Loans, or on EXHIBIT E-2B hereto, in
the case of Co-op Mortgage Loans; PROVIDED that, upon adoption by the CMSA of a
standard format and criteria, whether in respect of commercial mortgage loans
generally or in respect of residential cooperative mortgage loans, such format
and criteria shall be used for this report instead of EXHIBIT E-2A or EXHIBIT
E-2B, as applicable.
"CMSA WEBSITE" shall mean the CMSA's Website located at
"xxx.xxxxxxxx.xxx" or such other primary website as the CMSA may establish for
dissemination of its report forms.
"CODE" shall mean the Internal Revenue Code of 1986 and regulations
promulgated thereunder, including proposed regulations to the extent that, by
reason of their proposed effective date, could, as of the date of any
determination or opinion as to the tax consequences of any action or proposed
action or transaction, be applied to the Trust or the Certificates.
"COLLECTION ACCOUNT" shall mean the segregated account or accounts
created and maintained by each Master Servicer, pursuant to SECTION 3.04(a), in
trust for the Certificateholders, which shall be entitled "[name of subject
Master Servicer], as a Master Servicer, in trust for the registered holders of
Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2002-CKN2, Collection Account".
"COLLECTION PERIOD" shall mean, with respect to any Distribution Date,
the period commencing immediately following the Determination Date in the
calendar month preceding the month in which such Distribution Date occurs (or,
in the case of the initial Distribution Date, commencing as of the Closing Date)
and ending on and including the Determination Date in the calendar month in
which such Distribution Date occurs.
-19-
"COLUMN" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"COLUMN MORTGAGE LOAN" shall mean any Mortgage Loan that is either an
Original Column Mortgage Loan or a Replacement Mortgage Loan that was delivered
under the Column Mortgage Loan Purchase Agreement or the Column Performance
Guarantee in substitution for an Original Column Mortgage Loan.
"COLUMN MORTGAGE LOAN PURCHASE AGREEMENT" shall have the meaning
assigned thereto in the Preliminary Statement to this Agreement.
"COLUMN PERFORMANCE GUARANTEE" shall mean the Guarantee dated as of
May 2, 2002, from the Column Performance Guarantor in favor of the Trustee,
relating to the obligations of Column under Section 5 of the Column Mortgage
Loan Purchase Agreement.
"COLUMN PERFORMANCE GUARANTOR" shall mean Credit Suisse First Boston
acting through the Cayman Branch, its successor in interest or any successor
guarantor under the Column Performance Guarantee.
"COMMISSION" shall mean the Securities and Exchange Commission or any
successor thereto.
"COMPENSATING INTEREST PAYMENT" shall mean, with respect to any
Distribution Date, any payment made by a Master Servicer pursuant to
SECTION 3.19(a) to cover Prepayment Interest Shortfalls incurred during the
related Collection Period.
"COMPONENT" shall mean any of the components of the Class A-X or Class
A-SP Certificates, which components are: (a) in the case of the Class A-X
Certificates, the respective Group A-X REMIC III Regular Interests; and (b) in
the case of the Class A-SP Certificates, the respective Group A-SP REMIC III
Regular Interests.
"COMPONENT NOTIONAL AMOUNT" shall mean the hypothetical or notional
amount on which any Group A-X REMIC III Regular Interest or Group A-SP REMIC III
Regular Interest accrues interest from time to time, as calculated in accordance
with SECTION 2.16(e).
"CONDEMNATION PROCEEDS" shall mean all cash amounts actually received
by the Trust or by a Master Servicer or Special Servicer on its behalf in
connection with the taking of all or a part of a Mortgaged Property by exercise
of the power of eminent domain or condemnation, exclusive of any portion thereof
required to be released to the related Borrower or any other third-party in
accordance with applicable law and/or the terms and conditions of the related
Mortgage Loan Documents or any other applicable document.
"CONFIDENTIAL OFFERING CIRCULAR" shall mean the final Confidential
Offering Circular dated May 2, 2002, relating to certain classes of the
Non-Registered Certificates delivered by the Depositor to CSFB Corporation as of
the Closing Date.
"CONTROLLING CLASS" shall mean, as of any date of determination, the
Class of Principal Balance Certificates with the lowest payment priority
pursuant to SECTIONS 4.01(a) and 4.01(b), that has a
-20-
then outstanding Class Principal Balance that is not less than 25% of its
initial Class Principal Balance; PROVIDED that, if no Class of Principal Balance
Certificates has a Class Principal Balance that satisfies the foregoing
requirement, then the Controlling Class shall be the Class of Principal Balance
Certificates with the lowest payment priority pursuant to SECTIONS 4.01(a) and
4.01(b), that has a then outstanding Class Principal Balance greater than zero.
For purposes of this definition, all three (3) Classes of the Class A-P&I
Certificates shall be treated as a single Class and, if appropriate under the
terms of this definition, shall collectively constitute the Controlling Class.
Also for purposes of this definition, both Classes of the Class C Certificates
shall be treated as a single Class and, if appropriate under the terms of this
definition, shall collectively constitute the Controlling Class. As of the
Closing Date, the Controlling Class shall be the Class O Certificates.
"CONTROLLING CLASS CERTIFICATEHOLDER" shall mean any Holder of
Certificates of the Controlling Class.
"CONTROLLING CLASS REPRESENTATIVE" shall have the meaning assigned
thereto in SECTION 3.23(a), and shall initially be ARCap REIT, Inc.
"CO-OP MASTER SERVICER" shall mean NCBFSB, in its capacity as master
servicer with respect to the Co-op Mortgage Loans and any related REO Properties
hereunder, or any successor master servicer with respect to the Co-op Mortgage
Loans and any related REO Properties appointed as provided herein.
"CO-OP MORTGAGE LOAN" shall mean any Mortgage Loan that, as of the
date it is first included in the Trust Fund, is secured by a Mortgage that
encumbers a residential cooperative property, as identified on the Mortgage Loan
Schedule.
"CO-OP SPECIAL SERVICER" shall mean NCB, in its capacity as special
servicer with respect to the Co-op Mortgage Loans and any related REO Properties
hereunder, or any successor special servicer with respect to the Co-op Mortgage
Loans and any related REO Properties appointed as provided herein.
"CO-OP TRUST ASSETS" shall mean the Co-op Mortgage Loans, any REO
Properties acquired by the Trust with respect to the Co-op Mortgage Loans and
any and all other related Trust Assets.
"CORPORATE TRUST OFFICE" shall mean the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located, with respect to
Certificate transfers and surrenders, at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000 and, for all other purposes, at 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000.
"CORRECTED MORTGAGE LOAN" shall mean any Mortgage Loan that had been a
Specially Serviced Mortgage Loan but as to which all Servicing Transfer Events
have ceased to exist.
"CORRESPONDING CLASS OF PRINCIPAL BALANCE CERTIFICATES" shall mean,
with respect to any REMIC II Regular Interest, the Class of Principal Balance
Certificates that has an alphabetic or alphanumeric class designation that is
the same as the alphabetic or alphanumeric, as applicable, designation for such
REMIC II Regular Interest; PROVIDED that the Class A-3 Certificates shall be the
-21-
Corresponding Class of Principal Balance Certificates with respect to each of
REMIC II Regular Interest A-3-1 and REMIC II Regular Interest A-3-2.
"CORRESPONDING GROUP A-SP REMIC III REGULAR INTEREST" shall mean, with
respect to any REMIC II Regular Interest, the Group A-SP REMIC III Regular
Interest that has an alphabetic or alphanumeric designation that, with the
deletion of "A-SP-", is the same as the alphabetic or alphanumeric, as
applicable, designation for such REMIC II Regular Interest.
"CORRESPONDING GROUP A-X REMIC III REGULAR INTEREST" shall mean, with
respect to any REMIC II Regular Interest, the Group A-X REMIC III Regular
Interest that has an alphabetic or alphanumeric designation that, with the
deletion of "A-X-", is the same as the alphabetic or alphanumeric, as
applicable, designation for such REMIC II Regular Interest.
"CORRESPONDING GROUP XX XXXXX XX REGULAR INTEREST" shall mean: (a)
with respect to any Class of Principal Balance Certificates, the REMIC II
Regular Interest that has an alphabetic or alphanumeric designation that is the
same as the alphabetic or alphanumeric, as applicable, Class designation for
such Class of Principal Balance Certificates (PROVIDED that each of REMIC II
Regular Interest A-3-1 and REMIC II Regular Interest A-3-2 shall be a
Corresponding Group XX XXXXX XX Regular Interest with respect to the Class A-3
Certificates); (b) with respect to any Group A-SP REMIC III Regular Interest,
the REMIC II Regular Interest that has an alphabetic or alphanumeric designation
that, when preceded by "A-SP-", is the same as the alphabetic or alphanumeric,
as applicable, designation for such Group A-SP REMIC III Regular Interest; and
(c) with respect to any Group A-X REMIC III Regular Interest, the REMIC II
Regular Interest that has an alphabetic or alphanumeric designation that, when
preceded by "A-X-", is the same as the alphabetic or alphanumeric, as
applicable, designation for such Group A-X REMIC III Regular Interest.
"CROSS-COLLATERALIZED GROUP" shall mean any group of Mortgage Loans
that is cross-defaulted and cross-collateralized with each other.
"CROSS-COLLATERALIZED MORTGAGE LOAN" shall mean any Mortgage Loan,
that is, by its terms, cross-defaulted and cross-collateralized with any other
Mortgage Loan.
"CSFB CORPORATION" shall mean Credit Suisse First Boston Corporation
or its successor in interest.
"CURRENT INTEREST DISTRIBUTION AMOUNT" shall have:
(a) with respect to the Loan REMIC Regular Interest for any
Distribution Date, the meaning assigned thereto in SECTION 2.10(g);
(b) with respect to any REMIC I Regular Interest for any
Distribution Date, the meaning assigned thereto in SECTION 2.12(g);
(c) with respect to any REMIC II Regular Interest for any
Distribution Date, the meaning assigned thereto in SECTION 2.14(g);
-22-
(d) with respect to any Group A-SP REMIC III Regular Interest or
Group A-X REMIC III Regular Interest for any Distribution Date, the meaning
assigned thereto in SECTION 2.16(g); and
(e) with respect to any Class of REMIC III Regular Interest
Certificates for any Distribution Date, the meaning assigned thereto in
SECTION 2.16(g).
"CUSTODIAN" shall mean a Person who is at any time appointed by the
Trustee pursuant to SECTION 8.11 as a document custodian for the Mortgage Files.
"CUT-OFF DATE" shall mean, individually and collectively, the
respective Due Dates for the Original Mortgage Loans in May 2002.
"CUT-OFF DATE PRINCIPAL BALANCE" shall mean, with respect to any
Original Mortgage Loan, the outstanding principal balance of such Mortgage Loan
as of its Due Date in May 2002, after application of all payments of principal
due on or before such date, whether or not received.
"DEFAULT CHARGES" shall mean Default Interest and/or late payment
charges that are paid or payable, as the context may require, in respect of any
Mortgage Loan or REO Loan.
"DEFAULT INTEREST" shall mean, with respect to any Mortgage Loan (or
successor REO Loan), any amounts collected thereon, other than late payment
charges, Prepayment Premiums or Yield Maintenance Charges, that represent
interest (exclusive, if applicable, of Post-ARD Additional Interest) in excess
of interest accrued on the principal balance of such Mortgage Loan (or REO Loan)
at the related Mortgage Rate, such excess interest arising out of a default
under such Mortgage Loan.
"DEFAULTING PARTY" shall have the meaning assigned thereto in
SECTION 7.01(b).
"DEFECTIVE MORTGAGE LOAN" shall mean any Mortgage Loan as to which
there exists a Material Breach or a Material Document Defect that has not been
cured in all material respects.
"DEFINITIVE CERTIFICATE" shall have the meaning assigned thereto in
SECTION 5.03(a).
"DELETED MORTGAGE LOAN" shall mean a Defective Mortgage Loan that is
purchased or repurchased, as the case may be, from the Trust or replaced with
one or more Replacement Mortgage Loans, in either case as contemplated by
SECTION 2.03.
"DEPOSITOR" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"DEPOSITARY" shall mean The Depository Trust Company, or any successor
depositary hereafter named as contemplated by SECTION 5.03(c). The nominee of
the initial Depositary for purposes of registering those Certificates that are
to be Book-Entry Certificates, is Cede & Co. The Depositary shall at all times
be a "clearing corporation" as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of
New York and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
-23-
"DEPOSITARY PARTICIPANT" shall mean a broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
"DESIGNATED SUB-SERVICER" shall mean NCBFSB, any Sub-Servicer set
forth on EXHIBIT L hereto and any successor to NCBFSB or any such other
Sub-Servicer set forth on EXHIBIT L under the related Designated Sub-Servicer
Agreement.
"DESIGNATED SUB-SERVICER AGREEMENT" shall mean any Sub-Servicing
Agreement between a Designated Sub-Servicer and a Master Servicer.
"DETERMINATION DATE" shall mean, with respect to any calendar month,
commencing in June 2002, the 11th day of such month (or, if such 11th day is not
a Business Day, the next succeeding Business Day). Each Determination Date will
relate to the Distribution Date in the same calendar month.
"DIRECTLY OPERATE" shall mean, with respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers (other than the sale of REO Property pursuant to SECTION
3.18), the performance of any construction work thereon or any use of such REO
Property in a trade or business conducted by the Trust other than through an
Independent Contractor; PROVIDED, HOWEVER, that the applicable Special Servicer
(or any Sub-Servicer on behalf of the applicable Special Servicer) shall not be
considered to Directly Operate an REO Property solely because the applicable
Special Servicer (or any Sub-Servicer on behalf of the applicable Special
Servicer) establishes rental terms, chooses tenants, enters into or renews
leases, deals with taxes and insurance, or makes decisions as to repairs or
capital expenditures with respect to such REO Property.
"DISCOUNT RATE" shall have the meaning assigned thereto in
SECTION 4.01(d).
"DISQUALIFIED ORGANIZATION" shall mean any of the following: (i) the
United States or a possession thereof, 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 Xxxxxxx Mac, 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) any organization (except certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 of the Code or (v)
any other Person so designated by the Trustee, based upon an Opinion of Counsel
delivered to the Trustee to the effect that the holding of an Ownership Interest
in a Class R Certificate by such Person may cause the Trust 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 Class R
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.
"DISTRIBUTION ACCOUNT" shall mean, subject to SECTION 3.04(f), the
segregated account or accounts created and maintained by the Trustee, pursuant
to SECTION 3.04(b), in trust for the
-24-
Certificateholders, which shall be entitled "[name of Trustee], as Trustee, in
trust for the registered holders of
Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates, Series
2002-CKN2, Distribution Account".
"DISTRIBUTION DATE" shall mean, with respect to any calendar month,
commencing in June 2002, the fourth Business Day following the Determination
Date in such month.
"DOCUMENT DEFECT" shall mean, with respect to any Mortgage Loan, that
any document required to be part of the related Mortgage File has not been
properly executed, is missing, contains information that does not conform in any
material respect with the corresponding information set forth in the Mortgage
Loan Schedule (and the terms of such document have not been modified by written
instrument contained in the related Mortgage File), or does not appear to be
regular on its face.
"DUE DATE" shall mean with respect to any Mortgage Loan (and any
successor REO Loan), the day of the month set forth in the related Mortgage Note
on which each Monthly Payment on such Mortgage Loan is first scheduled to be due
(without regard to any applicable grace period).
"EARN-OUT RESERVE FUNDS" shall mean Reserve Funds as to which any
release thereof to the related Borrower is tied to conditions relating to the
economic performance, value and/or occupancy of the subject Mortgaged Property.
"XXXXX" shall mean the Electronic Data Gathering, Analysis, and
Retrieval System of the Commission, which is the computer system for the
receipt, acceptance, review and dissemination of documents submitted to the
Commission in electronic format.
"ELIGIBLE ACCOUNT" shall mean any of (i) an account maintained with a
federal or state chartered depositary institution or trust company, the
long-term deposit or long-term unsecured debt obligations of which are rated no
less than "Aa3" by Xxxxx'x and "AA" by S&P (if the deposits are to be held in
the account for more than 30 days), or the short-term deposit or short-term
unsecured debt obligations of which are rated no less than "P-1" by Xxxxx'x and
"A-1+" by S&P (if the deposits are to be held in the account for 30 days or
less), in any event at any time funds are on deposit therein, or (ii) a
segregated trust account maintained with a federal or state chartered depositary
institution or trust company acting in its fiduciary capacity, which, in the
case of a state chartered depositary institution or trust company is subject to
regulations regarding fiduciary funds on deposit therein substantially similar
to 12 CFR Section 9.10(b), and which, in either case, has a combined capital and
surplus of at least $50,000,000 and is subject to supervision or examination by
federal or state authority, (iii) an account or accounts maintained with KeyBank
so long as KeyBank's long-term unsecured debt rating shall be at xxxxx "X0" from
Xxxxx'x and "A" from S&P and KeyBank's short-term deposit or short-term
unsecured debt rating shall be at least "P-1" from Xxxxx'x and "A-1" from S&P,
(iv) in the case of Reserve Accounts and Servicing Accounts with respect to
Co-op Mortgage Loans and Mortgage Loans for which NCBFSB is the Designated
Sub-Servicer, any account maintained with NCBFSB (PROVIDED that NCBFSB has a
combined capital and surplus of at least $40,000,000 and, with respect to any
such Reserve Account or Servicing Account that has a balance in excess of
$500,000, has obtained and maintains in favor of the affected Borrower(s) a
standby letter of credit from the Federal Home Loan Bank in an amount equal to
the portion of such balance that is not covered by FDIC insurance), and (v) any
other account that is acceptable to the Rating Agencies (as evidenced by written
confirmation to the Trustee from each Rating Agency that the use of such account
would not, in and of itself, result in an Adverse Rating Event with respect to
any Class of Rated Certificates).
-25-
"ENVIRONMENTAL INSURANCE POLICY" shall mean, with respect to any
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 Mortgaged Property or REO Property, as the case may be,
for the benefit of, among others, the Trustee on behalf of the
Certificateholders.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ESCROW PAYMENT" shall mean any payment received by a Master Servicer
or Special Servicer for the account of any Borrower for application toward the
payment of real estate taxes, assessments, insurance premiums (including with
respect to any Environmental Insurance Policy), ground rents (if applicable) and
similar items in respect of the related Mortgaged Property.
"EVENT OF DEFAULT" shall have the meaning assigned thereto in
SECTION 7.01(a).
"EXCESS LIQUIDATION PROCEEDS" shall mean the excess, if any, of (a)
the Net Liquidation Proceeds from the sale or liquidation of a Specially
Serviced Mortgage Loan or REO Property, over (b) the sum of (i) the amount
needed to pay all principal, interest (including Additional Interest (if
applicable) and Default Interest), Prepayment Premiums or Yield Maintenance
Charges (as applicable) and late payment charges payable with respect to such
Mortgage Loan or the related REO Loan in full, (ii) any other fees that would
constitute Additional Master Servicing Compensation and/or Additional Special
Servicing Compensation, (iii) any related unreimbursed Servicing Advances, (iv)
all unpaid Advance Interest on any related Advances, (v) any related Liquidation
Fee and/or Special Servicing Fees paid or payable in respect of such Mortgage
Loan or the related REO Loan and (vi) any other Additional Trust Fund Expenses
paid or payable in respect of such Mortgage Loan or REO Property.
"EXCESS LIQUIDATION PROCEEDS ACCOUNT" shall mean, subject to SECTION
3.04(f), the segregated account created and maintained by the Trustee pursuant
to SECTION 3.04(d) in trust for the Certificateholders, which shall be entitled
"[name of Trustee], as Trustee, in trust for the registered holders of
Credit
Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2002-CKN2, Excess Liquidation Proceeds Account".
"EXCESS SERVICING FEES" shall mean, with respect to each Mortgage Loan
(and successor REO Loan), that portion of the Master Servicing Fees that accrue
at a per annum rate equal to the Excess Servicing Fee Rate.
"EXCESS SERVICING FEE RATE" shall mean, with respect to each Mortgage
Loan (and successor REO Loan), initially a rate per annum equal to the related
Master Servicing Fee Rate, minus the sum of 1.0 basis point and the per annum
rate applicable to any related primary servicing fee payable to a Designated
Sub-Servicer; PROVIDED that such Excess Servicing Fee Rate shall be subject to
reduction at any time following any resignation of the applicable Master
Servicer pursuant to SECTION 6.04 (if no successor is appointed in accordance
with the SECTION 6.04(d)) or any termination of the applicable Master Servicer
pursuant to SECTION 7.01, to the extent reasonably necessary (as determined by
the Trustee) for the Trustee to appoint a qualified successor to such Master
Servicer (which successor may include the Trustee) that meets the requirements
of SECTION 7.02 and that requires market rate master servicing compensation
(exclusive of any related primary servicing fee payable to a Designated
Sub-Servicer) that accrues at a per annum rate in excess of 1.0 basis point.
-26-
"EXCESS SERVICING FEE RIGHT" shall mean, with respect to each Mortgage
Loan (and successor REO Loan), the right to receive Excess Servicing Fees.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXEMPTION-FAVORED PARTY" shall mean any of (i) CSFB Corporation, (ii)
any Person directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with CSFB Corporation, and
(iii) any member of any underwriting syndicate or selling group of which any
Person described in CLAUSES (i) and (ii) is a manager or co-manager with respect
to a Class of Certificates (other than the Class A-Y and Class R Certificates)
that is investment grade rated by at least one Rating Agency.
"FAIR VALUE" shall mean, with respect to any Specially Designated
Defaulted Mortgage Loan, the amount that, in the applicable Special Servicer's
reasonable judgment, taking into account the factors set forth in the first
sentence of the second paragraph of SECTION 3.18(b) and such other factors as
the applicable Special Servicer reasonably deems appropriate, is the fair value
of such Mortgage Loan.
"XXXXXX MAE" shall mean the Federal National Mortgage Association or
any successor.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"FINAL DISTRIBUTION DATE" shall mean the final Distribution Date on
which any distributions are to be made on the Certificates as contemplated by
SECTION 9.01.
"FINAL RECOVERY DETERMINATION" shall mean a determination made by the
applicable Special Servicer, in its reasonable judgment, with respect to any
Specially Serviced Mortgage Loan or REO Property (other than a Mortgage Loan
that is paid in full and other than a Mortgage Loan or REO Property, as the case
may be, that is repurchased or replaced by a Mortgage Loan Seller pursuant to
the related Mortgage Loan Purchase Agreement, purchased or replaced by the
Column Performance Guarantor pursuant to the Column Performance Guarantee, the
NCBCC Performance Guarantor pursuant to the NCBCC Performance Guarantee or the
NCBFSB Performance Guarantor pursuant to the NCBFSB Performance Guarantee, or
purchased by a Master Servicer, a Special Servicer and/or any Controlling Class
Certificateholder(s) pursuant to SECTION 9.01 or otherwise acquired by the Sole
Certificateholder(s) in exchange for all the Certificates pursuant to SECTION
9.01), that there has been a recovery of all related Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries
that will ultimately be recoverable.
"FISCAL AGENT" shall mean a Person who is at any time appointed by the
Trustee pursuant to SECTION 8.13 to act as fiscal agent hereunder.
"FISCAL AGENT AGREEMENT" shall have the meaning assigned thereto in
SECTION 8.13.
"XXXXXXX MAC" shall mean the Federal Home Loan Mortgage Corporation or
any successor.
"GAAP" shall mean generally accepted accounting principles in the
United States.
-27-
"GENERAL MASTER SERVICER" shall mean KRECM, in its capacity as master
servicer with respect to the Mortgage Pool (exclusive of the Co-op Mortgage
Loans) and any related REO Properties hereunder, or any successor master
servicer with respect to the Mortgage Pool (exclusive of the Co-op Mortgage
Loans) and any related REO Properties appointed as provided herein.
"GENERAL SPECIAL SERVICER" shall mean ARCap, in its capacity as
special servicer with respect to the Mortgage Pool (exclusive of the Co-op
Mortgage Loans) and any related REO Properties hereunder, or any successor
special servicer with respect to the Mortgage Pool (exclusive of the Co-op
Mortgage Loans) and any related REO Properties appointed as provided herein.
"GRANTOR TRUST" shall mean a grantor trust as defined under Subpart E
of Part 1 of Subchapter J of the Code.
"GRANTOR TRUST POOL" shall mean either of Grantor Trust V or Grantor
Trust R.
"GRANTOR TRUST R" shall mean the Grantor Trust designated as such in
SECTION 2.17(b).
"GRANTOR TRUST V" shall mean the Grantor Trust designated as such in
SECTION 2.17(a).
"GROUND LEASE" shall mean the ground lease pursuant to which any
Borrower holds a leasehold interest in the related Mortgaged Property, together
with any estoppels or other agreements executed and delivered by the ground
lessor in favor of the lender under the related Mortgage Loans.
"GROUP A-SP REMIC III REGULAR INTERESTS" shall mean, collectively,
REMIC III Regular Interest A-SP-A-3, REMIC III Regular Interest A-SP-B,
REMIC III Regular Interest A-SP-C-1, REMIC III Regular Interest A-SP-C-2 and
REMIC III Regular Interest A-SP-D.
"GROUP A-X REMIC III REGULAR INTERESTS" shall mean, collectively,
REMIC III Regular Interest A-X-A-1, REMIC III Regular Interest A-X-A-2,
REMIC III Regular Interest A-X-A-3-1, REMIC III Regular Interest A-X-A-3-1,
REMIC III Regular Interest A-X-B, REMIC III Regular Interest A-X-C-1, REMIC III
Regular Interest A-X-C-2, REMIC III Regular Interest A-X-D, REMIC III Regular
Interest A-X-E, REMIC III Regular Interest A-X-F, REMIC III Regular Interest
A-X-G, REMIC III Regular Interest A-X-H, REMIC III Regular Interest A-X-J,
REMIC III Regular Interest A-X-K, REMIC III Regular Interest A-X-L, REMIC III
Regular Interest A-X-M, REMIC III Regular Interest A-X-N and REMIC III Regular
Interest A-X-O.
"GROUP A-Y REMIC I REGULAR INTERESTS" shall mean, collectively, all of
the REMIC I Regular Interests so designated in SECTION 2.12(d), which are the
REMIC I Regular Interests without principal balances (but that have notional
amounts for purposes of accruing interest).
"GROUP ENVIRONMENTAL INSURANCE POLICY" shall mean an Environmental
Insurance Policy that is maintained from time to time in respect of more than
one Mortgaged Property or REO Property.
"GROUP PB REMIC I REGULAR INTERESTS" shall mean, collectively, all of
the REMIC I Regular Interests so designated in SECTION 2.12(d), which are the
REMIC I Regular Interests with principal balances.
-28-
"GROUP XX XXXXX XX REGULAR INTERESTS" shall mean, collectively, all of
the REMIC II Regular Interests other than REMIC II Regular Interest A-Y.
"HAZARDOUS MATERIALS" shall mean any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including those so identified
pursuant to CERCLA or any other federal, state or local environmental related
laws and regulations now existing or hereafter enacted, and specifically
including asbestos and asbestos-containing materials, polychlorinated biphenyls
("PCBs"), radon gas, petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in process" or
similar classification which would, if classified as unusable, be included in
the foregoing definition.
"INDEPENDENT" shall mean, when used with respect to any specified
Person, any such Person who (i) is in fact independent of the Depositor, each
Mortgage Loan Seller, each Master Servicer, each Special Servicer, the Trustee,
any Fiscal Agent, the Controlling Class Representative and any and all
Affiliates thereof, (ii) does not have any direct financial interest in or any
material indirect financial interest in any of the Depositor, any Mortgage Loan
Seller, either Master Servicer, either Special Servicer, the Trustee, any Fiscal
Agent, the Controlling Class Representative or any Affiliate thereof, and (iii)
is not connected with the Depositor, any Mortgage Loan Seller, either Master
Servicer, either Special Servicer, the Trustee, any Fiscal Agent, the
Controlling Class Representative or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; PROVIDED, HOWEVER, that a Person shall not fail to be
Independent of the Depositor, any Mortgage Loan Seller, either Master Servicer,
either Special Servicer, the Trustee, any Fiscal Agent, the Controlling Class
Representative or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Depositor, such Mortgage Loan Seller, such Master Servicer, such Special
Servicer, the Trustee, such Fiscal Agent, the Controlling Class Representative
or any such Affiliate thereof, as the case may be, PROVIDED that such ownership
constitutes less than 1% of the total assets owned by such Person.
"INDEPENDENT CONTRACTOR" shall mean: (a) any Person that would be an
"independent contractor" with respect to any 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 that section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of any Class of Certificates, or such other interest in any Class of
Certificates as is set forth in an Opinion of Counsel, which shall be at no
expense to the Trustee or the Trust, delivered to the Trustee), PROVIDED that
(i) the Trust does not receive or derive any income from such Person and (ii)
the relationship between such Person and the Trust is at arm's length, all
within the meaning of Treasury regulation section 1.856-4(b)(5); or (b) any
other Person upon receipt by the Trustee of an Opinion of Counsel, which shall
be at no expense to the Trustee or the Trust, 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, or cause any income realized in respect of such REO Property to fail
to qualify as Rents from Real Property.
"INITIAL LTV CO-OP BASIS" shall mean, with respect to any Co-op
Mortgage Loan, the related loan-to-value ratio specified on EXHIBIT B-5 hereto.
-29-
"INITIAL POOL BALANCE" shall mean the aggregate Cut-off Date Principal
Balance of all the Original Mortgage Loans.
"INITIAL RESOLUTION PERIOD" shall have the meaning assigned thereto in
SECTION 2.03(b).
"INSTITUTIONAL ACCREDITED INVESTOR" or "IAI" shall mean an "accredited
investor" as defined in any of paragraphs (1), (2), (3) and (7) of Rule 501(a)
under the Securities Act or any entity in which all of the equity owners come
within such paragraphs.
"INSURANCE POLICY" shall mean, with respect to any Mortgage Loan or
REO Property, any hazard insurance policy, flood insurance policy, title
insurance policy, earthquake insurance policy, Environmental Insurance Policy,
business interruption insurance policy or other insurance policy that is
maintained from time to time in respect of such Mortgage Loan (or the related
Mortgaged Property) or such REO Property, as the case may be.
"INSURANCE PROCEEDS" shall mean proceeds paid under any Insurance
Policy, to the extent such proceeds actually received by the Trust or a Master
Servicer or Special Servicer on its behalf are not applied to the restoration of
the related Mortgaged Property or REO Property or released to the related
Borrower or any other third-party in accordance with applicable law and/or the
terms and conditions of the related Mortgage Loan Documents or any other
applicable document.
"INSURED ENVIRONMENTAL EVENT" shall have the meaning assigned thereto
in SECTION 3.07(c).
"INTEREST ACCRUAL AMOUNT" shall have:
(a) with respect to the Loan REMIC Regular Interest, for any
Interest Accrual Period, the meaning assigned thereto in SECTION 2.10(g);
(b) with respect to any REMIC I Regular Interest, for any Interest
Accrual Period, the meaning assigned thereto in SECTION 2.12(g);
(c) with respect to any REMIC II Regular Interest, for any
Interest Accrual Period, the meaning assigned thereto in SECTION 2.14(g);
(d) with respect to any Group A-SP REMIC III Regular Interest or
Group A-X REMIC III Regular Interest, for any Interest Accrual Period, the
meaning assigned thereto in SECTION 2.16(g); and
(e) with respect to any Class of REMIC III Regular Interest
Certificates, for any Interest Accrual Period, the meaning assigned thereto
in SECTION 2.16(g).
"INTEREST ACCRUAL BASIS" shall mean the basis on which interest
accrues in respect of any Mortgage Loan, the Loan REMIC Regular Interest, any
REMIC I Regular Interest, any REMIC II Regular Interest, any Group A-SP REMIC
III Regular Interest, any Group A-X REMIC III Regular Interest or any Class of
REMIC III Regular Interest Certificates, consisting of one of the following: (i)
a 30/360 Basis; or (ii) an Actual/360 Basis.
-30-
"INTEREST ACCRUAL PERIOD" shall mean, with respect to the Loan REMIC
Regular Interest, any REMIC I Regular Interest, any REMIC II Regular Interest,
any Group A-SP REMIC III Regular Interest, any Group A-X REMIC III Regular
Interest or any Class of REMIC III Regular Interest Certificates, for any
Distribution Date, the calendar month immediately preceding the month in which
such Distribution Date occurs.
"INTEREST DISTRIBUTION AMOUNT" shall mean, with respect to the Loan
REMIC Regular Interest, any REMIC I Regular Interest, any REMIC II Regular
Interest, any Group A-SP REMIC III Regular Interest, any Group A-X REMIC III
Regular Interest or any Class of REMIC III Regular Interest Certificates, for
any Distribution Date, the sum of the related Current Interest Distribution
Amount and the related Carryforward Interest Distribution Amount for such
Distribution Date.
"INTEREST ONLY CERTIFICATES" shall mean, collectively, the Class A-X,
Class A-Y and Class A-SP Certificates.
"INTEREST RESERVE ACCOUNT" shall mean, subject to SECTION 3.04(f), the
segregated account created and maintained by the Trustee, pursuant to SECTION
3.04(c), in trust for the Certificateholders, which shall be entitled "[name of
Trustee], as Trustee, in trust for the registered holders of
Credit Suisse First
Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates,
Series 0000-XXX0, Xxxxxxxx Xxxxxxx Account".
"INTEREST RESERVE AMOUNT" shall mean, with respect to each Interest
Reserve Loan and each Distribution Date that occurs during the month of February
of 2003 and each year thereafter and during the month of January of 2003 and
each year thereafter that is not a leap year, an amount equal to one-day's
interest at the related Net Mortgage Rate (or, in the case of an Interest
Reserve Loan that is, has replaced or relates to a Specially Designated Co-op
Mortgage Loan, at an annual rate equal to the related Net Mortgage Rate minus
the related Class A-Y Strip Rate) on the Stated Principal Balance of such
Interest Reserve Loan as of the Due Date in the month in which such Distribution
Date occurs (but prior to the application of any amounts due on such Due Date),
to the extent that a Monthly Payment is received in respect thereof for such Due
Date on or before the related Master Servicer Remittance Date or a P&I Advance
is made in respect thereof for such Due Date on the related P&I Advance Date.
"INTEREST RESERVE LOAN" shall mean any Actual/360 Mortgage Loan (or
successor REO Loan).
"INTERESTED PERSON" shall mean any party hereto, any Mortgage Loan
Seller, any Certificateholder, or any Affiliate of any such Person.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act of
1940, as amended.
"IRS" shall mean the Internal Revenue Service or any successor.
"ISSUE PRICE" shall mean, with respect to each Class of Certificates,
the "issue price" as defined in the Code and Treasury regulations promulgated
thereunder.
"KEYBANK" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
-31-
"KEYBANK MORTGAGE LOAN" shall mean any Mortgage Loan that is either an
Original KeyBank Mortgage Loan or a Replacement Mortgage Loan that was delivered
under the KeyBank Mortgage Loan Purchase Agreement in substitution for an
Original KeyBank Mortgage Loan.
"KEYBANK MORTGAGE LOAN PURCHASE AGREEMENT" shall have the meaning
assigned thereto in the Preliminary Statement to this Agreement.
"KRECM" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"LATE COLLECTIONS" shall mean: (a) with respect to any Mortgage Loan,
all amounts received by or on behalf of the Trust thereon during any Collection
Period, whether as payments, Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds or otherwise, which represent late collections of the
principal and/or interest portions of a Monthly Payment (other than a Balloon
Payment) or an Assumed Monthly Payment in respect of such Mortgage Loan due or
deemed due on a Due Date in a previous Collection Period or on a Due Date during
or prior to May 2002, and not previously recovered; and (b) with respect to any
REO Loan, all amounts received by or on behalf of the Trust in connection with
the related REO Property during any Collection Period, whether as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, REO Revenues or
otherwise, which represent late collections of the principal and/or interest
portions of a Monthly Payment (other than a Balloon Payment) or an Assumed
Monthly Payment in respect of the predecessor Mortgage Loan or late collections
of the principal and/or interest portions of an Assumed Monthly Payment in
respect of such REO Loan due or deemed due on a Due Date in a previous
Collection Period, and not previously recovered. Late Collections do not include
Default Charges.
"LATEST POSSIBLE MATURITY DATE" shall mean, with respect to the Loan
REMIC Regular Interest, any REMIC I Regular Interest, any REMIC II Regular
Interest, any Group A-SP REMIC III Regular Interest, any Group A-X REMIC III
Regular Interest or any Class of REMIC III Regular Interest Certificates, the
date designated as the "latest possible maturity date" thereof solely for
purposes of satisfying Treasury regulation section 1.860G-1(a)(4)(iii).
"LETTER OF CREDIT" shall mean, with respect to any Mortgage Loan, any
third-party letter of credit delivered by or at the direction of the Borrower
pursuant to the terms of such Mortgage Loan in lieu of the establishment of, or
deposit otherwise required to be made into, a Reserve Fund. "Letter of Credit"
shall not include the Paradise Island Letter of Credit.
"LIQUIDATION EVENT" shall mean: (a) with respect to any Mortgage Loan,
any of the following events--(i) such Mortgage Loan is paid in full, (ii) a
Final Recovery Determination is made with respect to such Mortgage Loan, (iii)
such Mortgage Loan is repurchased or replaced by a Mortgage Loan Seller pursuant
to the related Mortgage Loan Purchase Agreement or purchased or replaced by the
Column Performance Guarantor pursuant to the Column Performance Guarantee, the
NCBCC Performance Guarantor pursuant to the NCBCC Performance Guarantee or the
NCBSFB Performance Guarantor pursuant to the NCBFSB Performance Guarantee, in
each case as contemplated by SECTION 2.03, (iv) such Mortgage Loan is purchased
by the applicable Special Servicer, the Majority Controlling Class
Certificateholder(s) or any assignee of either of them pursuant to SECTION 3.18,
(v) such Mortgage Loan is purchased by a Master Servicer, a Special Servicer
and/or any Controlling Class Certificateholder(s) pursuant to SECTION 3.18 or
SECTION 9.01 or (vi) such Mortgage Loan is acquired by the Sole
Certificateholder(s) in exchange for all of the Certificates pursuant to
SECTION 9.01; and (b) with
-32-
respect to any REO Property (and the related REO Loan), any of the following
events--(i) a Final Recovery Determination is made with respect to such REO
Property, (ii) such REO Property is purchased by a Master Servicer, a Special
Servicer or any Controlling Class Certificateholder(s) pursuant to SECTION 9.01
or (iii) such REO Property is acquired by the Sole Certificateholder(s) in
exchange for all of the Certificates pursuant to SECTION 9.01.
"LIQUIDATION EXPENSES" shall mean all customary, reasonable and
necessary "out-of-pocket" costs and expenses due and owing (but not otherwise
covered by Servicing Advances) in connection with the liquidation of any
Specially Serviced Mortgage Loan or REO Property pursuant to SECTION 3.09 or
3.18 (including legal fees and expenses, committee or referee fees and, if
applicable, brokerage commissions and conveyance taxes).
"LIQUIDATION FEE" shall mean the fee designated as such in, and
payable to the applicable Special Servicer in connection with certain
Liquidation Events relating to a Specially Serviced Mortgage Loan or REO
Property pursuant to, the third paragraph of SECTION 3.11(c).
"LIQUIDATION FEE RATE" shall mean, with respect to each Specially
Serviced Mortgage Loan or REO Property as to which a Liquidation Fee is payable,
1.0%.
"LIQUIDATION PROCEEDS" shall mean all cash amounts (other than
Insurance Proceeds, Condemnation Proceeds and REO Revenues) actually received by
the Trust in connection with: (i) the liquidation of a Mortgaged Property or
other collateral constituting security for a defaulted Mortgage Loan, through
trustee's sale, foreclosure sale, REO Disposition or otherwise, exclusive of any
portion thereof required to be released to the related Borrower in accordance
with applicable law and/or the terms and conditions of the related Mortgage Note
and Mortgage; (ii) the realization upon any deficiency judgment obtained against
a Borrower; (iii) the purchase of a Specially Designated Defaulted Mortgage Loan
by the applicable Special Servicer, the Majority Controlling Class
Certificateholder(s) or any assignee of either of them pursuant to SECTION 3.18;
(iv) the repurchase or replacement of a Mortgage Loan by a Mortgage Loan Seller
pursuant to the related Mortgage Loan Purchase Agreement; (v) the purchase or
replacement of a Mortgage Loan by the Column Performance Guarantor pursuant to
the Column Performance Guarantee, by the NCBCC Performance Guarantor pursuant to
the NCBCC Performance Guarantee or by the NCBFSB Performance Guarantor pursuant
to the NCBFSB Performance Guarantee; (vi) the purchase of a Mortgage Loan or REO
Property by a Master Servicer, a Special Servicer and/or any Controlling Class
Certificateholder(s) pursuant to SECTION 9.01; (vii) the acquisition of any
Mortgage Loan or REO Property by the Sole Certificateholder(s) in exchange for
all the Certificates pursuant to SECTION 9.01; (viii) a draw on the Paradise
Island Letter of Credit; or (ix) a withdrawal from the Paradise Island Reserve
Fund.
"LOAN REMIC" shall mean the segregated pool of assets designated as
such in SECTION 2.10(a).
"LOAN REMIC REGULAR INTEREST" shall mean the separate non-certificated
beneficial ownership interest in the Loan REMIC issued hereunder and designated
as a "regular interest" (within the meaning of Section 860G(a)(1) of the Code)
in the Loan REMIC. The Loan REMIC Regular Interest has the designation and terms
provided for in SECTION 2.10.
-33-
"LOAN REMIC REMITTANCE RATE" shall mean the per annum rate at which
interest accrues in respect of the Loan REMIC Regular Interest during any
Interest Accrual Period, as set forth in or otherwise calculated in accordance
with SECTION 2.10(f).
"LOAN REMIC RESIDUAL INTEREST" shall mean the sole uncertificated
"residual interest" (within the meaning of 860G(a)(2) of the Code) in the Loan
REMIC issued pursuant to this Agreement.
"LOC CASH RESERVE" shall have the meaning assigned thereto in the
definition of "Mortgage File".
"LOSS REIMBURSEMENT AMOUNT" shall mean:
(a) with respect to the Loan REMIC Regular Interest, for any
Distribution Date, the total amount of all Unfunded Principal Balance
Reductions, if any, incurred by (but not reimbursed to) REMIC I with
respect to the Loan REMIC Regular Interest on all prior Distribution Dates,
if any;
(b) with respect to any REMIC I Regular Interest, for any
Distribution Date, the total amount of all Unfunded Principal Balance
Reductions, if any, incurred by (but not reimbursed to) REMIC II with
respect to such REMIC I Regular Interest on all prior Distribution Dates,
if any;
(c) with respect to any REMIC II Regular Interest, for any
Distribution Date, the total amount of all Unfunded Principal Balance
Reductions, if any, incurred by (but not reimbursed to) REMIC III with
respect to such REMIC II Regular Interest on all prior Distribution Dates,
if any; and
(d) with respect to any Class of Principal Balance Certificates,
for any Distribution Date, the total amount of all Unfunded Principal
Balance Reductions, if any, incurred by (but not reimbursed to) the Holders
of such Class of Certificates on all prior Distribution Dates, if any.
"LTV CO-OP BASIS" shall mean, as of any date for any Co-op Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Stated Principal Balance of such Co-op Mortgage Loan on such date, and the
denominator of which is the Appraised Value of the related Mortgaged Property.
"MAJORITY CONTROLLING CLASS CERTIFICATEHOLDER(S)" shall mean, as of
any date of determination, any single Holder or group of Holders of Certificates
representing a majority of the Voting Rights allocated to the Class of Principal
Balance Certificates that constitutes, or the Classes of Principal Balance
Certificates that constitute, the Controlling Class as of such date of
determination.
"MASTER SERVICER" shall mean: (a) with respect to any Mortgage Loan
(other than a Co-op Mortgage Loan), any REO Property acquired by the Trust with
respect to a Mortgage Loan (other than a Co-op Mortgage Loan) and any matters
relating to the foregoing, the General Master Servicer; and (b) with respect to
any Co-op Mortgage Loan, any REO Property acquired by the Trust with respect to
a Co-op Mortgage Loan and any matters relating to the foregoing, the Co-op
Master Servicer.
-34-
"MASTER SERVICER REMITTANCE AMOUNT" shall mean, with respect to either
Master Servicer for any Master Servicer Remittance Date, an amount equal to (a)
all amounts on deposit in such Master Servicer's Collection Account as of
11:00 a.m.,
New York City time, on such Master Servicer Remittance Date, net of
(b) any portion of the amounts described in CLAUSE (a) of this definition that
represents one or more of the following: (i) collected Monthly Payments that are
due on a Due Date following the end of the related Collection Period, (ii) any
payments of principal (including Principal Prepayments) and interest (including
Post-ARD Additional Interest), Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds received by or on behalf of the Trust after the end of the
related Collection Period, (iii) any Prepayment Premiums and/or Yield
Maintenance Charges received by or on behalf of the Trust after the end of the
related Collection Period, (iv) any Excess Liquidation Proceeds, (v) any amounts
payable or reimbursable to any Person from such Collection Account pursuant to
CLAUSES (ii) through (xvii) of SECTION 3.05(a), and (vi) any amounts deposited
in such Collection Account in error; PROVIDED that the Master Servicer
Remittance Amount with respect to each Master Servicer for the Master Servicer
Remittance Date that occurs in the same calendar month as the anticipated Final
Distribution Date shall be calculated without regard to CLAUSES (b)(i), (b)(ii),
(b)(iii) and (b)(iv) of this definition.
"MASTER SERVICER REMITTANCE DATE" shall mean the Business Day
preceding each Distribution Date.
"MASTER SERVICING FEE" shall mean, with respect to each Mortgage Loan
and REO Loan, the fee designated as such and payable to the applicable Master
Servicer pursuant to SECTION 3.11(a).
"MASTER SERVICING FEE RATE" shall mean, with respect to each Mortgage
Loan and any successor REO Loan, the rate per annum specified with respect to
such Mortgage Loan under the heading ["Servicing and Trustee Fees"] in the
Mortgage Loan Schedule, minus the Trustee Fee Rate.
"MATERIAL BREACH" shall mean any Breach that materially and adversely
affects the value of any Mortgage Loan or the interests of the
Certificateholders, or any of them, in or with respect to such Mortgage Loan,
including a material and adverse effect on any of the payments payable with
respect to any of the Certificates or the value of any of the Certificates. In
determining whether a Breach materially and adversely affects the value of a
Mortgage Loan or the interests of the Certificateholders, or any of them, in
such Mortgage Loan, the extent to which such Breach adversely affects the value
of the related Mortgaged Property, if at all, is a factor to be considered.
"MATERIAL DOCUMENT DEFECT" shall mean any Document Defect that
materially and adversely affects the value of any Mortgage Loan or the interests
of the Certificateholders, or any of them, in or with respect to such Mortgage
Loan, including a material and adverse effect on any of the payments payable
with respect to any of the Certificates or the value of any of the Certificates;
PROVIDED, HOWEVER, that, except as set forth in the next sentence, no Document
Defect will be considered to be a Material Document Defect prior to the first
anniversary of the Closing Date, unless the document with respect to which the
subject Document Defect exists is required in connection with an imminent
enforcement of the lender's rights or remedies under the related Mortgage Loan,
defending any claim asserted by any Borrower or third party with respect to the
related Mortgage Loan, establishing the validity or priority of any lien on any
collateral securing the related Mortgage Loan or for any immediate servicing
obligation. Without limiting the generality of the foregoing, it is agreed by
all
-35-
parties that the absence of a Specially Designated Mortgage Loan Document shall
be a Material Document Defect.
"MODIFIED MORTGAGE LOAN" shall mean any Mortgage Loan as to which any
Servicing Transfer Event has occurred and which has been modified by the
applicable Special Servicer pursuant to SECTION 3.20 in a manner that:
(a) materially affects the amount or timing of any payment of
principal or interest due thereon (other than, or in addition to, bringing
Monthly Payments current with respect to such Mortgage Loan);
(b) except as expressly contemplated by the related Mortgage Loan
Documents, results in a release of the lien of the Mortgage on any material
portion of the related Mortgaged Property without a corresponding Principal
Prepayment in an amount, or the delivery of substitute real property
collateral with a fair market value (as is), that is not less than the fair
market value (as is) of the property to be released, as determined by an
Appraisal delivered to the applicable Special Servicer (at the expense of
the related Borrower and upon which the applicable Special Servicer may
conclusively rely); or
(c) in the reasonable judgment of the applicable Special Servicer,
otherwise materially impairs the security for such Mortgage Loan or
materially reduces the likelihood of timely payment of amounts due thereon.
"MONTHLY PAYMENT" shall mean, with respect to any Mortgage Loan as of
any Due Date, the scheduled monthly payment (or, in the case of an ARD Mortgage
Loan after its Anticipated Repayment Date, the minimum required monthly payment)
of principal and/or interest on such Mortgage Loan, including any Balloon
Payment, that is actually payable by the related Borrower from time to time
under the terms of the related Mortgage Note (as such terms may be changed or
modified in connection with a bankruptcy, insolvency or similar proceeding
involving the related Borrower or by reason of a modification, waiver or
amendment granted or agreed to by the applicable Master Servicer or the
applicable Special Servicer pursuant to SECTION 3.20); PROVIDED that the Monthly
Payment due in respect of any ARD Mortgage Loan after its Anticipated Repayment
Date shall not include Post-ARD Additional Interest.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. or its successor
in interest. If neither such rating agency nor any successor remains in
existence, "Moody's" shall be deemed to refer to such other nationally
recognized statistical rating agency or other comparable Person designated by
the Depositor, notice of which designation shall be given to the other parties
hereto, and specific ratings of Xxxxx'x Investors Service, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated. References herein to "applicable rating category" (other than such
references to "highest applicable rating category") shall, in the case of
Moody's, be deemed to refer to such applicable rating category of Moody's,
without regard to any plus or minus or other comparable rating qualification.
"MORTGAGE" shall mean, with respect to any Mortgage Loan, separately
and collectively, as the context may require, each mortgage, deed of trust, deed
to secure debt or similar document that secures the related Mortgage Note and
creates a lien on the related Mortgaged Property.
-36-
"MORTGAGE FILE" shall mean, with respect to any Mortgage Loan, subject
to SECTIONS 1.04 and 2.01, the following documents on a collective basis:
(i) the original executed Mortgage Note, endorsed (either on the
face thereof or pursuant to a separate allonge) "Pay to the
order of Xxxxx Fargo Bank Minnesota, N.A., as trustee for the
registered holders of
Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2002-CKN2, without recourse" or in blank,
and further showing a complete, unbroken chain of endorsement
from the originator (if such originator is other than the
related Mortgage Loan Seller); or alternatively, if the
original executed Mortgage Note has been lost, a lost note
affidavit and indemnity with a copy of such Mortgage Note;
(ii) an original or a copy of the Mortgage and of any intervening
assignments thereof that precede the assignment referred to in
CLAUSE (iv) of this definition, in each case (unless the
particular item has been delivered to, but not been returned
from, the applicable recording office) with evidence of
recording indicated thereon or certified as to recording by
the applicable recording office;
(iii) an original or a copy of the related Assignment of Leases (if
such item is a document separate from the Mortgage) and of any
intervening assignments thereof that precede the assignment
referred to in CLAUSE (v) of this definition, in each case
(unless the particular item has been delivered to, but not
been returned from, the applicable recording office) with
evidence of recording indicated thereon or certified as to
recording by the applicable recording office;
(iv) an original executed assignment of the Mortgage, in favor of
Xxxxx Fargo, as trustee for the registered holders of
Credit
Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2002-CKN2, in
recordable form (except for any missing recording information
with respect to such Mortgage);
(v) an original executed assignment of any related Assignment of
Leases (if such item is a document separate from the
Mortgage), in favor of Xxxxx Fargo, as trustee for the
registered holders of
Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2002-CKN2, in recordable form (except for
any missing recording information with respect to such
Assignment of Leases);
(vi) originals or copies of any written assumption, modification,
assurance and substitution agreements in those instances where
the terms or provisions of the Mortgage or Mortgage Note have
been modified or the Mortgage Loan has been assumed, in each
case (unless the particular item has not been returned from
the applicable recording office) with evidence of recording
indicated thereon or certified as to recording by the
applicable recording office if the instrument being modified
or assumed is a recordable document;
-37-
(vii) the original or a copy of the policy of lender's title
insurance (or, if such policy has not yet been issued, a
"marked-up" PRO FORMA title policy or commitment for title
insurance, marked as binding and countersigned by the title
insurer or its authorized agent either on its face or by an
acknowledged closing instruction or escrow letter);
(viii) filed copies of any prior UCC Financing Statements in favor of
the originator of such Mortgage Loan or in favor of any
assignee prior to the Trustee (but only to the extent the
related Mortgage Loan Seller had or gains possession of such
UCC Financing Statements) and, in connection with such UCC
Financing Statements, an original UCC Financing Statement
Amendment, as appropriate, in form suitable for filing, in
favor of Xxxxx Fargo, as trustee for the registered holders of
Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series
2002-CKN2;
(ix) the original or a copy of any environmental indemnity
agreement and any Environmental Insurance Policy relating
solely to such Mortgage Loan;
(x) the original or a copy of any power of attorney, guaranty,
loan agreement, cash management agreement, Ground Lease and/or
Ground Lease estoppels relating to such Mortgage Loan;
(xi) any original documents (including any security agreement(s)
and any Letter(s) of Credit) relating to, evidencing or
constituting Additional Collateral and, if applicable, the
originals or copies of any intervening assignments thereof;
(xii) the original or a copy of any intercreditor agreement,
co-lender agreement or similar agreement relating to such
Mortgage Loan; and
(xiii) if the related Mortgaged Property is a hospitality property,
any franchise agreement and any franchisor comfort letter;
PROVIDED that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee or by a Custodian on its behalf such term shall
be deemed not to include such documents and instruments required to be included
therein unless they are actually so received; and PROVIDED, FURTHER, that the
Mortgage File for any Mortgage Loan need not include any Letter of Credit
referred to in ITEM (xi) of this definition if, in lieu thereof, the related
Mortgage Loan Seller has, on behalf of the related Borrower, either (i)
delivered to the Trustee a substitute letter of credit, in the same amount and
with the same draw conditions and renewal rights as, and otherwise substantially
similar to, that Letter of Credit and issued by an obligor that meets any
criteria in the related Mortgage Loan Documents applicable to the issuer of that
Letter of Credit or (ii) delivered to the applicable Master Servicer a cash
reserve in an amount equal to the amount of that Letter of Credit (the "LOC CASH
RESERVE"), which substitute letter of credit can be drawn on, or which cash
reserve can be applied to cover, the same items as that Letter of Credit was
intended to cover.
"MORTGAGE LOAN" shall mean each of the Original Mortgage Loans and
Replacement Mortgage Loans that are from time to time held in the Trust Fund,
including any such mortgage loan
-38-
that has been wholly or partially defeased. As used herein, the term "Mortgage
Loan" includes the related Mortgage Loan Documents.
"MORTGAGE LOAN DOCUMENTS" shall mean, with respect to any Mortgage
Loan, the documents included or required to be included, as the context may
require, in the related Mortgage File and Servicing File.
"MORTGAGE LOAN PURCHASE AGREEMENT" shall mean any of the Column
Mortgage Loan Purchase Agreement, the KeyBank Mortgage Loan Purchase Agreement,
the NCB Mortgage Loan Purchase Agreement, the NCBCC Mortgage Loan Purchase
Agreement and the NCBFSB Mortgage Loan Purchase Agreement.
"MORTGAGE LOAN SCHEDULE" shall mean, collectively, the five schedules
of Mortgage Loans attached hereto as EXHIBIT X-0X, XXXXXXX X-0X, XXXXXXX X-0X,
EXHIBIT B-1D and EXHIBIT B-1E, respectively, as any such schedule may be amended
from time to time in accordance with this Agreement. Such schedules shall set
forth the following information with respect to each Mortgage Loan:
(i) the Mortgage Loan number and the Prospectus Loan
Identification number as provided in the Prospectus;
(ii) the street address (including city, state and zip code) of the
related Mortgaged Property;
(iii) the (A) original principal balance and (B) Cut-off Date
Principal Balance;
(iv) the amount of the Monthly Payment due on the first Due Date
following the Closing Date (and, if a Mortgage Loan currently
requires only payments of interest but begins to amortize
prior to maturity, on the first Due Date after amortization
begins);
(v) the Mortgage Rate as of the Closing Date;
(vi) the original and remaining term to stated maturity;
(vii) in the case of a Balloon Mortgage Loan, the original and
remaining amortization term;
(viii) whether such Mortgage Loan is a Cross-Collateralized Mortgage
Loan and, if so, an identification of the Mortgage Loans with
which such Mortgage Loan is cross-collateralized;
(ix) whether such Mortgage Loan is a Co-op Mortgage Loan;
(ix) the Anticipated Repayment Date for each ARD Mortgage Loan;
(x) whether such Mortgage Loan provides for defeasance and if so,
the period during which defeasance may occur;
-39-
(xi) whether the Mortgage Loan is secured by a fee simple interest
in the Mortgaged Property; by the Borrower's leasehold
interest, and a fee simple interest, in the Mortgaged
Property; or solely by a leasehold interest in the Mortgaged
Property;
(xii) the name of the Mortgage Loan Seller;
(xiii) the name of the originator;
(xiv) the Interest Accrual Basis;
(xv) the Administrative Fee Rate;
(xvi) the number of grace days before such Mortgage Loan requires a
late payment charge in connection with a delinquent Monthly
Payment;
(xvii) the amount of Reserve Funds and Escrow Payments;
(xviii) whether there exists (and, if so, the amount of) any letter of
credit that constitutes Additional Collateral;
(xix) whether repayment of such Mortgage Loan is guaranteed by a
guarantor; and
(xx) whether the related Mortgaged Property is, as of the Cut-off
Date, operated as a hospitality property.
"MORTGAGE LOAN SELLERS" shall mean, collectively, Column, KeyBank,
NCB, NCBCC and NCBFSB.
"MORTGAGE LOANS DELINQUENT REPORT" shall mean the report in the form
of and containing the information provided for in EXHIBIT E-5 attached hereto.
"MORTGAGE NOTE" shall mean the original executed note evidencing the
indebtedness of a Borrower under a Mortgage Loan, together with any rider,
addendum or amendment thereto, or any renewal, substitution or replacement of
such note.
"MORTGAGE POOL" shall mean all of the Mortgage Loans and any successor
REO Loans, collectively, as of any particular date of determination.
"MORTGAGE RATE" shall mean, with respect to any Mortgage Loan (and any
successor REO Loan), the annualized rate at which interest is scheduled (in the
absence of a default) to accrue on such Mortgage Loan from time to time in
accordance with the related Mortgage Note and applicable law, as such rate may
be modified in connection with a bankruptcy, insolvency or similar proceeding
involving the related Borrower or by the applicable Master Servicer or the
applicable Special Servicer in accordance with SECTION 3.20. In the case of each
of the ARD Mortgage Loans, the related Mortgage Rate will be subject to increase
in accordance with the related Mortgage Note if the particular Mortgage Loan is
not paid in full by its Anticipated Repayment Date.
"MORTGAGED PROPERTY" shall mean, individually and collectively, as the
context may require, each real property (together with all improvements and
fixtures thereon) subject to the lien of a
-40-
Mortgage and constituting collateral for a Mortgage Loan. With respect to any
Cross-Collateralized Mortgage Loan, if and when the context may require,
"Mortgaged Property" shall mean, collectively, all the mortgaged real properties
(together with all improvements and fixtures thereon) securing the relevant
Cross-Collateralized Group.
"MORTGAGEE" shall mean the holder of legal title to any Mortgage Loan,
together with any third parties through which such holder takes actions with
respect to such Mortgage Loan.
"NCB" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"NCB MORTGAGE LOAN" shall mean any Mortgage Loan that is either an
Original NCB Mortgage Loan or a Replacement Mortgage Loan that was delivered
under the NCB Mortgage Loan Purchase Agreement in substitution for an Original
NCB Mortgage Loan.
"NCB MORTGAGE LOAN PURCHASE AGREEMENT" shall have the meaning assigned
thereto in the Preliminary Statement to this Agreement.
"NCBFSB SUBORDINATE DEBT CONDITIONS" shall mean, with respect to a
Borrower encumbering a Mortgaged Property relating to a Co-op Mortgage Loan with
a subordinate mortgage, the following conditions: (i) each of the loans, or the
sole loan, to be secured by each such subordinate mortgage is made by NCBFSB or
any Affiliate thereof (ii) each such subordinate mortgage is expressly subject
and subordinate to the lien of the Mortgage encumbering the Mortgaged Property
in question, (iii) each such subordinate mortgage is expressly made in
compliance with the underwriting standards which NCBFSB customarily employs in
connection with making subordinate mortgages for its own mortgage loan
portfolio, (iv) as of the date of the closing of the subordinate mortgage loan
in question, the New Loan-to-Value Ratio (as defined below) does not exceed the
lesser of (A) 40% and (B) the sum of 15% plus the Initial LTV Co-op Basis for
the related Co-op Mortgage Loan, (v) NCBFSB or any Affiliate thereof that
originates the subordinate mortgage loan, executes and delivers to the Trustee a
subordination agreement with respect to such subordinate mortgage in
substantially the form of EXHIBIT M hereto (PROVIDED that the Trustee shall have
no responsibility for determining the sufficiency or validity thereof), (vi) if
the subordinate mortgage loan will not be a fully amortizing loan, the stated
maturity date of the subordinate mortgage loan shall be no earlier than the
maturity date of the related Co-op Mortgage Loan, (vii) the subordinate mortgage
loan shall have interest payable on a current basis, with no deferral, (viii)
the subordinate mortgage loan is made principally for the purpose of funding
capital expenditures, major repairs or reserves at or with respect to the
Mortgaged Property in question and (ix) the aggregate amount of subordinate debt
encumbering the Mortgaged Property in question does not exceed $3,500,000. For
purposes of this definition, and notwithstanding anything herein to the
contrary: "MORTGAGE DEBT" shall mean the sum of (x) the aggregate outstanding
principal balance of all loans secured by one or more mortgages then encumbering
the Mortgaged Property in question (including the related Co-op Mortgage Loan
and any then existing subordinate mortgage loans) and (y) the principal amount
of the proposed new subordinate mortgage loan; "NEW LOAN-TO-VALUE RATIO" shall
mean, as of any date for any Co-op Mortgage Loan, the fraction, expressed as a
percentage, the numerator of which is the Mortgage Debt for the related
Mortgaged Property on such date, and the denominator of which is the Appraised
Value of the related Mortgaged Property; and "APPRAISAL" shall mean an MAI
appraisal of the applicable Mortgaged Property made, in conformance with
NCBFSB's
-41-
customary underwriting requirements, not more than one year prior to the
origination date of the related Co-op Mortgage Loan and reviewed by the Co-op
Master Servicer.
"NCBCC" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"NCBCC MORTGAGE LOAN" shall mean any Mortgage Loan that is either an
Original NCBCC Mortgage Loan or a Replacement Mortgage Loan that was delivered
under the NCBCC Mortgage Loan Purchase Agreement or the NCBCC Performance
Guarantee in substitution for an Original NCBCC Mortgage Loan.
"NCBCC MORTGAGE LOAN PURCHASE AGREEMENT" shall have the meaning
assigned thereto in the Preliminary Statement to this Agreement.
"NCBCC PERFORMANCE GUARANTEE" shall mean the Guarantee dated as of May
2, 2002, from the NCBCC Performance Guarantor in favor of the Trustee, relating
to the obligations of NCBCC under Section 5 of the NCBCC Mortgage Loan Purchase
Agreement.
"NCBCC PERFORMANCE GUARANTOR" shall mean NCB or any successor
guarantor under the NCBCC Performance Guarantee.
"NCBFSB" shall have the meaning assigned thereto in the Preliminary
Statement to this Agreement.
"NCBFSB MORTGAGE LOAN" shall mean any Mortgage Loan that is either an
Original NCBFSB Mortgage Loan or a Replacement Mortgage Loan that was delivered
under the NCBFSB Mortgage Loan Purchase Agreement or the NCBSFB Performance
Guarantee in substitution for an Original NCBFSB Mortgage Loan.
"NCBFSB MORTGAGE LOAN PURCHASE AGREEMENT" shall have the meaning
assigned thereto in the Preliminary Statement to this Agreement.
"NCBFSB PERFORMANCE GUARANTEE" shall mean the Guarantee dated as of
May 2, 2002, from the NCBFSB Performance Guarantor in favor of the Trustee,
relating to the obligations of NCBFSB under Section 5 of the NCBFSB Mortgage
Loan Purchase Agreement.
"NCBFSB PERFORMANCE GUARANTOR" shall mean NCB or any successor
guarantor under the NCBFSB Performance Guarantee.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" shall mean, with respect
to any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments, Insurance Proceeds and Condemnation Proceeds on the
Mortgage Loans during the related Collection Period, exceeds (b) the aggregate
amount of the Compensating Interest Payments remitted by the Master Servicers
pursuant to SECTION 3.19(a) on the Master Servicer Remittance Date related to
such Distribution Date.
"NET ASSUMPTION APPLICATION FEE" shall have the meaning assigned
thereto in SECTION 3.08.
-42-
"NET ASSUMPTION FEE" shall have the meaning assigned thereto in
SECTION 3.08.
"NET DEFAULT CHARGES" shall mean, with respect to any Mortgage Loan or
REO Loan, the Default Charges referred to in CLAUSE SEVENTH of SECTION 3.26(a),
which are payable to the applicable Master Servicer as Additional Master
Servicing Compensation or the applicable Special Servicer as Additional Special
Servicing Compensation.
"NET INVESTMENT EARNINGS" shall mean, with respect to any Account for
any Collection Period, the amount, if any, by which the aggregate of all
interest and other income realized during such Collection Period in connection
with the investment of funds held in such Account for the benefit of a Master
Servicer, a Special Servicer, the Trustee or Column, as applicable, in
accordance with SECTION 3.06, exceeds the aggregate of all losses, if any,
incurred during such Collection Period in connection with the investment of such
funds for the benefit of such Master Servicer, such Special Servicer, the
Trustee or Column, as applicable, in accordance with SECTION 3.06 (other than
losses of what would otherwise have constituted interest or other income earned
on such funds).
"NET INVESTMENT LOSS" shall mean, with respect to any Account for any
Collection Period, the amount by which the aggregate of all losses, if any,
incurred during such Collection Period in connection with the investment of
funds held in such Account for the benefit of a Master Servicer, a Special
Servicer, the Trustee or Column, as applicable, in accordance with SECTION 3.06
(other than losses of what would otherwise have constituted interest or other
income earned on such funds), exceeds the aggregate of all interest and other
income realized during such Collection Period in connection with the investment
of such funds for the benefit of such Master Servicer, such Special Servicer,
the Trustee or Column, as applicable, in accordance with SECTION 3.06; PROVIDED
that, in the case of any Account and any particular investment of funds in such
Account, Net Investment Loss shall not include any loss with respect to such
investment which is incurred solely as a result of the insolvency of the federal
or state chartered depositary institution or trust company that holds such
Account, so long as such depositary institution or trust company (i) satisfied
the qualifications set forth in the definition of "Eligible Account" both at the
time such investment was made and also as of a date not more than 30 days prior
to the date of such loss and (ii) was not the party benefiting from the
investment of funds in such Account or any Affiliate of such party.
"NET LIQUIDATION PROCEEDS" shall mean the excess, if any, of all
Liquidation Proceeds actually received by the Trust with respect to any
Specially Serviced Mortgage Loan or REO Property, over the amount of all
Liquidation Expenses incurred with respect thereto and all related Servicing
Advances reimbursable therefrom.
"NET MORTGAGE RATE" shall mean, with respect to any Mortgage Loan (or
successor REO Loan), the rate per annum equal to (a) the related Mortgage Rate
minus (b) the related Administrative Fee Rate and, in the case of an ARD
Mortgage Loan after its Anticipated Repayment Date, the related Post-ARD
Additional Interest Rate.
"NEW LEASE" shall mean any lease of an REO Property entered into at
the direction of the applicable Special Servicer, including any lease renewed,
modified or extended on behalf of the Certificateholders, if the applicable
Special Servicer has the right to renegotiate the terms of such lease.
"NONRECOVERABLE ADVANCE" shall mean any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
-43-
"NONRECOVERABLE P&I ADVANCE" shall mean, as evidenced by the Officer's
Certificate and supporting documentation contemplated by SECTION 4.03(c), any
P&I Advance previously made or to be made in respect of any Mortgage Loan or any
REO Loan that, as determined by the applicable Master Servicer or, if
applicable, the Trustee or any Fiscal Agent, in its reasonable judgment, based
on at least an Appraisal conducted within the twelve months preceding any such
determination, will not be ultimately recoverable from late payments, Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or any other recovery on
or in respect of such Mortgage Loan.
"NONRECOVERABLE SERVICING ADVANCE" shall mean, as evidenced by the
Officer's Certificate and supporting documentation contemplated by
SECTION 3.11(h), any Servicing Advance previously made or to be made in respect
of a Mortgage Loan or REO Property that, as determined by the applicable Master
Servicer, the applicable Special Servicer or, if applicable, the Trustee or any
Fiscal Agent, in its reasonable judgment, based on at least an Appraisal
conducted within the twelve months preceding any such determination, will not be
ultimately recoverable from late payments, Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or any other recovery on or in respect of such
Mortgage Loan or REO Property.
"NON-REGISTERED CERTIFICATE" shall mean any Certificate that has not
been subject to registration under the Securities Act. As of the Closing Date,
the Class A-SP, Class A-X, Class A-Y, Class E, Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N, Class O, Class R and Class V
Certificates will constitute Non-Registered Certificates.
"NON-UNITED STATES TAX PERSON" shall mean any Person other than a
United States Tax Person.
"OFFICER'S CERTIFICATE" shall mean a certificate signed by a Servicing
Officer of a Master Servicer or a Special Servicer or a Responsible Officer of
the Trustee or any Fiscal Agent, as the case may be.
"OPINION OF COUNSEL" shall mean a written opinion of counsel (which
counsel, in the case of any such opinion relating to the taxation of the Trust
Fund or any portion thereof or the status of any REMIC Pool as a REMIC or the
status of either Grantor Trust Pool as a Grantor Trust for taxation purposes,
shall be Independent of the Depositor, each Mortgage Loan Seller, each Master
Servicer, each Special Servicer, the Trustee and any Fiscal Agent, but which may
act as counsel to such Person) acceptable to and delivered to the addressee(s)
thereof and which Opinion of Counsel, except as provided herein, shall not be at
the expense of the Trustee.
"OPTION PERIOD" shall have the meaning assigned thereto in
SECTION 3.18(c).
"OPTION PRICE" shall have the meaning assigned thereto in
SECTION 3.18(c).
"ORIGINAL COLUMN MORTGAGE LOANS" shall have the meaning assigned
thereto in the Preliminary Statement to this Agreement.
"ORIGINAL KEYBANK MORTGAGE LOANS" shall have the meaning assigned
thereto in the Preliminary Statement to this Agreement.
-44-
"ORIGINAL MORTGAGE LOANS" shall have the meaning assigned thereto in
the Preliminary Statement to this Agreement.
"ORIGINAL NCB MORTGAGE LOANS" shall have the meaning assigned thereto
in the Preliminary Statement to this Agreement.
"ORIGINAL NCBCC MORTGAGE LOANS" shall have the meaning assigned
thereto in the Preliminary Statement to this Agreement.
"ORIGINAL NCBFSB MORTGAGE LOANS" shall have the meaning assigned
thereto in the Preliminary Statement to this Agreement.
"OTS" shall mean the Office of Thrift Supervision or any successor
thereto.
"OWNERSHIP INTEREST" shall mean, in the case of 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, with respect to any Mortgage Loan or REO
Loan, any advance made by the applicable Master Servicer, the Trustee or any
Fiscal Agent pursuant to SECTION 4.03.
"P&I ADVANCE DATE" shall mean the Business Day preceding each
Distribution Date.
"PARADISE ISLAND LETTER OF CREDIT" shall mean a letter of credit in
the original amount of $3,500,000 issued by the Paradise Island Letter of Credit
Provider.
"PARADISE ISLAND LETTER OF CREDIT PROVIDER" shall mean Credit Suisse
First Boston,
New York Branch.
"PARADISE ISLAND MORTGAGE LOAN" shall mean the Mortgage Loan secured
by a Mortgage on the Paradise Island Property.
"PARADISE ISLAND PROPERTY" shall mean the Mortgaged Property
identified on the Mortgage Loan Schedule as "Paradise Island Apartments".
"PARADISE ISLAND RESERVE FUND" shall mean the "outside reserve fund"
(within the meaning of Treasury regulation section 1.860G-2(h)) designated as
such pursuant to SECTION 2.17(c) of this Agreement. The Paradise Island Reserve
Fund will be part of the Trust Fund but not part of any REMIC Pool or Grantor
Trust Pool.
"PARADISE ISLAND SPECIAL ACCOUNT" shall mean the segregated account
created and maintained by the General Master Servicer, if necessary, pursuant to
SECTION 3.19(i), in trust for the Certificateholders and Column, as their
interests may appear, which shall be entitled "[name of subject Master
Servicer], as a Master Servicer, in trust for the registered holders of Credit
Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through
Certificates, Series 2002-CKN2 and Column Financial Inc., as their interests may
appear, Paradise Island Special Account".
-45-
"PASS-THROUGH RATE" shall mean the per annum rate at which interest
accrues in respect of any Class of REMIC III Regular Interest Certificates
during any Interest Accrual Period, as set forth in or otherwise calculated in
accordance with SECTION 2.16(f).
"PAYMENTS RECEIVED AFTER DETERMINATION DATE REPORT" shall mean the
report in the form of and containing the information provided for in EXHIBIT E-4
attached hereto.
"PERCENTAGE INTEREST" shall mean: (a) with respect to any REMIC III
Regular Interest Certificate, the portion of the relevant Class evidenced by
such Certificate, expressed as a percentage, the numerator of which is the
Certificate Principal Balance or Certificate Notional Amount, as the case may
be, of such Certificate as of the Closing Date, as specified on the face
thereof, and the denominator of which is the Class Principal Balance or Class
Notional Amount, as the case may be, of the relevant Class as of the Closing
Date; and (b) with respect to a Class R or Class V Certificate, the percentage
interest in distributions to be made with respect to the relevant Class, as
stated on the face of such Certificate.
"PERFORMANCE GUARANTORS" shall mean, together, the Column Performance
Guarantor, the NCBCC Performance Guarantor and the NCBFSB Performance Guarantor.
"PERFORMING MORTGAGE LOAN" shall mean, as of any date of
determination, any Mortgage Loan as to which no Servicing Transfer Event then
exists.
"PERMITTED INVESTMENTS" shall mean any one or more of the following
obligations or securities:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States
or any agency or instrumentality thereof, PROVIDED that each
such obligation is backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in CLAUSE (i),
PROVIDED that the short-term unsecured debt obligations of the
party agreeing to repurchase such obligations are at the time
of investment rated by S&P in the highest short-term debt
rating category of S&P and rated by Xxxxx'x "A2" or "P-1" if
such obligation has a maturity of less than one month, "A1"
and "P-1" if such obligation has a maturity of at least one
month but less than three months, "Aa3" and "P-1" if such
obligation has a maturity of at least three months but less
than six months, and "Aaa" and "P-1" if such obligation has a
maturity of six months or more;
(iii) federal funds, unsecured uncertificated certificates of
deposit, time deposits and bankers' acceptances of any bank or
trust company organized under the laws of the United States or
any state thereof, PROVIDED that the short-term unsecured debt
obligations of such bank or trust company are at the time of
investment rated by S&P in the highest short-term debt rating
category of S&P and rated by Xxxxx'x "A2" or "P-1" if such
obligation has a maturity of less than one month, "A1" and
"P-1" if such obligation has a maturity of at least one month
but less than three months, "Aa3" and "P-1" if such obligation
has a maturity of at least three months
-46-
but less than six months, and "Aaa" and "P-1" if such
obligation has a maturity of six months or more;
(iv) commercial paper of any corporation incorporated under the
laws of the United States or any state thereof (or of any
corporation not so incorporated, PROVIDED that the commercial
paper is United States Dollar denominated and amounts payable
thereunder are not subject to any withholding imposed by any
non-United States jurisdiction), PROVIDED that such commercial
paper is rated by S&P in the highest short-term debt rating
category of S&P and rated by Xxxxx'x "A2" or "P-1" if such
obligation has a maturity of less than one month, "A1" and
"P-1" if such obligation has a maturity of at least one month
but less than three months, "Aa3" and "P-1" if such obligation
has a maturity of at least three months but less than six
months, and "Aaa" and "P-1" if such obligation has a maturity
of six months or more;
(v) units of money market funds (including those managed or
advised by the Trustee or its Affiliates) which maintain a
constant net asset value, PROVIDED that such units of money
market funds are rated by S&P in the highest short-term debt
rating category of S&P and rated by Xxxxx'x "A2" or "P-1" if
such obligation has a maturity of less than one month, "A1"
and "P-1" if such obligation has a maturity of at least one
month but less than three months, "Aa3" and "P-1" if such
obligation has a maturity of at least three months but less
than six months, and "Aaa" and "P-1" if such obligation has a
maturity of six months or more; or
(vi) any other obligation or security that is acceptable to the
Rating Agencies and will not result in an Adverse Rating Event
with respect to any Class of Rated Certificates (as confirmed
in writing to the Trustee by each Rating Agency);
PROVIDED that (A) no investment described hereunder shall evidence either the
right to receive (1) only interest with respect to such investment or (2) a
yield to maturity greater than 120% of the yield to maturity at par of the
underlying obligations, (B) no investment described hereunder may be purchased
at a price greater than par if such investment may be prepaid or called at a
price less than its purchase price prior to stated maturity, (C) no investment
described hereunder may be sold prior to stated maturity if such sale would
result in a loss of principal on the instrument or a tax on "prohibited
transactions" under Section 860F of the Code and (D) no investment described
hereunder may have an "r" highlighter or other comparable qualifier attached to
its S&P rating; and PROVIDED, FURTHER, that each investment described hereunder
must have (X) a predetermined fixed amount of principal due at maturity (that
cannot vary or change), (Y) an original maturity of not more than 365 days and a
remaining maturity of not more than 30 days and (Z) except in the case of a
Permitted Investment described in CLAUSE (v) of this definition, a fixed
interest rate or an interest rate that is tied to a single interest rate index
plus a single fixed spread and moves proportionately with that index; and
PROVIDED, FURTHER, that each investment described hereunder must be a "cash flow
investment" (within the meaning of the REMIC Provisions).
"PERMITTED TRANSFEREE" shall mean any Transferee of a Class R
Certificate other than either a Disqualified Organization or a Non-United States
Tax Person; PROVIDED, HOWEVER, that if a Transferee is classified as a
partnership under the Code, such Transferee shall only be a Permitted
-47-
Transferee if all of its beneficial owners are United States Tax Persons and the
governing documents of the Transferee prohibit a transfer of any interest in the
Transferee to any Non-United States Tax Person.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PHASE I ENVIRONMENTAL ASSESSMENT" shall mean a "Phase I assessment"
as described in and meeting the criteria of the American Society for Testing and
Materials, Designation E-1527.
"PLAN" shall mean any of those retirement plans and other employee
benefit plans, 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 insurance company general
accounts, that are subject to ERISA or the Code.
"PLURALITY CLASS R CERTIFICATEHOLDER" shall mean, as to any taxable
year of any REMIC Pool, the Holder of Certificates evidencing the largest
Percentage Interest in the Class R Certificates.
"POST-ARD ADDITIONAL INTEREST" shall mean, with respect to any ARD
Mortgage Loan after its Anticipated Repayment Date, all interest accrued on the
principal balance of such ARD Mortgage Loan at the Post-ARD Additional Interest
Rate (the payment of which interest shall, under the terms of such Mortgage
Loan, be deferred until the principal balance of such Mortgage Loan has been
paid in full), together with all interest, if any, accrued at the related
Mortgage Rate on such deferred interest.
"POST-ARD ADDITIONAL INTEREST RATE" shall mean, with respect to any
ARD Mortgage Loan after its Anticipated Repayment Date, the incremental increase
in the Mortgage Rate for such Mortgage Loan resulting from the passage of such
Anticipated Repayment Date.
"PREPAYMENT ASSUMPTION" shall mean, for purposes of determining the
accrual of original issue discount, market discount and premium, if any, on the
Mortgage Loans, the Loan REMIC Regular Interest, the REMIC I Regular Interests,
the REMIC II Regular Interests, the Group A-SP REMIC III Regular Interests, the
Group A-X REMIC III Regular Interests and the Certificates for federal income
tax purposes, the assumptions that each ARD Mortgage Loan is paid in its
entirety on its Anticipated Prepayment Date and that no Mortgage Loan is
otherwise voluntarily prepaid prior to its Stated Maturity Date.
"PREPAYMENT INTEREST EXCESS" shall mean, with respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part made, or any
early collection of principal in the form of Insurance Proceeds or Condemnation
Proceeds received, after the Due Date for such Mortgage Loan in any Collection
Period, any payment of interest (net of related Master Servicing Fees and,
further, net of any portion of such interest that represents Default Interest or
Post-ARD Additional Interest) actually collected from the related Borrower or
out of such Insurance Proceeds or Condemnation Proceeds, as the case may be, and
intended to cover the period from and after such Due Date to, but not including,
the date of prepayment (exclusive, however, of any related Prepayment Premium or
Yield Maintenance Charge that may have been collected).
-48-
"PREPAYMENT INTEREST SHORTFALL" shall mean with respect to any
Mortgage Loan that was subject to a Principal Prepayment in full or in part
made, or any early collection of principal in the form of Insurance Proceeds or
Condemnation Proceeds received, prior to the Due Date for such Mortgage Loan in
any Collection Period, the amount of interest, to the extent not collected from
the related Borrower or out of such Insurance Proceeds or Condemnation Proceeds
(without regard to any Prepayment Premium or Yield Maintenance Charge that may
have been collected), that would have accrued on the amount of such Principal
Prepayment or other early collection of principal in the form of Insurance
Proceeds or Condemnation Proceeds during the period from the date of prepayment
to, but not including, such Due Date (less the amount of related Master
Servicing Fees and, if applicable, exclusive of Default Interest and Post-ARD
Additional Interest).
"PREPAYMENT PREMIUM" shall mean, with respect to any Mortgage Loan,
any premium, fee or other additional amount paid or payable, as the context
requires, by a Borrower in connection with a Principal Prepayment on, or other
early collection of principal of, a Mortgage Loan or any successor REO Loan, to
the extent such premium, fee or other additional amount is calculated as a
percentage of the principal amount being prepaid or as a specified amount (other
than a Yield Maintenance Minimum Amount).
"PRIMARY SERVICING OFFICE" shall mean the office of a Master Servicer
or Special Servicer, as the context may require, that is primarily responsible
for such party's servicing obligations hereunder.
"PRIME RATE" shall mean the "prime rate" published in the "Money
Rates" section of THE WALL STREET JOURNAL, as such "prime rate" may change from
time to time. If THE WALL STREET JOURNAL ceases to publish the "prime rate",
then the Trustee, in its sole discretion, shall select an equivalent publication
that publishes such "prime rate"; and if such "prime rate" is no longer
generally published or is limited, regulated or administered by a governmental
or quasi-governmental body, then the Trustee shall select a comparable interest
rate index. In either case, such selection shall be made by the Trustee in its
sole discretion and the Trustee shall notify the Master Servicers and the
Special Servicers in writing of its selection.
"PRINCIPAL BALANCE CERTIFICATE" shall mean any of the Class A-1,
Class A-2, Class A-3, Class B, Class C-1, Class C-2, Class D, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N and Class O
Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" shall mean:
(a) with respect to the Loan REMIC Regular Interest or any REMIC I
Regular Interest, for any Distribution Date, an amount equal to that
portion, if any, of the Total Principal Distribution Amount for such
Distribution Date that is attributable to each and every Mortgage Loan
and/or REO Loan, as the case may be, that relates to the Loan REMIC Regular
Interest or such REMIC I Regular Interest, as the case may be; and
(b) with respect to any Class of Principal Balance Certificates
(and, accordingly, with respect to that Class's Corresponding Group XX
XXXXX XX Regular Interest), for any Distribution Date, an amount equal to
that portion, if any, of the Total Principal Distribution Amount for such
Distribution Date that is allocable to such Class of Certificates as
provided below in this definition.
-49-
For purposes of the foregoing, for so long as any of the Class A-P&I
Certificates remain outstanding, the Total Principal Distribution Amount for
each Distribution Date shall be allocated to such Certificates, up to the lesser
of (i) the aggregate Certificate Principal Balance of the Class A-P&I
Certificates outstanding immediately prior to such Distribution Date and (ii)
the entire such Total Principal Distribution Amount. The portion of the Total
Principal Distribution Amount for each Distribution Date that is so allocable to
the Class A-P&I Certificates shall, in turn, be allocated as among the
respective Classes of those Classes of Certificates as follows: (i) prior to the
Senior Principal Distribution Cross-Over Date (or, if there is no Senior
Principal Distribution Cross-Over Date, prior to the Final Distribution Date),
FIRST, to the Class A-1 Certificates, up to the Class Principal Balance thereof
outstanding immediately prior to the subject Distribution Date, SECOND, to the
Class A-2 Certificates, up to the Class Principal Balance thereof outstanding
immediately prior to the subject Distribution Date, and THIRD, to the Class A-3
Certificates, up to the Class Principal Balance thereof outstanding immediately
prior to the subject Distribution Date; and (ii) on and after the Senior
Principal Distribution Cross-Over Date (and, in any event, on the Final
Distribution Date), to the Class A-1 Certificates, the Class A-2 Certificates
and the Class A-3 Certificates on a PRO RATA basis in accordance with the
respective Class Principal Balances thereof outstanding immediately prior to the
subject Distribution Date. After the aggregate Certificate Principal Balance of
the Class A-P&I Certificates has been reduced to zero, the Total Principal
Distribution Amount for each Distribution Date (net of any portion thereof that
may have been allocated to the respective Classes of the Class A-P&I
Certificates in retirement thereof pursuant to the prior two sentences) shall be
allocated among the respective Classes of the Subordinate Principal Balance
Certificates, sequentially in the following order and, in the case of each such
Class (or, in the case of CLAUSE SECOND below, such pair of Classes) of
Subordinate Principal Balance Certificates, up to the lesser of (i) the Class
Principal Balance of such Class (or, in the case of CLAUSE SECOND below, the
total Class Principal Balance of such pair of Classes) of Certificates
outstanding immediately prior to the subject Distribution Date and (ii) the
remaining unallocated portion of the Total Principal Distribution Amount for the
subject Distribution Date: FIRST, to the Class B Certificates; SECOND, to the
Class C-1 and Class C-2 Certificates on a PRO RATA basis in accordance with the
respective Class Principal Balances thereof outstanding immediately prior to the
subject Distribution Date; THIRD, to the Class D Certificates; FOURTH, to the
Class E Certificates; FIFTH, to the F Certificates; SIXTH, to the Class G
Certificates; SEVENTH, to the Class H Certificates; EIGHTH, to the Class J
Certificates; NINTH, to the Class K Certificates; TENTH, to the Class L
Certificates; ELEVENTH, to the Class M Certificates; TWELFTH, to the Class N
Certificates; and THIRTEENTH, to the Class O Certificates.
"PRINCIPAL PREPAYMENT" shall mean any payment of principal made by the
Borrower on a Mortgage Loan that is received in advance of its scheduled Due
Date and that is not accompanied by an amount of interest (without regard to any
Prepayment Premium, Yield Maintenance Charge and/or Post-ARD Additional Interest
that may have been collected) representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment; PROVIDED
that "Principal Prepayment" shall not include any such payment of principal made
out of Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds.
"PRIVILEGED PERSON" shall mean any of the following: a party to this
Agreement, an Underwriter, a Mortgage Loan Seller, the Controlling Class
Representative, a Rating Agency, a designee of the Depositor, a
Certificateholder and any Person who certifies to the Trustee in the form of
EXHIBIT K-1 hereto or EXHIBIT K-2 hereto, as applicable (which form shall also
be located on, and may be submitted electronically via, the Trustee's internet
website), that such Person is a Certificate Owner, or a prospective purchaser of
a Certificate or any interest therein.
-50-
"PROJECTED DEBT SERVICE COVERAGE RATIO" shall mean, with respect to
any Co-op Mortgage Loan, as of any date of determination, the Projected Net Cash
Flow for the related Mortgaged Property on an annualized basis, divided by the
annualized monthly payments for such Co-op Mortgage Loan.
"PROJECTED NET CASH FLOW" shall mean, with respect to any Mortgaged
Property that is a residential cooperative property, projected net operating
income at such Mortgaged Property, determined in a manner consistent with the
Appraisal obtained with respect to such Mortgaged Property in connection with
the origination of the related Mortgage Loan (or an updated Appraisal, if
required hereunder), assuming such Mortgaged Property was operated as a rental
property with rents set at prevailing market rates taking into account the
presence of existing rent controlled or rent stabilized occupants, reduced by
underwritten capital expenditures, property operating expenses, a market-rate
vacancy assumption and projected reserves.
"PROPOSED PLAN" shall have the meaning assigned thereto in
SECTION 3.17(a).
"PROSPECTUS" shall mean the Base Prospectus and the Prospectus
Supplement, together.
"PROSPECTUS SUPPLEMENT" shall mean that certain prospectus supplement
dated May 2, 2002, relating to the Registered Certificates, that is a supplement
to the Base Prospectus.
"PTCE" shall mean Prohibited Transaction Class Exemption.
"PTE" shall mean Prohibited Transaction Exemption.
"PURCHASE OPTION" shall have the meaning assigned thereto in
SECTION 3.18(c).
"PURCHASE PRICE" shall mean, with respect to any Mortgage Loan (or REO
Property), a cash price equal to the aggregate of (a) the outstanding principal
balance of such Mortgage Loan (or the related REO Loan) as of the date of
purchase, (b) all accrued and unpaid interest on such Mortgage Loan (or the
related REO Loan) at the related Mortgage Rate (exclusive of any portion of such
interest that represents Post-ARD Additional Interest) to, but not including,
the Due Date occurring in the Collection Period during which the applicable
purchase or repurchase occurs, (c) all related unreimbursed Servicing Advances
and all related Advances that were previously reimbursed out of collections on
other Mortgage Loans and/or REO Properties relating to other Mortgage Loans, (d)
all accrued and unpaid Advance Interest with respect to any related Advances,
and (e) solely in the case of a purchase, repurchase or substitution, as
applicable, by a Mortgage Loan Seller pursuant to the related Mortgage Loan
Purchase Agreement, the Column Performance Guarantor pursuant to the Column
Performance Guarantee, the NCBCC Performance Guarantor pursuant to the NCBCC
Performance Guarantee or the NCBFSB Performance Guarantor pursuant to the NCBFSB
Performance Guarantee, (i) all related Special Servicing Fees, Liquidation Fees,
Advance Interest (to the extent not otherwise included in CLAUSE (d) of this
definition) and other related Additional Trust Fund Expenses, whether paid or
then owing, that have not been offset by Default Charges related to such
Mortgage Loan (or any successor REO Loan) or by any Additional Master Servicing
Compensation or Additional Special Servicing Compensation related to such
Mortgage Loan (or any successor REO Loan), and (ii) to the extent not otherwise
included in the amount described in CLAUSE (c) or CLAUSE (e)(i) of this
definition, any costs and expenses incurred by the applicable Master Servicer,
the applicable Special Servicer or the Trustee (on
-51-
behalf of the Trust) in enforcing the obligation of such Person to repurchase or
replace such Mortgage Loan or REO Property.
"QUALIFIED APPRAISER" shall mean, in connection with the appraisal of
any Mortgaged Property or REO Property, an Independent MAI-designated appraiser
with at least five years of experience in respect of the relevant geographic
location and property type.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall mean a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act.
"QUALIFIED INSURER" shall mean an insurance company or security or
bonding company qualified to write the related Insurance Policy in the relevant
jurisdiction.
"QUALIFIED MORTGAGE" shall mean a qualified mortgage within the
meaning of Section 860G(a)(3) of the Code.
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" shall mean, in connection with
the replacement of a Defective Mortgage Loan as contemplated by SECTION 2.03,
any other mortgage loan which, on the date of substitution, (i) has a principal
balance, after deduction of the principal portion of any unpaid Monthly Payment
due on or before the date of substitution, not in excess of the Stated Principal
Balance of the Defective Mortgage Loan; (ii) is accruing interest at a fixed
rate of interest at least equal to, and not more than one percentage point in
excess of, that of the Defective Mortgage Loan; (iii) has the same Due Date as,
and a grace period for delinquent Monthly Payments that is no longer than, the
Due Date and grace period, respectively, of the Defective Mortgage Loan; (iv) is
accruing interest on the same Interest Accrual Basis as the Defective Mortgage
Loan; (v) has a remaining term to stated maturity not greater than, and not more
than one year less than, that of the Defective Mortgage Loan and, in any event,
has a Stated Maturity Date not later than two years prior to the Rated Final
Distribution Date; (vi) has a then current loan-to-value ratio not higher than,
and a then current debt service coverage ratio not lower than, the loan-to-value
ratio and debt service coverage ratio, respectively, of the Defective Mortgage
Loan as of the Closing Date (PROVIDED, HOWEVER, that with respect to Co-op
Mortgage Loans and corresponding Replacement Mortgage Loans, "loan-to-value
ratio" and "debt service coverage ratio" as used in this CLAUSE (vi) shall mean
LTV Co-op Basis and Projected Debt Service Coverage Ratio, respectively); (vii)
has comparable prepayment restrictions to those of the Defective Mortgage Loan;
(viii) will comply, as of the date of substitution, with all of the
representations relating to the Defective Mortgage Loan set forth in or made
pursuant to the related Mortgage Loan Purchase Agreement; (ix) has a Phase I
Environmental Assessment relating to the related Mortgaged Property in its
Servicing File, which Phase I Environmental Assessment will evidence that there
is no material adverse environmental condition or circumstance at the related
Mortgaged Property for which further remedial action may be required under
applicable law; (x) constitutes a "qualified replacement mortgage" within the
meaning of Section 860G(a)(4) of the Code (as evidenced by an Opinion of Counsel
provided by the related Mortgage Loan Seller at its expense); and (xi) is
secured by a residential cooperative property if the Defective Mortgage Loan is
a Co-op Mortgage Loan; PROVIDED, HOWEVER, that if more than one mortgage loan is
to be substituted for any Defective Mortgage Loan, then all such proposed
Replacement Mortgage Loans shall, in the aggregate, satisfy the requirement
specified in CLAUSE (i) of this definition and each such proposed Replacement
Mortgage Loan shall, individually, satisfy each of the requirements specified in
CLAUSES (ii) through (xi) of this definition; and PROVIDED, FURTHER, that no
mortgage loan shall be substituted for a Defective Mortgage Loan unless (a) such
-52-
prospective Replacement Mortgage Loan shall be acceptable to the Controlling
Class Representative (or, if there is no Controlling Class Representative then
serving, to the Holders of Certificates representing a majority of the Voting
Rights allocated to the Controlling Class), in its (or their) sole discretion,
and (b) each Rating Agency shall have confirmed in writing to the Trustee that
such substitution will not in and of itself result in an Adverse Rating Event
with respect to any Class of Rated Certificates (such written confirmation to be
obtained by the party (i.e., the related Mortgage Loan Seller or any related
Performance Guarantor) effecting the substitution).
"RATED CERTIFICATE" shall mean any of the Certificates to which a
rating has been assigned by either Rating Agency at the request of the
Depositor.
"RATED FINAL DISTRIBUTION DATE" shall mean the Distribution Date in
April 2037.
"RATING AGENCY" shall mean either of Moody's and S&P.
"REALIZED LOSS" shall mean:
(1) with respect to each defaulted Mortgage Loan as to which a
Final Recovery Determination has been made, or with respect to any
successor REO Loan as to which a Final Recovery Determination has been made
as to the related REO Property, an amount (not less than zero) equal to (a)
the unpaid principal balance of such Mortgage Loan or REO Loan, as the case
may be, as of the commencement of the Collection Period in which the Final
Recovery Determination was made, plus (b) without taking into account the
amount described in SUBCLAUSE (1)(c) of this definition, all unpaid
interest accrued in respect of such Mortgage Loan or REO Loan, as the case
may be, to but not including the related Due Date in the Collection Period
in which the Final Recovery Determination was made, exclusive, however, of
any portion of such unpaid interest that constitutes Default Interest or,
in the case of an ARD Mortgage Loan after its Anticipated Repayment Date,
Post-ARD Additional Interest, minus (c) all payments and proceeds, if any,
received in respect of such Mortgage Loan or REO Loan, as the case may be,
during the Collection Period in which such Final Recovery Determination was
made that are applied as a recovery of principal of, or interest on, such
Mortgage Loan or REO Loan, as the case may be;
(2) with respect to each defaulted Mortgage Loan as to which any
portion of the principal or past due interest payable thereunder was
canceled in connection with a bankruptcy, insolvency or similar proceeding
involving the related Borrower or a modification, waiver or amendment of
such Mortgage Loan granted or agreed to by the applicable Master Servicer
or the applicable Special Servicer pursuant to SECTION 3.20, the amount of
such principal or past due interest (other than any Default Interest and,
in the case of an ARD Mortgage Loan after its Anticipated Repayment Date,
Post-ARD Additional Interest) so canceled; and
(3) with respect to each defaulted Mortgage Loan as to which the
Mortgage Rate thereon has been permanently reduced and not recaptured for
any period in connection with a bankruptcy, insolvency or similar
proceeding involving the related Borrower or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the applicable
Master Servicer or the applicable Special Servicer pursuant to
SECTION 3.20, the amount of any consequent reduction in the interest
portion of each successive Monthly Payment due thereon
-53-
(each such Realized Loss to be deemed to have been incurred on the Due Date
for each affected Monthly Payment).
"RECORD DATE" shall mean, with respect to any Distribution Date, the
last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"REFERENCE RATE" shall mean, with respect to any Distribution Date
from and including the June 2002 Distribution Date to and including the May 2009
Distribution Date, the corresponding rate per annum set forth on EXHIBIT B-6
hereto.
"REGISTERED CERTIFICATE" shall mean any Certificate that has been
subject to registration under the Securities Act. As of the Closing Date, the
Class A-1, Class A-2, Class A-3, Class B, Class C-1, Class C-2 and Class D
Certificates constitute Registered Certificates.
"REGULATION S" shall mean Regulation S under the Securities Act.
"REGULATION S LEGEND" shall mean, with respect to any Class of
Book-Entry Non-Registered Certificates offered and sold outside the United
States in reliance on Regulation S, a legend generally to the effect that such
Certificates may not be offered, sold, pledged or otherwise transferred in the
United States or to a United States Securities Person prior to the Release Date
except pursuant to an exemption from the registration requirements of the
Securities Act.
"REGULATION S GLOBAL CERTIFICATE" shall mean, with respect to any
Class of Book-Entry Non-Registered Certificates offered and sold outside of the
United States in reliance on Regulation S, a single global Certificate, or
multiple global Certificates collectively, in definitive, fully registered form
without interest coupon, each of which Certificates bears a Regulation S Legend.
"REIMBURSEMENT RATE" shall mean the rate per annum applicable to the
accrual of Advance Interest, which rate per annum is equal to the Prime Rate.
"RELEASE DATE" shall mean the date that is 40 days following the later
of (i) the Closing Date and (ii) the commencement of the initial offering of the
Non-Registered Certificates.
"REMIC" shall mean a "real estate mortgage investment conduit" as
defined in Section 860D of the Code.
"REMIC I" shall mean the segregated pool of assets designated as such
in SECTION 2.12(a)
"REMIC I REGULAR INTEREST" shall mean any of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and,
in each such case, designated as a "regular interest" (within the meaning of
Section 860G(a)(1) of the Code) in REMIC I. The REMIC I Regular Interests have
the designations and terms provided for in SECTION 2.12.
"REMIC I REMITTANCE RATE" shall mean the per annum rate at which
interest accrues in respect of any REMIC I Regular Interest during any Interest
Accrual Period, as set forth in or otherwise calculated in accordance with
SECTION 2.12(f).
-54-
"REMIC I RESIDUAL INTEREST" shall mean the sole uncertificated
"residual interest" (within the meaning of Section 860G(a)(2) of the Code) in
REMIC I issued pursuant to this Agreement.
"REMIC II" shall mean the segregated pool of assets designated as such
in SECTION 2.14(a).
"REMIC II REGULAR INTEREST" shall mean any of the separate
non-certificated beneficial ownership interests in REMIC II issued hereunder
and, in each such case, designated as a "regular interest" (within the meaning
of Section 860G(a)(1) of the Code) in REMIC II. The REMIC II Regular Interests
have the designations and terms provided for in SECTION 2.14.
"REMIC II REGULAR INTEREST A-1" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "A-1".
"REMIC II REGULAR INTEREST A-2" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "A-2".
"REMIC II REGULAR INTEREST A-3-1" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "A-3-1".
"REMIC II REGULAR INTEREST A-3-2" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "A-3-2".
"REMIC II REGULAR INTEREST B" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "B".
"REMIC II REGULAR INTEREST C-1" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "C-1".
"REMIC II REGULAR INTEREST C-2" shall mean the REMIC II Regular
Interest that bears the alphanumeric designation "C-2".
"REMIC II REGULAR INTEREST D" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "D".
"REMIC II REGULAR INTEREST E" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "E".
"REMIC II REGULAR INTEREST F" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "F".
"REMIC II REGULAR INTEREST G" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "G".
"REMIC II REGULAR INTEREST H" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "H".
"REMIC II REGULAR INTEREST J" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "J".
-55-
"REMIC II REGULAR INTEREST K" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "K".
"REMIC II REGULAR INTEREST L" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "L".
"REMIC II REGULAR INTEREST M" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "M".
"REMIC II REGULAR INTEREST N" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "N".
"REMIC II REGULAR INTEREST O" shall mean the REMIC II Regular Interest
that bears the alphabetic designation "O".
"REMIC II REMITTANCE RATE" shall mean the per annum rate at which
interest accrues in respect of any REMIC II Regular Interest during any Interest
Accrual Period, as set forth in or otherwise calculated in accordance with
SECTION 2.14(f).
"REMIC II RESIDUAL INTEREST" shall mean the sole uncertificated
"residual interest" (within the meaning of Section 860G(a)(2) of the Code) in
REMIC II issued pursuant to this Agreement.
"REMIC III" shall mean the segregated pool of assets designated as
such in SECTION 2.16(a).
"REMIC III REGULAR INTEREST A-SP-A-3" shall mean the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in REMIC III
that bears the alphanumeric designation "A-SP-A-3".
"REMIC III REGULAR INTEREST A-SP-B" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-SP-B".
"REMIC III REGULAR INTEREST A-SP-C-1" shall mean the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in REMIC III
that bears the alphanumeric designation "A-SP-C-1".
"REMIC III REGULAR INTEREST A-SP-C-2" shall mean the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in REMIC III
that bears the alphanumeric designation "A-SP-C-2".
"REMIC III REGULAR INTEREST A-SP-D" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-SP-D".
"REMIC III REGULAR INTEREST A-X-A-1" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphanumeric designation "A-X-A-1".
-56-
"REMIC III REGULAR INTEREST A-X-A-2" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphanumeric designation "A-X-A-2".
"REMIC III REGULAR INTEREST A-X-A-3-1" shall mean the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in REMIC III
that bears the alphanumeric designation "A-X-A-3-1".
"REMIC III REGULAR INTEREST A-X-A-3-2" shall mean the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code) in REMIC III
that bears the alphanumeric designation "A-X-A-3-2".
"REMIC III REGULAR INTEREST A-X-B" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-B".
"REMIC III REGULAR INTEREST A-X-C-1" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphanumeric designation "A-X-C-1".
"REMIC III REGULAR INTEREST A-X-C-2" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphanumeric designation "A-X-C-2".
"REMIC III REGULAR INTEREST A-X-D" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-D".
"REMIC III REGULAR INTEREST A-X-E" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-E".
"REMIC III REGULAR INTEREST A-X-F" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-F".
"REMIC III REGULAR INTEREST A-X-G" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-G".
"REMIC III REGULAR INTEREST A-X-H" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-H".
"REMIC III REGULAR INTEREST A-X-J" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-J".
-57-
"REMIC III REGULAR INTEREST A-X-K" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-K".
"REMIC III REGULAR INTEREST A-X-L" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-L".
"REMIC III REGULAR INTEREST A-X-M" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-M".
"REMIC III REGULAR INTEREST A-X-N" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-N".
"REMIC III REGULAR INTEREST A-X-O" shall mean the "regular interest"
(within the meaning of Section 860G(a)(1) of the Code) in REMIC III that bears
the alphabetic designation "A-X-O".
"REMIC III REGULAR INTEREST CERTIFICATE" shall mean any of the
Interest Only Certificates and the Principal Balance Certificates.
"REMIC III REMITTANCE RATE" shall mean the per annum rate at which
interest accrues in respect of any Group A-SP REMIC III Regular Interest or
Group A-X REMIC III Regular Interest during any Interest Accrual Period, as set
forth in or otherwise calculated in accordance with SECTION 2.16(f).
"REMIC III RESIDUAL INTEREST" shall mean the sole uncertificated
"residual interest" (within the meaning of Section 860G(a)(2) of the Code) in
REMIC III issued pursuant to this Agreement.
"REMIC POOL" shall mean any of the Loan REMIC, REMIC I, REMIC II or
REMIC III.
"REMIC PROVISIONS" shall mean 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 proposed, temporary and final Treasury regulations and any
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"REMIC SUB-ACCOUNT" shall mean a sub-account of the Distribution
Account established pursuant to SECTION 3.04(b), which sub-account shall
constitute an asset of the Trust Fund and REMIC I, but not an asset of either
Grantor Trust Pool.
"RENTS FROM REAL PROPERTY" shall mean, with respect to any REO
Property, gross income of the character described in Section 856(d) of the Code.
-58-
"REO ACCOUNT" shall mean a segregated custodial account or accounts
created and maintained by a Special Servicer, pursuant to SECTION 3.16(b), on
behalf of the Trustee in trust for the Certificateholders, which shall be
entitled "[name of subject Special Servicer], as a Special Servicer, on behalf
of [name of Trustee], in trust for the registered holders of Credit Suisse First
Boston Mortgage Securities Corp., Commercial Mortgage Pass Through Certificates,
Series 2002-CKN2, REO Account."
"REO ACQUISITION" shall mean the acquisition of any REO Property
pursuant to SECTION 3.09.
"REO DISPOSITION" shall mean the sale or other disposition of any REO
Property pursuant to SECTION 3.18.
"REO EXTENSION" shall have the meaning assigned thereto in
SECTION 3.16(a).
"REO LOAN" shall mean the mortgage loan deemed for purposes hereof to
be outstanding with respect to each REO Property. Each REO Loan shall be deemed
to provide for monthly payments of principal and/or interest equal to its
Assumed Monthly Payment and otherwise to have the same terms and conditions as
its predecessor Mortgage Loan (such terms and conditions to be applied without
regard to the default on such predecessor Mortgage Loan or the Trust's
acquisition of the subject REO Property). Each REO Loan shall be deemed to have
an initial unpaid principal balance and Stated Principal Balance equal to the
unpaid principal balance and Stated Principal Balance, respectively, of its
predecessor Mortgage Loan as of the date of the related REO Acquisition. All
Monthly Payments (other than any Balloon Payment), Assumed Monthly Payments (in
the case of a Balloon Mortgage Loan delinquent in respect of its Balloon
Payment) and other amounts due and owing, or deemed to be due and owing, in
respect of the predecessor Mortgage Loan as of the date of the related REO
Acquisition, shall be deemed to continue to be due and owing in respect of an
REO Loan. In addition, all amounts payable or reimbursable to the applicable
Master Servicer, the applicable Special Servicer, the Trustee or any Fiscal
Agent in respect of the predecessor Mortgage Loan as of the date of the related
REO Acquisition, including any unpaid or unreimbursed Servicing Fees and
Advances (together with any related unpaid Advance Interest), shall continue to
be payable or reimbursable in the same priority and manner pursuant to
SECTION 3.05(a) to the applicable Master Servicer, the applicable Special
Servicer, the Trustee or any Fiscal Agent, as the case may be, in respect of an
REO Loan.
"REO PROPERTY" shall mean a Mortgaged Property acquired by or
otherwise on behalf of the Trust for the benefit of the Certificateholders
through foreclosure, acceptance of a deed in lieu of foreclosure or otherwise in
accordance with applicable law in connection with the default or imminent
default of a Mortgage Loan.
"REO REVENUES" shall mean all income, rents, profits and proceeds
derived from the ownership, operation or leasing of any REO Property, other than
any income, profits or proceeds derived from the REO Disposition of such REO
Property.
"REO TAX" shall have the meaning assigned thereto in SECTION 3.17(a).
"REPLACEMENT MORTGAGE LOAN" shall mean any Qualifying Substitute
Mortgage Loan that is substituted by a Mortgage Loan Seller or a Performance
Guarantor for a Defective Mortgage Loan as contemplated by SECTION 2.03.
-59-
"REQUEST FOR RELEASE" shall mean a request signed by a Servicing
Officer of, as applicable, a Master Servicer in the form of EXHIBIT D-1 attached
hereto or a Special Servicer in the form of EXHIBIT D-2 attached hereto.
"REQUIRED APPRAISAL LOAN" shall mean any Specially Serviced Mortgage
Loan (and any successor REO Loan) as to which an Appraisal Trigger Event has
occurred; PROVIDED that a Mortgage Loan shall cease to be a Required Appraisal
Loan if and when, following the occurrence of the most recent Appraisal Trigger
Event with respect thereto, such Mortgage Loan has become a Corrected Mortgage
Loan.
"RESERVE ACCOUNT" shall mean any of the accounts established and
maintained pursuant to SECTION 3.03(d).
"RESERVE FUNDS" shall mean, with respect to any Mortgage Loan, any
amounts delivered by the related Borrower to be held in escrow by or on behalf
of the mortgagee representing: (i) reserves for repairs, replacements, capital
improvements and/or environmental testing and remediation with respect to the
related Mortgaged Property; (ii) reserves for tenant improvements and leasing
commissions; (iii) reserves for debt service; or (iv) amounts to be applied as a
Principal Prepayment on such Mortgage Loan or held as Additional Collateral in
the event that certain leasing or other economic criteria in respect of the
related Mortgaged Property are not met.
"RESOLUTION EXTENSION PERIOD" shall have the meaning assigned thereto
in SECTION 2.03(b).
"RESPONSIBLE OFFICER" shall mean: (a) when used with respect to the
Trustee, the President, the Treasurer, the Secretary, any Vice President, any
Assistant Vice President, any Trust Officer, any Assistant Secretary or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement; and (b) when used with
respect to any Fiscal Agent or any Certificate Registrar (other than the
Trustee), any officer or assistant officer thereof.
"RESPONSIBLE PARTY" shall mean: (a) in the case of a Material Document
Defect or Material Breach with respect to any Column Mortgage Loan, each of
Column and the Column Performance Guarantor; (b) in the case of a Material
Document Defect or Material Breach with respect to any KeyBank Mortgage Loan,
KeyBank; (c) in the case of a Material Document Defect or Material Breach with
respect to any NCB Mortgage Loan, NCB; (d) in the case of a Material Document
Defect or Material Breach with respect to any NCBCC Mortgage Loan, each of NCBCC
and the NCBCC Performance Guarantor; and (e) in the case of a Material Document
Defect or Material Breach with respect to any NCBFSB Mortgage Loan, each of
NCBFSB and the NCBFSB Performance Guarantor.
"RESTRICTED SERVICER REPORTS" shall mean each of the CMSA Servicer
Watch List, the CMSA Operating Statement Analysis Report, the CMSA NOI
Adjustment Worksheet, CMSA Financial File and the CMSA Comparative Financial
Status Report.
"RULE 144A GLOBAL CERTIFICATE" shall mean, with respect to any Class
of Book-Entry Non-Registered Certificates, a single global Certificate, or
multiple global Certificates collectively, registered in the name of the
Depository or its nominee, in definitive, fully registered form without
-60-
interest coupons, each of which Certificates bears a Qualified Institutional
Buyer CUSIP number and does not bear a Regulation S Legend.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or its successor in interest. If neither such rating
agency nor any successor remains in existence, "S&P" shall be deemed to refer to
such other nationally recognized statistical rating agency or other comparable
Person designated by the Depositor, notice of which designation shall be given
to the other parties hereto, and specific ratings of Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc. herein referenced shall
be deemed to refer to the equivalent ratings of the party so designated.
References herein to "applicable rating category" (other than such references to
"highest applicable rating category") shall, in the case of S&P, be deemed to
refer to such applicable rating category of S&P, without regard to any plus or
minus or other comparable rating qualification.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SENIOR CERTIFICATES" shall mean, collectively, the Class A-P&I
Certificates and the Interest Only Certificates.
"SENIOR PRINCIPAL DISTRIBUTION CROSS-OVER DATE" shall mean the first
Distribution Date as of which the aggregate Certificate Principal Balance of the
Class A-P&I Certificates outstanding immediately prior thereto equals or exceeds
the sum of (a) the aggregate Stated Principal Balance of the Mortgage Pool that
will be outstanding immediately following such Distribution Date, plus (b) the
lesser of (i) the Total Principal Distribution Amount for such Distribution Date
and (ii) the portion of the Standard Available Distribution Amount for such
Distribution Date that will remain after all distributions of interest to be
made on the Senior Certificates on such Distribution Date pursuant to SECTION
4.01(a) have been so made.
"SERVICING ACCOUNT" shall mean any of the accounts established and
maintained pursuant to SECTION 3.03(a).
"SERVICING ADVANCES" shall mean all customary, reasonable and
necessary "out-of-pocket" costs and expenses, including reasonable attorneys'
fees and expenses, paid or to be paid, as the context requires, out of its own
funds, by the applicable Master Servicer or the applicable Special Servicer (or,
if applicable, the Trustee or any Fiscal Agent) in connection with the servicing
of a Mortgage Loan as to which a default, delinquency or other unanticipated
event has occurred or is imminent, or in connection with the administration of
any REO Property, including (1) any such costs and expenses associated with (a)
compliance with the obligations of the applicable Master Servicer and/or the
applicable Special Servicer set forth in SECTIONS 2.03, 3.03(c) and 3.09, (b)
the preservation, insurance, restoration, protection and management of a
Mortgaged Property, including the cost of any "force placed" insurance policy
purchased by the applicable Master Servicer or the applicable Special Servicer
to the extent such cost is allocable to a particular Mortgaged Property that the
applicable Master Servicer or the applicable Special Servicer is required to
cause to be insured pursuant to SECTION 3.07(a), (c) obtaining any Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds in respect of any such
Mortgage Loan or any REO Property, (d) any enforcement or judicial proceedings
with respect to any such Mortgage Loan, including foreclosures and similar
proceedings, (e) the operation, management, maintenance and liquidation of any
REO Property, (f) obtaining any Appraisal required to be obtained hereunder, and
(g) UCC filings (to the extent that the costs thereof are not reimbursed by the
related Borrower), (2) the reasonable and direct out-of-pocket travel expenses
incurred by such Special
-61-
Servicer in connection with performing inspections pursuant to SECTION 3.12(a),
and (3) any other expenditure which is expressly designated as a Servicing
Advance herein; PROVIDED that, notwithstanding anything to the contrary,
"Servicing Advances" shall not include (A) allocable overhead of a Master
Servicer or Special Servicer, such as costs for office space, office equipment,
supplies and related expenses, employee salaries and related expenses and
similar internal costs and expenses, (B) costs incurred by either such party or
any Affiliate thereof in connection with its purchase of any Mortgage Loan or
REO Property pursuant to any provision of this Agreement or (C) costs or
expenses expressly required under this Agreement to be borne by a Master
Servicer or Special Servicer.
"SERVICING FEES" shall mean, with respect to any Mortgage Loan or REO
Loan, the Master Servicing Fee and the Special Servicing Fee.
"SERVICING FILE" shall mean any documents (other than documents
required to be part of the related Mortgage File, but including any
correspondence file) in the possession or under the control of, or required
(pursuant to the applicable Mortgage Loan Purchase Agreement, this Agreement or
otherwise) to be delivered to, as the context may require, the applicable Master
Servicer or the applicable Special Servicer and relating to the origination and
servicing of any Mortgage Loan or the administration of any REO Property,
including any insurance certificates (and, if available, policies) relating to
hazard insurance maintained by the Borrower with respect to the related
Mortgaged Property that are in the possession of the applicable Master Servicer
or the applicable Special Servicer, as the case may be, at any particular time.
"SERVICING OFFICER" shall mean any officer or employee of a Master
Servicer or Special Servicer involved in, or responsible for, the administration
and servicing of Mortgage Loans, whose name and specimen signature appear on a
list of servicing officers furnished by such party to the Trustee and the
Depositor on the Closing Date, as such list may be amended from time to time by
such Master Servicer or Special Servicer.
"SERVICING RETURN DATE" shall mean, with respect to any Corrected
Mortgage Loan, the date that servicing thereof is returned by a Special Servicer
to the applicable Master Servicer pursuant to SECTION 3.21(a).
"SERVICING STANDARD" shall mean, with respect to each of the Master
Servicers and Special Servicers, to service and administer the Mortgage Loans
and any REO Properties for which it is responsible hereunder: (a) with the same
care, skill, prudence and diligence as it services and administers comparable
mortgage loans and real properties on behalf of third parties or on behalf of
itself, whichever is the higher standard, giving due consideration to customary
and usual standards of practice utilized by prudent institutional commercial
mortgage loan servicers under comparable circumstances; (b) with a view to (i)
the timely collection of all scheduled payments of principal and interest under
the Mortgage Loans, (ii) the full collection of all Prepayment Premiums and
Yield Maintenance Charges that may become payable under the Mortgage Loans,
(iii) in the case of the applicable Special Servicer, if a Mortgage Loan comes
into and continues in default and if, in the good faith and reasonable judgment
of such Special Servicer, no satisfactory arrangements can be made for the
collection of the delinquent payments, the maximization of the recovery on such
Mortgage Loan to the Certificateholders (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 related Net Mortgage
Rate) and the best interests of the Trust and the Certificateholders, as
determined by the
-62-
applicable Special Servicer or Master Servicer, as the case may be, in its
reasonable judgment and (iv) subject to the foregoing provisions of this
CLAUSE (b), the full collection of all Default Charges that may become payable
under the Mortgage Loans, insofar as those Default Charges do not constitute
Additional Master Servicing Compensation or Additional Special Servicing
Compensation, as applicable; and (c) without regard to (i) any relationship that
the subject Master Servicer or Special Servicer, as the case may be, or any of
its Affiliates may have with the related Borrower or with any other party to
this Agreement, (ii) the ownership of any Certificate by the subject Master
Servicer or Special Servicer, as the case may be, or any of its Affiliates,
(iii) the obligation of the subject Master Servicer to make Advances, (iv) the
obligation of the subject Special Servicer to make, or direct the applicable
Master Servicer to make, Servicing Advances, (v) the right of the subject Master
Servicer or Special Servicer, as the case may be, or any of its Affiliates to
receive reimbursement of costs, or the sufficiency of any compensation payable
to it, hereunder or with respect to any particular transaction, (vi) any
ownership, servicing and/or management by the subject Master Servicer or Special
Servicer, as the case may be, or any of its Affiliates of any other mortgage
loans or real property, (vii) the ownership by the subject Master Servicer or
Special Servicer, as the case may be, or any of its Affiliates of any other debt
owed by, or secured by ownership interests in, any of the Borrowers or any
Affiliate of a Borrower, and (viii) the obligations of the subject Master
Servicer or Special Servicer, as the case may be, or any of its Affiliates to
repurchase any Mortgage Loan from the Trust Fund, or to indemnify the Trust
Fund, in any event as a result of a Material Breach or a Material Document
Defect.
"SERVICING TRANSFER EVENT" shall mean, with respect to any Mortgage
Loan, any of the following events:
(a) the related Borrower has failed to make when due any Monthly
Payment (including a Balloon Payment) or any other payment required under
the related Mortgage Loan Documents, which failure continues, or the
applicable Master Servicer determines, in its reasonable judgment, will
continue, unremedied (i) except in the case of a delinquent Balloon
Payment, for 60 days beyond the date on which the subject payment was due,
and (ii) solely in the case of a delinquent Balloon Payment, for 90 days
beyond the related maturity date or, if the related Borrower has (A)
delivered to the applicable Master Servicer a refinancing commitment
reasonably acceptable to the applicable Special Servicer and (B) continued
to make monthly debt service payments equal to the Assumed Monthly Payment,
for such longer period, not to exceed 150 days beyond the related maturity
date, during which the refinancing would occur; or
(b) the applicable Master Servicer (or ARCap, provided that ARCap
is a Special Servicer for any of the Mortgage Loans) has determined, in its
reasonable judgment, that a default in making a Monthly Payment (including
a Balloon Payment) or any other material payment required under the related
Mortgage Loan Documents is reasonably foreseeable and likely to occur
within 30 days and either (i) the related Borrower has requested a material
modification of the payment terms of the related Mortgage Loan, which
modification the applicable Master Servicer, in its reasonable judgment,
determines is necessary to avoid a monetary or a material non-monetary
default, or (ii) such default is likely to remain unremedied for at least
the period contemplated by CLAUSE (a) of this definition; or
(c) the applicable Master Servicer has determined, in its
reasonable judgment, that a default, other than as described in CLAUSE (a)
or (b) of this definition, has occurred that may materially impair the
value of the related Mortgaged Property as security for the Mortgage Loan,
-63-
which default has continued unremedied for the applicable cure period under
the terms of the Mortgage Loan (or, if no cure period is specified, for 60
days), provided that in no event shall the violation of a covenant
contained in the Mortgage Loan Documents for any Co-op Mortgage Loan
requiring the related Borrower to xxxxx minor building code violations be a
Servicing Transfer Event; or
(d) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary action
against the related Borrower under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a conservator,
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the related
Borrower, provided that if such decree or order shall have been dismissed,
discharged or stayed within 60 days thereafter the Mortgage Loan shall not
be a Specially Serviced Mortgage Loan and no Special Servicing Fees,
Workout Fees or Liquidation Fees shall be payable with respect thereto; or
(e) the related Borrower shall have consented to the appointment
of a conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceeding of or
relating to such Borrower or of or relating to all or substantially all of
its property; or
(f) the related Borrower shall have admitted in writing its
inability to pay its debts generally as they become due, filed a petition
to take advantage of any applicable insolvency or reorganization statute,
made an assignment for the benefit of its creditors, or voluntarily
suspended payment of its obligations; or
(g) the applicable Master Servicer shall have received notice of
the commencement of foreclosure or similar proceedings with respect to the
related Mortgaged Property;
PROVIDED that an Acceptable Insurance Default will not, in and of itself, be a
Servicing Transfer Event.
A Servicing Transfer Event with respect to any Mortgage Loan shall cease to
exist:
(w) in the case of the circumstances described in CLAUSE (a)
above, if and when the related Borrower has made three consecutive full and
timely Monthly Payments under the terms of such Mortgage Loan (as such
terms may be changed or modified in connection with a bankruptcy or similar
proceeding involving the related Borrower or by reason of a modification,
waiver or amendment granted or agreed to by the applicable Master Servicer
or the applicable Special Servicer pursuant to SECTION 3.20);
(x) in the case of the circumstances described in CLAUSES (b),
(d), (e) and (f) above, if and when such circumstances cease to exist in
the reasonable judgment of the applicable Special Servicer;
(y) in the case of the circumstances described in CLAUSE (c)
above, if and when such default is cured in the reasonable judgment of the
applicable Special Servicer; and
-64-
(z) in the case of the circumstances described in CLAUSE (g)
above, if and when such proceedings are terminated.
"SOLE CERTIFICATEHOLDER(S)" shall mean any Holder or group of Holders,
as the case may be, of 100% of the then outstanding Certificates.
"SPECIAL SERVICER" shall mean: (a) with respect to any Mortgage Loan
(other than a Co-op Mortgage Loan), any REO Property acquired by the Trust with
respect to a Mortgage Loan (other than a Co-op Mortgage Loan) and any matters
relating to the foregoing, the General Special Servicer; and (b) with respect to
any Co-op Mortgage Loan, any REO Property acquired by the Trust with respect to
a Co-op Mortgage Loan and any matters relating to the foregoing, the Co-op
Special Servicer.
"SPECIAL SERVICING FEE" shall mean, with respect to each Specially
Serviced Mortgage Loan and each REO Loan, the fee designated as such and payable
to the applicable Special Servicer pursuant to the first paragraph of SECTION
3.11(c).
"SPECIAL SERVICING FEE RATE" shall mean, with respect to each
Specially Serviced Mortgage Loan and each REO Loan, 0.25% per annum.
"SPECIALLY DESIGNATED CO-OP MORTGAGE LOAN" shall mean any Co-op
Mortgage Loan as to which the Net Mortgage Rate in effect as of the Closing Date
was in excess of 6.35% per annum.
"SPECIALLY DESIGNATED DEFAULTED MORTGAGE LOAN" shall mean a Specially
Serviced Mortgage Loan that is delinquent 90 days or more with respect to any
Balloon Payment or 60 days (or, in the case of a Co-op Mortgage Loan, 90 days)
or more with respect to any other Monthly Payment, with such delinquency to be
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note and without regard to any acceleration of payments
under the related Mortgage and Mortgage Note, or a Specially Serviced Mortgage
Loan as to which the amounts due thereunder have been accelerated following any
other material default.
"SPECIALLY DESIGNATED MORTGAGE LOAN DOCUMENTS" shall mean, with
respect to any Mortgage Loan, subject to SECTIONS 1.04 and 2.01, the following
documents on a collective basis:
(i) the items referred to in CLAUSE (i) of the definition of
"Mortgage File";
(ii) the items (exclusive of intervening assignments) referred to
in CLAUSES (ii) and (iii) of the definition of "Mortgage
File";
(iii) the original or a copy of the policy of lender's title
insurance or, if such policy has not yet been issued, a
"marked-up" PRO FORMA title policy or commitment for title
insurance marked as binding and countersigned or evidenced as
binding by escrow letter or closing instructions;
(iv) the original or a copy of any Ground Lease and Ground Lease
estoppel;
(v) the original of any Letter(s) of Credit constituting
Additional Collateral;
-65-
(vi) originals or copies of any agreements evidencing material
modifications of the foregoing documents and any assumption
agreements; and
(vii) if the subject Mortgage Loan has a Cut-off Date Principal
Balance greater than 2% of the Initial Pool Balance, the
original or a copy of any cash management agreement related to
such Mortgage Loan;
PROVIDED that whenever the term "Specially Designated Mortgage Loan Documents"
is used to refer to documents actually received by the Trustee or by a Custodian
on its behalf such term shall not be deemed to include such documents and
instruments referred to in ITEMS (i) through (vi) of this definition unless they
are actually so received; and PROVIDED, FURTHER, that the Specially Designated
Mortgage Loan Documents for any Mortgage Loan need not include any Letter of
Credit referred to in ITEM (v) of this definition if, in lieu thereof, the
related Mortgage Loan Seller has, on behalf of the related Borrower, either (i)
delivered to the Trustee a substitute letter of credit, in the same amount and
with the same draw conditions and renewal rights as, and otherwise substantially
similar to, that Letter of Credit and issued by an obligor that meets any
criteria in the related Mortgage Loan Documents applicable to the issuer of that
Letter of Credit or (ii) delivered to the applicable Master Servicer an LOC Cash
Reserve, which substitute letter of credit can be drawn on, or which LOC Cash
Reserve can be applied to cover, the same items as that Letter of Credit was
intended to cover.
"SPECIALLY SERVICED MORTGAGE LOAN" shall mean any Mortgage Loan as to
which there then exists a Servicing Transfer Event. Upon the occurrence of a
Servicing Transfer Event with respect to any Mortgage Loan, such Mortgage Loan
shall remain a Specially Serviced Mortgage Loan until the earliest of (i) its
removal from the Trust Fund, (ii) an REO Acquisition with respect to the related
Mortgaged Property, and (iii) the cessation of all existing Servicing Transfer
Events with respect to such Mortgage Loan.
"STANDARD AVAILABLE DISTRIBUTION AMOUNT" shall mean, with respect to
any Distribution Date, an amount equal to (a) the sum of (i) all amounts on
deposit in the Distribution Account as of 11:00 a.m.,
New York City time, on
such Distribution Date, (ii) to the extent not included in the amount described
in CLAUSE (a)(i) of this definition, any P&I Advances and/or Compensating
Interest Payments that were made in respect of such Distribution Date, (iii) to
the extent not included in the amount described in CLAUSE (a)(i) of this
definition, the aggregate amount transferred (pursuant to SECTION 3.05(d)) from
the Excess Liquidation Proceeds Account to the Distribution Account in respect
of such Distribution Date, and (iv) to the extent not included in the amount
described in CLAUSE (a)(i) of this definition, if such Distribution Date occurs
during the month of March of 2003 or any year thereafter, the aggregate of the
Interest Reserve Amounts with respect to the Interest Reserve Loans transferred
from the Interest Reserve Account to the Distribution Account during such month
of March for distribution on such Distribution Date, NET of (b) any portion of
the amounts described in CLAUSE (a) of this definition that represents one or
more of the following: (i) collected Monthly Payments that are due on a Due Date
following the end of the related Collection Period, (ii) any payments of
principal (including Principal Prepayments) and interest, Insurance Proceeds,
Condemnation Proceeds and Liquidation Proceeds received by or on behalf of the
Trust after the end of the related Collection Period, (iii) any Prepayment
Premiums, Yield Maintenance Charges and/or Post-ARD Additional Interest, (iv)
any amounts payable or reimbursable to any Person from the Distribution Account
pursuant to CLAUSES (iii) through (vii) of SECTION 3.05(b), (v) if such
Distribution Date occurs during the month of February of 2003 or any year
thereafter
-66-
that is not a leap year, the aggregate of the Interest Reserve Amounts with
respect to the Interest Reserve Loans to be withdrawn (pursuant to
SECTION 3.04(c) and SECTION 3.05(b)(ii)) from the Distribution Account and
deposited into the Interest Reserve Account during such month of February or
such month of January, as the case may be, and held for future distribution, and
(vi) any amounts deposited in the Distribution Account in error; PROVIDED that
the Standard Available Distribution Amount for the Final Distribution Date shall
be calculated without regard to CLAUSES (b)(i), (b)(ii) and (b)(v) of this
definition.
"STARTUP DAY" shall mean, with respect to each REMIC Pool, the day
designated as such in SECTION 2.10(a) (in the case of the Loan REMIC),
SECTION 2.12(a) (in the case of REMIC I), SECTION 2.14(a) (in the case of REMIC
II) or SECTION 2.16(a) (in the case of REMIC III), as applicable.
"STATED MATURITY DATE" shall mean, with respect to any Mortgage Loan,
the Due Date specified in the related Mortgage Note (as in effect on the Closing
Date or, in the case of a Replacement Mortgage Loan, on the related date of
substitution) on which the last payment of principal is due and payable under
the terms of such Mortgage Note, without regard to any change in or modification
of such terms in connection with a bankruptcy or similar proceeding involving
the related Borrower or a modification, waiver or amendment of such Mortgage
Loan granted or agreed to by the applicable Master Servicer or the applicable
Special Servicer pursuant to SECTION 3.20 and, in the case of an ARD Mortgage
Loan, without regard to its Anticipated Repayment Date.
"STATED PRINCIPAL BALANCE" shall mean, with respect to any Mortgage
Loan (and any successor REO Loan), a principal balance which (a) initially shall
equal the unpaid principal balance thereof as of the related Due Date in
May 2002 or, in the case of any Replacement Mortgage Loan, as of the related
date of substitution, in any event after application of all payments of
principal due thereon on or before such date, whether or not received, and (b)
shall be permanently reduced on each subsequent Distribution Date (to not less
than zero) by (i) that portion, if any, of the Total Principal Distribution
Amount for such Distribution Date attributable to such Mortgage Loan (or
successor REO Loan), and (ii) the principal portion of any Realized Loss
incurred in respect of such Mortgage Loan (or successor REO Loan) during the
related Collection Period; PROVIDED that, if a Liquidation Event occurs in
respect of any Mortgage Loan or REO Property, then the "Stated Principal
Balance" of such Mortgage Loan or of the related REO Loan, as the case may be,
shall be zero commencing as of the Distribution Date in the Collection Period
next following the Collection Period in which such Liquidation Event occurred.
"SUBORDINATE CERTIFICATE" shall mean any of the Class B, Class C-1,
Class C-2, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N, Class O and Class R Certificates.
"SUBORDINATE PRINCIPAL BALANCE CERTIFICATE" shall mean any of the
Subordinate Certificates that are also Principal Balance Certificates.
"SUB-SERVICER" shall mean any Person with which a Master Servicer or
Special Servicer has entered into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" shall mean the written contract between a
Master Servicer or Special Servicer, on the one hand, and any Sub-Servicer, on
the other hand, relating to servicing and administration of Mortgage Loans as
provided in SECTION 3.22.
-67-
"SUBSTITUTION SHORTFALL AMOUNT" shall mean, in connection with the
substitution of one or more Replacement Mortgage Loans for any Defective
Mortgage Loan, the amount, if any, by which the Purchase Price for such
Defective Mortgage Loan (calculated as if it were to be repurchased, instead of
replaced, on the relevant date of substitution), exceeds the Stated Principal
Balance or the aggregate Stated Principal Balance, as the case may be, of such
Replacement Mortgage Loan(s) as of the date of substitution.
"TAX MATTERS PERSON" shall mean, with respect to any REMIC Pool, the
Person designated as the "tax matters person" of such REMIC Pool in the manner
provided under Treasury regulation section 1.860F-4(d) and temporary Treasury
regulation section 301.6231(a)(7)-1T, which Person shall, pursuant to
SECTION 10.01(b), be the Plurality Class R Certificateholder.
"TAX RETURNS" shall mean the federal income tax return on IRS Form
1066, U.S. Real Estate Mortgage Investment Conduit Income (REMIC) Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holder of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of each REMIC Pool due to its classification as a REMIC under the
REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the Certificateholders or filed
with the IRS under any applicable provisions of federal tax law or any other
governmental taxing authority under applicable state or local tax laws.
"TERMINATION PRICE" shall have the meaning assigned thereto in
SECTION 9.01(a).
"TOTAL PRINCIPAL DISTRIBUTION AMOUNT" shall mean:
(a) with respect to any Distribution Date prior to the Final
Distribution Date, an amount equal to the aggregate (without duplication) of the
following--
(i) all payments of principal (including Principal Prepayments)
received by or on behalf of the Trust with respect to the Mortgage Loans
during the related Collection Period, in each case net of any portion of
the particular payment that represents a Late Collection of principal for
which a P&I Advance was previously made for a prior Distribution Date or
that represents the principal portion of a Monthly Payment due on or before
the related Due Date in May 2002 or on a Due Date subsequent to the end of
the related Collection Period,
(ii) all scheduled payments of principal due in respect of the
Mortgage Loans for their respective Due Dates occurring during the related
Collection Period that were received by or on behalf of the Trust (other
than as part of a Principal Prepayment) prior to the related Collection
Period,
(iii) all Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds received by or on behalf of the Trust with respect to any of the
Mortgage Loans during the related Collection Period that were identified
and applied as recoveries of principal of such Mortgage Loans in accordance
with SECTION 1.03, in each case net of any portion of such proceeds that
represents a Late Collection of principal due on or before the related Due
Date in May 2002 or for which a P&I Advance was previously made for a prior
Distribution Date,
(iv) all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and REO Revenues received by or on behalf of the Trust in respect
of any REO Properties during the
-68-
related Collection Period that were identified and applied as recoveries of
principal of the related REO Loans in accordance with SECTION 1.03, in each
case net of any portion of such proceeds and/or revenues that represents a
Late Collection of principal due on or before the related Due Date in
May 2002 or for which a P&I Advance was previously made for a prior
Distribution Date, and
(v) the respective principal portions of all P&I Advances made in
respect of the Mortgage Loans and any REO Loans with respect to such
Distribution Date; and
(b) with respect to the Final Distribution Date, an amount equal
to the aggregate Stated Principal Balance of the entire Mortgage Pool
outstanding immediately prior to the Final Distribution Date.
"TRANSFER" shall mean any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFER AFFIDAVIT AND AGREEMENT" shall have the meaning assigned
thereto in SECTION 5.02(d).
"TRANSFEREE" shall mean any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRANSFEROR" shall mean any Person who is disposing by Transfer of any
Ownership Interest in a Certificate.
"TRUST" shall mean the trust created hereby.
"TRUST ASSETS" shall mean the assets comprising the Trust Fund.
"TRUSTEE" shall mean Xxxxx Fargo, in its capacity as trustee
hereunder, or any successor trustee appointed as provided herein.
"TRUSTEE REPORT" shall have the meaning assigned thereto in SECTION
4.02(a).
"TRUSTEE'S FEE" shall mean, with respect to any Mortgage Loan or REO
Loan, the fee designated as such and payable to the Trustee pursuant to
SECTION 8.05(a).
"TRUSTEE'S FEE RATE" shall mean 0.0030% per annum.
"TRUST FUND" shall mean, collectively, all of the assets of all the
REMIC Pools, both of the Grantor Trust Pools and the Paradise Island Reserve
Fund.
"UCC" shall mean the Uniform Commercial Code in effect in the
applicable jurisdiction.
"UCC FINANCING STATEMENT" shall mean a financing statement filed, or
to be filed, pursuant to the UCC.
"UCC FINANCING STATEMENT AMENDMENT" shall mean a financing statement
amendment filed, or to be filed, pursuant to the UCC.
-69-
"UNCERTIFICATED NOTIONAL AMOUNT" shall mean the notional amount on
which any Group A-Y REMIC I Regular Interest accrues interest from time to time,
calculated in accordance with SECTION 2.12(e) hereof, or on which REMIC II
Regular Interest A-Y accrues interest from time to time, calculated in
accordance with SECTION 2.14(e).
"UNCERTIFICATED PRINCIPAL BALANCE" shall mean the principal balance
outstanding from time to time of the Loan REMIC Regular Interest (calculated in
accordance with SECTION 2.10(e) hereof), any REMIC I Regular Interest
(calculated in accordance with SECTION 2.12(e) hereof) or any REMIC II Regular
Interest (calculated in accordance with SECTION 2.14(e) hereof).
"UNDERWRITERS" shall mean, collectively, CSFB Corporation and Xxxxxx
Brothers Inc.
"UNDERWRITER EXEMPTION" shall mean PTE 89-90, as amended by PTE 97-34
and PTE 2000-58, and as may be subsequently amended following the Closing Date.
"UNFUNDED PRINCIPAL BALANCE REDUCTION" shall mean any reduction made
in the Class Principal Balance of any Class of Principal Balance Certificates
pursuant to SECTION 4.04(a), the Uncertificated Principal Balance of any REMIC
II Regular Interest pursuant to SECTION 4.04(b), the Uncertificated Principal
Balance of any REMIC I Regular Interest pursuant to SECTION 4.04(c), or the
Uncertificated Principal Balance of the Loan REMIC Regular Interest pursuant to
SECTION 4.04(d).
"UNITED STATES SECURITIES PERSON" shall mean any "U.S. person" as
defined in Rule 902(k) of Regulation S.
"UNITED STATES TAX PERSON" shall mean a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in, or under the laws of, the United States or any political subdivision
thereof, or an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States Tax Persons have the authority to control all substantial
decisions of the trust, all within the meaning of Section 7701(a)(30) of the
Code.
"UNRESTRICTED SERVICER REPORTS" shall mean each of the files and
reports comprising the CMSA Investor Reporting Package (excluding the CMSA Bond
Level File, the CMSA Collateral Summary File and the Restricted Servicer
Reports).
"USAP" shall mean the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America.
"USPAP" shall mean the Uniform Standards of Professional Appraisal
Practices.
"VOTING RIGHTS" shall mean the voting rights evidenced by the
respective Certificates. At all times during the term of this Agreement, 99.0%
of the Voting Rights shall be allocated among all the Holders of the various
Classes of Principal Balance Certificates in proportion to the respective Class
Principal Balances of such Classes, and 1.0% of the Voting Rights shall be
allocated among all the Holders of the various Classes of Interest Only
Certificates in proportion to the respective Class Notional Amounts of such
Classes. Voting Rights allocated to a particular Class of Certificateholders
-70-
shall be allocated among such Certificateholders in proportion to the respective
Percentage Interests evidenced by their respective Certificates. No Voting
Rights shall be allocated to the Class R or Class V Certificateholders.
"XXXXX FARGO" shall have the meaning assigned thereto in the
Preliminary Statement to this Agreement.
"WORKOUT FEE" shall mean the fee designated as such in, and payable to
the applicable Special Servicer in connection with certain recoveries on a
Corrected Mortgage Loan pursuant to, the second paragraph of SECTION 3.11(c).
"WORKOUT FEE RATE" shall mean, with respect to each Corrected Mortgage
Loan, 1.0%.
"YIELD MAINTENANCE CERTIFICATES" shall mean the Class A-1, Class A-2,
Class A-3, Class B, Class C-1, Class C-2, Class D, Class E, Class F and Class G
Certificates.
"YIELD MAINTENANCE CHARGE" shall mean, with respect to any Mortgage
Loan, any premium, fee or other additional amount paid or payable, as the
context requires, by a Borrower in connection with a Principal Prepayment on, or
other early collection of principal of, a Mortgage Loan, calculated, in whole or
in part, pursuant to a yield maintenance formula or otherwise pursuant to a
formula that reflects the lost interest, including a Yield Maintenance Minimum
Amount.
"YIELD MAINTENANCE MINIMUM AMOUNT" shall mean, with respect to a
Mortgage Loan that provides for a Yield Maintenance Charge to be paid in
connection with any Principal Prepayment thereon or other early collection of
principal thereof, any specified amount or specified percentage of the amount
prepaid which constitutes the minimum amount that such Yield Maintenance Charge
may be.
SECTION 1.02. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement include the plural as well
as the singular, and the use of any gender herein shall be deemed to
include the other gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP as in effect from time to
time;
(iii) references herein to "Articles", "Sections", "Subsections",
"Paragraphs" and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section
in which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;
(v) the words "herein", "hereof", "hereunder", "hereto", "hereby"
and other words of similar import refer to this Agreement as a whole and
not to any particular provision; and
-71-
(vi) the terms "include" and "including" shall mean without
limitation by reason of enumeration.
SECTION 1.03. Certain Calculations in Respect of the Mortgage Pool.
(a) All amounts collected by or on behalf of the Trust in respect
of any Cross-Collateralized Group, including any payments from Borrowers,
Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds, shall be
applied among the Mortgage Loans constituting such Cross-Collateralized Group in
accordance with the express provisions of the related Mortgage Loan Documents
and, in the absence of such express provisions, in accordance with the Servicing
Standard. All amounts collected by or on behalf of the Trust in respect of or
allocable to any particular Mortgage Loan (whether or not such Mortgage Loan
constitutes part of a Cross-Collateralized Group), including any payments from
Borrowers, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds,
shall be applied to amounts due and owing under the related Mortgage Note and
Mortgage (including for principal and accrued and unpaid interest) in accordance
with the express provisions of the related Mortgage Loan Documents and, in the
absence of such express provisions or if and to the extent that such terms
authorize the lender to use its discretion, shall be applied: FIRST, as a
recovery of any related and unreimbursed Servicing Advances and, if applicable,
unpaid Liquidation Expenses; SECOND, as a recovery of accrued and unpaid
interest on such Mortgage Loan to, but not including, the date of receipt by or
on behalf of the Trust (or, in the case of a full Monthly Payment from any
Borrower, through the related Due Date), exclusive, however, of any portion of
such accrued and unpaid interest that constitutes Default Interest or, in the
case of an ARD Mortgage Loan after its Anticipated Repayment Date, that
constitutes Post-ARD Additional Interest; THIRD, as a recovery of principal of
such Mortgage Loan then due and owing, including by reason of acceleration of
the Mortgage Loan following a default thereunder (or, if a Liquidation Event has
occurred in respect of such Mortgage Loan, as a recovery of principal to the
extent of its entire remaining unpaid principal balance); FOURTH, unless a
Liquidation Event has occurred in respect of such Mortgage Loan, as a recovery
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items; FIFTH, unless a Liquidation Event has occurred in
respect of such Mortgage Loan, as a recovery of Reserve Funds to the extent then
required to be held in escrow; SIXTH, as a recovery of any Default Charges then
due and owing under such Mortgage Loan; SEVENTH, as a recovery of any Prepayment
Premium or Yield Maintenance Charge then due and owing under such Mortgage Loan;
EIGHTH, as a recovery of any assumption fees and modification fees then due and
owing under such Mortgage Loan; NINTH, as a recovery of any other amounts then
due and owing under such Mortgage Loan other than remaining unpaid principal
and, in the case of an ARD Mortgage Loan after its Anticipated Repayment Date,
other than Post-ARD Additional Interest; TENTH, as a recovery of any remaining
principal of such Mortgage Loan to the extent of its entire remaining unpaid
principal balance; and, ELEVENTH, in the case of an ARD Mortgage Loan after its
Anticipated Repayment Date, as a recovery of accrued and unpaid Post-ARD
Additional Interest on such ARD Mortgage Loan to but not including the date of
receipt by or on behalf of the Trust.
(b) Collections by or on behalf of the Trust in respect of each
REO Property (exclusive of amounts to be applied to the payment of the costs of
operating, managing, maintaining and disposing of such REO Property) shall be
treated: FIRST, as a recovery of any related and unreimbursed Servicing Advances
and, if applicable, unpaid Liquidation Expenses; SECOND, as a recovery of
accrued and unpaid interest on the related REO Loan to, but not including, the
Due Date in the Collection Period of receipt, by or on behalf of the Trust,
exclusive, however, of any portion of such accrued and unpaid
-72-
interest that constitutes Default Interest or, in the case of an REO Loan that
relates to an ARD Mortgage Loan after its Anticipated Repayment Date, that
constitutes Post-ARD Additional Interest; THIRD, as a recovery of principal of
the related REO Loan to the extent of its entire unpaid principal balance;
FOURTH, as a recovery of any Default Charges deemed to be due and owing in
respect of the related REO Loan; FIFTH, as a recovery of any Prepayment Premium
or Yield Maintenance Charge deemed to be due and owing in respect of the related
REO Loan; SIXTH, as a recovery of any other amounts deemed to be due and owing
in respect of the related REO Loan (other than, in the case of an REO Loan that
relates to an ARD Mortgage Loan after its Anticipated Repayment Date, accrued
and unpaid Post-ARD Additional Interest); and SEVENTH, in the case of an REO
Loan that relates to an ARD Mortgage Loan after its Anticipated Repayment Date,
as a recovery of any accrued and unpaid Post-ARD Additional Interest on such REO
Loan to but not including the date of receipt by or on behalf of the Trust.
(c) For the purposes of this Agreement, Post-ARD Additional
Interest on an ARD Mortgage Loan or a successor REO Loan shall be deemed not to
constitute principal or any portion thereof and shall not be added to the unpaid
principal balance or Stated Principal Balance of such ARD Mortgage Loan or
successor REO Loan, notwithstanding that the terms of the related loan documents
so permit. To the extent any Post-ARD Additional Interest is not paid on a
current basis, it shall be deemed to be deferred interest.
(d) Insofar as amounts received in respect of any Mortgage Loan or
REO Property and allocable to shared fees and shared charges owing in respect of
such Mortgage Loan or the related REO Loan, as the case may be, that constitute
Additional Master Servicing Compensation payable to the applicable Master
Servicer and/or Additional Special Servicing Compensation payable to the
applicable Special Servicer, are insufficient to cover the full amount of such
fees and charges, such amounts shall be allocated between such of those fees and
charges as are payable to the applicable Master Servicer, on the one hand, and
such of those fees and charges as are payable to the applicable Special
Servicer, on the other, PRO RATA in accordance with their respective
entitlements in accordance with SECTION 3.11 hereof.
(e) The foregoing applications of amounts received in respect of
any Mortgage Loan or REO Property shall be determined by the applicable Master
Servicer and reflected in the appropriate monthly report from such Master
Servicer and in the appropriate monthly Trustee Report as provided in
SECTION 4.02.
(f) In the case of each Mortgaged Property that is a residential
cooperative property, the respective files and reports comprising the CMSA
Investor Reporting Package (other than the CMSA Servicer Watch List) shall
present the Projected Net Cash Flow for such Mortgaged Property and the
Projected Debt Service Coverage Ratio for the related Co-op Mortgage Loan, as
such terms apply to residential cooperative properties, if and to the extent
that such file or report requires preparation and/or submission of data
concerning net cash flow or debt service coverage.
SECTION 1.04. Cross-Collateralized Mortgage Loans.
Notwithstanding anything herein to the contrary, it is hereby
acknowledged that the groups of Mortgage Loans identified on the Mortgage Loan
Schedule as being cross-collateralized with each other are, in the case of each
such particular group of Mortgage Loans, by their terms, cross-defaulted and
cross-collateralized with each other. For purposes of reference only in this
Agreement, and without in any way limiting the servicing rights and powers of
the applicable Master Servicer and/or the applicable Special Servicer, with
respect to any Cross-Collateralized Mortgage Loan (or successor
-73-
REO Loan), the Mortgaged Property (or REO Property) that relates or corresponds
thereto shall be the property identified in the Mortgage Loan Schedule as
corresponding thereto. The provisions of this Agreement, including each of the
defined terms set forth in SECTION 1.01, shall be interpreted in a manner
consistent with this SECTION 1.04; PROVIDED that, if there exists with respect
to any Cross-Collateralized Group only one original of any document referred to
in the definition of "Mortgage File" covering all the Mortgage Loans in such
Cross-Collateralized Group, then the inclusion of the original of such document
in the Mortgage File for any of the Mortgage Loans constituting such
Cross-Collateralized Group shall be deemed an inclusion of such original in the
Mortgage File for each such Mortgage Loan.
-74-
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES; ORIGINAL ISSUANCE OF LOAN REMIC REGULAR INTEREST, REMIC I
REGULAR INTERESTS, REMIC II REGULAR INTERESTS, GROUP A-X REMIC III REGULAR
INTERESTS, GROUP A-SP REMIC III REGULAR INTERESTS, LOAN REMIC RESIDUAL
INTEREST, REMIC I RESIDUAL INTEREST, REMIC II RESIDUAL INTEREST, REMIC III
RESIDUAL INTEREST AND CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans.
(a) It is the intention of the parties hereto that a common law
trust be established under the laws of the State of
New York pursuant to this
Agreement and, further, that such trust be designated as "Credit Suisse First
Boston Mortgage Securities Trust 2002-CKN2". Xxxxx Fargo is hereby appointed,
and does hereby agree to act, as Trustee hereunder and, in such capacity, to
hold the Trust Fund in trust for the exclusive use and benefit of all present
and future Certificateholders. It is not intended that this Agreement create a
partnership or a joint-stock association.
(b) The Depositor, concurrently with the execution and delivery
hereof, does hereby sell, assign, transfer and otherwise convey 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 Original Mortgage Loans,
all payments under and proceeds of such Mortgage Loans received after the
Closing Date (other than scheduled payments of interest and principal due on or
before the respective Due Dates for the Original Mortgage Loans in May 2002),
and all documents included in the related Mortgage Files and Servicing Files and
any related Additional Collateral; (ii) any REO Property acquired in respect of
any such Mortgage Loan; (iii) such funds or assets as from time to time are
deposited in each Collection Account, the Distribution Account, the Interest
Reserve Account, the Excess Liquidation Proceeds Account and, if established,
each REO Account; (iv) the Mortgage Loan Purchase Agreements; (v) the Column
Performance Guarantee; (vi) the NCBCC Performance Guarantee; (vii) the NCBFSB
Performance Guarantee; (viii) the Paradise Island Letter of Credit; and (ix) all
other assets included or to be included in the Trust Fund. This conveyance is
subject to the right of the Designated Sub-Servicers to primary service certain
of the Original Mortgage Loans pursuant to the Designated Sub-Servicer
Agreements.
Under GAAP, the Depositor shall report and cause all of its records to
reflect: (i) its acquisition of the Original Column Mortgage Loans from Column,
pursuant to the Column Mortgage Loan Purchase Agreement, as a purchase of such
Mortgage Loans from Column; (ii) its acquisition of the Original KeyBank
Mortgage Loans from KeyBank, pursuant to the KeyBank Mortgage Loan Purchase
Agreement, as a purchase of such Mortgage Loans from KeyBank; (iii) its
acquisition of the Original NCB Mortgage Loans from NCB, pursuant to the NCB
Mortgage Loan Purchase Agreement, as a purchase of such Mortgage Loans from NCB;
(iv) its acquisition of the Original NCBCC Mortgage Loans from NCBCC, pursuant
to the NCBCC Mortgage Loan Purchase Agreement, as a purchase of such Mortgage
Loans from NCBCC; (v) its acquisition of the Original NCBFSB Mortgage Loans from
NCBFSB, pursuant to the NCBFSB Mortgage Loan Purchase Agreement, as a purchase
of such Mortgage Loans from NCBFSB; and (vi) its transfer of the Original
Mortgage Loans to the Trust, pursuant to this SECTION 2.01(b), as a sale of such
Mortgage Loans to the Trust; PROVIDED that, in the case
-75-
of the transactions described in CLAUSES (i) and (vi) of this sentence, the
Depositor shall do so only upon the sale of Certificates representing at least
10% of the aggregate Certificate Principal Balance of all the Certificates to
parties that are not Affiliates of the Depositor. Regardless of its treatment of
the transfer of the Original Mortgage Loans to the Trust under GAAP, the
Depositor shall at all times following the Closing Date cause all of its records
and financial statements and any relevant consolidated financial statements of
any direct or indirect parent clearly to reflect that the Original Mortgage
Loans have been transferred to the Trust and are no longer available to satisfy
claims of the Depositor's creditors.
After the Depositor's transfer of the Original Mortgage Loans to the
Trustee pursuant to this SECTION 2.01(b), the Depositor shall not take any
action inconsistent with the Trust's ownership of the Mortgage Loans.
(c) The conveyance of the Original Mortgage Loans and the related
rights and property accomplished hereby is absolute and is intended by the
parties hereto to constitute an absolute transfer of such Mortgage Loans and
such other related rights and property by the Depositor to the Trustee for the
benefit of the Certificateholders. Furthermore, it is not intended that such
conveyance be a pledge of security for a loan. If such conveyance is determined
to be a pledge of security for a loan, however, the Depositor and the Trustee
intend that the rights and obligations of the parties to such loan shall be
established pursuant to the terms of this Agreement. The Depositor and the
Trustee also intend and agree that, in such event, (i) this Agreement shall
constitute a security agreement under applicable law, (ii) the Depositor shall
be deemed to have granted to the Trustee (in such capacity) a first priority
security interest in all of the Depositor's right, title and interest in and to
the assets constituting the Trust Fund, including the Mortgage Loans subject
hereto from time to time, all principal and interest received on or with respect
to such Mortgage Loans after the Closing Date (other than scheduled payments of
interest and principal due and payable on such Mortgage Loans on or prior to the
related Due Date in May 2002 or, in the case of a Replacement Mortgage Loan, on
or prior to the related date of substitution), all amounts held from time to
time in each Collection Account, the Distribution Account, the Interest Reserve
Account, the Excess Liquidation Proceeds Account, each REO Account (if
established) and the Paradise Island Reserve Fund, and all investment earnings
on such amounts, and all of the Depositor's right, title and interest under the
Mortgage Loan Purchase Agreements, the Column Performance Guarantee, the NCBCC
Performance Guarantee and the NCBFSB Performance Guarantee, (iii) the possession
by the Trustee or its agent of the Mortgage Notes with respect to the Mortgage
Loans subject hereto from time to time and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" or possession by a purchaser or
person designated by such secured party for the purpose of perfecting such
security interest under applicable law, and (iv) notifications to, and
acknowledgments, receipts or confirmations from, Persons holding such property,
shall be deemed to be notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law. The Depositor shall file or cause to be filed, as a
precautionary filing, a Form UCC-1 financing statement substantially in the form
attached as EXHIBIT J hereto in all appropriate locations in the State of
Delaware promptly following the initial issuance of the Certificates, and the
General Master Servicer shall prepare and file at each such office, and the
Trustee shall execute, continuation statements with respect thereto, in each
case within six months prior to the fifth anniversary of the immediately
preceding filing. The Depositor hereby authorizes the Trustee and General Master
Servicer to prepare and file in the name of the Depositor, and shall cooperate
in a reasonable manner with the Trustee and the Master Servicers in
-76-
preparing and filing, such continuation statements. This SECTION 2.01(C) shall
constitute notice to the Trustee pursuant to any requirements of the UCC in
effect in each applicable jurisdiction.
(d) In connection with the Depositor's assignment pursuant to
SECTION 2.01(b) above, the Depositor hereby represents and warrants that it has
contractually obligated each Mortgage Loan Seller, at such Mortgage Loan
Seller's expense, pursuant to the related 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 thereby, on or before the Closing Date, the
Mortgage File and any Additional Collateral (other than Reserve Funds) for each
Original Mortgage Loan acquired by the Depositor from such Mortgage Loan Seller.
In addition, with respect to each Mortgage Loan under which any Additional
Collateral is in the form of a Letter of Credit as of the Closing Date, the
Depositor hereby represents and warrants that it has contractually obligated the
related Mortgage Loan Seller, subject to the next paragraph, to cause to be
prepared, executed and delivered to the issuer of each such Letter of Credit
such notices, assignments and acknowledgments as are required under such Letter
of Credit to assign, without recourse, to the Trustee the related Mortgage Loan
Seller's rights as the beneficiary thereof and drawing party thereunder. The
Depositor shall deliver to the Trustee on or before the Closing Date a fully
executed counterpart of each Mortgage Loan Purchase Agreement, the Column
Performance Guarantee, the NCBCC Performance Guarantee and the NCBFSB
Performance Guarantee.
Notwithstanding the foregoing, if any Mortgage Loan Seller is unable
to deliver any Letter of Credit constituting Additional Collateral for any of
its Original Mortgage Loans, then that Mortgage Loan Seller may, in lieu
thereof, deliver on behalf of the related Borrower, to be used for the same
purposes as such missing Letter of Credit either: (i) a substitute instrument
substantially comparable to, but in all cases in the same amount and with the
same draw conditions and renewal rights as, that Letter of Credit and issued by
an obligor that meets any criteria in the related Mortgage Loan Documents
applicable to the issuer of that Letter of Credit; or (ii) a cash reserve in an
amount equal to the amount of that Letter of Credit. For purposes of the
delivery requirements of this SECTION 2.01, any such substitute instrument shall
be deemed to be Additional Collateral of the type covered by the prior paragraph
of this SECTION 2.01(d) and any such cash reserve shall be deemed to be Reserve
Funds of the type covered by SECTION 2.01(f).
(e) As soon as reasonably possible, and in any event within 45
days after the later of (i) the Closing Date (or, in the case of a Replacement
Mortgage Loan substituted as contemplated by SECTION 2.03, after the related
date of substitution) and (ii) the date on which all recording information
necessary to complete the subject document is received by the Trustee, the
Trustee shall complete (to the extent necessary), and shall submit for recording
or filing, as the case may be, including via electronic means, if appropriate,
in or with the appropriate office for real property records or UCC Financing
Statements, as applicable, each assignment of Mortgage and assignment of
Assignment of Leases in favor of the Trustee referred to in CLAUSES (iv) and (v)
of the definition of "Mortgage File" that has been received by the Trustee or a
Custodian on its behalf and each UCC Financing Statement Amendment in favor of
the Trustee referred to in CLAUSE (viii) of the definition of "Mortgage File"
that has been received by the Trustee or a Custodian on its behalf. Each such
assignment shall reflect that it should be returned by the public recording
office to the Trustee following recording, and each such UCC Financing Statement
Amendment shall reflect that the file copy thereof or an appropriate receipt
therefor, as applicable, should be returned to the Trustee following filing;
PROVIDED that in those instances where the public recording office retains the
original assignment of Mortgage or assignment of Assignment of Leases the
Trustee shall obtain therefrom a copy of the recorded original. At such time
-77-
as such assignments, UCC Financing Statement Amendments or verifications of
electronic filing have been returned to the Trustee, the Trustee shall forward a
copy thereof to the applicable Master Servicer. If any such document or
instrument is lost or returned unrecorded or unfiled, as the case may be,
because of a defect therein, the Trustee shall direct the related Mortgage Loan
Seller to prepare or cause to be prepared promptly, pursuant to the related
Mortgage Loan Purchase Agreement, a substitute therefor or cure such defect, as
the case may be, and thereafter the Trustee shall, upon receipt thereof, cause
the same to be duly recorded or filed, as appropriate. If any Mortgage Loan
Seller has been so notified and has not prepared a substitute document or cured
such defect, as the case may be, within 60 days, the Trustee shall promptly
notify the Master Servicers, the Special Servicers, the Rating Agencies and the
Controlling Class Representative. The Depositor and the Trustee hereby
acknowledge and agree that each Mortgage Loan Seller shall be responsible for
paying the reasonable fees and out-of-pocket expenses of the Trustee in
connection with the above-referenced recording and filing of documents insofar
as it relates to the Original Mortgage Loans acquired by the Depositor from such
Mortgage Loan Seller, as and to the extent provided for in the related Mortgage
Loan Purchase Agreement; PROVIDED that no Mortgage Loan Seller shall actually
record or file any such documents.
(f) In connection with the Depositor's assignment pursuant to
SECTION 2.01(b) above, the Depositor hereby represents and warrants that it has
contractually obligated each Mortgage Loan Seller, at such Mortgage Loan
Seller's expense, pursuant to the related Mortgage Loan Purchase Agreement, to
deliver to and deposit with, or cause to be delivered to and deposited with, the
applicable Master Servicer, on or before the Closing Date, the following items
(except to the extent that any of the following items are to be retained by a
primary servicer that will continue to act on behalf of the applicable Master
Servicer as a Sub-Servicer): (i) originals or copies of all financial
statements, appraisals, environmental/engineering reports, transaction screens,
leases, rent rolls (or, in the case of Mortgage Loans secured by residential
cooperative properties, maintenance schedules), third-party underwriting
reports, insurance policies, legal opinions, tenant estoppels and any other
relevant documents that the applicable Master Servicer or Special Servicer
reasonably deems necessary to service the subject Mortgage Loan in the
possession or under the control of such Mortgage Loan Seller that relate to the
Original Mortgage Loans transferred by it to the Depositor and, to the extent
they are not required to be a part of a Mortgage File for any such Original
Mortgage Loan, originals or copies of all documents, certificates and opinions
in the possession or under the control of such Mortgage Loan Seller that were
delivered by or on behalf of the related Borrowers in connection with the
origination of such Original Mortgage Loans (PROVIDED that such Mortgage Loan
Seller shall not be required to deliver any attorney-client privileged
communication or any documents or materials prepared by it or its Affiliates
solely for internal uses); and (ii) all unapplied Reserve Funds and Escrow
Payments in the possession or under the control of such Mortgage Loan Seller
that relate to the Original Mortgage Loans transferred by such Mortgage Loan
Seller to the Depositor. Each Master Servicer shall hold all such documents,
records and funds that it so receives on behalf of the Trustee in trust for the
benefit of the Certificateholders.
(g) Also in connection with the Depositor's assignment pursuant to
SECTION 2.01(b) above, the Depositor shall deliver to and deposit with, or cause
to be delivered to and deposited with, the applicable Master Servicer, on or
before the Closing Date, the original or a copy of any Group Environmental
Insurance Policy acquired by the Depositor or an Affiliate of the Depositor and
the original of the Paradise Island Letter of Credit.
-78-
SECTION 2.02. Acceptance of Mortgage Assets by Trustee.
(a) Subject to the other provisions in this SECTION 2.02, the
Trustee, by its execution and delivery of this Agreement, hereby accepts receipt
on behalf of the Trust, directly or through a Custodian on its behalf, of (i)
the Original Mortgage Loans and all documents delivered to it that constitute
portions of the related Mortgage Files and (ii) all other assets delivered to it
and included in the Trust Fund, in good faith and without notice of any adverse
claim, and declares that it or a Custodian on its behalf holds and will hold
such documents and any other documents received by it that constitute portions
of the Mortgage Files, and that it holds and will hold the Original Mortgage
Loans and such other assets, together with any other Mortgage Loans and assets
subsequently delivered to it that are to be included in the Trust Fund, in trust
for the exclusive use and benefit of all present and future Certificateholders.
The Trustee or such Custodian shall hold any Letter of Credit in a custodial
capacity only and shall have no obligation to maintain, extend the term of,
enforce or otherwise pursue any rights under such Letter of Credit. In
connection with the foregoing, the Trustee hereby certifies to each of the other
parties hereto and the Mortgage Loan Sellers that, as to each Original Mortgage
Loan, except as to any LOC Cash Reserve and except as specifically identified in
the Schedule of Exceptions to Mortgage File Delivery attached hereto as EXHIBIT
B-2, (i) the Specially Designated Mortgage Loan Documents (without regard to
Assignments of Leases, modification agreements and assumption agreements) are in
its possession or the possession of a Custodian on its behalf, and (ii) such
Mortgage Loan Documents have been reviewed by it or by such Custodian on its
behalf and (A) appear regular on their face (handwritten additions, changes or
corrections shall not constitute irregularities if initialed by the Borrower),
(B) appear to have been executed and (C) purport to relate to such Mortgage
Loan.
(b) On or about the 45th day following the Closing Date (and, if
any exceptions are noted or if the recordation/filing contemplated by SECTION
2.01(e) has not been completed (based solely on receipt by the Trustee of the
particular documents showing evidence of the recordation/filing), every 90 days
thereafter until the earlier of (i) the date on which such exceptions are
eliminated and such recordation/filing has been completed, and (ii) the date on
which all the affected Mortgage Loans are removed from the Trust Fund), the
Trustee or a Custodian on its behalf shall review the documents delivered to it
or such Custodian with respect to each Original Mortgage Loan, and the Trustee
shall, subject to SECTIONS 1.04, 2.02(c) and 2.02(d), certify in writing
(substantially in the form of EXHIBIT B-3) to each of the other parties hereto,
the Mortgage Loan Sellers and the Controlling Class Representative that, as to
each Original Mortgage Loan then subject to this Agreement (except as to any LOC
Cash Reserve and except as specifically identified in any exception report
annexed to such certification): (i) the original Mortgage Note specified in
CLAUSE (i) of the definition of "Mortgage File" and all allonges thereto, if any
(or a copy of such Mortgage Note, together with a lost note affidavit and
indemnity certifying that the original of such Mortgage Note has been lost), the
original or copy of documents specified in CLAUSES (ii) through (v), (vii), (x),
(xii) and (xiii) of the definition of "Mortgage File" and, in the case of a
hospitality property, the documents specified in CLAUSE (viii) of the definition
of "Mortgage File" (without regard to the parenthetical) and any other Specially
Designated Mortgage Loan Documents (without regard to modification agreements
and assumption agreements), have been received by it or a Custodian on its
behalf; (ii) if such report is due more than 180 days after the Closing Date,
the recordation/filing contemplated by SECTION 2.01(e) has been completed (based
solely on receipt by the Trustee of the particular recorded/filed documents or
an appropriate receipt of recording/filing therefor); (iii) all documents
received by it or any Custodian with respect to such Mortgage Loan have been
reviewed by it or by such Custodian on its behalf and (A) appear regular on
their face (handwritten additions, changes or corrections shall not constitute
irregularities if initialed by the Borrower),
-79-
(B) appear to have been executed and (C) purport to relate to such Mortgage
Loan; and (iv) based on the examinations referred to in SECTION 2.02(a) above
and this SECTION 2.02(b) and only as to the foregoing documents, the information
set forth in the Mortgage Loan Schedule with respect to the items specified in
CLAUSE (iii)(a) and CLAUSE (vi) of the definition of "Mortgage Loan Schedule"
accurately reflects the information set forth in the related Mortgage File.
If a Mortgage Loan Seller, the Column Performance Guarantor, the NCBCC
Performance Guarantor or the NCBFSB Performance Guarantor substitutes a
Replacement Mortgage Loan for any Defective Mortgage Loan as contemplated by
SECTION 2.03, the Trustee or a Custodian on its behalf shall review the
documents delivered to it or such Custodian with respect to such Replacement
Mortgage Loan, and the Trustee shall deliver a certification comparable to that
described in the prior paragraph, in respect of such Replacement Mortgage Loan,
on or about the 30th day following the related date of substitution (and, if any
exceptions are noted, every 90 days thereafter until the earlier of (i) the date
on which such exceptions are eliminated and all related recording/filing has
been completed, and (ii) the date on which such Replacement Mortgage Loan is
removed from the Trust Fund).
With respect to the documents described in CLAUSE (iii) of the
definition of "Mortgage File", absent actual knowledge to the contrary, the
Trustee may assume, for purposes of the certification(s) delivered in this
SECTION 2.02(a) or to be delivered pursuant to SECTION 2.02(b), that the
Mortgage File for each Mortgage Loan includes a separate Assignment of Leases.
With respect to the documents described in CLAUSE (viii) of the
definition of "Mortgage File", absent actual knowledge to the contrary or copies
of UCC Financing Statements delivered to the Trustee as part of the Mortgage
File indicating otherwise, the Trustee may assume, for purposes of the
certification(s) to be delivered pursuant to this SECTION 2.02(b), that the
Mortgage File for each Mortgage Loan should include one state-level UCC
Financing Statement filed in the state of incorporation or organization of the
related Borrower for each Mortgaged Property (or with respect to any Mortgage
Loan that has two or more Borrowers, for each related Borrower). To the extent
appropriate under applicable law, the UCCs to be assigned to the Trust will be
delivered on the new national forms and in recordable form and will be filed in
the state of incorporation or organization as so indicated on the documents
provided.
(c) None of the Trustee, the Master Servicers, the Special
Servicers or any Custodian is under any duty or obligation to inspect, review or
examine any of the documents, instruments, certificates or other papers relating
to the Mortgage Loans delivered to it to determine that the same are valid,
legal, effective, genuine, binding, enforceable, sufficient or appropriate for
the represented purpose or that they are other than what they purport to be on
their face. Furthermore, except as expressly provided in SECTION 2.01(e), none
of the Trustee, the Master Servicers, the Special Servicers or any Custodian
shall have any responsibility for determining whether the text of any assignment
or endorsement is in proper or recordable form, whether the requisite recording
of any document is in accordance with the requirements of any applicable
jurisdiction, or whether a blanket assignment is permitted in any applicable
jurisdiction.
(d) In performing the reviews contemplated by SUBSECTIONS (a) and
(b) above, the Trustee may conclusively rely on the related Mortgage Loan Seller
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents specified in CLAUSES (i) through
(v),
-80-
CLAUSE (vii) and, in the case of any Mortgage Loan secured by a Mortgage on
a hospitality property, CLAUSE (viii) of the definition of "Mortgage File" and
any other Specially Designated Mortgage Loan Documents, have been received and
such additional information as will be necessary for delivering the
certifications required by SUBSECTIONS (a) and (b) above.
SECTION 2.03. Certain Repurchases and Substitutions of Mortgage
Loans by the Mortgage Loan Sellers, the Column
Performance Guarantor, the NCBCC Performance Guarantor
and the NCBFSB Performance Guarantor.
(a) If any party hereto discovers, or receives notice from a
non-party, that a Document Defect or Breach exists with respect to any Mortgage
Loan, then such party shall give prompt written notice thereof to the other
parties hereto, including (unless it is the party that discovered the Document
Defect or Breach) the Trustee. Upon the Trustee's discovery or receipt of notice
that a Document Defect or Breach exists with respect to any Mortgage Loan, the
Trustee shall notify the Controlling Class Representative, the Depositor and
each Person that would be a Responsible Party with respect thereto if such
Document Defect or Breach, as the case may be, were a Material Document Defect
or a Material Breach, as applicable.
If necessary, the Trustee shall request each Mortgage Loan Seller to
comply with the second paragraph of Section 2(c) of the related Mortgage Loan
Purchase Agreement with respect to any Document Defect or other deficiency in a
Mortgage File relating to an Original Mortgage Loan transferred by such Mortgage
Loan Seller to the Depositor. If the Trustee becomes aware of any failure on the
part of any Mortgage Loan Seller to do so, the Trustee shall promptly notify the
applicable Master Servicer and the applicable Special Servicer.
(b) Promptly upon its becoming aware of any Material Document
Defect or Material Breach with respect to any Mortgage Loan or its receipt of
notice from the Trustee or any other party to this Agreement of a Material
Document Defect or Material Breach with respect to any Mortgage Loan, the
applicable Master Servicer shall (and the applicable Special Servicer may)
notify the Responsible Party or Parties with respect thereto in writing of such
Material Document Defect or Material Breach, as the case may be, and direct such
Responsible Party or Parties that it or they, as the case may be, must, not
later than 90 days from the receipt by such Responsible Party or Parties of such
notice (or, if such Material Breach or Material Document Defect, as the case may
be, relates to whether such Mortgage Loan is or, as of the Closing Date (or, in
the case of a Replacement Mortgage Loan, as of the related date of
substitution), was a Qualified Mortgage, and provided that such Responsible
Party or Parties received prompt written notice thereof, within 90 days after
any earlier discovery by any party to this Agreement of such Material Breach or
Material Document Defect, as the case may be) (such 90-day period, in any case,
the "INITIAL RESOLUTION PERIOD"), correct or cure such Material Document Defect
or Material Breach, as the case may be, in all material respects, or repurchase
the affected Mortgage Loan (as, if and to the extent required by the related
Mortgage Loan Purchase Agreement, the Column Performance Guarantee, the NCBCC
Performance Guarantee or the NCBFSB Performance Guarantee, as applicable), at
the applicable Purchase Price; PROVIDED that if a Responsible Party with respect
to any Material Document Defect or Material Breach certifies to the Trustee in
writing (i) that such Material Document Defect or Material Breach, as the case
may be, does not relate to whether the affected Mortgage Loan is or, as of the
Closing Date (or, in the case of a Replacement Mortgage Loan, as of the related
date of substitution), was a Qualified Mortgage, (ii) that such Material
Document Defect or
-81-
Material Breach, as the case may be, is capable of being cured but not within
the applicable Initial Resolution Period, (iii) that such Responsible Party has
commenced and is diligently proceeding with the cure of such Material Document
Defect or Material Breach, as the case may be, during the applicable Initial
Resolution Period, (iv) what actions such Responsible Party is pursuing in
connection with the cure of such Material Document Defect or Material Breach, as
the case may be, and (v) that such Responsible Party anticipates that such
Material Document Defect or Material Breach, as the case may be, will be cured
within an additional 90-day period (such additional 90-day period, the
"RESOLUTION EXTENSION PERIOD") (a copy of which certification shall be delivered
by the Trustee to the applicable Master Servicer, the applicable Special
Servicer and the Controlling Class Representative), then such Responsible Party
(or, if applicable, both of the Responsible Parties with respect to such
Material Document Defect or Material Breach, as the case may be) shall have an
additional period equal to any such applicable Resolution Extension Period to
complete such correction or cure (or, upon failure to complete such correction
or cure, to repurchase the affected Mortgage Loan); and PROVIDED, FURTHER, that,
in lieu of repurchasing the affected Mortgage Loan as contemplated above (but,
in any event, no later than such repurchase would have to have been completed),
a Responsible Party with respect to any Material Document Defect or Material
Breach shall be permitted, during the three-month period following the Startup
Day for the REMIC Pool that holds the related Mortgage Loan (or during the
two-year period following such Startup Day if the affected 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)), to replace the affected
Mortgage Loan with one or more Qualifying Substitute Mortgage Loans and to pay a
cash amount equal to the applicable Substitution Shortfall Amount, subject to
any other applicable terms and conditions of the related Mortgage Loan Purchase
Agreement, the Column Performance Guarantee, the NCBCC Performance Guarantee or
the NCBFSB Performance Guarantee, as applicable, and this Agreement. If any
Mortgage Loan is to be repurchased or replaced as contemplated by this SECTION
2.03, the applicable Master Servicer shall designate its Collection Account as
the account to which funds in the amount of the applicable Purchase Price or
Substitution Shortfall Amount (as the case may be) are to be wired, and the
applicable Master Servicer shall promptly notify the Trustee when such deposit
is made. Any such repurchase or replacement of a Mortgage Loan shall be on a
whole loan, servicing released basis.
The remedies provided for in this SECTION 2.03(b) with respect to any
Material Document Defect or Material Breach with respect to any Mortgage Loan
shall apply to the related REO Property.
If one or more (but not all) of the Mortgage Loans constituting a
Cross-Collateralized Group are to be repurchased or replaced by a Mortgage Loan
Seller, the Column Performance Guarantor, the NCBCC Performance Guarantor or the
NCBFSB Performance Guarantor, as contemplated by this SECTION 2.03, then, prior
to the subject repurchase or substitution, the applicable Master Servicer shall
use its reasonable efforts, subject to the terms of the affected Mortgage Loans,
to prepare and, to the extent necessary and appropriate, have executed by the
related Borrower and record, such documentation as may be necessary to terminate
the cross-collateralization between the Mortgage Loans in such
Cross-Collateralized Group that are to be repurchased or replaced, on the one
hand, and the remaining Mortgage Loans therein, on the other hand, such that
those two groups of Mortgage Loans are each secured only by the Mortgaged
Properties identified in the Mortgage Loan Schedule as directly corresponding
thereto; PROVIDED that no such termination shall be effected unless the Mortgage
Loans from such Cross-Collateralized Group that are to remain part of the Trust
Fund have a loan-to-value ratio of no more than 75% and a debt service coverage
ratio of no less than 1.25x; and PROVIDED, FURTHER, that no such termination
shall be effected unless and until the applicable Master Servicer and the
Trustee
-82-
have received from the related Mortgage Loan Seller, the Column Performance
Guarantor, the NCBCC Performance Guarantor or the NCBFSB Performance Guarantor,
as applicable, (i) an Opinion of Counsel addressed to the Trustee and the
applicable Master Servicer from Independent counsel to the effect that such
termination will not cause an Adverse REMIC Event to occur with respect to any
REMIC Pool or an Adverse Grantor Trust Event with respect to either Grantor
Trust Pool and (ii) written confirmation from each Rating Agency that such
termination will not cause an Adverse Rating Event to occur with respect to any
Class of Rated Certificates; and PROVIDED, FURTHER, that the related Mortgage
Loan Seller, the Column Performance Guarantor, the NCBCC Performance Guarantor
or the NCBFSB Performance Guarantor, as applicable, may, at its option,
repurchase or replace the entire Cross-Collateralized Group without termination
of the cross-collateralization. To the extent necessary and appropriate, the
Trustee shall execute (or, subject to SECTION 3.10, provide the applicable
Master Servicer with a limited power of attorney that enables the applicable
Master Servicer to execute) the loan documentation referred to in the prior
sentence; PROVIDED that the Trustee shall not be liable for any misuse of any
such power of attorney by a Master Servicer. The applicable Master Servicer
shall advance all costs and expenses incurred by the Trustee and such Master
Servicer with respect to any Cross-Collateralized Group pursuant to this
paragraph, and such advances shall (i) constitute and be reimbursable as
Servicing Advances and (ii) be included in the calculation of Purchase Price for
the Mortgage Loan(s) to be repurchased or replaced. No Master Servicer or
Special Servicer shall be liable to any Certificateholder or any other party
hereto if the cross-collateralization of any Cross-Collateralized Group cannot
be terminated as contemplated by this paragraph for any reason beyond the
control of such Master Servicer or Special Servicer, as the case may be.
If the cross-collateralization of any Cross-Collateralized Group of
Mortgage Loans cannot be terminated as contemplated by the preceding paragraph
for any reason (including, but not limited to, the failure of the related
Mortgage Loan Seller, the Column Performance Guarantor, the NCBCC Performance
Guarantor or the NCBFSB Performance Guarantor, as the case may be, to satisfy
any of the conditions set forth in the provisos to the first sentence of the
preceding paragraph), then, for purposes of this SECTION 2.03, the related
Mortgage Loan Purchase Agreement, and, in the case of a Cross-Collateralized
Group of Column Mortgage Loans, the Column Performance Guarantee, and, in the
case of a Cross-Collateralized Group of NCBCC Mortgage Loans, the NCBCC
Performance Guarantee, and, in the case of a Cross-Collateralized Group of
NCBFSB Mortgage Loans, the NCBFSB Performance Guarantee, including for purposes
of (i) determining whether the particular Breach or Document Defect that gave
rise to the repurchase/substitution obligation for such Cross-Collateralized
Group is a Material Breach or Material Document Defect, as the case may be, and
(ii) the application of remedies, such Cross-Collateralized Group shall be
treated as a single Mortgage Loan.
Whenever one or more Replacement Mortgage Loans are substituted for a
Defective Mortgage Loan by a Mortgage Loan Seller, the Column Performance
Guarantor, the NCBCC Performance Guarantor or the NCBFSB Performance Guarantor,
as contemplated by this SECTION 2.03, the applicable Master Servicer shall
direct the party effecting the substitution to deliver the related Mortgage File
to the Trustee, to certify that such Replacement Mortgage Loan satisfies or such
Replacement Mortgage Loans satisfy, as the case may be, all of the requirements
of the definition of "Qualifying Substitute Mortgage Loan" and to send such
certification to the Trustee. No mortgage loan may be substituted for a
Defective Mortgage Loan as contemplated by this SECTION 2.03 if the Mortgage
Loan to be replaced was itself a Replacement Mortgage Loan, in which case,
absent a cure of the relevant Material Breach or Material Document Defect, the
affected Mortgage Loan will be required to be repurchased as contemplated
hereby. Monthly Payments due with respect to each Replacement
-83-
Mortgage Loan (if any) after the related date of substitution, and Monthly
Payments due with respect to each corresponding Deleted Mortgage Loan (if any)
after the related Due Date in May 2002 and on or prior to the related date of
substitution, shall be part of the Trust Fund. Monthly Payments due with respect
to each Replacement Mortgage Loan (if any) on or prior to the related date of
substitution, and Monthly Payments due with respect to each corresponding
Deleted Mortgage Loan (if any) after the related date of substitution, shall not
be part of the Trust Fund and are to be remitted by the applicable Master
Servicer to the party effecting the related substitution promptly following
receipt.
In the case of the 00 Xxxx Xxx Xxxxxx Mortgage Loan, the applicable
Master Servicer shall monitor if and when a permanent certificate of occupancy
is issued with respect to the 00 Xxxx Xxx Xxxxxx Property. If as of November 6,
2003 the related Borrower has not obtained a permanent certificate of occupancy
for the 00 Xxxx Xxx Xxxxxx Property, then the applicable Master Servicer shall
promptly so notify the Controlling Class Representative and NCB and, further,
shall demand that NCB, pursuant to the NCB Mortgage Loan Purchase Agreement,
repurchase the 00 Xxxx Xxx Xxxxxx Mortgage Loan at the Purchase Price, no later
than December 31, 2003. The applicable Master Servicer shall designate the
Collection Account as the account to which such Purchase Price shall be wired.
The applicable Special Servicer shall enforce the rights of the Trust to require
NCB's repurchase of the 00 Xxxx Xxx Xxxxxx Mortgage Loan upon NCB's failure to
do so pursuant to the foregoing requirements.
In connection with any repurchase of the 00 Xxxx Xxx Xxxxxx Mortgage
Loan as contemplated by this SECTION 2.03(b), the Trustee shall effect a
"qualified liquidation" of the Loan REMIC in accordance with the REMIC
Provisions.
If any Mortgage Loan is to be repurchased or replaced by a Mortgage
Loan Seller, the Column Performance Guarantor, the NCBCC Performance Guarantor
or the NCBFSB Performance Guarantor as contemplated by this SECTION 2.03, the
applicable Master Servicer shall direct such party to amend the Mortgage Loan
Schedule to reflect the removal of any Deleted Mortgage Loan and, if applicable,
the substitution of the related Replacement Mortgage Loan(s); and, upon its
receipt of such amended Mortgage Loan Schedule, the applicable Master Servicer
shall deliver or cause the delivery of such amended Mortgage Loan Schedule to
the other parties hereto. Upon any substitution of one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, such Replacement Mortgage Loan(s)
shall become part of the Trust Fund and be subject to the terms of this
Agreement in all respects.
The reasonable "out-of-pocket" costs and expenses incurred by the
applicable Master Servicer, the applicable Special Servicer and/or the Trustee
pursuant to this SECTION 2.03(b), including reasonable attorney fees and
expenses, shall constitute Servicing Advances to the extent not collected from
the related Mortgage Loan Seller, the Column Performance Guarantor, the NCBCC
Performance Guarantor or the NCBFSB Performance Guarantor, as applicable.
(c) Upon receipt of an Officer's Certificate from the applicable
Master Servicer to the effect that the full amount of the Purchase Price or
Substitution Shortfall Amount (as the case may be) for any Mortgage Loan
repurchased or replaced by the related Mortgage Loan Seller, the Column
Performance Guarantor, the NCBCC Performance Guarantor or the NCBFSB Performance
Guarantor as contemplated by this SECTION 2.03 has been deposited in such Master
Servicer's Collection Account, and further, if applicable, upon receipt of the
Mortgage File for each Replacement Mortgage Loan (if any) to be substituted for
a Deleted Mortgage Loan, together with any certifications and/or opinions
required pursuant to SECTION 2.03(b) to be delivered by the party effecting the
repurchase/substitution, the Trustee
-84-
shall (i) release or cause the release of the Mortgage File and any Additional
Collateral held by or on behalf of the Trustee for the Deleted Mortgage Loan to
the party effecting the repurchase/substitution or its designee and (ii) execute
and deliver such instruments of release, transfer and/or assignment, in each
case without recourse, as shall be provided to it and are reasonably necessary
to vest in the party effecting the repurchase/substitution or its designee the
ownership of the Deleted Mortgage Loan, and the applicable Master Servicer shall
notify the affected Borrowers of the transfers of the Deleted Mortgage Loan(s)
and any Replacement Mortgage Loan(s). In connection with any such repurchase or
substitution by the related Mortgage Loan Seller, the Column Performance
Guarantor, the NCBCC Performance Guarantor or the NCBFSB Performance Guarantor,
each of the applicable Master Servicer and the applicable Special Servicer shall
deliver to the party effecting the repurchase/substitution or its designee any
portion of the related Servicing File, together with any Escrow Payments,
Reserve Funds and Additional Collateral, held by or on behalf of such Master
Servicer or such Special Servicer, as the case may be, with respect to the
Deleted Mortgage Loan, in each case at the expense of the party effecting the
repurchase/substitution. The reasonable "out-of-pocket" costs and expenses,
including reasonable attorneys' fees and expenses, incurred by a Master
Servicer, a Special Servicer and/or the Trustee pursuant to this SECTION
2.03(c), to the extent not collected from the related Mortgage Loan Seller, the
Column Performance Guarantor, the NCBCC Performance Guarantor or the NCBFSB
Performance Guarantor, shall be reimbursable to each of them as Servicing
Advances in respect of the affected Mortgage Loan.
(d) The related Mortgage Loan Purchase Agreement, the Column
Performance Guarantee (in the case of the Column Mortgage Loans), the NCBCC
Performance Guarantee (in the case of the NCBCC Mortgage Loans), the NCBFSB
Performance Guarantee (in the case of the NCBFSB Mortgage Loans) and/or this
Pooling and Servicing Agreement provide the sole remedies available to the
Certificateholders, or the Trustee on their behalf, respecting any Document
Defect or Breach. If, in connection with any Material Document Defect or
Material Breach, each Responsible Party with respect thereto defaults on its
obligations to cure such Material Document Defect or Material Breach, as the
case may be, in all material respects or to repurchase or replace the affected
Mortgage Loan as contemplated by this SECTION 2.03, then the applicable Master
Servicer shall (and the applicable Special Servicer may) promptly notify the
Trustee and the Controlling Class Representative, and the Trustee shall notify
the Certificateholders. Thereafter, the applicable Master Servicer shall (and
the applicable Special Servicer may) take such actions on behalf of the Trust
with respect to the enforcement of such repurchase/substitution obligations (and
if the applicable Master Servicer (or the applicable Special Servicer) is
notified or otherwise becomes aware of a default on the part of any Mortgage
Loan Seller in respect of its obligations under the second paragraph of Section
2(c) of the related Mortgage Loan Purchase Agreement, such Master Servicer shall
(and such Special Servicer may) also take such actions on behalf of the Trust
with respect to the enforcement of such obligations of such Mortgage Loan
Seller), including the institution and prosecution of appropriate legal
proceedings, as such Master Servicer (or, if applicable, such Special Servicer)
shall determine are in the best interests of the Certificateholders (taken as a
collective whole). Any and all reasonable "out-of-pocket" costs and expenses
incurred by a Master Servicer, a Special Servicer and/or the Trustee pursuant to
this SECTION 2.03(d), including, reasonable attorney's fees and expenses, to the
extent not collected from the related Mortgage Loan Seller, the Column
Performance Guarantor, the NCBCC Performance Guarantor or the NCBFSB Performance
Guarantor, shall constitute Servicing Advances in respect of the affected
Mortgage Loan.
-85-
SECTION 2.04. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants to each of the
other parties hereto and for the benefit of the Certificateholders, as of the
Closing Date, that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(ii) The Depositor's execution and delivery of, performance under,
and compliance with this Agreement, will not violate the Depositor's
organizational documents or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material agreement or other material
instrument to which it is a party or by which it is bound, which default or
breach, in the good faith and reasonable judgment of the Depositor, is
likely to affect materially and adversely either the ability of the
Depositor to perform its obligations under this Agreement or the financial
condition of the Depositor.
(iii) The Depositor has the full power and authority to own its
properties, to conduct its business as presently conducted by it and to
enter into and consummate all transactions involving the Depositor
contemplated by this Agreement, has duly authorized the execution, delivery
and performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Depositor, enforceable against the Depositor
in accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement is considered
in a proceeding in equity or at law.
(v) The Depositor is not in violation of, and its execution and
delivery of, performance under and compliance with this Agreement will not
constitute a violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Depositor's
good faith and reasonable judgment, is likely to affect materially and
adversely either the ability of the Depositor to perform its obligations
under this Agreement or the financial condition of the Depositor.
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the Depositor of the transactions contemplated herein,
except (A) for those consents, approvals, authorizations or orders that
previously have been obtained, (B) such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and sale of
the Certificates by the Underwriters, and (C) any recordation of the
assignments of Mortgage Loan Documents to the Trustee pursuant to
SECTION 2.01(e), which has not yet been completed.
(vii) The Depositor's transfer of the Original Mortgage Loans to the
Trustee as contemplated herein requires no regulatory approval, other than
any such approvals as have been
-86-
obtained, and is not subject to any bulk transfer or similar law in effect
in any applicable jurisdiction.
(viii) The Depositor is not transferring the Original Mortgage Loans
to the Trustee with any intent to hinder, delay or defraud its present or
future creditors.
(ix) The Depositor has been solvent at all relevant times prior to,
and will not be rendered insolvent by, its transfer of the Original
Mortgage Loans to the Trustee, pursuant to SECTION 2.01(b).
(x) After giving effect to its transfer of the Original Mortgage
Loans to the Trustee, pursuant to SECTION 2.01(b), the value of the
Depositor's assets, either taken at their present fair saleable value or at
fair valuation, will exceed the amount of the Depositor's debts and
obligations, including contingent and unliquidated debts and obligations of
the Depositor, and the Depositor will not be left with unreasonably small
assets or capital with which to engage in and conduct its business.
(xi) The Depositor does not intend to, and does not believe that it
will, incur debts or obligations beyond its ability to pay such debts and
obligations as they mature.
(xii) No proceedings looking toward merger, liquidation, dissolution
or bankruptcy of the Depositor are pending or contemplated.
(xiii) No litigation is pending or, to the best of the Depositor's
knowledge, threatened against the Depositor that, if determined adversely
to the Depositor, would prohibit the Depositor from entering into this
Agreement or that, in the Depositor's good faith and reasonable judgment,
is likely to materially and adversely affect either the ability of the
Depositor to perform its obligations under this Agreement or the financial
condition of the Depositor.
(xiv) Immediately prior to the transfer of the Original Mortgage
Loans to the Trustee for the benefit of the Certificateholders pursuant to
this Agreement, the Depositor had such right, title and interest in and to
each Original Mortgage Loan as was transferred to it by the related
Mortgage Loan Seller pursuant to the related Mortgage Loan Purchase
Agreement. The Depositor has not transferred any of its right, title and
interest in and to the Original Mortgage Loans to any Person other than the
Trustee.
(xv) The Depositor is transferring all of its right, title and
interest in and to the Original Mortgage Loans to the Trustee for the
benefit of the Certificateholders free and clear of any and all liens,
pledges, charges, security interests and other encumbrances created by or
through the Depositor.
(xvi) Except for any actions that are the express responsibility of
another party hereunder or under any Mortgage Loan Purchase Agreement, and
further except for actions that the Depositor is expressly permitted to
complete subsequent to the Closing Date, the Depositor has taken all
actions required under applicable law to effectuate the transfer of all of
its right, title and interest in and to the Original Mortgage Loans by the
Depositor to the Trustee.
-87-
(b) The representations and warranties of the Depositor set forth
in SECTION 2.04(A) shall survive the execution and delivery of this Agreement
and shall inure to the benefit of the Persons for whose benefit they were made
for so long as the Trust remains in existence. Upon discovery by any party
hereto of any breach of any of such representations and warranties that
materially and adversely affects the interests of the Certificateholders or any
party hereto, the party discovering such breach shall give prompt written notice
thereof to the other parties hereto.
SECTION 2.05. Representations and Warranties of the General
Master Servicer.
(a) The General Master Servicer hereby represents and warrants to
each of the other parties hereto and for the benefit of the Certificateholders,
as of the Closing Date, that:
(i) The General Master Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio,
and the General Master Servicer is in compliance with the laws of each
State in which any related Mortgaged Property is located to the extent
necessary to ensure the enforceability of each non-Co-op Mortgage Loan and
to perform its obligations under this Agreement.
(ii) The General Master Servicer's execution and delivery of,
performance under and compliance with this Agreement, will not violate the
General Master Servicer's organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute
a default) under, or result in the breach of, any material agreement or
other material instrument to which it is a party or by which it is bound,
which default or breach, in the good faith and reasonable judgment of the
General Master Servicer, is likely to affect materially and adversely
either the ability of the General Master Servicer to perform its
obligations under this Agreement or the financial condition of the General
Master Servicer.
(iii) The General Master Servicer has the full power and authority
to enter into and consummate all transactions involving the General Master
Servicer contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the General Master Servicer, enforceable against
the General Master Servicer in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The General Master Servicer is not in violation of, and its
execution and delivery of, performance under and compliance with this
Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in
the General Master Servicer's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the General Master
Servicer to perform its obligations under this Agreement or the financial
condition of the General Master Servicer.
-88-
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the General Master Servicer of the transactions
contemplated herein, except for those consents, approvals, authorizations
or orders that previously have been obtained or where the lack of such
consent, approval, authorization or order would not have a material adverse
effect on the ability of the General Master Servicer to perform its
obligations under this Agreement.
(vii) No litigation is pending or, to the best of the General Master
Servicer's knowledge, threatened against the General Master Servicer that,
if determined adversely to the General Master Servicer, would prohibit the
General Master Servicer from entering into this Agreement or that, in the
General Master Servicer's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the General Master
Servicer to perform its obligations under this Agreement or the financial
condition of the General Master Servicer.
(viii) The General Master Servicer has errors and omissions insurance
in the amounts and with the coverage required by SECTION 3.07(d).
(ix) The General Master Servicer has examined each of the
Sub-Servicing Agreements entered into by the General Master Servicer that
will be in effect as of the Closing Date with respect to the non-Co-op
Mortgage Loans, and each such Sub-Servicing Agreement complies with the
requirements of SECTION 3.22(a) in all material respects.
(b) The representations and warranties of the General Master
Servicer set forth in SECTION 2.05(a) shall survive the execution and delivery
of this Agreement and shall inure to the benefit of the Persons for whose
benefit they were made for so long as the Trust remains in existence. Upon
discovery by any party hereto of a breach of any of such representations and
warranties that materially and adversely affects the interests of the
Certificateholders or any party hereto, the party discovering such breach shall
give prompt written notice to each of the other parties hereto.
(c) Any successor General Master Servicer shall be deemed to have
made, as of the date of its succession, each of the representations and
warranties set forth in SECTION 2.05(a), subject to such appropriate
modifications to the representation and warranty set forth in SECTION 2.05(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
SECTION 2.06. Representations and Warranties of the General
Special Servicer.
(a) The General Special Servicer hereby represents and warrants to
each of the other parties hereto and for the benefit of the Certificateholders,
as of the Closing Date, that:
(i) The General Special Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and the General Special Servicer is in compliance with the laws
of each State in which any related Mortgaged Property is located to the
extent necessary to ensure the enforceability of each non-Co-op Mortgage
Loan and to perform its obligations under this Agreement.
-89-
(ii) The General Special Servicer's execution and delivery of,
performance under and compliance with this Agreement will not violate the
General Special Servicer's organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute
a default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or any
of its assets, which default, in the good faith and reasonable judgment of
the General Special Servicer, is likely to affect materially and adversely
either the ability of the General Special Servicer to perform its
obligations under this Agreement or the financial condition of the General
Special Servicer.
(iii) The General Special Servicer has the full power and authority
to enter into and consummate all transactions involving the General Special
Servicer contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the General Special Servicer, enforceable against
the General Special Servicer in accordance with the terms hereof, subject
to (A) applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The General Special Servicer is not in violation of, and its
execution and delivery of, performance under and compliance with the terms
of this Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which
violation, in the General Special Servicer's good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of the General Special Servicer to perform its obligations under this
Agreement or the financial condition of the General Special Servicer.
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the General Special Servicer of the transactions
contemplated herein, except for those consents, approvals, authorizations
or orders that previously have been obtained or where the lack of such
consent, approval, authorization or order would not have a material adverse
effect on the ability of the General Special Servicer to perform its
obligations under this Agreement.
(vii) No litigation is pending or, to the best of the General
Special Servicer's knowledge, threatened against the General Special
Servicer that, if determined adversely to the General Special Servicer,
would prohibit the General Special Servicer from entering into this
Agreement or that, in the General Special Servicer's good faith and
reasonable judgment, is likely to materially and adversely affect either
the ability of the General Special Servicer to perform its obligations
under this Agreement or the financial condition of the General Special
Servicer.
(viii) The General Special Servicer has errors and omissions
insurance in the amounts and with the coverage required by SECTION 3.07(d).
-90-
(ix) As of the Closing Date, the General Special Servicer is not a
party to any Sub-Servicing Agreement providing for the performance of
duties of the General Special Servicer by any Sub-Servicers with respect to
any of the Mortgage Loans or REO Properties.
(b) The representations and warranties of the General Special
Servicer set forth in SECTION 2.06(a) shall survive the execution and delivery
of this Agreement and shall inure to the benefit of the Persons for whose
benefit they were made for so long as the Trust remains in existence. Upon
discovery by any party hereto of a breach of any of such representations and
warranties that materially and adversely affects the interests of the
Certificateholders or any party hereto, the party discovering such breach shall
give prompt written notice to each of the other parties hereto.
(c) Any successor General Special Servicer shall be deemed to have
made, as of the date of its succession, each of the representations and
warranties set forth in SECTION 2.06(a), subject to such appropriate
modifications to the representation and warranty set forth in SECTION 2.06(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
SECTION 2.07. Representations and Warranties of the Co-op
Master Servicer.
(a) The Co-op Master Servicer hereby represents and warrants to
each of the other parties hereto and for the benefit of the Certificateholders,
as of the Closing Date, that:
(i) The Co-op Master Servicer is a federal savings bank duly
organized, validly existing and in good standing under the laws of the
United States, and the Co-op Master Servicer is in compliance with the laws
of each State in which any related Mortgaged Property is located to the
extent necessary to ensure the enforceability of each Co-op Mortgage Loan
and to perform its obligations under this Agreement.
(ii) The Co-op Master Servicer's execution and delivery of,
performance under and compliance with this Agreement, will not violate the
Co-op Master Servicer's organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute
a default) under, or result in the breach of, any material agreement or
other material instrument to which it is a party or by which it is bound,
which default or breach, in the good faith and reasonable judgment of the
Co-op Master Servicer, is likely to affect materially and adversely either
the ability of the Co-op Master Servicer to perform its obligations under
this Agreement or the financial condition of the Co-op Master Servicer.
(iii) The Co-op Master Servicer has the full power and authority to
enter into and consummate all transactions involving the Co-op Master
Servicer contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Co-op Master Servicer, enforceable against
the Co-op Master Servicer in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
-91-
(v) The Co-op Master Servicer is not in violation of, and its
execution and delivery of, performance under and compliance with this
Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental or regulatory authority, which violation, in
the Co-op Master Servicer's good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of the Co-op Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Co-op Master Servicer.
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the Co-op Master Servicer of the transactions contemplated
herein, except for those consents, approvals, authorizations or orders that
previously have been obtained or where the lack of such consent, approval,
authorization or order would not have a material adverse effect on the
ability of the Co-op Master Servicer to perform its obligations under this
Agreement.
(vii) No litigation is pending or, to the best of the Co-op Master
Servicer's knowledge, threatened against the Co-op Master Servicer that, if
determined adversely to the Co-op Master Servicer, would prohibit the Co-op
Master Servicer from entering into this Agreement or that, in the Co-op
Master Servicer's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Co-op Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Co-op Master Servicer.
(viii) The Co-op Master Servicer has errors and omissions insurance
in the amounts and with the coverage required by SECTION 3.07(d).
(ix) As of the Closing Date, the Co-op Master Servicer is not a
party to any Sub-Servicing Agreement providing for the performance of
duties of the Co-op Master Servicer by any Sub-Servicer with respect to the
Co-op Mortgage Loans.
(b) The representations and warranties of the Co-op Master
Servicer set forth in SECTION 2.07(a) shall survive the execution and delivery
of this Agreement and shall inure to the benefit of the Persons for whose
benefit they were made for so long as the Trust remains in existence. Upon
discovery by any party hereto of a breach of any of such representations and
warranties that materially and adversely affects the interests of the
Certificateholders or any party hereto, the party discovering such breach shall
give prompt written notice to each of the other parties hereto.
(c) Any successor Co-op Master Servicer shall be deemed to have
made, as of the date of its succession, each of the representations and
warranties set forth in SECTION 2.07(a), subject to such appropriate
modifications to the representation and warranty set forth in SECTION 2.07(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
-92-
SECTION 2.08. Representations and Warranties of the Co-op
Special Servicer.
(a) The Co-op Special Servicer hereby represents and warrants to
each of the other parties hereto and for the benefit of the Certificateholders,
as of the Closing Date, that:
(i) The Co-op Special Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the United States,
and the Co-op Special Servicer is in compliance with the laws of each State
in which any related Mortgaged Property is located to the extent necessary
to ensure the enforceability of each Co-op Mortgage Loan and to perform its
obligations under this Agreement.
(ii) The Co-op Special Servicer's execution and delivery of,
performance under and compliance with this Agreement will not violate the
Co-op Special Servicer's organizational documents or constitute a default
(or an event which, with notice or lapse of time, or both, would constitute
a default) under, or result in the breach of, any material agreement or
other instrument to which it is a party or which is applicable to it or any
of its assets, which default, in the good faith and reasonable judgment of
the Co-op Special Servicer, is likely to affect materially and adversely
either the ability of the Co-op Special Servicer to perform its obligations
under this Agreement or the financial condition of the Co-op Special
Servicer.
(iii) The Co-op Special Servicer has the full power and authority to
enter into and consummate all transactions involving the Co-op Special
Servicer contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Co-op Special Servicer, enforceable against
the Co-op Special Servicer in accordance with the terms hereof, subject to
(A) applicable bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the enforcement of creditors' rights
generally, and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(v) The Co-op Special Servicer is not in violation of, and its
execution and delivery of, performance under and compliance with the terms
of this Agreement will not constitute a violation of, any law, any order or
decree of any court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority, which
violation, in the Co-op Special Servicer's good faith and reasonable
judgment, is likely to affect materially and adversely either the ability
of the Co-op Special Servicer to perform its obligations under this
Agreement or the financial condition of the Co-op Special Servicer.
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the Co-op Special Servicer of the transactions contemplated
herein, except for those consents, approvals, authorizations or orders that
previously have been obtained or where the lack of such consent, approval,
authorization or order would not have a material adverse effect on the
ability of the Co-op Special Servicer to perform its obligations under this
Agreement.
-93-
(vii) No litigation is pending or, to the best of the Co-op Special
Servicer's knowledge, threatened against the Co-op Special Servicer that,
if determined adversely to the Co-op Special Servicer, would prohibit the
Co-op Special Servicer from entering into this Agreement or that, in the
Co-op Special Servicer's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Co-op Special
Servicer to perform its obligations under this Agreement or the financial
condition of the Co-op Special Servicer.
(viii) The Co-op Special Servicer has errors and omissions insurance
in the amounts and with the coverage required by SECTION 3.07(d).
(ix) As of the Closing Date, the Co-op Special Servicer is not a
party to any Sub-Servicing Agreement providing for the performance of
duties of the Co-op Special Servicer by any Sub-Servicer with respect to
any Co-op Mortgage Loans or related REO Properties.
(b) The representations and warranties of the Co-op Special
Servicer set forth in SECTION 2.08(a) shall survive the execution and delivery
of this Agreement and shall inure to the benefit of the Persons for whose
benefit they were made for so long as the Trust remains in existence. Upon
discovery by any party hereto of a breach of any of such representations and
warranties that materially and adversely affects the interests of the
Certificateholders or any party hereto, the party discovering such breach shall
give prompt written notice to each of the other parties hereto.
(c) Any successor Co-op Special Servicer shall be deemed to have
made, as of the date of its succession, each of the representations and
warranties set forth in SECTION 2.08(a), subject to such appropriate
modifications to the representation and warranty set forth in SECTION 2.08(a)(i)
to accurately reflect such successor's jurisdiction of organization and whether
it is a corporation, partnership, bank, association or other type of
organization.
SECTION 2.09. Representations, Warranties and Covenants of the
Trustee.
(a) The Trustee hereby represents and warrants to, and covenants
with, each of the other parties hereto and for the benefit of the
Certificateholders, as of the Closing Date, that:
(i) The Trustee is duly organized and validly existing as a
national banking association under the laws of the United States and is,
shall be or, if necessary, shall appoint a co-trustee that is, in
compliance with the laws of each State in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Mortgage Loan (insofar as such enforceability is dependent upon compliance
by the Trustee with such laws) and to perform its obligations under this
Agreement.
(ii) The Trustee's execution and delivery of, performance under and
compliance with this Agreement, will not violate the Trustee's
organizational documents or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or
result in a material breach of, any material agreement or other material
instrument to which it is a party or by which it is bound, which breach or
default, in the good faith and reasonable judgment of the Trustee is likely
to affect materially and adversely either the ability of the Trustee to
perform its obligations under this Agreement or the financial condition of
the Trustee.
-94-
(iii) The Trustee has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the enforcement of creditors' rights generally and, in
particular, the rights of creditors of national banking associations, and
(B) general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of, performance under and compliance with this Agreement will not
constitute a violation of, any law, any order or decree of any court or
arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the Trustee's
good faith and reasonable judgment, is likely to affect materially and
adversely either the ability of the Trustee to perform its obligations
under this Agreement or the financial condition of the Trustee.
(vi) No consent, approval, authorization or order of any state or
federal court or governmental agency or body is required for the
consummation by the Trustee of the transactions contemplated herein, except
for those consents, approvals, authorizations or orders that previously
have been obtained.
(vii) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee that, if determined adversely to
the Trustee, would prohibit the Trustee from entering into this Agreement
or that, in the Trustee's good faith and reasonable judgment, is likely to
materially and adversely affect either the ability of the Trustee to
perform its obligations under this Agreement or the financial condition of
the Trustee.
(viii) The Trustee is eligible to act as trustee hereunder in
accordance with SECTION 8.06.
(b) The representations, warranties and covenants of the Trustee
set forth in SECTION 2.09(a) shall survive the execution and delivery of this
Agreement and shall inure to the benefit of the Persons for whose benefit they
were made for so long as the Trust remains in existence. Upon discovery by any
party hereto of a breach of any such representations, warranties and covenants
that materially and adversely affects the interests of the Certificateholders or
any party hereto, the party discovering such breach shall give prompt written
notice thereof to the other parties hereto.
(c) Any successor Trustee shall be deemed to have made, as of the
date of its succession, each of the representations and warranties set forth in
SECTION 2.09(a), subject to such appropriate modifications to the
representation, warranty and covenant set forth in SECTION 2.09(a)(i) to
accurately reflect such successor's jurisdiction of organization and whether it
is a corporation, partnership, bank, association or other type of organization.
-95-
SECTION 2.10. Creation of the Loan REMIC; Issuance of the Loan
REMIC Regular Interest and the Loan REMIC Residual
Interest; Certain Matters Involving the Loan REMIC
(a) It is the intention of the parties hereto that the following
segregated pool of assets constitute a REMIC for federal income tax purposes
and, further, that such segregated pool of assets be designated as the "LOAN
REMIC": (i) the 00 Xxxx Xxx Xxxxxx Mortgage Loan and any Replacement Mortgage
Loan substituted for the 00 Xxxx Xxx Xxxxxx Mortgage Loan, together with (A) all
payments under and proceeds of each such Mortgage Loan received while it is part
of the Loan REMIC (other than any such amounts that constitute scheduled
payments of interest and principal due on or before the related Due Date in May
2002 or, in the case of a Replacement Mortgage Loan, on or before the related
date of substitution, and exclusive of any such amounts that constitute Excess
Servicing Fees and (B) all rights of the holder of each such Mortgage Loan under
the related Mortgage Loan Documents and in and to any related Additional
Collateral; (ii) any REO Property acquired with respect to the 00 Xxxx Xxx
Xxxxxx Mortgage Loan or any Replacement Mortgage Loan substituted for the 00
Xxxx Xxx Xxxxxx Mortgage Loan; (iii) such funds and assets as from time to time
are deposited in the Collection Account, the Distribution Account, the Interest
Reserve Account, the Excess Liquidation Proceeds Account and, if established,
the REO Account with respect to the 00 Xxxx Xxx Xxxxxx Mortgage Loan, any
Replacement Mortgage Loan substituted for the 00 Xxxx Xxx Xxxxxx Mortgage Loan
or any related REO Property (exclusive of any such amounts that constitute
Excess Servicing Fees); and (iv) the rights of the Depositor under the NCB
Mortgage Loan Purchase Agreement with respect to the 00 Xxxx Xxx Xxxxxx Mortgage
Loan, any Replacement Mortgage Loan substituted for the 00 Xxxx Xxx Xxxxxx
Mortgage Loan or any related REO Property. The Closing Date is hereby designated
as the "STARTUP DAY" of the Loan REMIC within the meaning of Section 860G(a)(9)
of the Code.
(b) Concurrently with the assignment of the 00 Xxxx Xxx Xxxxxx
Mortgage Loan and certain related assets to the Trustee pursuant to SECTION
2.01(b) and in exchange therefor, the Loan REMIC Regular Interest and the Loan
REMIC Residual Interest shall be issued. Neither the Loan REMIC Residual
Interest nor the Loan REMIC Regular Interest shall be certificated. The Loan
REMIC Regular Interest and the Loan REMIC Residual Interest shall collectively
constitute the entire beneficial ownership of the Loan REMIC.
(c) The Loan REMIC Regular Interest shall constitute the "regular
interest" (within the meaning of Section 860G(a)(1) of the Code), and the Loan
REMIC Residual Interest shall constitute the sole "residual interest" (within
the meaning of Section 860G(a)(2) of the Code), in the Loan REMIC. None of the
parties hereto, to the extent it is within the control thereof, shall create or
permit the creation of any other "interests" in the Loan REMIC (within the
meaning of Treasury regulation section 1.860D-1(b)(1)).
(d) The designation for the Loan REMIC Regular Interest shall be
the identification number for the 00 Xxxx Xxx Xxxxxx Mortgage Loan set forth in
the Mortgage Loan Schedule.
(e) The Loan REMIC Regular Interest shall have an Uncertificated
Principal Balance. As of the Closing Date, the Uncertificated Principal Balance
of the Loan REMIC Regular Interest shall equal the Cut-off Date Principal
Balance of the 00 Xxxx Xxx Xxxxxx Mortgage Loan (as specified in the Mortgage
Loan Schedule). On each Distribution Date, the Uncertificated Principal Balance
of the Loan REMIC Regular Interest shall be permanently reduced by any
distributions of principal deemed made
-96-
with respect to the Loan REMIC Regular Interest on such Distribution Date
pursuant to SECTION 4.01(m) and, further, by any Unfunded Principal Balance
Reduction made with respect to the Loan REMIC Regular Interest on such
Distribution Date pursuant to SECTION 4.04(e). Except as provided in the
preceding sentence, the Uncertificated Principal Balance of the Loan REMIC
Regular Interest shall not otherwise be increased or reduced. Deemed
distributions to REMIC I in reimbursement of Unfunded Principal Balance
Reductions with respect to the Loan REMIC Regular Interest shall not constitute
deemed distributions of principal and shall not result in any reduction of the
Uncertificated Principal Balance of the Loan REMIC Regular Interest.
(f) The Loan REMIC Regular Interest shall have a Loan REMIC Remittance
Rate. The Loan REMIC Remittance Rate with respect to the Loan REMIC Regular
Interest for any Interest Accrual Period shall be calculated as follows:
(i) if, as of the Closing Date, the 00 Xxxx Xxx Xxxxxx Mortgage
Loan bears or bore, as the case may be, interest calculated on a 30/360
Basis, then the Loan REMIC Remittance Rate with respect to the Loan REMIC
Regular Interest for any Interest Accrual Period shall equal the Net
Mortgage Rate in effect for the 00 Xxxx Xxx Xxxxxx Mortgage Loan as of the
Closing Date; and
(ii) if, as of the Closing Date, the 00 Xxxx Xxx Xxxxxx Mortgage
Loan bears or bore, as the case may be, interest calculated on an
Actual/360 Basis, then the Loan REMIC Remittance Rate with respect to the
Loan REMIC Regular Interest for any Interest Accrual Period shall (subject
to adjustment as provided below in this CLAUSE (ii)) equal the product of
(A) a fraction (expressed as a percentage), the numerator of which is the
number of days in such Interest Accrual Period, and the denominator of
which is 30, multiplied by (B) the Net Mortgage Rate in effect for the 00
Xxxx Xxx Xxxxxx Mortgage Loan as of the Closing Date; PROVIDED that, if the
subject Interest Accrual Period occurs during the month of January of 2003
or any year thereafter or during the month of December of 2002 or any year
thereafter that does not immediately precede a leap year, the Loan REMIC
Remittance Rate with respect to the Loan REMIC Regular Interest for such
Interest Accrual Period shall equal (M) the Loan REMIC Remittance Rate with
respect to the Loan REMIC Regular Interest for such Interest Accrual
Period, calculated without regard to this proviso, minus (N) a fraction
(expressed as a percentage), the numerator of which is equal to 12 times
any Interest Reserve Amount for the 00 Xxxx Xxx Xxxxxx Mortgage Loan, any
Replacement Mortgage Loan that is substituted for the 00 Xxxx Xxx Xxxxxx
Mortgage Loan or any successor REO Loan with respect to the foregoing, that
is to be transferred from the Distribution Account to the Interest Reserve
Account on the related Distribution Date in accordance with
SECTION 3.04(c), and the denominator of which is equal to the
Uncertificated Principal Balance of the Loan REMIC Regular Interest
outstanding immediately prior to the related Distribution Date; and,
PROVIDED, FURTHER, that, if the subject Interest Accrual Period occurs
during the month of February of 2003 or any year thereafter, the Loan REMIC
Remittance Rate with respect to the Loan REMIC Regular Interest for such
Interest Accrual Period shall equal (S) the Loan REMIC Remittance Rate with
respect to the Loan REMIC Regular Interest for such Interest Accrual
Period, calculated without regard to this proviso, plus (T) a fraction
(expressed as a percentage), the numerator of which is equal to 12 times
any Interest Reserve Amount(s) for the 00 Xxxx Xxx Xxxxxx Mortgage Loan,
any Replacement Mortgage Loan that is substituted for the 00 Xxxx Xxx
Xxxxxx Mortgage Loan or any successor REO Loan with respect to the
foregoing, that is or are to be transferred from the Interest Reserve
-97-
Account to the Distribution Account pursuant to SECTION 3.05(c) for
distribution on the related Distribution Date, and the denominator of which
is equal to the Uncertificated Principal Balance of the Loan REMIC Regular
Interest outstanding immediately prior to the related Distribution Date.
(g) The Loan REMIC Regular Interest shall bear interest, and such
interest shall commence accruing on May 1, 2002. Such interest shall be
calculated on a 30/360 Basis and, during each Interest Accrual Period, shall
accrue at the Loan REMIC Remittance Rate with respect to the Loan REMIC Regular
Interest for such Interest Accrual Period on the Uncertificated Principal
Balance of the Loan REMIC Regular Interest outstanding immediately prior to the
related Distribution Date. The total amount of such interest accrued with
respect to the Loan REMIC Regular Interest during each Interest Accrual Period
(herein referred to as the "Interest Accrual Amount" with respect to the Loan
REMIC Regular Interest for such Interest Accrual Period) shall equal 1/12 of the
product of (i) the Loan REMIC Remittance Rate with respect to the Loan REMIC
Regular Interest for such Interest Accrual Period, multiplied by (ii) the
Uncertificated Principal Balance of the Loan REMIC Regular Interest outstanding
immediately prior to the related Distribution Date. The portion of the Interest
Accrual Amount with respect to the Loan REMIC Regular Interest for any Interest
Accrual Period that shall be distributable to REMIC I, as the holder of the Loan
REMIC Regular Interest, on the related Distribution Date pursuant to
SECTION 4.01(m), shall be an amount (herein referred to as the "CURRENT INTEREST
DISTRIBUTION AMOUNT" with respect to the Loan REMIC Regular Interest for the
related Distribution Date) equal to (i) the Interest Accrual Amount with respect
to the Loan REMIC Regular Interest for the related Interest Accrual Period,
reduced (to not less than zero) by (ii) the portion of any Net Aggregate
Prepayment Interest Shortfall for such Distribution Date that is attributable to
the 00 Xxxx Xxx Xxxxxx Mortgage Loan or any Replacement Mortgage Loan that is
substituted for the 00 Xxxx Xxx Xxxxxx Mortgage Loan. If the entire Current
Interest Distribution Amount with respect to the Loan REMIC Regular Interest for
any Distribution Date is not deemed distributed to REMIC I, as the holder of the
Loan REMIC Regular Interest, on such Distribution Date pursuant to
SECTION 4.01(m), then the unpaid portion of such Current Interest Distribution
Amount shall be added to, and be payable as part of, the Carryforward Interest
Distribution Amount with respect to the Loan REMIC Regular Interest for future
Distribution Dates. The "CARRYFORWARD INTEREST DISTRIBUTION AMOUNT" with respect
to the Loan REMIC Regular Interest for any Distribution Date shall be an amount
equal to the excess, if any, of (i) all Current Interest Distribution Amounts
with respect to the Loan REMIC Regular Interest for all prior Distribution
Dates, if any, over (ii) the total amount of interest deemed distributed to
REMIC I with respect to the Loan REMIC Regular Interest on all such prior
Distribution Dates, if any, pursuant to SECTION 4.01(m).
(h) Solely for purposes of satisfying Treasury regulation
section 1.860G-1(a)(4)(iii), the Latest Possible Maturity Date for the Loan
REMIC Regular Interest shall be the Rated Final Distribution Date.
(i) The Loan REMIC Residual Interest shall not have a principal
balance and shall not bear interest.
-98-
SECTION 2.11. Conveyance of the Loan REMIC Regular Interest;
Acceptance of the Loan REMIC Regular Interest by
Trustee.
The Depositor, as of the Closing Date, and concurrently with the
execution and delivery of this Agreement, does hereby assign without recourse
all of its right, title and interest in and to the Loan REMIC Regular Interest
to the Trustee for the benefit of the Holders of the REMIC III Regular Interest
Certificates and the Class R Certificates. The Trustee acknowledges the
assignment to it of the Loan REMIC Regular Interest and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Holders of the REMIC III Regular Interest Certificates and the Class
R Certificates.
SECTION 2.12. Creation of REMIC I; Issuance of the REMIC I Regular
Interests and the REMIC I Residual Interest; Certain
Matters Involving REMIC I.
(a) It is the intention of the parties hereto that the following
segregated pool of assets constitute a REMIC for federal income tax purposes
and, further, that such segregated pool of assets be designated as "REMIC I":
(i) the Mortgage Loans that are from time to time subject to this Agreement
(other than the Mortgage Loan(s) held by the Loan REMIC), together with (A) all
payments under and proceeds of such Mortgage Loans received after the Closing
Date or, in the case of any such Mortgage Loan that is a Replacement Mortgage
Loan, after the related date of substitution (other than scheduled payments of
interest and principal due on or before the respective Due Dates for such
Mortgage Loans in May 2002 or, in the case of any such Mortgage Loan that is a
Replacement Mortgage Loan, on or before the related date of substitution, and
exclusive of any such amounts that constitute Excess Servicing Fees and/or
Post-ARD Additional Interest), and (B) all rights of the holder of such Mortgage
Loans under the related Mortgage Loan Documents and in and to any related
Additional Collateral; (ii) any REO Property acquired in respect of any Mortgage
Loan (other than a Mortgage Loan held by the Loan REMIC); (iii) such funds and
assets as from time to time are deposited in the Collection Accounts, the
Distribution Account, the Interest Reserve Account, the Excess Liquidation
Proceeds Account and, if established, the REO Accounts (exclusive of any such
amounts that constitute Excess Servicing Fees and/or Post-ARD Additional
Interest, and further exclusive of any such amounts that are held as part of the
Loan REMIC); (iv) the rights of the Depositor under the respective Mortgage Loan
Purchase Agreements; (v) the rights of the Trustee under the Column Performance
Guarantee, the NCBCC Performance Guarantee and the NCBFSB Performance Guarantee
(other than with respect to the Mortgage Loan(s) held by the Loan REMIC); and
(vi) the Loan REMIC Regular Interest and all payments under and proceeds of the
Loan REMIC Regular Interest received after the Closing Date. The Closing Date is
hereby designated as the "STARTUP DAY" of REMIC I within the meaning of Section
860G(a)(9) of the Code.
(b) Concurrently with the assignment to the Trustee of the
Original Mortgage Loans (other than the 00 Xxxx Xxx Xxxxxx Mortgage Loan) and
certain related assets, pursuant to SECTION 2.01(b), and of the Loan REMIC
Regular Interest, pursuant to SECTION 2.11, and in exchange therefor, the
REMIC I Regular Interests and the REMIC I Residual Interest shall be issued. Two
separate REMIC I Regular Interests shall be issued with respect to each Original
Mortgage Loan that is a Specially Designated Co-op Mortgage Loan, a single
separate REMIC I Regular Interest shall be issued with respect to the Loan REMIC
Regular Interest (and, accordingly, the 00 Xxxx Xxx Xxxxxx Mortgage Loan) and a
single separate REMIC I Regular Interest shall be issued with respect to each
other Original
-99-
Mortgage Loan. For purposes of this Agreement: (i) the REMIC I Regular Interest
issued with respect to the Loan REMIC Regular Interest shall relate to the Loan
REMIC Regular Interest, to the Mortgage Loan(s) held by the Loan REMIC and to
each REO Loan deemed outstanding with respect to an REO Property held by the
Loan REMIC; and (ii) each other REMIC I Regular Interest shall relate to the
Original Mortgage Loan in respect of which it was issued, to each Replacement
Mortgage Loan (if any) substituted for such Original Mortgage Loan, and to each
REO Loan deemed outstanding with respect to any REO Property acquired in respect
of such Original Mortgage Loan or any such Replacement Mortgage Loan. Neither
the REMIC I Residual Interest nor any of the REMIC I Regular Interests shall be
certificated. The REMIC I Regular Interests and the REMIC I Residual Interest
shall collectively constitute the entire beneficial ownership of REMIC I.
(c) The REMIC I Regular Interests shall constitute the "regular
interests" (within the meaning of Section 860G(a)(1) of the Code), and the REMIC
I Residual Interest shall constitute the sole "residual interest" (within the
meaning of Section 860G(a)(2) of the Code), in REMIC I. None of the parties
hereto, to the extent it is within the control thereof, shall create or permit
the creation of any other "interests" in REMIC I (within the meaning of Treasury
regulation section 1.860D-1(b)(1)).
(d) One of the REMIC I Regular Interests that relates to each
Original Mortgage Loan that is a Specially Designated Co-op Mortgage Loan shall
be a "Group PB REMIC I Regular Interest", and the other REMIC I Regular Interest
that relates to such Original Mortgage Loan shall be a "Group A-Y REMIC I
Regular Interest". The sole REMIC I Regular Interest that relates to each
Original Mortgage Loan that is not a Specially Designated Co-op Mortgage Loan,
including the sole REMIC I Regular Interest that relates to the Loan REMIC
Regular Interest (and, accordingly, the 00 Xxxx Xxx Xxxxxx Mortgage Loan), shall
be a "Group PB REMIC I Regular Interest". The designation for each Group PB
REMIC I Regular Interest shall be the identification number for the related
Original Mortgage Loan set forth in the Mortgage Loan Schedule preceded by
"PB-". The designation for each Group A-Y REMIC I Regular Interest shall be the
identification number for the related Original Mortgage Loan set forth in the
Mortgage Loan Schedule preceded by "A-Y-".
(e) Each Group PB REMIC I Regular Interest shall have an
Uncertificated Principal Balance. As of the Closing Date, the Uncertificated
Principal Balance of the Group PB REMIC I Regular Interest issued in respect of
the Loan REMIC Regular Interest shall equal the then Uncertificated Principal
Balance of the Loan REMIC Regular Interest and the Uncertificated Principal
Balance of each other Group PB REMIC I Regular Interest shall equal the Cut-off
Date Principal Balance of the related Original Mortgage Loan (as specified in
the Mortgage Loan Schedule). On each Distribution Date, the Uncertificated
Principal Balance of each Group PB REMIC I Regular Interest shall be permanently
reduced by any distributions of principal deemed made with respect to such
REMIC I Regular Interest on such Distribution Date pursuant to SECTION 4.01(l)
and, further, by any Unfunded Principal Balance Reduction made with respect to
such REMIC I Regular Interest on such Distribution Date pursuant to
SECTION 4.04(c). Except as provided in the preceding sentence, the
Uncertificated Principal Balance of each Group PB REMIC I Regular Interest shall
not otherwise be increased or reduced. Deemed distributions to REMIC II in
reimbursement of Unfunded Principal Balance Reductions with respect to a Group
PB REMIC I Regular Interest shall not constitute deemed distributions of
principal and shall not result in any reduction of the Uncertificated Principal
Balance of such REMIC I Regular Interest.
-100-
The Group A-Y REMIC I Regular Interests shall not have principal
balances. For purposes of accruing interest, however, each Group A-Y REMIC I
Regular Interest shall have an Uncertificated Notional Amount that is, as of any
date of determination, equal to the then total Stated Principal Balance of the
related Mortgage Loan(s) and/or REO Loan(s).
(f) Each REMIC I Regular Interest shall have a REMIC I Remittance
Rate.
With respect to the Group PB REMIC I Regular Interest issued in
respect of the Loan REMIC Regular Interest, the REMIC I Remittance Rate for any
Interest Accrual Period shall equal the Loan REMIC Remittance Rate in respect of
the Loan REMIC Regular Interest for such Interest Accrual Period. The REMIC I
Remittance Rate with respect to any other particular Group PB REMIC I Regular
Interest for any Interest Accrual Period shall be calculated as follows:
(i) if, as of the Closing Date, the related Original Mortgage Loan
bears or bore, as the case may be, interest calculated on a 30/360 Basis,
then the REMIC I Remittance Rate with respect to the subject Group PB
REMIC I Regular Interest for any Interest Accrual Period shall equal the
Net Mortgage Rate in effect for the related Original Mortgage Loan as of
the Closing Date (reduced by the related Class A-Y Strip Rate if such
Original Mortgage Loan is or was, as the case may be, a Specially
Designated Co-op Mortgage Loan); and
(ii) if, as of the Closing Date, the related Original Mortgage Loan
bears or bore, as the case may be, interest calculated on an Actual/360
Basis, then the REMIC I Remittance Rate with respect to the subject REMIC I
Regular Interest for any Interest Accrual Period shall (subject to
adjustment as provided below in this CLAUSE (ii)) equal the product of (A)
a fraction (expressed as a percentage), the numerator of which is the
number of days in such Interest Accrual Period, and the denominator of
which is 30, multiplied by (B) the Net Mortgage Rate in effect for the
related Original Mortgage Loan as of the Closing Date (reduced by the
related Class A-Y Strip Rate if such Original Mortgage Loan is or was, as
the case may be, a Specially Designated Co-op Mortgage Loan); PROVIDED
that, in the case of a REMIC I Regular Interest that corresponds to an
Interest Reserve Loan, if the subject Interest Accrual Period occurs during
the month of January of 2003 or any year thereafter or during the month of
December of 2002 or any year thereafter that does not immediately precede a
leap year, the REMIC I Remittance Rate with respect to such REMIC I Regular
Interest for such Interest Accrual Period shall equal (M) the REMIC I
Remittance Rate with respect to such REMIC I Regular Interest for such
Interest Accrual Period, calculated without regard to this proviso, MINUS
(N) a fraction (expressed as a percentage), the numerator of which is equal
to 12 times the related Interest Reserve Amount that is to be transferred
from the Distribution Account to the Interest Reserve Account on the
related Distribution Date in accordance with SECTION 3.04(c), and the
denominator of which is equal to the Uncertificated Principal Balance of
such REMIC I Regular Interest outstanding immediately prior to the related
Distribution Date; and, PROVIDED, FURTHER, that, in the case of a REMIC I
Regular Interest that corresponds to an Interest Reserve Loan, if the
subject Interest Accrual Period occurs during the month of February of 2003
or any year thereafter, the REMIC I Remittance Rate with respect to such
REMIC I Regular Interest for such Interest Accrual Period shall equal (S)
the REMIC I Remittance Rate with respect to such REMIC I Regular Interest
for such Interest Accrual Period, calculated without regard to this
proviso, PLUS (T) a fraction (expressed as a percentage), the numerator of
which is equal to 12 times any related Interest Reserve Amount(s) to be
transferred from the Interest Reserve Account to the Distribution
-101-
Account pursuant to SECTION 3.05(c) for distribution on the related
Distribution Date, and the denominator of which is equal to the
Uncertificated Principal Balance of such REMIC I Regular Interest
outstanding immediately prior to the related Distribution Date.
The REMIC I Remittance Rate with respect to any particular Group A-Y
REMIC I Regular Interest for any Interest Accrual Period shall be calculated as
follows:
(i) if, as of the Closing Date, the related Original Mortgage Loan
bears or bore, as the case may be, interest calculated on a 30/360 Basis,
then the REMIC I Remittance Rate with respect to the subject Group A-Y
REMIC I Regular Interest for any Interest Accrual Period shall equal the
Class A-Y Strip Rate for such Original Mortgage Loan; and
(ii) if, as of the Closing Date, the related Original Mortgage Loan
bears or bore, as the case may be, interest calculated on an Actual/360
Basis, then the REMIC I Remittance Rate with respect to the subject Group
A-Y REMIC I Regular Interest for any Interest Accrual Period shall equal
the product of (A) the Class A-Y Strip Rate for such Original Mortgage
Loan, multiplied by (B) a fraction, the numerator of which is the number of
days in such Interest Accrual Period, and the denominator of which is 30.
(g) Each REMIC I Regular Interest shall bear interest, and such
interest shall commence accruing on May 1, 2002. In the case of each REMIC I
Regular Interest, such interest shall be calculated on a 30/360 Basis and,
during each Interest Accrual Period, shall accrue at the REMIC I Remittance Rate
with respect to such REMIC I Regular Interest for such Interest Accrual Period
on the Uncertificated Principal Balance (or, in the case of a Group A-Y REMIC I
Regular Interest, the Uncertificated Notional Amount) of such REMIC I Regular
Interest outstanding immediately prior to the related Distribution Date. The
total amount of such interest accrued with respect to each REMIC I Regular
Interest during each Interest Accrual Period (herein referred to as the
"INTEREST ACCRUAL AMOUNT" with respect to such REMIC I Regular Interest for such
Interest Accrual Period) shall equal 1/12 of the product of (i) the REMIC I
Remittance Rate with respect to such REMIC I Regular Interest for such Interest
Accrual Period, multiplied by (ii) the Uncertificated Principal Balance (or, in
the case of a Group A-Y REMIC I Regular Interest, the Uncertificated Notional
Amount) of such REMIC I Regular Interest outstanding immediately prior to the
related Distribution Date. The portion of the Interest Accrual Amount with
respect to any REMIC I Regular Interest for any Interest Accrual Period that
shall be distributable to REMIC II, as the holder of such REMIC I Regular
Interest, on the related Distribution Date pursuant to SECTION 4.01(l), shall be
an amount (herein referred to as the "CURRENT INTEREST DISTRIBUTION Amount" with
respect to such REMIC I Regular Interest for the related Distribution Date)
equal to (i) the Interest Accrual Amount with respect to such REMIC I Regular
Interest for the related Interest Accrual Period, reduced (to not less than
zero) by (ii) the portion of any Net Aggregate Prepayment Interest Shortfall for
such Distribution Date that is allocable to such REMIC I Regular Interest. For
purposes of the foregoing, the Net Aggregate Prepayment Interest Shortfall, if
any, for each Distribution Date shall be allocated among all the REMIC I Regular
Interests on a PRO RATA basis in accordance with their respective Interest
Accrual Amounts for the related Interest Accrual Period. If the entire Current
Interest Distribution Amount with respect to any REMIC I Regular Interest for
any Distribution Date is not deemed distributed to REMIC II, as the holder of
such REMIC I Regular Interest, on such Distribution Date pursuant to SECTION
4.01(l), then the unpaid portion of such Current Interest Distribution Amount
shall be added to, and be payable as part of, the Carryforward Interest
Distribution Amount with respect to such REMIC I Regular Interest for future
Distribution Dates. The
-102-
"CARRYFORWARD INTEREST DISTRIBUTION AMOUNT" with respect to any REMIC I Regular
Interest for any Distribution Date shall be an amount equal to the excess, if
any, of (i) all Current Interest Distribution Amounts with respect to such REMIC
I Regular Interest for all prior Distribution Dates, if any, over (ii) the total
amount of interest deemed distributed to REMIC II with respect to such REMIC I
Regular Interest on all such prior Distribution Dates, if any, pursuant to
SECTION 4.01(l).
(h) Solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the Latest Possible Maturity Date for each REMIC I Regular
Interest shall be the Rated Final Distribution Date.
(i) The REMIC I Residual Interest will not have a principal
balance and will not bear interest.
SECTION 2.13. Conveyance of the REMIC I Regular Interests;
Acceptance of the REMIC I Regular Interests by Trustee.
The Depositor, as of the Closing Date, and concurrently with the
execution and delivery of this Agreement, does hereby assign without recourse
all of its right, title and interest in and to the REMIC I Regular Interests to
the Trustee for the benefit of the Holders of the REMIC III Regular Interest
Certificates and the Class R Certificates. The Trustee acknowledges the
assignment to it of the REMIC I Regular Interests and declares that it holds and
will hold the same in trust for the exclusive use and benefit of all present and
future Holders of the REMIC III Regular Interest Certificates and the Class R
Certificates.
SECTION 2.14. Creation of REMIC II; Issuance of the REMIC II
Regular Interests and the REMIC II Residual Interest;
Certain Matters Involving REMIC II.
(a) It is the intention of the parties hereto that the segregated
pool of assets consisting of the REMIC I Regular Interests constitute a REMIC
for federal income tax purposes and, further, that such segregated pool of
assets be designated as "REMIC II". The Closing Date is hereby designated as the
"STARTUP DAY" of REMIC II within the meaning of Section 860G(a)(9) of the Code.
(b) Concurrently with the assignment of the REMIC I Regular
Interests to the Trustee pursuant to SECTION 2.13 and in exchange therefor, the
REMIC II Regular Interests and the REMIC II Residual Interest shall be issued.
There shall be nineteen (19) separate REMIC II Regular Interests. Neither the
REMIC II Residual Interest nor any of the REMIC II Regular Interests shall be
certificated. The REMIC II Regular Interests and the REMIC II Residual Interest
shall collectively constitute the entire beneficial ownership of REMIC II.
(c) The REMIC II Regular Interests shall constitute the "regular
interests" (within the meaning of Section 860G(a)(1) of the Code), and the
REMIC II Residual Interest shall constitute the sole "residual interest" (within
the meaning of Section 860G(a)(2) of the Code), in REMIC II. None of the parties
hereto, to the extent it is within the control thereof, shall create or permit
the creation of any other "interests" in REMIC II (within the meaning of
Treasury regulation section 1.860D-1(b)(1)).
-103-
(d) The REMIC II Regular Interests will have the following
respective alphabetic or alphanumeric designations: "A-Y", "A-1", "X-0",
"X-0-0", "X-0-0", "X", "C-1", "C-2", "D", "E", "F", "G", "H", "J", "K", "L",
"M", "N" and "O".
(e) Each Group XX XXXXX XX Regular Interest shall have an
Uncertificated Principal Balance. The following table sets forth for each Group
XX XXXXX XX Regular Interest the initial Uncertificated Principal Balance
thereof:
DESIGNATION OF GROUP PB INITIAL UNCERTIFICATED
REMIC II REGULAR INTEREST PRINCIPAL BALANCE
------------------------- -----------------
A-1 $ 59,040,000
A-2 $ 116,844,000
A-3--1 $ 73,398,000
A-3--2 $ 499,000,000
B $ 34,430,000
C-1 $ 15,000,000
C-2 $ 14,840,000
D $ 9,181,000
E $ 11,477,000
F $ 13,722,000
G $ 10,329,000
H $ 11,477,000
J $ 12,624,000
K $ 4,591,000
L $ 4,590,000
M $ 9,182,000
N $ 2,295,000
O $ 16,067,952
On each Distribution Date, the Uncertificated Principal Balance of
each Group XX XXXXX XX Regular Interest shall be permanently reduced by any
distributions of principal deemed made with respect to such REMIC II Regular
Interest on such Distribution Date pursuant to SECTION 4.01(k) and, further, by
any Unfunded Principal Balance Reduction made with respect to such REMIC II
Regular Interest on such Distribution Date pursuant to SECTION 4.04(b). Except
as provided in the preceding sentence, the Uncertificated Principal Balance, of
each Group XX XXXXX XX Regular Interest shall not otherwise be increased or
decreased. Deemed distributions to REMIC III in reimbursement of Unfunded
Principal Balance Reductions with respect to a Group XX XXXXX XX Regular
Interest, shall not constitute deemed distributions of principal and shall not
result in any reduction of the Uncertificated Principal Balance of such REMIC II
Regular Interest.
REMIC II Regular Interest A-Y shall not have a principal balance. For
purposes of accruing interest, however, REMIC II Regular Interest A-Y shall be
deemed to have an Uncertificated Notional Amount that is, as of any date of
determination, equal to the total of the then Uncertificated Notional Amounts of
the Group A-Y REMIC I Regular Interests.
-104-
(f) Each REMIC II Regular Interest shall have or be deemed to have
a REMIC II Remittance Rate that, with respect to any Interest Accrual Period,
shall equal: (i) in the case of REMIC II Regular Interest A-Y, the weighted
average, expressed as a percentage and rounded to ten decimal places, of the
respective REMIC I Remittance Rates in effect for all the Group A-Y REMIC I
Regular Interests for such Interest Accrual Period, weighted on the basis of the
respective Uncertificated Notional Amounts of such REMIC I Regular Interests
outstanding immediately prior to the related Distribution Date; and (ii) in the
case of each other REMIC II Regular Interest, the weighted average, expressed as
a percentage and rounded to ten decimal places, of the respective REMIC I
Remittance Rates in effect for all the Group PB REMIC I Regular Interests for
such Interest Accrual Period, weighted on the basis of the respective
Uncertificated Principal Balances of such REMIC I Regular Interests outstanding
immediately prior to the related Distribution Date.
(g) Each REMIC II Regular Interest shall bear interest, and such
interest shall commence accruing on May 1, 2002. In the case of each REMIC II
Regular Interest, such interest shall be calculated on a 30/360 Basis and,
during each Interest Accrual Period, shall accrue at the REMIC II Remittance
Rate with respect to such REMIC II Regular Interest for such Interest Accrual
Period on the Uncertificated Principal Balance (or, in the case of REMIC II
Regular Interest A-Y, the Uncertificated Notional Amount) of such REMIC II
Regular Interest outstanding immediately prior to the related Distribution Date.
The total amount of such interest accrued with respect to each REMIC II Regular
Interest during each Interest Accrual Period (herein referred to as the
"INTEREST ACCRUAL AMOUNT" with respect to such REMIC II Regular Interest for
such Interest Accrual Period) shall equal 1/12 of the product of (i) the
REMIC II Remittance Rate with respect to such REMIC II Regular Interest for such
Interest Accrual Period, multiplied by (ii) the Uncertificated Principal Balance
(or, in the case of REMIC II Regular Interest A-Y, the Uncertificated Notional
Amount) of such REMIC II Regular Interest outstanding immediately prior to the
related Distribution Date.
The portion of the Interest Accrual Amount with respect to any
REMIC II Regular Interest for any Interest Accrual Period that shall be
distributable to REMIC III, as the holder of such REMIC II Regular Interest, on
the related Distribution Date pursuant to SECTION 4.01(k), shall be an amount
(herein referred to as the "CURRENT INTEREST DISTRIBUTION AMOUNT" with respect
to such REMIC II Regular Interest for the related Distribution Date) equal to
(i) the Interest Accrual Amount with respect to such REMIC II Regular Interest
for the related Interest Accrual Period, reduced (to not less than zero) by (ii)
the portion of any Net Aggregate Prepayment Interest Shortfall for such
Distribution Date that is allocable to such REMIC II Regular Interest. For
purposes of the foregoing, the Net Aggregate Prepayment Interest Shortfall, if
any, for each Distribution Date shall be allocated among all the REMIC II
Regular Interests on a PRO RATA basis in accordance with their respective
Interest Accrual Amounts for the related Interest Accrual Period. The Current
Interest Distribution Amount with respect to REMIC II Regular Interest A-Y for
any Distribution Date can also be expressed as 100% of the total Current
Interest Distribution Amount with respect to the Group A-Y REMIC I Regular
Interests for such Distribution Date.
If the entire Current Interest Distribution Amount with respect to any
REMIC II Regular Interest for any Distribution Date is not deemed distributed to
REMIC III, as the holder of such REMIC II Regular Interest, on such Distribution
Date pursuant to SECTION 4.01(k), then the unpaid portion of such Current
Interest Distribution Amount shall be added to, and be payable as part of, the
Carryforward Interest Distribution Amount with respect to such REMIC II Regular
Interest for future Distribution Dates. The "CARRYFORWARD INTEREST DISTRIBUTION
AMOUNT" with respect to any REMIC II Regular Interest
-105-
for any Distribution Date shall be an amount equal to the excess, if any, of (i)
all Current Interest Distribution Amounts with respect to such REMIC II Regular
Interest for all prior Distribution Dates, if any, over (ii) the total amount of
interest deemed distributed to REMIC III with respect to such REMIC II Regular
Interest on all such prior Distribution Dates, if any, pursuant to SECTION
4.01(k).
(h) Solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the Latest Possible Maturity Date for each REMIC II Regular
Interest shall be the Rated Final Distribution Date.
(i) The REMIC II Residual Interest shall not have a principal
balance and shall not bear interest.
SECTION 2.15. Conveyance of the REMIC II Regular Interests;
Acceptance of the REMIC II Regular Interests by
Trustee.
The Depositor, as of the Closing Date, and concurrently with the
execution and delivery of this Agreement, does hereby assign without recourse
all of its right, title and interest in and to the REMIC II Regular Interests to
the Trustee for the benefit of the Holders of the REMIC III Regular Interest
Certificates and the Class R Certificates. The Trustee acknowledges the
assignment to it of the REMIC II Regular Interests and declares that it holds
and will hold the same in trust for the exclusive use and benefit of all present
and future Holders of the REMIC III Regular Interest Certificates and the
Class R Certificates.
SECTION 2.16. Creation of REMIC III; Issuance of the REMIC III
Regular Interest Certificates, the Group A-X REMIC III
Regular Interests, the Group A-SP REMIC III Regular
Interests and the REMIC III Residual Interest; Certain
Matters Involving REMIC III.
(a) It is the intention of the parties hereto that the segregated
pool of assets consisting of the REMIC II Regular Interests constitute a REMIC
for federal income tax purposes and, further, that such segregated pool of
assets be designated as "REMIC III". The Closing Date is hereby designated as
the "STARTUP DAY" of REMIC III within the meaning of Section 860G(a)(9) of the
Code.
(b) Concurrently with the assignment of the REMIC II Regular
Interests to the Trustee pursuant to SECTION 2.15 and in exchange therefor, the
Group A-X REMIC III Regular Interests, the Group A-SP REMIC III Regular
Interests and the REMIC III Residual Interest shall be issued, and the Trustee
shall execute, and the Certificate Registrar shall authenticate and deliver, to
or upon the order of the Depositor, the REMIC III Regular Interest Certificates
in authorized denominations. There shall be twenty (20) Classes of REMIC III
Regular Interest Certificates. The Class A-X Certificates shall collectively
represent all of the Group A-X REMIC III Regular Interests, and the Class A-SP
Certificates shall collectively represent all of the Group A-SP REMIC III
Regular Interests. The REMIC III Residual Interest shall not be certificated.
The interests evidenced by the REMIC III Regular Interest Certificates, together
with the REMIC III Residual Interest, shall collectively constitute the entire
beneficial ownership of REMIC III.
(c) The respective Group A-X REMIC III Regular Interests, the
respective Group A-SP REMIC III Regular Interests and the respective interests
evidenced by the Class A-Y Certificates and the various Classes of the Principal
Balance Certificates shall constitute the "regular interests" (within
-106-
the meaning of Section 860G(a)(1) of the Code), and the REMIC III Residual
Interest shall constitute the sole "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code), in REMIC III. None of the parties hereto, to
the extent it is within the control thereof, shall create or permit the creation
of any other "interests" in REMIC III (within the meaning of Treasury regulation
section 1.860D-1(b)(1)).
(d) The twenty (20) Classes of the REMIC III Regular Interest
Certificates will have the following respective alphabetic or alphanumeric class
designations: "A-X", "A-Y", "A-SP", "X-0", "X-0", "X-0", "X", "C-1", "C-2", "D",
"E", "F", "G", "H", "J", "K", "L", "M", "N" and "O".
The Group A-X REMIC III Regular Interests will have the following
respective alphabetic or alphanumeric designations: "A-X-A-1", "A-X-A-2",
"A-X-A-3-1", "A-X-A-3-2", "A-X-B", "A-X-C-1", "A-X-C-2", "A-X-D", "A-X-E",
"A-X-F", "A-X-G", "A-X-H", "A-X-J", "A-X-K", "A-X-L", "A-X-M", "A-X-N" and
"A-X-O". The Group A-X REMIC III Regular Interests shall constitute the
respective Components of the Class A-X Certificates.
The Group A-SP REMIC III Regular Interests will have the following
respective alphabetic or alphanumeric designations: "A-SP-A-3", "A-SP-B",
"A-SP-C-1", "A-SP-C-2" and "A-SP-D". The Group A-SP REMIC III Regular Interests
shall constitute the respective Components of the Class A-SP Certificates.
(e) Each Class of Principal Balance Certificates shall have a
Class Principal Balance. The following table sets forth for each Class of
Principal Balance Certificates the initial Class Principal Balance thereof:
CLASS INITIAL CLASS
DESIGNATION PRINCIPAL BALANCE
----------- -----------------
Class A-1 $ 59,040,000
Class A-2 $ 116,844,000
Class A-3 $ 572,398,000
Class B $ 34,430,000
Class C-1 $ 15,000,000
Class C-2 $ 14,840,000
Class D $ 9,181,000
Class E $ 11,477,000
Class F $ 13,772,000
Class G $ 10,329,000
Class H $ 11,477,000
Class J $ 12,624,000
Class K $ 4,591,000
Class L $ 4,590,000
Class M $ 9,182,000
Class N $ 2,295,000
Class O $ 16,067,952
On each Distribution Date, the Class Principal Balance of each Class
of Principal Balance Certificates shall be permanently reduced by any
distributions of principal made with respect to such
-107-
Class of Certificates on such Distribution Date pursuant to SECTION 4.01(a) or
SECTION 4.01(b), as applicable, and, further, by any Unfunded Principal Balance
Reduction made with respect to such Class of Certificates on such Distribution
Date pursuant to SECTION 4.04(a). Except as provided in the preceding sentence,
the Class Principal Balance of each Class of Principal Balance Certificates
shall not otherwise be increased or reduced. Distributions to the Holders of a
Class of Principal Balance Certificates in reimbursement of any Unfunded
Principal Balance Reductions with respect to such Class of Certificates shall
not constitute distributions of principal and shall not result in any reduction
of the related Class Principal Balance.
The Interest Only Certificates shall not have principal balances. For
purposes of accruing interest, however, each Class of Interest Only Certificates
shall have or be deemed to have a Class Notional Amount that is, as of any date
of determination, equal to: (i) in the case of the Class A-X Certificates, the
total of the then Uncertificated Principal Balances of all the Group XX XXXXX XX
Regular Interests; (ii) in the case of the Class A-Y Certificates, the then
Uncertificated Notional Amount of REMIC III Regular Interest A-Y; and (iii) in
the case of the Class A-SP Certificates, the total of the then Uncertificated
Principal Balances of REMIC II Regular Interest A-3, REMIC II Regular Interest
B, REMIC II Regular Interest C-1, REMIC II Regular Interest C-2 and REMIC II
Regular Interest D.
None of the Group A-X REMIC III Regular Interests or the Group A-SP
REMIC III Regular Interests shall have a principal balance. For purposes of
accruing interest, however, each of the Group A-X REMIC III Regular Interests
and the Group A-SP REMIC III Regular Interest shall have a Component Notional
Amount that is, as of any date of determination, equal to the Uncertificated
Principal Balance of its Corresponding Group XX XXXXX XX Regular Interest.
(f) Each Class of REMIC III Regular Interest Certificates shall
have or be deemed to have a Pass-Through Rate, and each of the Group A-X REMIC
III Regular Interests and the Group A-SP REMIC III Regular Interests shall have
a REMIC III Remittance Rate.
Each Class of Principal Balance Certificates identified in the
following table shall, for each and every Interest Accrual Period, have the
fixed Pass-Through Rates set forth next to its alphabetic or alphanumeric, as
the case may be, class designation:
CLASS PASS-THROUGH RATE
----- -----------------
A-1 4.637% per annum
A-2 5.939% per annum
A-3 6.133% per annum
B 6.256% per annum
The Pass-Through Rate for the Class C-1 Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.376% per annum and (ii) the REMIC
II Remittance Rate with respect to REMIC II Regular Interest C-1 for such
Interest Accrual Period.
The Pass-Through Rate for the Class C-2 Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.816% per annum and (ii) the REMIC
II Remittance Rate with respect to REMIC II Regular Interest C-2 for such
Interest Accrual Period.
-108-
The Pass-Through Rate for the Class D Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.455% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest D for such
Interest Accrual Period.
The Pass-Through Rate for the Class E Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.671% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest E for such
Interest Accrual Period.
The Pass-Through Rate for the Class F Certificates for any Interest
Accrual Period shall equal the lesser of (i) 7.007% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest F for such
Interest Accrual Period.
The Pass-Through Rate for the Class G Certificates for any Interest
Accrual Period shall equal the lesser of (i) 7.341% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest G for such
Interest Accrual Period.
The Pass-Through Rate for the Class H Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest H for such
Interest Accrual Period.
The Pass-Through Rate for the Class J Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest J for such
Interest Accrual Period.
The Pass-Through Rate for the Class K Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest K for such
Interest Accrual Period.
The Pass-Through Rate for the Class L Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest L for such
Interest Accrual Period.
The Pass-Through Rate for the Class M Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest M for such
Interest Accrual Period.
The Pass-Through Rate for the Class N Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest N for such
Interest Accrual Period.
The Pass-Through Rate for the Class O Certificates for any Interest
Accrual Period shall equal the lesser of (i) 6.122% per annum and (ii) the
REMIC II Remittance Rate with respect to REMIC II Regular Interest O for such
Interest Accrual Period.
The Pass-Through Rate for the Class A-X Certificates for any Interest
Accrual Period shall be deemed to equal the weighted average, expressed as a
percentage and rounded to ten decimal places, of the respective REMIC III
Remittance Rates in effect for all of the Group A-X REMIC III Regular Interests
for such Interest Accrual Period, weighted on the basis of the respective
Component
-109-
Notional Amounts of the Group A-X REMIC III Regular Interests immediately prior
to the related Distribution Date.
The REMIC III Remittance Rate for any of REMIC III Regular Interest
A-X-A-1, REMIC III Regular Interest A-X-A-2, REMIC III Regular Interest A-X-E,
REMIC III Regular Interest A-X-F, REMIC III Regular Interest A-X-G, REMIC III
Regular Interest A-X-H, REMIC III Regular Interest A-X-J, REMIC III Regular
Interest A-X-K, REMIC III Regular Interest A-X-L, REMIC III Regular Interest
A-X-M, REMIC III Regular Interest A-X-N and REMIC III Regular Interest A-X-O for
any Interest Accrual Period shall equal the excess, if any, of (i) the REMIC II
Remittance Rate in effect during such Interest Accrual Period for the
Corresponding Group XX XXXXX XX Regular Interest in respect of such Group A-X
REMIC III Regular Interest, over (ii) the Adjusted REMIC II Remittance Rate in
effect during such Interest Accrual Period for the Corresponding Group XX
XXXXX XX Regular Interest in respect of such Group A-X REMIC III Regular
Interest.
The REMIC III Remittance Rate for any of REMIC III Regular Interest
A-X-A-3, REMIC III Regular Interest A-X-B, REMIC III Regular Interest A-X-C-1,
REMIC III Regular Interest A-X-C-2 and REMIC III Regular Interest A-X-D for any
Interest Accrual Period shall be as follows:
(i) if such Interest Accrual Period occurs from and including
May 2002 through and including April 2009, a rate per annum equal to the
excess, if any, of (A) the REMIC II Remittance Rate in effect during such
Interest Accrual Period for the Corresponding Group XX XXXXX XX Regular
Interest in respect of such Group A-X REMIC III Regular Interest, over (B)
the Reference Rate for the related Distribution Date; and
(ii) if such Interest Accrual Period occurs after April 2009, a
rate per annum equal to the excess, if any, of (A) the REMIC II Remittance
Rate in effect during such Interest Accrual Period for the Corresponding
Group XX XXXXX XX Regular Interest in respect of such Group A-X REMIC III
Regular Interest, over (B) the Adjusted REMIC II Remittance Rate in effect
during such Interest Accrual Period for the Corresponding Group XX XXXXX XX
Regular Interest in respect of such Group A-X REMIC III Regular Interest.
The Pass-Through Rate for the Class A-Y Certificates for any Interest
Accrual Period shall be deemed to equal the REMIC II Remittance Rate in effect
for REMIC II Regular Interest A-Y for such Interest Accrual Period.
The Pass-Through Rate for the Class A-SP Certificates for any Interest
Accrual Period shall be deemed to equal the weighted average, expressed as a
percentage and rounded to ten decimal places, of the respective REMIC III
Remittance Rates in effect for all of the Group A-SP REMIC III Regular Interests
for such Interest Accrual Period, weighted on the basis of the respective
Component Notional Amounts of the Group A-SP REMIC III Regular Interests
immediately prior to the related Distribution Date.
The REMIC III Remittance Rate for any of the Group A-SP REMIC III
Regular Interests for any Interest Accrual Period shall be as follows:
(i) if such Interest Accrual Period occurs from and including
May 2002 through and including April 2009, a rate per annum equal to the
excess, if any, of (A) the lesser of (1) the Reference Rate for the related
Distribution Date and (2) the REMIC II Remittance Rate in effect
-110-
during such Interest Accrual Period for the Corresponding Group XX XXXXX XX
Regular Interest in respect of such Group A-SP REMIC III Regular Interest,
over (B) the Adjusted REMIC II Remittance Rate in effect during such
Interest Accrual Period for the Corresponding Group XX XXXXX XX Regular
Interest in respect of such Group A-SP REMIC III Regular Interest; and
(ii) if such Interest Accrual Period occurs after April 2009, 0%
per annum.
(g) Each Class of REMIC III Regular Interest Certificates shall
bear interest, and such interest shall commence accruing on May 1, 2002. In the
case of each Class of REMIC III Regular Interest Certificates, such interest
shall be calculated on a 30/360 Basis and, during each Interest Accrual Period,
shall accrue at the Pass-Through Rate with respect to such Class of Certificates
for such Interest Accrual Period on the Class Principal Balance (or, in the case
of a Class of Interest Only Certificates, the Class Notional Amount) of such
Class of Certificates outstanding immediately prior to the related Distribution
Date. Accordingly, the total amount of such interest accrued with respect to any
Class of REMIC III Regular Interest Certificates during any Interest Accrual
Period (herein referred to as the "INTEREST ACCRUAL AMOUNT" with respect to such
Class of Certificates for such Interest Accrual Period) shall equal 1/12 of the
product of (i) the Pass-Through Rate with respect to such Class of Certificates
for such Interest Accrual Period, multiplied by (ii) the Class Principal Balance
(or, in the case of a Class Interest Only Certificates, the Class Notional
Amount) of such Class of Certificates outstanding immediately prior to the
related Distribution Date. The portion of the Interest Accrual Amount with
respect to the Class A-X Certificates or the Class A-SP Certificates for any
Interest Accrual Period that is attributable to any particular Component of such
Class of Certificates shall be an amount (herein referred to as the "INTEREST
ACCRUAL AMOUNT" with respect to such Component for such Interest Accrual Period)
equal to 1/12 of the product of (i) the REMIC III Remittance Rate with respect
to such Component for such Interest Accrual Period, multiplied by (ii) the
Component Notional Amount of such Component immediately prior to the related
Distribution Date.
The Class A-SP Certificates and the respective Group A-SP REMIC III
Regular Interests shall cease to accrue interest after the end of the April 2009
Interest Accrual Period.
The portion of the Interest Accrual Amount with respect to any Class
of REMIC III Regular Interest Certificates for any Interest Accrual Period that
shall be distributable to the Holders of such Class of Certificates on the
related Distribution Date pursuant to SECTION 4.01(a) or SECTION 4.01(b), as
applicable, shall be an amount (herein referred to as the "CURRENT INTEREST
DISTRIBUTION AMOUNT" with respect to such Class of Certificates for the related
Distribution Date) equal to (i) the Interest Accrual Amount with respect to such
Class of Certificates for the related Interest Accrual Period, reduced (to not
less than zero) by (ii) the portion of any Net Aggregate Prepayment Interest
Shortfall for such Distribution Date that is allocable to such Class of
Certificates. For purposes of the foregoing, the Net Aggregate Prepayment
Interest Shortfall, if any, for each Distribution Date shall be allocated among
all the Classes of REMIC III Regular Interest Certificates on a PRO RATA basis
in accordance with their respective Interest Accrual Amounts for the related
Interest Accrual Period. The portion of the Current Interest Distribution Amount
with respect to the Class A-X Certificates or the Class A-SP Certificates for
any Distribution Date that is attributable to any particular Component of such
Class of Certificates shall be an amount (herein referred to as the "CURRENT
INTEREST DISTRIBUTION AMOUNT" with respect to such Component for such
Distribution Date) equal to (i) the Interest Accrual Amount with respect to such
Component for the related Interest Accrual Period, reduced (to not less than
zero) by (ii) such Component's share of the portion of any Net Aggregate
Prepayment Interest Shortfall for such
-111-
Distribution Date that is allocable to such Class of Certificates. For purposes
of the foregoing, any portion of the Net Aggregate Prepayment Interest Shortfall
for any Distribution Date that is allocated to the Class A-X Certificates or the
Class A-SP Certificates shall in turn be allocated among the respective
Components of such Class of Certificates on a PRO RATA basis in accordance with
their respective Interest Accrual Amounts for the related Interest Accrual
Period. The Current Interest Distribution Amount with respect to the Class A-Y
Certificates for any Distribution Date can also be expressed as 100% of the
Current Interest Distribution Amount with respect to REMIC II Regular Interest
A-Y for such Distribution Date.
If the entire Current Interest Distribution Amount with respect to any
Class of REMIC III Regular Interest Certificates for any Distribution Date is
not distributed to the Holders thereof on such Distribution Date pursuant to
SECTION 4.01(a) or SECTION 4.01(b), as applicable, then the unpaid portion of
such Current Interest Distribution Amount shall be added to, and be payable as
part of, the Carryforward Interest Distribution Amount with respect to such
Class of Certificates for future Distribution Dates. The "CARRYFORWARD INTEREST
DISTRIBUTION AMOUNT" with respect to any Class of REMIC III Regular Interest
Certificates for any Distribution Date shall be an amount equal to the excess,
if any, of (i) all Current Interest Distribution Amounts with respect to such
Class of Certificates for all prior Distribution Dates, if any, over (ii) the
total amount of interest distributed to the Holders of such Class of
Certificates on all such prior Distribution Dates, if any, pursuant to
SECTION 4.01(a) or SECTION 4.01(b), as applicable. The portion of the
Carryforward Interest Distribution Amount with respect to the Class A-X
Certificates or the Class A-SP Certificates for any Distribution Date that is
attributable to any particular Component of such Class of Certificates shall be
an amount (herein referred to as the "CARRYFORWARD INTEREST DISTRIBUTION AMOUNT"
with respect to such Component for such Distribution Date) equal to the excess,
if any, of (i) all Current Interest Distribution Amounts with respect to such
Component for all prior Distribution Dates, if any, over (ii) the total amount
of interest deemed distributed to the Holders of such Class of Certificates with
respect to such Component on all such prior Distribution Dates, if any, pursuant
to SECTION 4.01(a).
(h) Solely for purposes of satisfying Treasury regulation section
1.860G-1(a)(4)(iii), the Latest Possible Maturity Date for each Class of
Principal Balance Certificates, for the Class A-Y Certificates, for each
Component of the Class A-X Certificates and for each Component of the Class A-SP
Certificates shall be the Rated Final Distribution Date.
(i) The REMIC III Residual Interest shall not have a principal
balance and shall not bear interest.
SECTION 2.17. Acceptance of Grantor Trusts and the Paradise
Island Reserve Fund by Trustee; Issuance of the Class V
and Class R Certificates.
(a) It is the intention of the parties hereto that the segregated
pool of assets consisting of any collections of Post-ARD Additional Interest
received on the ARD Mortgage Loans constitute a Grantor Trust for federal income
tax purposes and, further, that such segregated pool of assets be designated as
"GRANTOR TRUST V". The Trustee, by its execution and delivery hereof,
acknowledges the assignment to it of the assets of Grantor Trust V and declares
that it holds and will hold such assets in trust for the exclusive use and
benefit of all present and future Holders of the Class V Certificates.
Concurrently with the assignment to it of the assets included in
Grantor Trust V, the Trustee shall execute, and the Certificate Registrar shall
authenticate and deliver, to or upon the order of the
-112-
Depositor, the Class V Certificates in authorized denominations evidencing the
entire beneficial ownership of Grantor Trust V. The rights of the Holders of the
Class V Certificates to receive distributions from the proceeds of
Grantor Trust V, and all ownership interests of such Holders in and to such
distributions, shall be as set forth in this Agreement.
(b) The Depositor, as of the Closing Date, and concurrently with
the execution and delivery of this Agreement, does hereby assign without
recourse all right, title and interest of the Depositor in and to the Loan REMIC
Residual Interest, the REMIC I Residual Interest, the REMIC II Residual Interest
and the REMIC III Residual Interest to the Trustee for the benefit of the
Holders of the Class R Certificates. It is the intention of the parties hereto
that the segregated pool of assets consisting of the Loan REMIC Residual
Interest, the REMIC I Residual Interest, the REMIC II Residual Interest and the
REMIC III Residual Interest constitute a Grantor Trust for federal income tax
purposes and, further, that such segregated pool of assets be designated as
"GRANTOR TRUST R". The Trustee, by its execution and delivery hereof,
acknowledges the assignment to it of the assets of Grantor Trust R and declares
that it holds and will hold such assets in trust for the exclusive use and
benefit of all present and future Holders of the Class R Certificates.
Concurrently with the assignment to it of the assets included in Grantor Trust
R, the Trustee shall execute, and the Certificate Registrar shall authenticate
and deliver, to or upon the order of the Depositor, the Class R Certificates in
authorized denominations evidencing the entire beneficial ownership of Grantor
Trust R. The rights of the Holders of the Class R Certificates to receive
distributions from the proceeds of Grantor Trust R, and all ownership interests
of such Holders in and to such distributions, shall be as set forth in this
Agreement.
(c) It is the intention of the parties hereto that the Paradise
Island Letter of Credit, any amounts received by the Trust Fund pursuant to a
draw on the Paradise Island Letter of Credit, the Paradise Island Special
Account and such funds and assets as from time to time are deposited in the
Paradise Island Special Account shall collectively constitute an "outside
reserve fund" within the meaning of Treasury regulation section 1.860G-2(h),
designated as the "PARADISE ISLAND RESERVE FUND". The Trustee, by execution and
delivery hereof, acknowledges the assignment to it of the assets of the Paradise
Island Reserve Fund and declares that it holds and will hold such assets,
through the General Master Servicer, in accordance with SECTION 3.19, in trust
and for the benefit of Certificateholders and Column, as their interests may
appear. Notwithstanding anything herein to the contrary, unless there is a
change in applicable law occurring after the date hereof, for all income and
franchise tax purposes, Column shall be treated and reported as the sole
beneficial owner of the Paradise Island Reserve Fund.
-113-
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
SECTION 3.01. General Provisions.
(a) The General Master Servicer shall be the Master Servicer with
respect to all the Trust Assets other than the Co-op Trust Assets and, as such,
subject to SECTION 3.21, shall service and administer such of the Trust Assets
(other than the Co-op Trust Assets) as constitute Performing Mortgage Loans and
shall continue to collect such information and prepare such reports to the
Trustee, and shall render such other incidental services, as shall be required
of such Master Servicer hereunder with respect to such of the Trust Assets
(other than the Co-op Trust Assets) as constitute Specially Serviced Mortgage
Loans and REO Properties. The Co-op Master Servicer shall be the Master Servicer
with respect to the Co-op Trust Assets and, as such, subject to SECTION 3.21,
shall service and administer such of the Co-op Trust Assets as constitute
Performing Mortgage Loans and shall continue to collect such information and
prepare such reports to the Trustee, and shall render such other incidental
services, as shall be required of such Master Servicer hereunder with respect to
such of the Co-op Trust Assets as constitute Specially Serviced Mortgage Loans
and REO Properties. The General Special Servicer shall be the Special Servicer
with respect to all the Trust Assets other than the Co-op Trust Assets and, as
such, subject to SECTION 3.21, shall service and administer such of the Trust
Assets (other than the Co-op Trust Assets) as constitute Specially Serviced
Mortgage Loans and REO Properties and shall render such incidental services as
are required of such Special Servicer with respect to such of the Trust Assets
(other than the Co-op Trust Assets) as constitute Performing Mortgage Loans. The
Co-op Special Servicer shall be the Special Servicer with respect to the Co-op
Trust Assets and, as such, subject to SECTION 3.21, shall service and administer
such of the Co-op Trust Assets as constitute Specially Serviced Mortgage Loans
and REO Properties and shall render such incidental services as are required of
such Special Servicer with respect to such of the Co-op Trust Assets as
constitute Performing Mortgage Loans.
(b) Each of the Master Servicers and the Special Servicers shall
service and administer the Mortgage Loans and any REO Properties that it is
obligated to service and administer pursuant to this Agreement, for the benefit
of the Certificateholders (as a collective whole), in accordance with: (i) any
and all applicable laws; (ii) the express terms of this Agreement and the
respective Mortgage Loan Documents; and (iii) to the extent consistent with the
foregoing, the Servicing Standard. Subject to the foregoing, each Master
Servicer and Special Servicer shall have full power and authority, acting alone
or through Sub-Servicers, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Master
Servicer (with respect to those Performing Mortgage Loans that it is obligated
to service and administer pursuant to this Agreement) and Special Servicer (with
respect to those Specially Serviced Mortgage Loans that it is obligated to
service and administer pursuant to this Agreement), in its own name or in the
name of the Trustee, is hereby authorized and empowered by the Trustee to
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them: (i) any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien created by the Mortgage
or other security document in the related Mortgage File on the related Mortgaged
Property and other related collateral; (ii) any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
-114-
partial or full defeasance, and all other comparable instruments; and (iii)
subject to SECTIONS 3.08 and 3.20, any and all assumptions, modifications,
waivers, substitutions, extensions, amendments and consents. Subject to
SECTION 3.10, the Trustee shall, at the written request of a Servicing Officer
of any Master Servicer or Special Servicer, furnish, or cause to be so
furnished, to such Master Servicer or Special Servicer, as the case may be, any
limited powers of attorney and other documents (each of which shall be prepared
by such Master Servicer or Special Servicer, as the case may be) necessary or
appropriate to enable it to carry out its servicing and administrative duties
hereunder; PROVIDED that the Trustee shall not be held liable for any misuse of
any such power of attorney by any Master Servicer or Special Servicer.
(c) The relationship of each of the Master Servicers and Special
Servicers to the Trustee and, unless they are the same Person, each other under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or, except as specifically
set forth herein, agent.
SECTION 3.02. Collection of Mortgage Loan Payments.
(a) The applicable Master Servicer, with respect to each
Performing Mortgage Loan, and the applicable Special Servicer, with respect to
each Specially Serviced Mortgage Loan, shall undertake reasonable efforts to
collect all payments called for under the terms and provisions of each Mortgage
Loan and, in connection therewith, shall follow such collection procedures as
are consistent with applicable law, the express terms of this Agreement and the
related Mortgage Loan Documents and, to the extent consistent with the
foregoing, the Servicing Standard; PROVIDED that none of the Master Servicers or
Special Servicers (other than the applicable Special Servicer) shall, with
respect to any ARD Mortgage Loan after its Anticipated Repayment Date, take any
enforcement action with respect to the payment of Post-ARD Additional Interest
(other than the making of requests for its collection), and the applicable
Special Servicer may do so only if (i) the taking of an enforcement action with
respect to the payment of other amounts due under such Mortgage Loan is, in the
reasonable judgment of the applicable Special Servicer, and without regard to
such Post-ARD Additional Interest, also necessary, appropriate and consistent
with the Servicing Standard or (ii) all other amounts due under such Mortgage
Loan have been paid, the payment of such Post-ARD Additional Interest has not
been forgiven in accordance with SECTION 3.20 and, in the reasonable judgment of
the applicable Special Servicer, 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 Advance
Interest. Consistent with the foregoing, the applicable Master Servicer, as to a
Performing Mortgage Loan, and the applicable Special Servicer, as to a Specially
Serviced Mortgage Loan, each may waive any Default Charges in connection with
any specific delinquent payment on such Mortgage Loan; PROVIDED that, to the
extent the applicable Master Servicer, as to a Performing Mortgage Loan, and the
applicable Special Servicer, as to a Specially Serviced Mortgage Loan, waives
any Default Charges, any outstanding Advance Interest, property inspection costs
and other Additional Trust Fund Expenses with respect to such Mortgage Loan that
would otherwise have been paid out of such Default Charges shall be paid out of
the Additional Master Servicing Compensation payable to such Master Servicer or
Additional Special Servicing Compensation payable to such Special Servicer, as
the case may be, with respect to that Mortgage Loan; and PROVIDED, FURTHER, that
if no Additional Master Servicing Compensation or Additional Special Servicing
Compensation, as applicable, is available to offset the outstanding Advance
Interest, property inspection costs and other Additional Trust Fund Expenses
with respect to such Mortgage Loan that would otherwise be offset by the Default
Charges, then the
-115-
applicable Master Servicer or Special Servicer, as the case may be, shall not
waive such Default Charges unless (i) it is the first such waiver with respect
to the subject Mortgage Loan under such circumstances (regardless of whether
such first waiver is made by the applicable Master Servicer or the applicable
Special Servicer), or (ii) in the case of a Performing Mortgage Loan, the
applicable Master Servicer has obtained the consent of the Special Servicer
which has, as and to the extent contemplated by SECTION 3.24, obtained the
consent of the Controlling Class Representative, or (iii) in the case of a
Specially Serviced Mortgage Loan, the Special Servicer has, as and to the extent
contemplated by SECTION 3.24, obtained the consent of the Controlling Class
Representative.
(b) At least ninety days prior to the maturity date of each
Balloon Mortgage Loan, the applicable Master Servicer shall send a notice to the
related Borrower of such maturity date (with a copy to be sent to the applicable
Special Servicer) and shall request confirmation that the Balloon Payment will
be paid by such maturity date; PROVIDED that if the Master Servicer has not
received such confirmation, the Master Servicer shall send a second notice at
least 60 days prior to such maturity date, and a third notice at least 30 days
prior to such maturity date.
SECTION 3.03. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts; Reserve Accounts.
(a) Each Master Servicer shall establish and maintain one or more
accounts ("SERVICING ACCOUNTS"), in which all Escrow Payments received by it
with respect to the Mortgage Loans as to which it is the applicable Master
Servicer, shall be deposited and retained. The General Master Servicer shall
maintain the Servicing Accounts with respect to the non-Co-op Mortgage Loans
(including any such Mortgage Loans that are Specially Serviced Mortgage Loans),
and the Co-op Master Servicer shall maintain the Servicing Accounts with respect
to the Co-op Mortgage Loans (including any such Mortgage Loans that are
Specially Serviced Mortgage Loans). Subject to any terms of the related Mortgage
Loan Documents that specify the nature of the account in which Escrow Payments
shall be held, each Servicing Account shall be an Eligible Account. As and to
the extent consistent with the Servicing Standard, applicable law and the
related Mortgage Loan Documents, each Master Servicer may make withdrawals from
the Servicing Accounts maintained by it, and may apply Escrow Payments held
therein with respect to any Mortgage Loan (together with interest earned
thereon), only as follows: (i) to effect the payment of real estate taxes,
assessments, insurance premiums (including, premiums on any Environmental
Insurance Policy), ground rents (if applicable) and comparable items in respect
of the related Mortgaged Property; (ii) to reimburse such Master Servicer, the
applicable Special Servicer, the Trustee or any Fiscal Agent, as applicable, for
any unreimbursed Servicing Advances made thereby with respect to such Mortgage
Loan to cover any of the items described in the immediately preceding
CLAUSE (i); (iii) to refund to the related Borrower any sums as may be
determined to be overages; (iv) to pay interest or other income, if required and
as described below, to the related Borrower on balances in the Servicing Account
(or, if and to the extent not payable to the related Borrower to pay such
interest or other income (up to the amount of any Net Investment Earnings in
respect of such Servicing Account for each Collection Period) to such Master
Servicer); (v) after an event of default, to pay the principal of, accrued
interest on and any other amounts payable with respect to such Mortgage Loan; or
(vi) to clear and terminate the Servicing Account at the termination of this
Agreement in accordance with SECTION 9.01. Each Master Servicer shall pay or
cause to be paid to the related Borrowers interest and other income, if any,
earned on the investment of funds in Servicing Accounts maintained thereby, if
and to the extent required by law or the terms of the related Mortgage Loan
Documents. If a Master Servicer shall deposit in a Servicing Account maintained
by it
-116-
any amount not required to be deposited therein, it may at any time withdraw
such amount from such Servicing Account, any provision herein to the contrary
notwithstanding. Promptly after any Escrow Payments are received by a Special
Servicer from any Borrower, and in any event within two Business Days after any
such receipt, such Special Servicer shall remit such Escrow Payments to the
applicable Master Servicer for deposit in the applicable Servicing Account(s).
(b) The applicable Master Servicer shall as to each Mortgage Loan
(including each Specially Serviced Mortgage Loan) (i) maintain accurate records
with respect to the related Mortgaged Property reflecting the status of real
estate taxes, assessments and other similar items that are or may become a lien
thereon and the status of insurance premiums and any ground rents payable in
respect thereof and (ii) use reasonable efforts consistent with the Servicing
Standard to obtain, from time to time, all bills for the payment of such items
(including renewal premiums) and effect payment thereof prior to the applicable
penalty or termination date. For purposes of effecting any such payment with
respect to any Mortgage Loan, the applicable Master Servicer shall apply Escrow
Payments as allowed under the terms of the related Mortgage Loan Documents;
PROVIDED that if such Mortgage Loan does not require the related Borrower to
escrow for the payment of real estate taxes, assessments, insurance premiums,
ground rents (if applicable) and similar items, the applicable Master Servicer
(or, if such Mortgage Loan becomes a Specially Serviced Mortgage Loan, the
applicable Special Servicer) shall, subject to and in accordance with the
Servicing Standard, enforce the requirement of the related Mortgage that the
related Borrower make payments in respect of such items at the time they first
become due.
(c) In accordance with the Servicing Standard, but subject to
SECTION 3.11(h), the applicable Master Servicer shall make a Servicing Advance
with respect to each Mortgaged Property (including each Mortgaged Property
relating to a Specially Serviced Mortgage Loan) all such funds as are necessary
for the purpose of effecting the timely payment of (i) real estate taxes,
assessments and other similar items, (ii) ground rents (if applicable), and
(iii) premiums on Insurance Policies (including, premiums on any Environmental
Insurance Policy), in each instance prior to the applicable penalty or
termination date if and to the extent that (x) Escrow Payments (if any)
collected from the related Borrower are insufficient to pay such item when due,
and (y) the related Borrower has failed to pay such item on a timely basis;
PROVIDED that, in the case of amounts described in the preceding CLAUSE (i), the
applicable Master Servicer shall not make a Servicing Advance of any such amount
if such Master Servicer reasonably anticipates (in accordance with the Servicing
Standard) that such amounts will be paid by the related Borrower on or before
the applicable penalty date, in which case such Master Servicer shall use its
best efforts consistent with the Servicing Standard to confirm whether such
amounts have been paid and, subject to SECTION 3.11(h), shall make a Servicing
Advance of such amounts, if necessary, not later than five Business Days
following confirmation by such Master Servicer that such amounts have not been
paid by the applicable penalty date. All such Advances shall be reimbursable in
the first instance from related collections from the Borrowers and further as
provided in SECTION 3.05(a). No costs incurred by a Master Servicer in effecting
the payment of real estate taxes, assessments and, if applicable, ground rents
on or in respect of such Mortgaged Properties shall, for purposes hereof,
including calculating monthly distributions to Certificateholders, be added to
the respective unpaid principal balances or Stated Principal Balances of the
subject Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit; PROVIDED that this sentence shall not be construed to limit the rights
of the applicable Master Servicer or the applicable Special Servicer on behalf
of the Trust to enforce any obligations of the related Borrower under such
Mortgage Loan.
-117-
(d) Each Master Servicer shall establish and maintain one or more
accounts ("RESERVE ACCOUNTS"), in which all Reserve Funds, if any, received by
it with respect to the Mortgage Loans as to which it is the applicable Master
Servicer, shall be deposited and retained. The General Master Servicer shall
maintain the Reserve Accounts with respect to all of the Mortgage Loans (other
than the Co-op Mortgage Loans), and the Co-op Master Servicer shall maintain the
Reserve Accounts with respect to the Co-op Mortgage Loans. Subject to any terms
of the related Mortgage Loan Documents that specify the nature of the account in
which Reserve Funds shall be held, each Reserve Account shall be an Eligible
Account. As and to the extent consistent with the Servicing Standard, applicable
law and the related Mortgage Loan Documents, each Master Servicer may make
withdrawals from the Reserve Accounts maintained by it, and may apply Reserve
Funds held therein with respect to any Mortgage Loan (together with interest
earned thereon), only as follows: (i) in the case of Reserve Funds that are
intended to cover specific costs and expenses, to pay for, or to reimburse the
related Borrower in connection with, the costs associated with the related
tenant improvements, leasing commissions, repairs, replacements, capital
improvements and/or environmental testing and remediation, litigation and/or
other special expenses at or with respect to the related Mortgaged Property for
which such Reserve Funds were intended and to refund the related Borrower any
sums as may be determined to be overages; (ii) in the case of Reserve Funds
intended to cover debt service payments, to apply amounts on deposit therein in
respect of principal and interest on such Mortgage Loan; (iii) to reimburse such
Master Servicer, either Special Servicer, the Trustee or any Fiscal Agent, as
applicable, for any unreimbursed Advances made thereby with respect to such
Mortgage Loan to cover any of the items described in the immediately preceding
CLAUSES (i) and (ii); (iv) to release such Reserve Funds to the related Borrower
if the conditions precedent for such release are satisfied or, in the case of
Earn-Out Reserve Funds, to otherwise apply such Reserve Funds in accordance with
the related Mortgage Loan Documents if the conditions precedent for such release
are not satisfied, including any requirements set forth in this Agreement; (v)
to pay interest or other income, if required and as described below, to the
related Borrower on balances in the Reserve Account (or, if and to the extent
not payable to the related Borrower, to pay such interest or other income (up to
the amount of any Net Investment Earnings in respect of such Reserve Account for
each Collection Period) to such Master Servicer); (vi) after an event of
default, to pay the principal of, accrued interest on and any other amounts
payable with respect to such Mortgage Loan; or (vii) to clear and terminate the
Reserve Account at the termination of this Agreement in accordance with
SECTION 9.01. If the Borrower under any Mortgage Loan delivers a Letter of
Credit in lieu of Reserve Funds, then the applicable Master Servicer shall make
draws on such Letter of Credit at such times and for such purposes as it would
have made withdrawals from a Reserve Account and, to the extent consistent with
the Servicing Standard, applicable law and the related Mortgage Loan Documents,
in order to convert the amount of such Letter of Credit into Reserve Funds.
Notwithstanding the foregoing, no Master Servicer shall release any Earn-Out
Reserve Funds, or return any related Letter of Credit delivered in lieu of
Earn-Out Reserve Funds, to the related Borrower, unless and until: (i) such
Master Servicer has so notified the applicable Special Servicer in writing and
has provided the applicable Special Servicer with any written or electronic
information in such Master Servicer's possession regarding such Mortgage Loan or
the related Mortgaged Property that the applicable Special Servicer may
reasonably request within ten Business Days of receiving such written notice;
and (ii) subject to SECTION 3.24, the applicable Special Servicer has consented
to such release of any such Earn-Out Reserve Funds or return of any related
Letter of Credit (such consent to be given or withheld in accordance with the
Servicing Standard and to be deemed given if the applicable Special Servicer
does not object in writing to such release of any such Earn-Out Reserve Funds or
return of any such Letter of Credit within ten Business Days
-118-
after receiving such additional information from the applicable Master Servicer
(or, if it did not request additional information, within ten Business Days
after receiving such notice)). Each Master Servicer shall pay or cause to be
paid to the relevant Borrowers interest and other income, if any, earned on the
investment of funds in Reserve Accounts maintained thereby, if and to the extent
required by law or the terms of the related Mortgage Loan Documents. If a Master
Servicer shall deposit in a Reserve Account maintained by it any amount not
required to be deposited therein, it may at any time withdraw such amount from
such Reserve Account, any provision herein to the contrary notwithstanding.
Promptly after any Reserve Funds are received by a Special Servicer from any
Borrower, and in any event within two Business Days of such receipt, such
Special Servicer shall remit such Reserve Funds to the applicable Master
Servicer for deposit in the applicable Reserve Account(s). Any out-of-pocket
expenses, including reasonable attorneys' fees and expenses, incurred by a
Master Servicer or Special Servicer to enable such Master Servicer or Special
Servicer, as the case may be, to make any draw under any Letter of Credit shall
constitute a Servicing Advance, and such Master Servicer or Special Servicer, as
the case may be, shall make reasonable efforts to recover such expenses from the
related Borrower to the extent the Borrower is required to pay such expenses
under the terms of the related Mortgage Loan.
(e) To the extent an operations and maintenance plan is required
to be established and executed pursuant to the terms of a Mortgage Loan, the
applicable Master Servicer shall request from the related Borrower written
confirmation thereof within a reasonable time after the later of the Closing
Date and the date as of which such plan is required to be established or
completed. To the extent any other action or remediation with respect to
environmental matters is required to have been taken or completed pursuant to
the terms of a Mortgage Loan, the applicable Master Servicer shall request from
the related Borrower written confirmation of such action and remediations within
a reasonable time after the later of the Closing Date and the date as of which
such action or remediations are required to have been taken or completed. To the
extent that a Borrower shall fail to promptly respond to any inquiry described
in this SECTION 3.03(e), the applicable Master Servicer shall notify the
Trustee, the applicable Special Servicer and the Controlling Class
Representative. The applicable Master Servicer shall promptly notify the
Trustee, the applicable Special Servicer and the Controlling Class
Representative if such Master Servicer shall determine that the Borrower under
any Mortgage Loan has failed to perform its obligations under such Mortgage Loan
in respect of environmental matters.
(f) Subject to applicable law and the terms of the related
Mortgage Loan Documents, funds in the Servicing Accounts and the Reserve
Accounts may be invested only in Permitted Investments in accordance with the
provisions of SECTION 3.06.
SECTION 3.04. Collection Accounts, Distribution Account,
Interest Reserve Account and Excess Liquidation
Proceeds Account.
(a) Each of the Master Servicers shall segregate and hold all
funds collected and received by it in connection with the Mortgage Pool separate
and apart from its own funds and general assets. In connection therewith, each
Master Servicer shall establish and maintain one or more segregated accounts
(collectively, a "COLLECTION ACCOUNT"), in which the funds described below are
to be deposited and held on behalf of the Trustee in trust for the benefit of
the Certificateholders. Each account that constitutes a Collection Account shall
be an Eligible Account. Each Master Servicer shall deposit or cause to be
deposited in its Collection Account, within one Business Day of receipt by it
(in the case of payments by Borrowers or other collections on the Mortgage Loans
as to which it acts as Master Servicer) or as otherwise required hereunder, the
following payments and collections received or made by or on behalf of such
Master Servicer subsequent to the Closing Date with respect to the
-119-
Mortgage Loans and REO Properties as to which it is the applicable Master
Servicer (other than in respect of scheduled payments of principal and interest
due and payable on such Mortgage Loans on or before their respective Due Dates
in May 2002 (or, in the case of a Replacement Mortgage Loan, on or before the
related date of substitution), which payments shall be delivered promptly to the
related Mortgage Loan Seller or its designee, with negotiable instruments
endorsed as necessary and appropriate without recourse):
(i) all payments, from whatever source, or transfers from a debt
service reserve account, on account of principal of such Mortgage Loans,
including Principal Prepayments;
(ii) all payments, from whatever source, or transfers from a debt
service reserve account, on account of interest on such Mortgage Loans,
including Default Interest and Post-ARD Additional Interest;
(iii) all Prepayment Premiums, Yield Maintenance Charges and late
payment charges received with respect to such Mortgage Loans;
(iv) all Insurance Proceeds, Condemnation Proceeds and Liquidation
Proceeds received with respect to such Mortgage Loans;
(v) any amounts required to be deposited by such Master Servicer
pursuant to SECTION 3.06 in connection with losses incurred with respect to
Permitted Investments of funds held in such Collection Account;
(vi) any amounts relating to such Mortgage Loan and/or REO
Properties required to be deposited by such Master Servicer or the
applicable Special Servicer pursuant to SECTION 3.07(b) in connection with
losses resulting from a deductible clause in a blanket or master force
placed hazard insurance policy;
(vii) any amounts relating to REO Properties required to be
transferred from any REO Account pursuant to SECTION 3.16(c); and
(viii) insofar as they do not constitute Escrow Payments or Reserve
Funds, any amounts relating to such Mortgage Loans paid by a Borrower
specifically to cover items for which a Servicing Advance has been made or
that represent a recovery of property protection expenses from a Borrower.
The foregoing requirements for deposit in a Collection Account shall
be exclusive. Without limiting the generality of the foregoing, actual payments
from Borrowers in the nature of Escrow Payments, assumption fees, assumption
application fees, earn-out fees, extension fees, modification fees, charges for
beneficiary statements or demands, amounts collected for checks returned for
insufficient funds and other fees and amounts collected from Borrowers that
constitute Additional Master Servicing Compensation and/or Additional Special
Servicing Compensation, need not be deposited by either Master Servicer in its
Collection Account. Each Master Servicer shall promptly within one Business Day
deliver to the applicable Special Servicer any of the foregoing items received
by it with respect to any Mortgage Loan, if and to the extent that such items
constitute Additional Special Servicing Compensation. If either Master Servicer
shall deposit in its Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from such Collection Account,
any
-120-
amount not required to be deposited therein, it may at any time withdraw such
amount from such Collection Account, any provision herein to the contrary
notwithstanding.
Upon receipt of any of the amounts described in CLAUSES (i) through
(iv) and (viii) of the first paragraph of this SECTION 3.04(a) with respect to
any Mortgage Loan, a Special Servicer shall promptly, but in no event later than
one Business Day after receipt, remit such amounts to the applicable Master
Servicer for deposit into such Master Servicer's Collection Account, unless such
Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement.
With respect to any such amounts paid by check to the order of a Special
Servicer, such Special Servicer shall endorse such check to the order of the
applicable Master Servicer (in its capacity as such), without recourse,
representation or warranty, unless such Special Servicer determines, consistent
with the Servicing Standard, that a particular item cannot be so endorsed and
delivered because of a restrictive endorsement. Any such amounts received by a
Special Servicer with respect to an REO Property shall be deposited by such
Special Servicer into its REO Account and remitted to the applicable Master
Servicer for deposit into such Master Servicer's Collection Account pursuant to
SECTION 3.16(c).
(b) The Trustee shall establish and maintain one or more
segregated accounts (collectively, the "DISTRIBUTION ACCOUNT"), to be held in
trust for the benefit of the Certificateholders. Each account that constitutes
the Distribution Account shall be an Eligible Account. The Trustee shall, as a
bookkeeping matter, establish and maintain two sub-accounts of the Distribution
Account (i) one of which sub-accounts (such sub-account, the "REMIC
SUB-ACCOUNT") shall be deemed to be held in trust for the benefit of the Holders
of the REMIC III Regular Interest Certificates and the Class R Certificates, and
(ii) one of which sub-accounts (such sub-account, the "CLASS V SUB-ACCOUNT")
shall be deemed to be held in trust for the benefit of the Holders of the Class
V Certificates. By 1:00 p.m. (
New York City time) on each Master Servicer
Remittance Date, each Master Servicer shall deliver to the Trustee, for deposit
in the Distribution Account, an aggregate amount of immediately available funds
equal to the Master Servicer Remittance Amount with respect to such Master
Servicer for such Master Servicer Remittance Date. Immediately upon deposit of a
Master Servicer Remittance Amount into the Distribution Account, any portion
thereof that represents any Post-ARD Additional Interest related to the ARD
Mortgage Loans shall be deemed to have been deposited into the Class V
Sub-Account, and the remaining portion thereof shall be deemed to have been
deposited into the REMIC Sub-Account. In addition, each Master Servicer shall,
as and when required hereunder, deliver to the Trustee for deposit in the
Distribution Account any P&I Advances and Compensating Interest Payments
required to be made by such Master Servicer hereunder. Furthermore, any amounts
paid by any party hereto to indemnify the Trust Fund pursuant to any provision
hereof shall be delivered to the Trustee for deposit in the Distribution
Account. The Trustee shall, upon receipt, deposit in the Distribution Account
any and all amounts received or, pursuant to SECTION 4.03, advanced by the
Trustee or any Fiscal Agent that are required by the terms of this Agreement to
be deposited therein. As and when required pursuant to SECTION 3.05(c), the
Trustee shall transfer Interest Reserve Amounts in respect of the Interest
Reserve Loans from the Interest Reserve Account to the Distribution Account.
Furthermore, as and when required pursuant to SECTION 3.05(d), the Trustee shall
transfer monies from the Excess Liquidation Proceeds Account to the Distribution
Account. The Trustee shall also deposit in the Distribution Account any amounts
required to be deposited by the Trustee pursuant to SECTION 3.06 in connection
with losses incurred with respect to Permitted Investments of funds held in the
Distribution Account. If the Trustee shall deposit in the Distribution Account
any amount not required to be deposited therein, it
-121-
may at any time withdraw such amount from the Distribution Account, any
provision herein to the contrary notwithstanding.
(c) The Trustee shall establish and maintain one or more accounts
(collectively, the "INTEREST RESERVE ACCOUNT") to be held in trust for the
benefit of the Certificateholders. Each account that constitutes the Interest
Reserve Account shall be an Eligible Account. On the Distribution Date in
January (except during a leap year) and February of each calendar year,
commencing in 2003, prior to any distributions being made with respect to the
Certificates on such Distribution Date, the Trustee shall, with respect to each
Interest Reserve Loan, withdraw from the Distribution Account and deposit in the
Interest Reserve Account an amount equal to the Interest Reserve Amount, if any,
in respect of such Interest Reserve Loan for such Distribution Date; PROVIDED
that no such transfer of monies from the Distribution Account to the Interest
Reserve Account shall be made on the Final Distribution Date. The Trustee shall
also deposit in the Interest Reserve Account any amounts required to be
deposited by the Trustee pursuant to SECTION 3.06 in connection with losses
incurred with respect to Permitted Investments of funds held in the Interest
Reserve Account.
(d) If any Excess Liquidation Proceeds are received, the Trustee
shall establish and maintain one or more accounts (collectively, the "EXCESS
LIQUIDATION PROCEEDS ACCOUNT") to be held in trust for the benefit of the
Certificateholders. Each account that constitutes the Excess Liquidation
Proceeds Account shall be an Eligible Account. On each Master Servicer
Remittance Date, each Master Servicer shall withdraw from its Collection Account
and remit to the Trustee for deposit in the Excess Liquidation Proceeds Account
all Excess Liquidation Proceeds received during the Collection Period ending on
the Determination Date immediately prior to such Master Servicer Remittance
Date. The Trustee shall also deposit in the Excess Liquidation Proceeds Account
any amounts required to be deposited by the Trustee pursuant to SECTION 3.06 in
connection with losses incurred with respect to Permitted Investments of funds
held in the Excess Liquidation Proceeds Account.
(e) Funds in a Collection Account, the Distribution Account, the
Interest Reserve Account and/or the Excess Liquidation Proceeds Account may be
invested in Permitted Investments in accordance with the provisions of
SECTION 3.06. Each Master Servicer shall give notice to the other parties hereto
of the location of its Collection Account as of the Closing Date and of the new
location of its Collection Account prior to any change thereof. The Distribution
Account, Interest Reserve Account and Excess Liquidation Proceeds Account shall
each be established at the Corporate Trust Office of the Trustee as of the
Closing Date, and the Trustee shall give notice to the other parties hereto of
the new location of each of the Distribution Account, Interest Reserve Account
and Excess Liquidation Proceeds Account prior to any change thereof.
(f) Notwithstanding the foregoing or any other provision to the
contrary in this Agreement, the Trustee may maintain the Distribution Account,
the Interest Reserve Account and the Excess Liquidation Proceeds Account as
three separate subaccounts of a single Eligible Account; provided that: (i) all
deposits into and withdrawals from such single Eligible Account shall be made in
the same manner as would be the case if the Distribution Account, the Interest
Reserve Account and the Excess Liquidation Proceeds Account were maintained as
three separate accounts; (ii) all distributions on the Certificates will be
calculated and made in the same manner as would be the case if the Distribution
Account, the Interest Reserve Account and the Excess Liquidation Proceeds
Account were maintained as three separate accounts; (iii) the Trustee shall make
debits and credits to those three subaccounts in a manner consistent with the
provisions of this Agreement governing transfers of funds
-122-
between the Distribution Account, the Interest Reserve Account and the Excess
Liquidation Proceeds Account, as the case may be; (iv) the Trustee's maintaining
the Distribution Account, the Interest Reserve Account and the Excess
Liquidation Proceeds Account as three separate subaccounts of a single Eligible
Account (as opposed to in the form of three separate Eligible Accounts) shall
not materially and adversely affect any of the Certificateholders; and (v) such
single Eligible Account shall be entitled "[name of Trustee], as Trustee, in
trust for the registered holders of Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates, Series
2002-CKN2, Distribution Account, Interest Reserve Account and Excess Liquidation
Proceeds Account".
SECTION 3.05. Permitted Withdrawals From the Collection Accounts, the
Distribution Account, the Interest Reserve Account and
the Excess Liquidation Proceeds Account.
(a) Each Master Servicer may, from time to time, make withdrawals
from its Collection Account for any of the following purposes (the order set
forth below not constituting an order of priority for such withdrawals):
(i) to remit to the Trustee for deposit in the Distribution
Account (A) the Master Servicer Remittance Amount with respect to such
Master Servicer for each Master Servicer Remittance Date and (B) any
amounts that may be applied by such Master Servicer to make P&I Advances
pursuant to SECTION 4.03(a);
(ii) to reimburse itself, the Trustee or any Fiscal Agent, as
applicable, for xxxxxxxxxxxx X&X Advances made by such Person (in each
case, with its own funds) with respect to those Mortgage Loans as to which
such Master Servicer is the applicable Master Servicer and/or any successor
REO Loans in respect thereof, such Master Servicer's, the Trustee's and any
Fiscal Agent's, as the case may be, respective rights to reimbursement
pursuant to this CLAUSE (ii) with respect to any P&I Advance (other than a
Nonrecoverable P&I Advance, which is reimbursable pursuant to CLAUSE (vi)
below) being limited to amounts that represent Late Collections of interest
and principal received in respect of the particular Mortgage Loan or REO
Loan as to which such P&I Advance was made (net of related Master Servicing
Fees);
(iii) to pay itself earned and unpaid Master Servicing Fees with
respect to those Mortgage Loans as to which it is the applicable Master
Servicer and/or any REO Loans in respect thereof, such Master Servicer's
right to payment pursuant to this CLAUSE (iii) with respect to any such
Mortgage Loan or REO Loan being limited to amounts that are allocable as
interest thereon;
(iv) to pay each Special Servicer (or, if applicable, any
predecessor thereto) earned and unpaid Special Servicing Fees, Workout Fees
and Liquidation Fees to which it is entitled pursuant to, and from the
sources contemplated by, SECTION 3.11(c), but only if and to the extent
that such Special Servicing Fees, Workout Fees and Liquidation Fees relate
to Mortgage Loans and/or REO Properties as to which such Master Servicer is
the applicable Master Servicer;
(v) to reimburse itself, either Special Servicer, the Trustee or
any Fiscal Agent, as applicable, for any unreimbursed Servicing Advances
made thereby (in each case, with its own funds) with respect to those
Mortgage Loans and REO Properties as to which such Master
-123-
Servicer is the applicable Master Servicer, such Master Servicer's, such Special
Servicer's, the Trustee's and any Fiscal Agent's, as the case may be, respective
rights to reimbursement pursuant to this CLAUSE (v) with respect to any
Servicing Advance (other than a Nonrecoverable Servicing Advance, which is
reimbursable pursuant to CLAUSE (vi) below) being limited to (A) payments made
by the related Borrower that are allocable to cover the item in respect of which
such Servicing Advance was made, and (B) Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds and, if applicable, REO Revenues received in
respect of the particular Mortgage Loan or REO Property as to which such
Servicing Advance was made;
(vi) (A) to reimburse itself, either Special Servicer, the Trustee
or any Fiscal Agent, as applicable, out of such general collections on the
Mortgage Loans and any REO Properties as are then on deposit in such
Collection Account, for any unreimbursed Nonrecoverable Advances made
thereby with respect to any of the Mortgage Loans and/or REO Properties as
to which such Master Servicer is the applicable Master Servicer and (B) if
such Master Servicer shall have received from the other Master Servicer an
Officer's Certificate setting forth that (1) such other Master Servicer,
either Special Servicer, the Trustee or any Fiscal Agent, as applicable, is
entitled to reimbursement for any Nonrecoverable Advance made with respect
to any of the Mortgage Loans and/or REO Properties as to which such other
Master Servicer is the applicable Master Servicer (and setting forth the
nature and amount of such unreimbursed Nonrecoverable Advance and the party
entitled to reimbursement therefor) and (2) such other Master Servicer has
insufficient funds then on deposit in its Collection Account, then to
reimburse such other Master Servicer, either Special Servicer, the Trustee
or any Fiscal Agent, as applicable, out of such general collections on the
Mortgage Loans and any REO Properties as are then on deposit in the subject
Master Servicer's Collection Account, for such unreimbursed Nonrecoverable
Advance made with respect to any of the Mortgage Loans and/or REO
Properties as to which such other Master Servicer is the applicable Master
Servicer;
(vii) to pay itself, either Special Servicer, the Trustee or any
Fiscal Agent, as applicable, any unpaid Advance Interest accrued on
Advances made by such Person with respect to Mortgage Loans and/or REO
Properties as to which such Master Servicer is the applicable Master
Servicer, such payment to be made, as and to the extent contemplated by
SECTION 3.26, out of Default Charges collected on the Mortgage Loan or REO
Loan, as the case may be, as to which the subject Advance was made;
(viii) to the extent that, during any Collection Period, such Master
Servicer has reimbursed or is reimbursing itself, either Special Servicer,
the Trustee or any Fiscal Agent, as applicable, for any unreimbursed
Advance with respect to any Mortgage Loan or REO Property as to which such
Master Servicer is the applicable Master Servicer (regardless of whether
such reimbursement is pursuant to CLAUSE (ii), (v) or (vi) above or
pursuant to SECTION 3.03(c) or SECTION 3.03(d)), and insofar as payment has
not already been made out of related Default Charges, and the related
Default Charges then on deposit in such Collection Account are not
sufficient to make such payment, pursuant to CLAUSE (vii) above, to pay
itself, such Special Servicer, the Trustee or such Fiscal Agent, as the
case may be, first out of the remaining Liquidation Proceeds from the
Mortgage Loan to which the Advance relates, then out of such general
collections on the Mortgage Loans and any REO Properties as are then on
deposit in such Collection Account, any related Advance Interest accrued
and payable on the portion of such Advance so reimbursed or being
reimbursed;
-124-
(ix) to pay (A) any outstanding expenses that were incurred by
either Special Servicer in connection with its inspecting, pursuant to
SECTION 3.12(a), any Mortgaged Property securing a Specially Serviced
Mortgage Loan as to which such Master Servicer is the applicable Master
Servicer or any REO Property as to which such Master Servicer is the
applicable Master Servicer or (B) any other outstanding expenses incurred
on behalf of the Trust with respect to any Mortgage Loan or REO Property as
to which such Master Servicer is the applicable Master Servicer (other than
Advance Interest, which is covered by CLAUSE (vii) above, and other than
Special Servicing Fees, Workout Fees and Liquidation Fees) that will likely
otherwise become Additional Trust Fund Expenses, such payment to be made,
as and to the extent contemplated by SECTION 3.26, out of Default Charges
collected on the related Mortgage Loan or REO Loan, as the case may be, and
then from Liquidation Proceeds from the related Mortgage Loan or REO Loan;
(x) to pay itself any items of Additional Master Servicing
Compensation, and to pay the applicable Special Servicer any items of
Additional Special Servicing Compensation, in each case on deposit in such
Collection Account from time to time;
(xi) to pay any unpaid Liquidation Expenses incurred with respect
to any Mortgage Loan or REO Property as to which such Master Servicer is
the applicable Master Servicer, such payments to be made, FIRST, out of
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds and, if
applicable, REO Revenues received with respect to such Mortgage Loan or REO
Property, as the case may be, and THEN, out of such general collections on
other Mortgage Loans and REO Properties as are then on deposit in such
Collection Account;
(xii) to pay, in accordance with SECTION 3.11(i), out of such
general collections on the Mortgage Loans and any REO Properties as are
then on deposit in such Collection Account, certain servicing expenses
related to the Mortgage Loans and REO Properties as to which such Master
Servicer is the applicable Master Servicer, which expenses would, if
advanced, constitute Nonrecoverable Servicing Advances;
(xiii) to pay, FIRST out of related Liquidation Proceeds, and THEN,
out of such general collections on the Mortgage Loans and any REO
Properties as are then on deposit in such Collection Account, costs and
expenses incurred by the Trust pursuant to SECTION 3.09(c) with respect to
any Mortgage Loan or REO Property as to which such Master Servicer is the
applicable Master Servicer (other than the costs of environmental testing,
which are to be covered by, and reimbursable as, a Servicing Advance);
(xiv) to pay itself, either Special Servicer, the Depositor, the
Trustee, any Fiscal Agent, or any of their respective directors, officers,
members, managers, employees and agents, as the case may be, FIRST out of
related Liquidation Proceeds, and THEN, out of such general collections on
the Mortgage Loans and any REO Properties as are then on deposit in such
Collection Account, any amounts payable to any such Person pursuant to
SECTION 6.03, SECTION 7.01(b), SECTION 8.05(b) or SECTION 8.13, as
applicable, but only if and to the extent that such amounts relate to
Mortgage Loans and/or REO Properties as to which such Master Servicer is
the applicable Master Servicer;
(xv) to pay, FIRST out of related Liquidation Proceeds, and THEN,
out of such general collections on the Mortgage Loans and any REO
Properties then on deposit in such Collection
-125-
Account, (A) any reasonable out-of-pocket cost or expense (including the
reasonable fees of tax accountants and attorneys) incurred by the Trustee
pursuant to SECTION 3.17(a)(iii) in connection with providing advice to a
Special Servicer with respect to any REO Property as to which such Master
Servicer is the applicable Master Servicer, and (B) to the extent not
otherwise advanced by such Master Servicer, any fees and/or expenses
payable or reimbursable, as the case may be, in accordance with
SECTION 3.18(c), to the General Master Servicer, the Trustee or an
Independent third party for confirming, in accordance with such
SECTION 3.18(c), a Fair Value determination made with respect to any
Specially Designated Defaulted Mortgage Loan as to which such Master
Servicer is the applicable Master Servicer;
(xvi) to pay itself, either Special Servicer, the Trustee, any
Fiscal Agent or the Depositor, as the case may be, any amount related to
the Mortgage Loans and/or REO Properties as to which such Master Servicer
is the applicable Master Servicer, that is specifically required to be paid
to such Person at the expense of the Trust Fund under any provision of this
Agreement and to which reference is not made in any other clause of this
SECTION 3.05(a), it being acknowledged that this CLAUSE (xvi) shall not be
construed to modify any limitation otherwise set forth in this Agreement on
the time at which any Person is entitled to payment or reimbursement of any
amount or the funds from which any such payment or reimbursement is
permitted to be made;
(xvii) to pay itself, either Special Servicer, any Mortgage Loan
Seller, a Controlling Class Certificateholder or any other particular
Person, as the case may be, with respect to any Mortgage Loan as to which
such Master Servicer is the applicable Master Servicer and that was
previously purchased or otherwise removed from the Trust Fund by such
Person pursuant to or as contemplated by this Agreement, all amounts
received on such Mortgage Loan subsequent to the date of purchase or other
removal;
(xviii) to transfer any Excess Liquidation Proceeds on deposit in such
Collection Account to the Excess Liquidation Proceeds Account in accordance
with SECTION 3.04(d); and
(xix) to clear and terminate such Collection Account at the
termination of this Agreement pursuant to SECTION 9.01.
If amounts on deposit in either Collection Account at any particular
time (after withdrawing any portion of such amounts deposited in such Collection
Account in error) are insufficient to satisfy all payments, reimbursements and
remittances to be made therefrom as set forth in CLAUSES (ii) through (xvii)
above, then the corresponding withdrawals from such Collection Account shall be
made in the following priority and subject to the following rules: (x) if the
payment, reimbursement or remittance is to be made from a specific source of
funds, then such payment, reimbursement or remittance shall be made from that
specific source of funds on a PRO RATA basis with any and all other payments,
reimbursements and remittances to be made from such specific source of funds;
and (y) if the payment, reimbursement or remittance can be made from any funds
on deposit in such Collection Account, then (following any withdrawals made from
such Collection Account in accordance with the immediately preceding CLAUSE (x)
above) such payment, reimbursement or remittance shall be made from the general
funds remaining on deposit in such Collection Account on a PRO RATA basis with
any and all other payments, reimbursements or remittances to be made from such
general funds; PROVIDED that any reimbursements of Advances in respect of any
particular Mortgage Loan or REO Property out
-126-
of a Collection Account pursuant to any of CLAUSES (ii), (v) and (vi) above, and
any payments of interest thereon out of a Collection Account pursuant to either
of CLAUSES (vii) and (viii) above, shall be made (to the extent of their
respective entitlements to such reimbursements and/or payments): FIRST, to any
Fiscal Agent; SECOND, to the Trustee; and THIRD, PRO RATA, to the applicable
Master Servicer and Special Servicer.
Each Master Servicer shall keep and maintain separate accounting
records, on a loan-by-loan and property-by-property basis when appropriate, in
connection with any withdrawal from its Collection Account pursuant to any of
CLAUSES (ii) through (xviii) above.
Each Master Servicer shall pay to the applicable Special Servicer from
such Master Servicer's Collection Account on each Master Servicer Remittance
Date amounts permitted to be paid to such Special Servicer therefrom based upon
an Officer's Certificate received from such Special Servicer on the first
Business Day following the immediately preceding Determination Date, describing
the item and amount to which such Special Servicer is entitled. Each Master
Servicer may rely conclusively on any such certificate and shall have no duty to
re-calculate the amounts stated therein. Each Special Servicer shall keep and
maintain separate accounting for each Specially Serviced Mortgage Loan and REO
Property as to which it is the applicable Special Servicer, on a loan-by-loan
and property-by-property basis, for the purpose of justifying any request
thereby for withdrawal from a Collection Account.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account for each of the following purposes (the order set forth
below not constituting an order of priority for such withdrawals):
(i) to make distributions to Certificateholders on each
Distribution Date pursuant to SECTION 4.01;
(ii) to transfer Interest Reserve Amounts in respect of the
Interest Reserve Loans to the Interest Reserve Account as and when required
by SECTION 3.04(c);
(iii) to pay itself, either Master Servicer, either Special
Servicer, the Depositor, the Trustee, any Fiscal Agent or any of their
respective directors, officers, members, managers, employees and agents, as
the case may be, any amounts payable to any such Person pursuant to
SECTION 6.03, SECTION 7.01(b), SECTION 8.05 or SECTION 8.13, as applicable,
if and to the extent such amounts are not payable out of a Collection
Account pursuant to SECTION 3.05;
(iv) to pay any and all federal, state and local taxes imposed on
any REMIC Pool or on the assets or transactions of any REMIC Pool, together
with all incidental costs and expenses, and any and all expenses relating
to tax audits, if and to the extent that either (A) none of the parties
hereto are liable therefor pursuant to SECTION 10.01(b) and/or
SECTION 10.01(f) or (B) any such Person that may be so liable has failed to
timely make the required payment;
(v) to pay for the cost of the Opinions of Counsel sought by the
Trustee as contemplated by SECTION 11.01(a) or SECTION 11.01(c) in
connection with any amendment to this Agreement requested by the Trustee
which amendment is in furtherance of the rights and interests of
Certificateholders;
-127-
(vi) to pay for the cost of recording this Agreement pursuant to
SECTION 11.02(a);
(vii) to pay itself interest or other income earned on deposits in
the Distribution Account, in accordance with SECTION 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to the
Distribution Account for each Collection Period); and
(viii) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to SECTION 9.01.
(c) On the Master Servicer Remittance Date in March of each year
(commencing in March 2003), and in any event on the Master Servicer Remittance
Date that occurs in the same calendar month as the Final Distribution Date, the
Trustee shall withdraw from the Interest Reserve Account and deposit in the
Distribution Account all Interest Reserve Amounts in respect of the Interest
Reserve Loans then on deposit in the Interest Reserve Account. In addition, the
Trustee shall, from time to time, make withdrawals from the Interest Reserve
Account to pay itself interest or other income earned on deposits in the
Interest Reserve Account, in accordance with SECTION 3.06(b) (but only to the
extent of the Net Investment Earnings, if any, with respect to the Interest
Reserve Account for each Collection Period).
(d) On the Business Day prior to each Distribution Date, the
Trustee shall withdraw from the Excess Liquidation Proceeds Account and deposit
in the Distribution Account, for distribution on such Distribution Date, an
amount equal to the lesser of (i) the entire amount, if any, then on deposit in
the Excess Liquidation Proceeds Account and (ii) the excess, if any, of the
aggregate amount distributable on such Distribution Date pursuant to
SECTIONS 4.01(a) and 4.01(b), over the Standard Available Distribution Amount
for such Distribution Date (calculated without regard to such transfer from the
Excess Liquidation Proceeds Account to the Distribution Account); PROVIDED that
on the Business Day prior to the Final Distribution Date, the Trustee shall
withdraw from the Excess Liquidation Proceeds Account and deposit in the
Distribution Account, for distribution on such Distribution Date, any and all
amounts then on deposit in the Excess Liquidation Proceeds Account. In addition,
the Trustee shall, from time to time, make withdrawals from the Excess
Liquidation Proceeds Account to pay itself interest or other income earned on
deposits in the Excess Liquidation Proceeds Account, in accordance with
SECTION 3.06(b) (but only to the extent of the Net Investment Earnings, if any,
with respect to the Excess Liquidation Proceeds Account for each Collection
Period).
(e) The Trustee, any Fiscal Agent, the Depositor, each Master
Servicer and each Special Servicer, as applicable, shall in all cases have a
right prior to the Certificateholders to any particular funds on deposit in the
Collection Accounts and the Distribution Account from time to time for the
reimbursement or payment of compensation, Advances (with interest thereon at the
Reimbursement Rate) and their respective expenses hereunder, but only if and to
the extent such compensation, Advances (with interest) and expenses are to be
reimbursed or paid from such particular funds on deposit in such Collection
Account or the Distribution Account pursuant to the express terms of this
Agreement.
SECTION 3.06. Investment of Funds in the Accounts.
(a) Each Master Servicer may direct (pursuant to a standing order
or otherwise) any depositary institution (including the Trustee) maintaining its
Collection Account and any Servicing Account or Reserve Account maintained by
it, the General Master Servicer may direct (pursuant to a
-128-
standing order or otherwise) any depositary institution (including the Trustee)
maintaining the Paradise Island Special Account, and each Special Servicer may
direct (pursuant to a standing order or otherwise) any depositary institution
(including the Trustee) maintaining its REO Account, and the Trustee may direct
(pursuant to a standing order or otherwise) any depositary institution
maintaining the Distribution Account, the Interest Reserve Account or the Excess
Liquidation Proceeds Account, to invest, or if any of the Master Servicers, the
Special Servicers or the Trustee is such depositary institution, such Master
Servicer, such Special Servicer or the Trustee may invest itself, the funds held
therein in (but only in) one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, no later than the
Business Day immediately preceding the next succeeding date on which such funds
are required to be withdrawn from such Account pursuant to this Agreement or the
related Mortgage Loan Documents, as applicable, or with respect to Permitted
Investments of funds held in the Distribution Account, no later than 12:00 p.m.
on the next succeeding Distribution Date, or with respect to Permitted
Investments of funds in the Paradise Island Special Account, no later than
12:00 p.m. on the next succeeding Determination Date; PROVIDED that any such
investment of funds in any Servicing Account or Reserve Account shall be subject
to applicable law and the terms of the related Mortgage Loan Documents; and
PROVIDED, FURTHER, that any such investment direction made by the General Master
Servicer with respect to funds in the Paradise Island Special Account shall only
be made based upon the written direction of Column delivered pursuant to the
Column Mortgage Loan Purchase Agreement; and PROVIDED, FURTHER, that the funds
in any Account shall remain uninvested unless and until the applicable Master
Servicer, the applicable Special Servicer, the Trustee or Column, as
appropriate, gives timely investment instructions with respect thereto pursuant
to or as contemplated by this SECTION 3.06. All such Permitted Investments shall
be held to maturity, unless payable on demand. Any investment of funds in an
Account shall be made in the name of the Trustee (in its capacity as such). Each
Master Servicer (with respect to Permitted Investments of amounts in its
Collection Account or any Servicing Account or Reserve Account maintained by
it), the General Master Servicer (with respect to Permitted Investments of
amounts in the Paradise Island Special Account) and each Special Servicer (with
respect to Permitted Investments of amounts in its REO Account), acting on
behalf of the Trustee, shall (and Trustee hereby designates the applicable
Master Servicer or Special Servicer, as the case may be, as the Person that
shall), and the Trustee (with respect to Permitted Investments of amounts in the
Distribution Account, the Interest Reserve Account or the Excess Liquidation
Proceeds Account), acting on behalf of itself, shall (i) be the "entitlement
holder" of any Permitted Investment that is a "security entitlement" and (ii)
maintain "control" of any Permitted Investment that is either a "certificated
security" or an "uncertificated security". For purposes of this SECTION 3.06(a),
the terms "entitlement holder", "security entitlement", "control", "certificated
security" and "uncertificated security" shall have the meanings given such terms
in Revised Article 8 (1994 Revision) of the UCC, and "control" of any Permitted
Investment by a Master Servicer, a Special Servicer or the Trustee shall
constitute "control" by a Person designated by, and acting on behalf of, the
Trustee for purposes of Revised Article 8 (1994 Revision) of the UCC. If amounts
on deposit in an Account are at any time invested in a Permitted Investment
payable on demand, the party hereunder that maintains such Account (whether it
is a Master Servicer, a Special Servicer or the Trustee), shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount at least equal to the lesser of (1) all amounts then
payable thereunder and (2) the amount required to be withdrawn
on such date; and
-129-
(y) demand payment of all amounts due thereunder promptly upon
determination by such Master Servicer, such Special Servicer
or the Trustee, as the case may be, that such Permitted
Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in such Account.
(b) Whether or not a Master Servicer directs the investment of
funds in its Collection Account, interest and investment income realized on
funds deposited therein, to the extent of the Net Investment Earnings, if any,
for such Account for each Collection Period, shall be for the sole and exclusive
benefit of such Master Servicer and shall be subject to its withdrawal in
accordance with SECTION 3.05(a). Whether or not a Master Servicer directs the
investment of funds in any Servicing Account or Reserve Account maintained by
it, interest and investment income realized on funds deposited therein, to the
extent of the Net Investment Earnings, if any, for such Account for each
Collection Period, and subject to the requirements of applicable law or the
terms of the related Mortgage Loan regarding the payment of such interest and
investment income to the related Borrower, shall be for the sole and exclusive
benefit of such Master Servicer and shall be subject to withdrawal from time to
time in accordance with SECTION 3.03. Whether or not a Special Servicer directs
the investment of funds in its REO Account, interest and investment income
realized on funds deposited therein, to the extent of the Net Investment
Earnings, if any, for such Account for each Collection Period, shall be for the
sole and exclusive benefit of such Special Servicer and shall be subject to its
withdrawal in accordance with SECTION 3.16(b). Whether or not the Trustee
directs the investment of funds in the Distribution Account, the Interest
Reserve Account or the Excess Liquidation Proceeds Account, interest and
investment income realized on funds deposited therein, to the extent of the Net
Investment Earnings, if any, for such Account for each Collection Period, shall
be for the sole and exclusive benefit of the Trustee and shall be subject to its
withdrawal in accordance with SECTION 3.05(b). Whether or not Column directs the
investment of funds in any Paradise Island Special Account, interest and
investment income realized on funds deposited therein, to the extent of the Net
Investment Earnings, if any, for such Account for each Collection Period, shall
be for the sole and exclusive benefit of Column and shall be withdrawn and paid
to Column monthly on each Determination Date. If any loss shall be incurred in
respect of any Permitted Investment on deposit in any Account, the party
hereunder that maintains such Account (whether it is a Master Servicer, a
Special Servicer or the Trustee) (or, in the case of the Paradise Island Special
Account, pursuant to the Column Mortgage Loan Purchase Agreement, Column), shall
promptly deposit therein from its own funds, without right of reimbursement, no
later than the end of the Collection Period during which such loss was incurred,
the amount of the Net Investment Loss, if any, in respect of such Account for
such Collection Period (or, in the case of a Servicing Account or Reserve
Account, the entire amount of such loss), except (in the case of any such loss
with respect to a Servicing Account or Reserve Account) to the extent the loss
amounts were invested for the benefit of a Borrower under the terms of a
Mortgage Loan or applicable law and such Borrower has no recourse against the
Trust in respect of such loss.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of any payment due (or in any other performance
required) under any Permitted Investment of funds on deposit in any Account
(exclusive of the Distribution Account, the Interest Reserve Account and the
Excess Liquidation Proceeds Account), and if the Master Servicer or Special
Servicer, as the case may be, that maintains such Account (or, in the case of
the Paradise Island Special Account, pursuant to the Column Mortgage Loan
Purchase Agreement, Column), is in default of its obligations under or
contemplated by SECTION 3.06(b), the Trustee may (and, subject to SECTION 8.02,
upon the request of (i) Holders of Certificates entitled to not less than 25% of
the Voting Rights allocated to any
-130-
Class of REMIC III Regular Interest Certificates or (ii) the Controlling Class
Representative, the Trustee shall) take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate legal proceedings. Any costs incurred by the Trustee in taking
any such action shall be reimbursed to it by the Master Servicer or Special
Servicer, as the case may be, that maintains such Account (or, in the case of
the Paradise Island Special Account, pursuant to the Column Mortgage Loan
Purchase Agreement, Column). This provision is in no way intended to limit any
actions that a Master Servicer or Special Servicer may take in this regard at
its own expense.
(d) Notwithstanding the investment of funds held in any Account,
for purposes of the calculations hereunder, including the calculation of the
Standard Available Distribution Amount and the Master Servicer Remittance
Amounts, the amounts so invested shall be deemed to remain on deposit in such
Account.
SECTION 3.07. Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage.
(a) In the case of each Mortgage Loan (including each Specially
Serviced Mortgage Loan), the applicable Master Servicer shall use reasonable
efforts consistent with the Servicing Standard to cause the related Borrower to
maintain (and, if such Borrower does not so maintain, such Master Servicer will
itself cause to be maintained) for the related Mortgaged Property all insurance
coverage as is required, subject to applicable law, under the related Mortgage
Loan Documents (except to the extent that the failure to maintain such insurance
coverage is an Acceptable Insurance Default); PROVIDED that, if and to the
extent that any Mortgage Loan grants the lender thereunder any discretion (by
way of consent, approval or otherwise) as to the insurance coverage that the
related Borrower is required to maintain, the applicable Master Servicer shall
exercise such discretion in a manner consistent with the Servicing Standard,
with a view towards requiring insurance coverage with respect to the related
Mortgaged Property no less favorable to that in place with respect to the
related Mortgaged Property on the Closing Date and otherwise comparable to that
required under other Mortgage Loans with express provisions governing such
matters and, in any event, including insurance for property damage resulting
from terrorist and similar acts (either by way of an all-risk casualty policy
with no exclusion for such risks or a separate policy covering property damage
from such risks), as well as business interruption or rental loss insurance for
at least 12 months; and PROVIDED, FURTHER, that, if and to the extent that any
Mortgage Loan grants the lender thereunder any discretion (by way of consent,
approval or otherwise) as to the insurance provider from whom the related
Borrower is to obtain the requisite insurance coverage, the applicable Master
Servicer shall require the related Borrower to obtain the requisite insurance
coverage from Qualified Insurers that, in each case, have a financial strength
or claims-paying rating no lower than two rating categories below the highest
rated Certificates outstanding, and in any event no lower than "A" from S&P and
"A2" from Xxxxx'x (or in such other form and amount or issued by an insurer with
such other financial strength or claims-paying ability as would not, as
confirmed in writing by the relevant Rating Agency, result in an Adverse Rating
Event); and PROVIDED, FURTHER, that, in the case of any Mortgage Loan, the
applicable Master Servicer shall be required to maintain such insurance coverage
upon the related Borrower's failure to do so only to the extent that such
insurance is available at commercially reasonable rates and the Trustee as
mortgagee has an insurable interest (PROVIDED that, subject to the Trustee as
mortgagee having an insurable interest, the applicable master servicer shall
maintain insurance coverage for property damage resulting from terrorist or
similar acts, unless the Borrower's failure to maintain such insurance
constituted an Acceptable Insurance Default). Subject to SECTION 3.17(b), the
applicable Special Servicer shall also
-131-
cause to be maintained for each REO Property no less insurance coverage (to the
extent such insurance is available at commercially reasonable rates (except in
the case of insurance coverage for property damage resulting from terrorist or
similar acts, which coverage the applicable Special Servicer shall maintain
unless the borrower's failure to maintain such insurance would have constituted
an Acceptable Insurance Default)) than was previously required of the related
Borrower under the related Mortgage Loan Documents and, at a minimum, (i) hazard
insurance with a replacement cost rider and, unless it would have constituted an
Acceptable Insurance Default for the related Borrower, no exclusion for
terrorist or similar acts, (ii) business interruption or rental loss insurance
for at least 12 months, and (iii) commercial general liability insurance, in
each case, in an amount customary for the type and geographic location of such
REO Property and consistent with the Servicing Standard; PROVIDED that all such
insurance shall be obtained from Qualified Insurers that, in each case, shall
have a financial strength or claims-paying rating no lower than two rating
categories below the highest rated Certificates outstanding, and in any event no
lower than "A" from S&P and "A2" from Xxxxx'x (or in such other form and amount
or issued by an insurer with such other financial strength or claims-paying
ability as would not, as confirmed in writing by the relevant Rating Agency,
result in an Adverse Rating Event). All such insurance policies shall contain
(if they insure against loss to property) a "standard" mortgagee clause, with
loss payable to the applicable Master Servicer on behalf of the Trustee (in the
case of insurance maintained in respect of a Mortgage Loan), or shall name the
Trustee as the insured, with loss payable to the applicable Special Servicer on
behalf of the Trustee (in the case of insurance maintained in respect of an REO
Property), and shall be issued by an insurer authorized under applicable law to
issue such insurance. Any amounts collected by a Master Servicer or Special
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or REO Property or
amounts to be released to the related Borrower, in each case in accordance with
the Servicing Standard) shall be deposited in the Collection Account of the
applicable Master Servicer, subject to withdrawal pursuant to SECTION 3.05(a),
in the case of amounts received in respect of a Mortgage Loan, or in the REO
Account of the applicable Special Servicer, subject to withdrawal pursuant to
SECTION 3.16(c), in the case of amounts received in respect of an REO Property.
Any cost incurred by a Master Servicer or Special Servicer in maintaining any
such insurance shall not, for purposes hereof, including calculating monthly
distributions to Certificateholders, be added to unpaid principal balance or
Stated Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit; PROVIDED, HOWEVER, that this sentence
shall not limit the rights of a Master Servicer on behalf of the Trust to
enforce any obligations of the related Borrower under such Mortgage Loan. Costs
to a Master Servicer or Special Servicer of maintaining insurance policies
pursuant to this SECTION 3.07 shall be paid by and reimbursable to such Master
Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If a Master Servicer or Special Servicer shall obtain and
maintain, or cause to be obtained and maintained, a blanket policy or master
force placed policy insuring against hazard losses on all of the Mortgage Loans
or REO Properties, as applicable, as to which it is the applicable Master
Servicer or Special Servicer, as the case may be, then, to the extent such
policy (i) is obtained from a Qualified Insurer having a financial strength or
claims-paying rating no lower than "A" from S&P and "A2" from Xxxxx'x or having
such other financial strength or claims-paying ability rating as would not, as
confirmed in writing by the relevant Rating Agency, result in an Adverse Rating
Event, and (ii) provides protection equivalent to the individual policies
otherwise required, such Master Servicer or Special Servicer, as the case may
be, shall conclusively be deemed to have satisfied its obligation to cause
hazard insurance to be maintained on the related Mortgaged Properties or REO
Properties, as applicable. Such a blanket or master force placed policy may
contain a deductible clause (not in excess
-132-
of a customary amount), in which case the Master Servicer or Special Servicer,
as the case may be, that maintains such policy shall, if there shall not have
been maintained on any Mortgaged Property or REO Property thereunder a hazard
insurance policy complying with the requirements of SECTION 3.07(a), and there
shall have been one or more losses that would have been covered by such an
individual policy, promptly deposit into the Collection Account maintained by
the applicable Master Servicer, from its own funds, the amount not otherwise
payable under the blanket or master force placed policy in connection with such
loss or losses because of such deductible clause to the extent that any such
deductible exceeds the deductible limitation that pertained to the related
Mortgage Loan (or, in the absence of any such deductible limitation, the
deductible limitation for an individual policy which is consistent with the
Servicing Standard). Each Master Servicer and Special Servicer shall prepare and
present, on behalf of itself, the Trustee and Certificateholders, claims under
any such blanket or master force placed policy maintained by it in a timely
fashion in accordance with the terms of such policy.
(c) Within 45 days after the Closing Date, with respect to each of
the Mortgage Loans covered by an Environmental Insurance Policy that are listed
on EXHIBIT B-4 to this Agreement, the applicable Master Servicer shall notify
the insurer under such Environmental Insurance Policy and take all other action
necessary for the Trustee, on behalf of the Certificateholders, to be an insured
(and for such Master Servicer, on behalf of the Trust, to make claims) under
such Environmental Insurance Policy. In the event that the applicable Master
Servicer has actual knowledge of any event (an "INSURED ENVIRONMENTAL EVENT")
giving rise to a claim under any Environmental Insurance Policy in respect of
any Mortgage Loan covered thereby, the applicable Master Servicer shall, in
accordance with the terms of such Environmental Insurance Policy and the
Servicing Standard, timely make a claim thereunder with the appropriate insurer
and shall take such other actions in accordance with the Servicing Standard
which are necessary under such Environmental Insurance Policy in order to
realize the full value thereof for the benefit of the Certificateholders. If any
other party hereto has actual knowledge of an Insured Environmental Event with
respect to any Mortgage Loan listed on EXHIBIT B-4 to this Agreement, such party
shall promptly so notify the applicable Master Servicer. Any legal fees,
premiums or other out-of-pocket costs incurred in accordance with the Servicing
Standard in connection with any such claim under an Environmental Insurance
Policy shall be paid by the applicable Master Servicer and shall be reimbursable
to it as a Servicing Advance. With respect to each Environmental Insurance
Policy that relates to one or more Mortgage Loans, the applicable Master
Servicer shall review and familiarize itself with the terms and conditions
relating to enforcement of claims and shall monitor the dates by which any claim
must be made or any action must be taken under such policy in order to realize
the full value thereof for the benefit of the Certificateholders in the event
the applicable Master Servicer has actual knowledge of an Insured Environmental
Event giving rise to a claim under such policy.
In the event that the applicable Master Servicer receives notice of
any termination of any Environmental Insurance Policy that relates to one or
more Mortgage Loans, such Master Servicer shall, within five Business Days after
receipt of such notice, notify the applicable Special Servicer, the Controlling
Class Representative, the Rating Agencies and the Trustee of such termination in
writing. Upon receipt of such notice, the applicable Master Servicer shall
address such termination in accordance with SECTION 3.07(a) in the same manner
as it would the termination of any other Insurance Policy required under the
related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket
costs incurred in accordance with the Servicing Standard in connection with a
resolution of such termination of an Environmental Insurance Policy shall be
paid by the applicable Master Servicer and shall be reimbursable to it as a
Servicing Advance.
-133-
(d) Each of the Master Servicers and Special Servicers shall at
all times during the term of this Agreement (or, in the case of a Special
Servicer, at all times during the term of this Agreement during which Specially
Serviced Mortgage Loans and/or REO Properties as to which it is the applicable
Special Servicer exist as part of the Trust Fund) keep in force with a Qualified
Insurer having a financial strength or claims-paying rating no lower than two
rating categories below the highest rated Certificates outstanding, and in any
event no lower than "A" from S&P and "A2" from Xxxxx'x, a fidelity bond in such
form and amount as would permit it to be a qualified Xxxxxx Xxx seller-servicer
of multifamily mortgage loans (or in such other form and amount or issued by an
insurer with such other financial strength or claims-paying ability rating as
would not result in an Adverse Rating Event with respect to any Class of Rated
Certificates (as confirmed in writing to the Trustee by the relevant Rating
Agency)). A Master Servicer or Special Servicer shall be deemed to have complied
with the foregoing provision if an Affiliate thereof has such fidelity bond
coverage and, by the terms of such fidelity bond, the coverage afforded
thereunder extends to such Master Servicer or Special Servicer, as the case may
be. Such fidelity bond shall provide that it may not be canceled without ten
days' prior written notice to the Trustee.
Each of the Master Servicers and Special Servicers shall at all times
during the term of this Agreement (or, in the case of a Special Servicer, at all
times during the term of this Agreement during which Specially Serviced Mortgage
Loans and/or REO Properties as to which it is the applicable Special Servicer
exist as part of the Trust Fund) also keep in force with a Qualified Insurer
having a financial strength or claims-paying rating no lower than two rating
categories below the highest rated Certificates outstanding, and in any event no
lower than "A" from S&P and "A2" from Xxxxx'x, a policy or policies of insurance
covering loss occasioned by the errors and omissions of its officers and
employees in connection with its servicing obligations hereunder, which policy
or policies shall be in such form and amount as would permit it to be a
qualified Xxxxxx Xxx seller-servicer of multifamily mortgage loans (or in such
other form and amount or issued by an insurer with such other financial strength
or claims-paying rating as would not result in an Adverse Rating Event with
respect to any Class of Rated Certificates (as confirmed in writing to the
Trustee by the relevant Rating Agency)). A Master Servicer or Special Servicer
shall be deemed to have complied with the foregoing provisions if an Affiliate
thereof has such insurance and, by the terms of such policy or policies, the
coverage afforded thereunder extends to such Master Servicer or Special
Servicer, as the case may be. Any such errors and omissions policy shall provide
that it may not be canceled without ten days' prior written notice to the
Trustee.
SECTION 3.08. Enforcement of Alienation Clauses.
Subject to the second following paragraph, the applicable Master
Servicer (with respect to a Performing Mortgage Loan) and the applicable Special
Servicer (with respect to a Specially Serviced Mortgage Loan), on behalf of the
Trustee as the mortgagee of record, shall enforce any "due-on-sale" or
"due-on-encumbrance" clauses and any other restrictions contained in the related
Mortgage or other related loan document on transfers or further encumbrances of
the related Mortgaged Property and on transfers of interests in the related
Borrower, unless the applicable Master Servicer or the applicable Special
Servicer, as the case may be, has (i) determined, in its reasonable judgment,
that waiver of such restrictions would be in accordance with the Servicing
Standard and (ii) complied with the applicable requirements, if any, of
SECTION 3.20(a) and SECTION 3.24; PROVIDED that, subject to the related Mortgage
Loan Documents and applicable law, neither the applicable Master Servicer nor
the applicable Special Servicer shall waive any right it has, or grant any
consent it is otherwise entitled to
-134-
withhold, in accordance with any related "due-on-encumbrance" clause under any
Mortgage Loan (other than a Co-op Mortgage Loan as to which the NCBFSB
Subordinate Debt Conditions have been satisfied) until it has received written
confirmation from each Rating Agency that such action would not result in an
Adverse Rating Event with respect to any Class of Rated Certificates; and
PROVIDED, FURTHER, that, if the affected Mortgage Loan, individually or together
with all other Mortgage Loans, if any, that are in the same Cross-Collateralized
Group as such Mortgage Loan is one of the 10 largest Mortgage Loans then in the
trust or has a Cut-off Date Principal Balance in excess of $18,000,000, then,
subject to the related Mortgage Loan Documents and applicable law, neither the
applicable Master Servicer nor the applicable Special Servicer shall waive any
right it has, or grant any consent it is otherwise entitled to withhold, in
accordance with any related "due-on-sale" clause under any Mortgage Loan until
it has received written confirmation from each Rating Agency that such action
would not result in an Adverse Rating Event with respect to any Class of Rated
Certificates; and PROVIDED, FURTHER, that, subject to the related Mortgage Loan
Documents and applicable law, the applicable Master Servicer shall not waive any
right it has, or grant any consent it is otherwise entitled to withhold, in
accordance with any related "due-on-encumbrance" clause under any Mortgage Loan
(other than a Co-op Mortgage Loan as to which the NCBFSB Subordinate Debt
Conditions have been satisfied) until it has delivered to the applicable Special
Servicer its recommendation and analysis of the request, together with a copy of
the materials and information upon which such recommendation is based, and has
received the consent of the applicable Special Servicer (the giving of which
consent shall be subject to the Servicing Standard and SECTION 3.24), which
consent shall be deemed given if not denied in writing within 10 Business Days
of receipt by the applicable Special Servicer of the applicable Master
Servicer's written recommendation and analysis and any additional information
requested by the applicable Special Servicer or the Controlling Class
Representative; and PROVIDED, FURTHER, that, subject to the related Mortgage
Loan Documents and applicable law, the applicable Master Servicer shall not
waive any right it has, or grant any consent it is otherwise entitled to
withhold, in accordance with any related "due-on-sale" clause under any Mortgage
Loan until it has received the consent of the applicable Special Servicer (the
giving of which consent shall be subject to the Servicing Standard and SECTION
3.24), which consent shall be deemed given if not denied in writing within 10
Business Days of receipt by the applicable Special Servicer of the applicable
Master Servicer's written recommendation and analysis and any additional
information requested by the applicable Special Servicer or the Controlling
Class Representative; and PROVIDED, FURTHER, that, subject to the related
Mortgage Loan Documents and applicable law, neither the applicable Master
Servicer nor the applicable Special Servicer shall waive any right it has, or
grant any consent it is otherwise entitled to withhold, in accordance with any
related "due-on-sale" or "due-on-encumbrance" clause under any Mortgage Loan, or
approve the assumption of any Mortgage Loan, unless in any such case, all
associated costs and expenses are covered without any expense to the Trust (it
being understood and agreed that, except as expressly provided herein, neither
the applicable Master Servicer nor the applicable Special Servicer shall be
obligated to cover or assume any such costs or expenses); and PROVIDED, FURTHER,
that neither the applicable Master Servicer nor the applicable Special Servicer
shall (to the extent that it is within the control thereof to prohibit such
event) consent to the transfer of any Mortgaged Property which secures a
Cross-Collateralized Group unless (i) all of the Mortgaged Properties securing
such Cross-Collateralized Group are transferred simultaneously by the respective
Borrower or (ii) it obtains the consent of the Controlling Class Representative,
which consent shall be deemed given if not denied in writing within 10 Business
Days of receipt by the Controlling Class Representative of written notice of
such action and all reasonably requested information related thereto. In the
case of any Mortgage Loan, the applicable Master Servicer and the applicable
Special Servicer shall each provide the other with all such information as each
may reasonably request in order to perform its duties under this section.
-135-
In connection with any permitted assumption of any Mortgage Loan or
waiver of a "due-on-sale" or "due-on-encumbrance" clause thereunder, the
applicable Master Servicer (in the case of a Performing Mortgage Loan) or the
applicable Special Servicer (in the case of a Specially Serviced Mortgage Loan)
shall prepare all documents necessary and appropriate for such purposes and
shall coordinate with the related Borrower for the due execution and delivery of
such documents.
Notwithstanding the foregoing, and regardless of whether a particular
Co-op Mortgage Loan contains specific provisions regarding the incurrence of
subordinate debt, or prohibits the incurrence of subordinate debt, or requires
the consent of the Mortgagee in order to incur subordinate debt, the Co-op
Master Servicer may, nevertheless, in accordance with the Servicing Standard,
without the need to obtain any consent hereunder (and without the need to obtain
a ratings confirmation), permit the related Borrower to incur subordinate debt
if the NCBFSB Subordinate Debt Conditions have been met (as certified in writing
to the Trustee and the Controlling Class Representative by the Co-op Master
Servicer no later than five Business Days prior to the making of the subject
subordinate loan without right of reimbursement from the Trust) which
certification shall include notice of the circumstances of the waiver, including
information necessary for the Controlling Class Representative to determine
whether the NCBFSB Subordinate Debt Conditions have been satisfied); PROVIDED
that, subject to the related Mortgage Loan Documents and applicable law, the
Co-op Master Servicer shall not waive any right it has, or grant any consent it
is otherwise entitled to withhold, in accordance with any related
"due-on-encumbrance" clause under any Mortgage Loan, pursuant to this paragraph,
unless in any such case, all associated costs and expenses are covered without
any expense to the Trust.
If a Master Servicer or Special Servicer collects an assumption fee or
an assumption application fee in connection with any transfer or proposed
transfer of any interest in a Borrower or a Mortgaged Property, then such Master
Servicer or Special Servicer, as applicable, will apply that fee to cover the
costs and expenses associated with that transfer or proposed transfer that are
not otherwise paid by the related Borrower and that would otherwise be payable
or reimbursable out of the Trust Fund, including any Rating Agency fees and
expenses to the extent such fees and expenses are collectible under applicable
law and the applicable Master Servicer or Special Servicer, as appropriate,
fails to enforce such requirement in accordance with the related Mortgage Loan
Documents. Any remaining portion of such assumption fee (such remaining portion,
a "NET ASSUMPTION FEE") or of such assumption application fee (such remaining
portion, a "NET ASSUMPTION APPLICATION FEE") will be applied as additional
compensation to the applicable Master Servicer or the applicable Special
Servicer in accordance with SECTION 3.11. Neither the applicable Master Servicer
nor the applicable Special Servicer shall waive any assumption fee or assumption
application fee, to the extent it would constitute additional compensation for
the other such party, without the consent of such other party.
SECTION 3.09. Realization Upon Defaulted Mortgage Loans.
(a) The applicable Special Servicer shall, subject to
SECTIONS 3.09(b), 3.09(c), 3.09(d) and 3.24, exercise reasonable efforts,
consistent with the Servicing Standard, to foreclose upon or otherwise
comparably convert the ownership of the real property and other collateral
securing any Mortgage Loan that comes into and continues in default and as to
which no satisfactory arrangements can be made for collection of delinquent
payments, including pursuant to SECTION 3.20; PROVIDED that none of the Master
Servicers or Special Servicers (other than the applicable Special Servicer)
shall, with respect to any ARD Mortgage Loan after its Anticipated Repayment
Date, take any enforcement action with respect to the payment of Post-ARD
Additional Interest (other than the making of requests for its
-136-
collection), and the applicable Special Servicer may do so only if (i) the
taking of an enforcement action with respect to the payment of other amounts due
under such Mortgage Loan is, in the reasonable judgment of the applicable
Special Servicer, and without regard to such Post-ARD Additional Interest, also
necessary, appropriate and consistent with the Servicing Standard or (ii) all
other amounts due under such Mortgage Loan have been paid, the payment of such
Post-ARD Additional Interest has not been forgiven in accordance with
SECTION 3.20 and, in the reasonable judgment of the applicable Special Servicer,
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 Advance Interest. In connection with the
foregoing, in the event of a default under any Mortgage Loan or
Cross-Collateralized Group that is secured by real properties located in
multiple states, and such states include California or another state with a
statute, rule or regulation comparable to California's "one action rule", then
the applicable Special Servicer shall consult Independent counsel regarding the
order and manner in which the applicable Special Servicer should foreclose upon
or comparably proceed against such properties. The reasonable costs of such
consultation shall be paid by, and reimbursable to, the applicable Special
Servicer as a Servicing Advance. In addition, all other costs and expenses
incurred in any foreclosure sale or similar proceeding shall be paid by, and
reimbursable to, the applicable Special Servicer as a Servicing Advance. Nothing
contained in this SECTION 3.09 shall be construed so as to require the
applicable Special Servicer, on behalf of the Trust, to make a bid on any
Mortgaged Property at a foreclosure sale or similar proceeding that is in excess
of the fair market value of such property, as determined by the applicable
Special Servicer taking into account the factors described in SECTION 3.18 and
the results of any appraisal obtained pursuant to the following sentence or
otherwise, all such cash bids to be made in a manner consistent with the
Servicing Standard. If and when the applicable Special Servicer deems it
necessary in accordance with the Servicing Standard for purposes of establishing
the fair market value of any Mortgaged Property securing a defaulted Mortgage
Loan, whether for purposes of bidding at foreclosure or otherwise, the
applicable Special Servicer is authorized to have an Appraisal completed with
respect to such property (the cost of which appraisal shall be covered by, and
be reimbursable as, a Servicing Advance).
No Master Servicer or Special Servicer, other than the applicable
Special Servicer, shall foreclose upon or otherwise comparably convert,
including by taking title thereto, any real property or other collateral
securing a defaulted Mortgage Loan.
(b) Notwithstanding the foregoing provisions of this SECTION 3.09,
no Mortgaged Property shall be acquired by a Special Servicer on behalf of the
Trust under such circumstances, in such manner or pursuant to such terms as
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code (unless the
portion of such REO Property that is not treated as "foreclosure property" and
that is held by any REMIC Pool at any given time constitutes not more than a DE
MINIMIS amount of the assets of such REMIC Pool within the meaning of Treasury
regulation section 1.860D-1(b)(3)(i) and (ii)), or (ii) except as permitted by
SECTION 3.17(a), subject the Trust to the imposition of any federal income or
prohibited transaction taxes under the Code. Subject to the foregoing, however,
a Mortgaged Property may be acquired through a single member limited liability
company. In addition, except as permitted under SECTION 3.17(a), a Special
Servicer shall not acquire any personal property on behalf of the Trust pursuant
to this SECTION 3.09 unless either:
(i) such personal property is incident to real property (within
the meaning of Section 856(e)(1) of the Code) so acquired by the applicable
Special Servicer; or
-137-
(ii) the applicable Special Servicer shall have obtained an Opinion
of Counsel (the cost of which shall be covered by, and reimbursable as, a
Servicing Advance) to the effect that the holding of such personal property
as part of the Trust Fund will not result in an Adverse REMIC Event with
respect to any REMIC Pool or an Adverse Grantor Trust Event with respect to
either Grantor Trust Pool.
(c) Notwithstanding the foregoing provisions of this SECTION 3.09,
a Special Servicer shall not, on behalf of the Trust, obtain title to a
Mortgaged Property by foreclosure, deed in lieu of foreclosure or otherwise, or
take any other action with respect to any Mortgaged Property, if, as a result of
any such action, the Trustee, on behalf of the Certificateholders, could, in the
reasonable judgment of the applicable Special Servicer, exercised in accordance
with the Servicing Standard, 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 comparable law, unless:
(i) the applicable Special Servicer has previously determined in
accordance with the Servicing Standard, based on a Phase I Environmental
Assessment (and any additional environmental testing that the applicable
Special Servicer deems necessary and prudent) of such Mortgaged Property
conducted by an Independent Person who regularly conducts Phase I
Environmental Assessments and performed during the 12-month period
preceding any such acquisition of title or other action, that such
Mortgaged Property is in compliance with applicable environmental laws and
regulations and there are no circumstances or conditions present at the
Mortgaged Property relating to the use, management or disposal of Hazardous
Materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any applicable
environmental laws and regulations; or
(ii) in the event that the determination described in CLAUSE (c)(i)
above cannot be made, the applicable Special Servicer has previously
determined in accordance with the Servicing Standard, on the same basis as
described in CLAUSE (c)(i) above, and taking into account the coverage
provided under the related Environmental Insurance Policy, that it would
maximize the recovery to the Certificateholders on a present value basis
(the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the related Net
Mortgage Rate) to acquire title to or possession of the Mortgaged Property
and to take such remedial, corrective and/or other further actions as are
necessary to bring the Mortgaged Property into compliance with applicable
environmental laws and regulations and to appropriately address any of the
circumstances and conditions referred to in CLAUSE (c)(i) above.
Any such determination by the applicable Special Servicer contemplated
by CLAUSE (i) or CLAUSE (ii) of the preceding paragraph shall be evidenced by an
Officer's Certificate to such effect delivered to the Trustee, the applicable
Master Servicer and the Controlling Class Representative, specifying all of the
bases for such determination, such Officer's Certificate to be accompanied by
all related environmental reports. The cost of such Phase I Environmental
Assessment and any such additional environmental testing shall be advanced by
the applicable Master Servicer at the direction of the applicable Special
Servicer in accordance with SECTION 3.19(b) given in accordance with the
Servicing Standard; PROVIDED, HOWEVER, that no Master Servicer shall be
obligated in connection therewith to advance any funds which, if so advanced,
would constitute a Nonrecoverable Servicing Advance. Amounts so advanced shall
be subject to reimbursement as Servicing Advances in accordance with
SECTION 3.05(a). The cost of any remedial, corrective or other further action
contemplated by
-138-
CLAUSE (ii) of the preceding paragraph shall be payable out of the applicable
Master Servicer's Collection Account pursuant to SECTION 3.05(a).
(d) If neither of the conditions set forth in CLAUSES (i) and (ii)
of the first paragraph of SECTION 3.09(c) has been satisfied with respect to any
Mortgaged Property securing a defaulted Mortgage Loan, the applicable Special
Servicer shall take such action as is in accordance with the Servicing Standard
(other than proceeding against the Mortgaged Property) and, at such time as it
deems appropriate, may, on behalf of the Trust, release all or a portion of such
Mortgaged Property from the lien of the related Mortgage.
(e) The applicable Special Servicer shall report to the Trustee,
the applicable Master Servicer and the Controlling Class Representative monthly
in writing as to any actions taken by such Special Servicer with respect to any
Mortgaged Property as to which neither of the conditions set forth in CLAUSES
(i) and (ii) of the first paragraph of SECTION 3.09(c) has been satisfied, in
each case until the earliest to occur of satisfaction of either of such
conditions, release of the lien of the related Mortgage on such Mortgaged
Property and the related Mortgage Loan's becoming a Corrected Mortgaged Loan.
(f) The applicable Special Servicer shall have the right to
determine, in accordance with the Servicing Standard, the advisability of
seeking to obtain a deficiency judgment if the state in which the related
Mortgaged Property is located and the terms of the subject Mortgage Loan permit
such an action and shall, in accordance with the Servicing Standard, seek such
deficiency judgment if it deems advisable.
(g) Annually in each January, the applicable Special Servicer
shall on a timely basis forward to the applicable Master Servicer, who shall
promptly file same with the IRS on a timely basis, the information returns with
respect to the reports of foreclosures and abandonments and reports relating to
any cancellation of indebtedness income with respect to any Mortgage Loan or
Mortgaged Property required by Sections 6050H (as applicable), 6050J and 6050P
of the Code. Contemporaneously, the applicable Special Servicer shall deliver to
the applicable Master Servicer, who shall promptly forward it to the Trustee, an
Officer's Certificate stating that all such information returns relating to any
Specially Serviced Mortgage Loan or REO Property that were required to be filed
during the prior twelve (12) months have been properly completed and timely
provided to such Master Servicer. The applicable Master Servicer shall prepare
and file the information returns with respect to the receipt of any mortgage
interest received in a trade or business from individuals with respect to any
Mortgage Loan as required by Section 6050H of the Code. All information returns
shall be in form and substance sufficient to meet the reporting requirements
imposed by the relevant sections of the Code.
(h) As soon as the applicable Special Servicer makes, in
consultation with the Controlling Class Representative, a Final Recovery
Determination with respect to any Mortgage Loan or REO Property, it shall
promptly notify the Trustee, the applicable Master Servicer and the Controlling
Class Representative. Each Special Servicer shall maintain accurate records,
prepared by a Servicing Officer, of each such Final Recovery Determination (if
any) made by it and the basis thereof. Each such Final Recovery Determination
(if any) shall be evidenced by an Officer's Certificate delivered to the
Trustee, the applicable Master Servicer and the Controlling Class Representative
no later than the third Business Day following such Final Recovery
Determination.
-139-
SECTION 3.10. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the applicable Master Servicer of a notification that payment in full shall
be escrowed or made in a manner customary for such purposes, the applicable
Master Servicer shall promptly so notify the Trustee and request delivery to it
or its designee of the related Mortgage File (such notice and request to be
effected by delivering to the Trustee a Request for Release in the form of
EXHIBIT D-1 attached hereto, which Request for Release shall be accompanied by
the form of any release or discharge to be executed by the Trustee and 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 such Master
Servicer's Collection Account pursuant to SECTION 3.04(a) have been or will be
so deposited). Upon receipt of such Request for Release, the Trustee shall
promptly release, or cause any related Custodian to release, the related
Mortgage File to the applicable Master Servicer or its designee and shall
deliver to the applicable Master Servicer or its designee such accompanying
release or discharge, duly executed. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to a
Collection Account or the Distribution Account.
(b) If from time to time, and as appropriate for servicing or
foreclosure of any Mortgage Loan, the applicable Master Servicer or the
applicable Special Servicer shall otherwise require any Mortgage File (or any
portion thereof), then, upon request of such Master Servicer and receipt from
such Master Servicer of a Request for Release in the form of EXHIBIT D-1
attached hereto signed by a Servicing Officer thereof, or upon request of such
Special Servicer and receipt from such Special Servicer of a Request for Release
in the form of EXHIBIT D-2 attached hereto, the Trustee shall release, or cause
any related Custodian to release, such Mortgage File (or portion thereof) to
such Master Servicer or such Special Servicer, as the case may be, or its
designee. Upon return of such Mortgage File (or portion thereof) to the Trustee
or the related Custodian, or upon the applicable Special Servicer's delivery to
the Trustee of an Officer's Certificate stating that (i) such Mortgage Loan was
liquidated and all amounts received or to be received in connection with such
liquidation that are required to be deposited into the applicable Master
Servicer's Collection Account pursuant to SECTION 3.04(a) have been or will be
so deposited or (ii) such Mortgage Loan has become an REO Property, a copy of
the Request for Release shall be returned by the Trustee to the applicable
Master Servicer or the applicable Special Servicer, as appropriate.
(c) Within five Business Days of the applicable Special Servicer's
request therefor (or, if the applicable Special Servicer notifies the Trustee of
an exigency, within such shorter period as is reasonable under the
circumstances), the Trustee shall execute and deliver to the applicable Special
Servicer, in the form supplied to the Trustee by such Special Servicer, any
court pleadings, requests for trustee's sale or other documents reasonably
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or to any legal action brought to obtain judgment against any Borrower
on a Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce
any other remedies or rights provided by a Mortgage Note or Mortgage or
otherwise available at law or in equity or to defend any legal action or
counterclaim filed against the Trust, the applicable Master Servicer or such
Special Servicer; PROVIDED that the Trustee may alternatively execute and
deliver to the applicable Special Servicer, in the form supplied to the Trustee
by such Special Servicer, a limited power of attorney issued in favor of such
Special Servicer and empowering such Special Servicer to execute and deliver any
or all of such pleadings or documents relating to any Mortgage Loan on behalf of
the Trustee (however, the Trustee shall not be liable for any misuse of such
power of attorney by a Special Servicer). Together
-140-
with such pleadings or documents (or such power of attorney empowering the
applicable Special Servicer to execute the same on behalf of the Trustee), the
applicable Special Servicer shall deliver to the Trustee an Officer's
Certificate requesting that such pleadings or documents (or such power of
attorney empowering the applicable Special Servicer to execute the same on
behalf of the Trustee) be executed by the Trustee and certifying as to the
reason such pleadings or documents are required and that the execution and
delivery thereof by the Trustee (or by the applicable Special Servicer on behalf
of the Trustee) will not invalidate or otherwise affect the lien of the subject
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
SECTION 3.11. Master Servicing and Special Servicing Compensation;
Interest on and Reimbursement of Servicing Advances;
Payment of Certain Expenses; Obligations of the Trustee
and any Fiscal Agent Regarding Back-up Servicing
Advances.
(a) As compensation for its activities hereunder, each Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each Mortgage Loan (including each Specially Serviced Mortgage Loan) as to which
it is the applicable Master Servicer and each REO Loan that relates to an REO
Property as to which it is the applicable Master Servicer. As to each Mortgage
Loan and REO Loan, for each calendar month (commencing with May 2002) or any
applicable portion thereof, the Master Servicing Fee shall accrue at the related
Master Servicing Fee Rate on the same principal amount as interest accrues from
time to time during such calendar month (or portion thereof) on such Mortgage
Loan or is deemed to accrue from time to time during such calendar month (or
portion thereof) on such REO Loan, as the case may be, and shall be calculated
on the same Interest Accrual Basis as is applicable for such Mortgage Loan or
REO Loan, as the case may be. The Master Servicing Fee with respect to any
Mortgage Loan or REO Loan shall cease to accrue if a Liquidation Event occurs in
respect thereof. Master Servicing Fees earned with respect to any Mortgage Loan
or REO Loan shall be payable monthly from payments of interest on such Mortgage
Loan or REO Revenues allocable as interest on such REO Loan, as the case may be.
The applicable Master Servicer shall be entitled to recover unpaid Master
Servicing Fees in respect of any Mortgage Loan or REO Loan out of the portion
any related Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds
allocable as interest on such Mortgage Loan or REO Loan, as the case may be.
NCBFSB and any successor holder of the Excess Servicing Fee Rights
that relate to the Co-op Mortgage Loans (and any successor REO Loans with
respect to such Co-op Mortgage Loans) shall be entitled, at any time, at its own
expense, to transfer, sell, pledge or otherwise assign such Excess Servicing Fee
Rights in whole (but not in part), and KRECM and any successor holder of the
Excess Servicing Fee Rights that relate to the other Mortgage Loans (and any
successor REO Loans with respect to such other Mortgage Loans) shall be
entitled, at any time at its own expense, to transfer, sell, pledge or otherwise
assign such Excess Servicing Fee Rights in whole (but not in part), in either
case, to any Qualified Institutional Buyer or Institutional Accredited Investor
(other than a Plan), PROVIDED that no such transfer, sale, pledge or other
assignment shall be made unless (i) that transfer, sale, pledge or other
assignment is exempt from the registration and/or qualification requirements of
the Securities Act and any applicable state securities laws and is otherwise
made in accordance with the Securities Act and such state securities laws, (ii)
the prospective transferor shall have delivered to the Depositor a certificate
substantially in the form attached as EXHIBIT F-3A hereto, and (iii) the
prospective transferee shall have delivered to KRECM or NCBFSB, as applicable,
and the Depositor a certificate substantially in the form attached as
EXHIBIT F-3B hereto. None of the Depositor, the Trustee or the Certificate
-141-
Registrar is obligated to register or qualify an Excess Servicing Fee Right
under the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer, sale, pledge or
assignment of an Excess Servicing Fee Right without registration or
qualification. KRECM, NCBFSB and each holder of an Excess Servicing Fee Right
desiring to effect a transfer, sale, pledge or other assignment of such Excess
Servicing Fee Right shall, and each of KRECM and NCBFSB hereby agrees, and each
such holder of an Excess Servicing Fee Right by its acceptance of such Excess
Servicing Fee Right shall be deemed to have agreed, in connection with any
transfer of such Excess Servicing Fee Right effected by such Person, to
indemnify the Certificateholders, the Trust, the Depositor, the Underwriters,
the Trustee, any Fiscal Agent, the Master Servicers, the Certificate Registrar
and the Special Servicers against any liability that may result if such transfer
is not exempt from registration and/or qualification under the Securities Act or
other applicable federal and state securities laws or is not made in accordance
with such federal and state laws or in accordance with the foregoing provisions
of this paragraph. By its acceptance of an Excess Servicing Fee Right, the
holder thereof shall be deemed to have agreed (i) to keep all information
relating to the Trust and the Trust Fund and made available to it by either
Master Servicer confidential (except as permitted pursuant to CLAUSE (iii) below
or, in the case of a Master Servicer, as contemplated hereby in the performance
of its duties and obligations hereunder), (ii) not to use or disclose such
information in any manner that could result in a violation of any provision of
the Securities Act or other applicable securities laws or that would require
registration of such Excess Servicing Fee Right or any Non-Registered
Certificate pursuant to the Securities Act, and (iii) not to disclose such
information, and to cause its officers, directors, partners, employees, agents
or representatives not to disclose such information, in any manner whatsoever,
in whole or in part, to any other Person other than such holder's auditors,
legal counsel and regulators, except to the extent such disclosure is required
by law, court order or other legal requirement or to the extent such information
is of public knowledge at the time of disclosure by such holder or has become
generally available to the public other than as a result of disclosure by such
holder; PROVIDED, HOWEVER, that such holder may provide all or any part of such
information to any other Person who is contemplating an acquisition of such
Excess Servicing Fee Right if, and only if, such Person (x) confirms in writing
such prospective acquisition and (y) agrees in writing to keep such information
confidential, not to use or disclose such information in any manner that could
result in a violation of any provision of the Securities Act or other applicable
securities laws or that would require registration of such Excess Servicing Fee
Right or any Non-Registered Certificates pursuant to the Securities Act and not
to disclose such information, and to cause its officers, directors, partners,
employees, agents or representatives not to disclose such information, in any
manner whatsoever, in whole or in part, to any other Person other than such
Persons' auditors, legal counsel and regulators. From time to time following any
transfer, sale, pledge or assignment of an Excess Servicing Fee Right, the
Person then acting as the Master Servicer with respect to the Mortgage Loan or
REO Loan to which the Excess Servicing Fee Right relates, shall pay, out of each
amount paid to such Master Servicer as Master Servicing Fees with respect to
such Mortgage Loan or REO Loan, as the case may be, the related Excess Servicing
Fees to the holder of such Excess Servicing Fee Right within one Business Day
following the payment of such Master Servicing Fees to such Master Servicer, in
each case in accordance with payment instructions provided by such holder in
writing to such Master Servicer. The holder of an Excess Servicing Fee Right
shall not have any rights under this Agreement except as set forth in the
preceding sentences of this paragraph. Neither the Certificate Registrar nor the
Trustee shall have any obligation whatsoever regarding payment of an Excess
Servicing Fee or the assignment or transfer of an Excess Servicing Fee Right.
-142-
A Master Servicer's right to receive the Master Servicing Fees to
which it is entitled may not be transferred in whole or in part except in
connection with the transfer of all of such Master Servicer's responsibilities
and obligations under this Agreement and except as otherwise expressly provided
herein, including as contemplated by the prior paragraph.
(b) Subject to offset as provided in SECTION 3.02(a), the
applicable Master Servicer shall be entitled to receive the following items as
additional servicing compensation (the following items, collectively,
"ADDITIONAL MASTER SERVICING COMPENSATION"):
(i) any and all Net Default Charges collected with respect to a
Performing Mortgage Loan;
(ii) 50% of any and all Net Assumption Application Fees, Net
Assumption Fees, modification fees, extension fees, consent fees, release
fees, waiver fees, fees paid in connection with defeasance and earn-out
fees actually paid by a Borrower with respect to a Performing Mortgage
Loan;
(iii) any and all charges for beneficiary statements or demands,
amounts collected for checks returned for insufficient funds and other loan
processing fees actually paid by a Borrower with respect to a Performing
Mortgage Loan and, in the case of checks returned for insufficient funds,
with respect to a Specially Serviced Mortgage Loan;
(iv) any and all Prepayment Interest Excesses collected with
respect to a Mortgage Loan, including a Specially Serviced Mortgage Loan,
to the extent not needed to pay Compensating Interest Payments;
(v) all fees earned by reason of the failure of the Borrower under
the 00 Xxxx Xxx Xxxxxx Mortgage Loan to obtain a permanent certificate of
occupancy with respect to the 00 Xxxx Xxx Xxxxxx Property by a specified
date; and
(vi) interest or other income earned on deposits in the Accounts
(other than, if applicable, the Paradise Island Special Account) maintained
by such Master Servicer, in accordance with SECTION 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to any such
Account for each Collection Period and, further, in the case of a Servicing
Account or Reserve Account, only to the extent such interest or other
income is not required to be paid to any Borrower under applicable law or
under the related Mortgage).
To the extent that any of the amounts described in CLAUSES (i) through
(v) in the preceding paragraph are collected by a Special Servicer, such Special
Servicer shall promptly pay such amounts to the applicable Master Servicer.
(c) As compensation for its activities hereunder, subject to the
proviso to CLAUSE (d) of the definition of "Servicing Transfer Event", each
Special Servicer shall be entitled to receive monthly the Special Servicing Fee
with respect to each Specially Serviced Mortgage Loan as to which it is the
applicable Special Servicer and each REO Loan that relates to an REO Property as
to which it is the applicable Special Servicer. As to each Specially Serviced
Mortgage Loan and REO Loan, for any particular calendar month or applicable
portion thereof, the Special Servicing Fee shall accrue at the Special Servicing
Fee Rate on the same principal amount as interest accrues from time to time
during
-143-
such calendar month (or portion thereof) on such Specially Serviced Mortgage
Loan or is deemed to accrue from time to time during such calendar month (or
portion thereof) on such REO Loan, as the case may be, and shall be calculated
on the same Interest Accrual Basis as is applicable for such Specially Serviced
Mortgage Loan or REO Loan, as the case may be. The Special Servicing Fee with
respect to any Specially Serviced Mortgage Loan or REO Loan shall cease to
accrue as of the date a Liquidation Event occurs in respect thereof or, in the
case of a Specially Serviced Mortgage Loan, as of the date it becomes a
Corrected Mortgage Loan. Earned but unpaid Special Servicing Fees shall be
payable first out of related Liquidation Proceeds and then monthly out of
general collections on the Mortgage Loans and any REO Properties on deposit in
the applicable Master Servicer's Collection Account pursuant to SECTION 3.05(a).
As further compensation for its activities hereunder, subject to the
proviso to CLAUSE (d) of the definition of "Servicing Transfer Event", the
applicable Special Servicer shall be entitled to receive the Workout Fee with
respect to each Corrected Mortgage Loan. As to each such Corrected Mortgage
Loan, the Workout Fee shall be payable out of, and shall be calculated by
application of the Workout Fee Rate to, each payment of interest (other than
Post-ARD Additional Interest and Default Interest) and principal received from
the related Borrower on such Mortgage Loan for so long as it remains a Corrected
Mortgage Loan. The Workout Fee with respect to any Corrected Mortgage Loan will
cease to be payable if a Servicing Transfer Event occurs with respect thereto or
if the related Mortgaged Property becomes an REO Property; PROVIDED that a new
Workout Fee would become payable if and when such Mortgage Loan again became a
Corrected Mortgage Loan with respect to such new Servicing Transfer Event. If a
Special Servicer is terminated (other than for cause), including pursuant to
SECTION 3.25, or resigns in accordance with SECTION 6.04, it shall retain the
right to receive any and all Workout Fees payable in respect of (i) any Mortgage
Loans as to which it was the applicable Special Servicer, that became Corrected
Mortgage Loans during the period that it acted in such capacity and that were
still Corrected Mortgage Loans at the time of such termination or resignation
and (ii) any Specially Serviced Mortgage Loan for which it has resolved the
circumstances and/or conditions causing such Mortgage Loan to be a Specially
Serviced Mortgage Loan, but which had not as of the time it was terminated or
resigned become a Corrected Mortgage Loan solely because the related Borrower
had not made three consecutive timely Monthly Payments and which subsequently
becomes a Corrected Mortgage Loan as a result of the related Borrower making
such three consecutive timely Monthly Payments (and the successor Special
Servicer shall not be entitled to any portion of such Workout Fees), in each
case until the Workout Fee for any such loan ceases to be payable in accordance
with the preceding sentence; PROVIDED that, in the case of any Specially
Serviced Mortgage Loan described in CLAUSE (ii) of this sentence, the terminated
Special Servicer shall immediately deliver the related Servicing File to the
applicable Master Servicer, and the applicable Master Servicer shall (without
further compensation) monitor that all conditions precedent to such Mortgage
Loan's becoming a Corrected Mortgage Loan are satisfied and, further, shall
immediately transfer such Servicing File to the new applicable Special Servicer
if and when it becomes apparent to the applicable Master Servicer that such
conditions precedent will not be satisfied.
As further compensation for its activities hereunder, subject to the
proviso to CLAUSE (d) of the definition of "Servicing Transfer Event", the
applicable Special Servicer shall also be entitled to receive a Liquidation Fee
with respect to each Specially Serviced Mortgage Loan or REO Property as to
which (i) it is the applicable Special Servicer and (ii) it receives any full,
partial or discounted payoff from the related Borrower or any Condemnation
Proceeds or Liquidation Proceeds (other than in connection with (A) any draw on
the Paradise Island Letter of Credit, (B) the purchase of any such
-144-
Specially Serviced Mortgage Loan by the applicable Special Servicer or the
Majority Controlling Class Certificateholder(s) pursuant to SECTION 3.18, (C)
the purchase of any such Specially Serviced Mortgage Loan or REO Property by a
Master Servicer, a Special Servicer or a Controlling Class Certificateholder
pursuant to SECTION 9.01, (D) the acquisition of any such Specially Serviced
Mortgage Loan or REO Property by the Sole Certificateholder(s) in exchange for
all the Certificates pursuant to SECTION 9.01, (E) the repurchase or replacement
no later than the end of the applicable Initial Resolution Period and any
applicable Resolution Extension Period, as a result of a Material Breach or
Material Document Defect, of any such Specially Serviced Mortgage Loan or REO
Property by a Mortgage Loan Seller pursuant to the related Mortgage Loan
Purchase Agreement, the Column Performance Guarantor pursuant to the Column
Performance Guarantee, the NCBCC Performance Guarantor pursuant to the NCBCC
Performance Guarantee or the NCBFSB Performance Guarantor pursuant to the NCBFSB
Performance Guarantee, (F) the purchase, on or before December 31, 2003, of the
00 Xxxx Xxx Xxxxxx Mortgage Loan by NCB pursuant to the NCB Mortgage Loan
Purchase Agreement as a result of the related Borrower's failure to obtain a
permanent certificate of occupancy for the 00 Xxxx Xxx Xxxxxx Property by
November 6, 2003 or (G) any withdrawals from the Paradise Island Reserve Fund
pursuant to SECTION 3.19(i)). As to each such Specially Serviced Mortgage Loan
or REO Property, the Liquidation Fee shall be payable out of, and shall be
calculated by application of the Liquidation Fee Rate to, any such full, partial
or discounted payoff, Condemnation Proceeds and/or Liquidation Proceeds received
or collected in respect thereof (other than any portion of such payment or
proceeds that represents Post-ARD Additional Interest, Default Charges, a
Prepayment Premium or a Yield Maintenance Charge). The Liquidation Fee with
respect to any such Specially Serviced Mortgage Loan will not be payable if such
Mortgage Loan becomes a Corrected Mortgage Loan.
A Special Servicer's right to receive any Special Servicing Fee,
Workout Fee and/or Liquidation Fee to which it is entitled may not be
transferred in whole or in part except in connection with the transfer of all of
such Special Servicer's responsibilities and obligations under this Agreement
and except as otherwise expressly provided herein.
(d) Subject to offset as provided in SECTION 3.02(a), the
applicable Special Servicer shall be entitled to receive the following items as
additional special servicing compensation (the following items, collectively,
the "ADDITIONAL SPECIAL SERVICING COMPENSATION"):
(i) any and all Net Default Charges collected with respect to a
Specially Serviced Mortgage Loan or an REO Loan;
(ii) any and all Net Assumption Fees, Net Assumption Application
Fees, modification fees, extension fees, consent fees, release fees, waiver
fees, fees paid in connection with defeasance, earn-out fees and charges
for beneficiary statements or demands that are actually received on or with
respect to a Specially Serviced Mortgage Loan or an REO Loan;
(iii) 50% of any and all Net Assumption Fees, Net Assumption
Application Fees, modification fees, extension fees, consent fees, release
fees, waiver fees, fees paid in connection with defeasance and earn-out
fees that are actually received on or with respect to a Performing Mortgage
Loan; and
(iv) interest or other income earned on deposits in any REO Account
maintained by such Special Servicer, in accordance with SECTION 3.06(b)
(but only to the extent of the Net Investment Earnings, if any, with
respect to such REO Account for each Collection Period).
-145-
To the extent that any of the amounts described in CLAUSES (i) through
(iii) of the preceding paragraph are collected by a Master Servicer, such Master
Servicer shall promptly pay such amounts to the applicable Special Servicer and
shall not be required to deposit such amounts in such Master Servicer's
Collection Account pursuant to SECTION 3.04(a).
(e) Each of the Master Servicers and Special Servicers shall be
required (subject to SECTION 3.11(h) below) to pay out of its own funds all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of any amounts due and owing to any of Sub-Servicers retained
by it (including any termination fees) and the premiums for any blanket policy
or the standby fee or similar premium, if any, for any master force placed
policy obtained by it insuring against hazard losses pursuant to
SECTION 3.07(b)), if and to the extent such expenses are not payable directly
out of any Collection Account, Servicing Account, Reserve Account or REO
Account, and no Master Servicer or Special Servicer shall be entitled to
reimbursement for any such expense incurred by it except as expressly provided
in this Agreement. If either Master Servicer is required to make any Servicing
Advance hereunder at the discretion of a Special Servicer in accordance with
SECTION 3.19 or otherwise, such Special Servicer shall promptly provide such
Master Servicer with such documentation regarding the subject Servicing Advance
as such Master Servicer may reasonably request.
(f) If a Master Servicer or, as contemplated by SECTION 3.19(b), a
Special Servicer is required under this Agreement to make a Servicing Advance,
but fails to do so within ten days after such Advance is required to be made,
the Trustee shall, if it has actual knowledge of such failure on the part of
such Master Servicer or Special Servicer, as the case may be, give notice of
such failure to the defaulting party. If such Advance is not made by such Master
Servicer or Special Servicer within three Business Days after such notice, then
(subject to SECTION 3.11(h) below) the Trustee or a Fiscal Agent appointed
thereby shall make such Advance. If any Fiscal Agent makes any such Servicing
Advance, the Trustee shall be deemed not to be in default under this Agreement
for failing to do so.
(g) Each Master Servicer, each Special Servicer, the Trustee and
any Fiscal Agent shall each be entitled to receive interest at the Reimbursement
Rate in effect from time to time, accrued on the amount of each Servicing
Advance made thereby (with its own funds), for so long as such Servicing Advance
is outstanding. Such interest with respect to any Servicing Advances shall be
payable: (i) FIRST, in accordance with SECTIONS 3.05 and 3.26, out of any
Default Charges subsequently collected on or in respect of the particular
Mortgage Loan or REO Loan as to which such Servicing Advance relates; and (ii)
THEN, after such Servicing Advance is reimbursed, but only if and to the extent
that such Default Charges are insufficient to cover such Advance Interest, out
of general collections on the Mortgage Loans and REO Properties on deposit in
the applicable Master Servicer's Collection Account. The applicable Master
Servicer shall reimburse itself, either Special Servicer, the Trustee or any
Fiscal Agent, as appropriate, for any Servicing Advance made by any such Person
with respect to any Mortgage Loan or REO Property as to which such Master
Servicer is the applicable Master Servicer as soon as practicable after funds
available for such purpose are deposited in such Master Servicer's Collection
Account. A Master Servicer shall not be entitled to Advance Interest on any
Servicing Advance made thereby to the extent a payment is received but is being
held by such Master Servicer in suspense.
(h) Notwithstanding anything to the contrary set forth herein,
none of the Master Servicers, the Special Servicers, the Trustee or any Fiscal
Agent shall be required to make any Servicing Advance that it determines in its
reasonable judgment would constitute a Nonrecoverable Servicing
-146-
Advance. The determination by any Person with an obligation hereunder to make
Servicing Advances that it has made a Nonrecoverable Servicing Advance or that
any proposed Servicing Advance, if made, would constitute a Nonrecoverable
Servicing Advance, shall be made by such Person in its reasonable judgment and
shall be evidenced by an Officer's Certificate delivered promptly to the
Depositor, the Trustee (unless it is the Person making such determination) and
the Controlling Class Representative, setting forth the basis for such
determination, accompanied by a copy of an Appraisal of the related Mortgaged
Property or REO Property performed within the 12 months preceding such
determination, and further accompanied by any other information, including
engineers' reports, environmental surveys or similar reports, that such Person
may have obtained and that support such determination. Notwithstanding the
foregoing, the Trustee and any Fiscal Agent shall be entitled to conclusively
rely on any determination of nonrecoverability that may have been made by the
applicable Master Servicer or the applicable Special Servicer with respect to a
particular Servicing Advance for any Mortgage Loan or REO Property, and the
applicable Master Servicer and the applicable Special Servicer shall each be
entitled to conclusively rely on any determination of nonrecoverability that may
have been made by the other such party with respect to a particular Servicing
Advance for any Mortgage Loan or REO Property. A copy of any such Officer's
Certificate (and accompanying information) of a Master Servicer shall also be
delivered promptly to the Special Servicer for the subject Mortgage Loan or REO
Property, a copy of any such Officer's Certificate (and accompanying
information) of a Special Servicer shall also be promptly delivered to the
Master Servicer for the subject Mortgage Loan or REO Property, and a copy of any
such Officer's Certificates (and accompanying information) of the Trustee or the
Fiscal Agent shall also be promptly delivered to the Controlling Class
Representative and the Master Servicer and Special Servicer for the subject
Mortgage Loan or REO Property.
(i) Notwithstanding anything to the contrary set forth herein, the
applicable Master Servicer may (and, at the direction of the applicable Special
Servicer if a Specially Serviced Mortgage Loan or an REO Property is involved,
shall) pay directly out of such Master Servicer's Collection Account any
servicing expense that, if paid by the applicable Master Servicer or the
applicable Special Servicer, would constitute a Nonrecoverable Servicing Advance
for the subject Mortgage Loan or REO Property; PROVIDED that the applicable
Master Servicer (or the applicable Special Servicer, if a Specially Serviced
Mortgage Loan or an REO Property is involved) has determined in accordance with
the Servicing Standard that making such payment is in the best interests of the
Certificateholders (as a collective whole), as evidenced by an Officer's
Certificate delivered promptly to the Depositor, the Trustee and the Controlling
Class Representative, setting forth the basis for such determination and
accompanied by any information that such Person may have obtained that supports
such determination. A copy of any such Officer's Certificate (and accompanying
information) of a Master Servicer shall also be delivered promptly to the
Controlling Class Representative and the Special Servicer for the subject
Mortgage Loan or REO Property, and a copy of any such Officer's Certificate (and
accompanying information) of a Special Servicer shall also be promptly delivered
to the Master Servicer and the Controlling Class Representative for the subject
Mortgage Loan or REO Property.
SECTION 3.12. Property Inspections; Collection of Financial
Statements; Delivery of Certain Reports.
(a) The applicable Special Servicer shall perform or cause to be
performed a physical inspection of a Mortgaged Property as soon as practicable
(but in any event not later than 60 days) after the related Mortgage Loan
becomes a Specially Serviced Mortgage Loan (and, in cases where the related
Mortgage Loan has become a Specially Serviced Mortgage Loan, the applicable
Special Servicer
-147-
shall continue to perform or cause to be performed a physical inspection of the
subject Mortgaged Property at least once per calendar year thereafter for so
long as the related Mortgage Loan remains a Specially Serviced Mortgage Loan or
if such Mortgaged Property becomes an REO Property); PROVIDED that each Special
Servicer shall be entitled to reimbursement of the reasonable and direct
out-of-pocket expenses incurred by it in connection with each such inspection as
Servicing Advances and otherwise as contemplated by SECTION 3.05(b). Beginning
in 2003, the applicable Master Servicer shall at its expense perform or cause to
be performed an inspection of the Mortgaged Property for each Mortgage Loan at
least once per calendar year, if the applicable Special Servicer has not already
done so during that period pursuant to the preceding sentence. Each of the
Master Servicers and Special Servicers shall prepare (and, promptly following
preparation, if there has been a material adverse change in the condition of the
subject Mortgaged Property or REO Property, as applicable, deliver to the
Controlling Class Representative) a written report of each such inspection
performed by it or on its behalf that sets forth in detail the condition of the
subject Mortgaged Property and that specifies the occurrence or existence of:
(i) any sale, transfer or abandonment of the subject Mortgaged Property of which
such Master Servicer or Special Servicer, as applicable, is aware, (ii) any
change in the condition or occupancy of the subject Mortgaged Property of which
such Master Servicer or Special Servicer, as applicable, is aware and that it
considers, in accordance with the Servicing Standard, material, or (iii) any
waste committed on the Mortgaged Property of which such Master Servicer or
Special Servicer, as the case may be, is aware and that it considers, in
accordance with the Servicing Standard, material. Each of the Master Servicers
and Special Servicers shall deliver to the Controlling Class Representative
(imaged with the ARCap Naming Convention) and, upon request, to the Trustee a
copy (or image in suitable electronic media) of each such written report
prepared by it, in each case within 30 days following the request (or, if later
or if request is not required, within 30 days following the later of completion
of the related inspection if the inspection is performed by the applicable
Master Servicer or Special Servicer, as appropriate, or receipt of the related
inspection report if the inspection is performed by a third party). Upon
request, the Trustee shall request from the applicable Master Servicer or
Special Servicer, as appropriate, and, to the extent such items have been
delivered to the Trustee by the applicable Master Servicer or Special Servicer,
as appropriate, deliver to each of the Depositor, the related Mortgage Loan
Seller, the Controlling Class Representative, any Certificateholder or, if the
Trustee has in accordance with SECTION 5.06(b) confirmed the Ownership Interest
in Certificates held thereby, any Certificate Owner, a copy (or image in
suitable electronic media) of each such written report prepared by a Master
Servicer or Special Servicer.
(b) Commencing with respect to the calendar quarter ended June 30,
2002, the applicable Special Servicer, in the case of any Specially Serviced
Mortgage Loan, and the applicable Master Servicer, in the case of each
Performing Mortgage Loan, shall make reasonable efforts to collect promptly from
each related Borrower quarterly and annual operating statements, budgets and
rent rolls (or, in the case of a residential cooperative property, maintenance
schedules) of the related Mortgaged Property, and quarterly and annual financial
statements of such Borrower, whether or not delivery of such items is required
(or, in the case of Co-op Mortgage Loans, only if delivery of such items is
required) pursuant to the terms of the related Mortgage Loan Documents. In
addition, the applicable Special Servicer shall cause quarterly and annual
operating statements, budgets and rent rolls to be regularly prepared in respect
of each REO Property and shall collect all such items promptly following their
preparation. Each Special Servicer shall deliver images in suitable electronic
media (or, in the case of the Co-op Master Servicer, until April 2003, paper or
electronic copies) of all of the foregoing items so collected or obtained by it
to the applicable Master Servicer within 30 days of its receipt thereof. In the
case of each Performing Mortgage Loan serviced by the Co-op Master Servicer,
such deliveries shall
-148-
be limited to those required under the applicable loan documents. Each Master
Servicer shall deliver at least quarterly all items required to be delivered to
it by the applicable Special Servicer pursuant to the second preceding sentence
to the Controlling Class Representative and the Trustee in an imaged format with
the ARCap Naming Convention (or, in the case of the Co-op Master Servicer, until
April 2003, in either paper or electronic format).
The applicable Master Servicer shall maintain a CMSA Operating
Statement Analysis Report with respect to each Mortgaged Property and REO
Property. Within 60 days after receipt by the applicable Master Servicer from
the related Borrower or otherwise, as to a Performing Mortgage Loan, and within
30 days after receipt by the applicable Master Servicer from a Special Servicer
or otherwise, as to a Specially Serviced Mortgage Loan or an REO Property, of
any annual operating statements or rent rolls (or, in the case of a residential
cooperative property, maintenance schedules) with respect to any Mortgaged
Property or REO Property, such Master Servicer shall, based upon such operating
statements or rent rolls (or, in the case of a residential cooperative property,
maintenance schedules), prepare (or, if previously prepared, update) the CMSA
Operating Statement Analysis Report for the subject Mortgaged Property or REO
Property. Each Master Servicer shall remit electronically an image with the
ARCap Naming Convention of a copy of each CMSA Operating Statement Analysis
Report prepared or updated by it (promptly following initial preparation and
each update thereof), together with, if so requested, the underlying operating
statements and rent rolls (or, in the case of a residential cooperative
property, maintenance schedules), to the Controlling Class Representative, the
Trustee and the applicable Special Servicer (PROVIDED that the Co-op Master
Servicer may deliver such accompanying items in paper or electronic format until
April 2003). The Trustee shall, upon request, request from the applicable Master
Servicer (if necessary) and, to the extent such items have been delivered to the
Trustee by the applicable Master Servicer, deliver to any Certificateholder or,
if the Trustee has in accordance with SECTION 5.06(b) confirmed the Ownership
Interest in the Certificates held thereby, any Certificate Owner, a copy of the
CMSA Operating Statement Analysis (or update thereof) for any Mortgaged Property
or REO Property and, if requested, the related operating statement or rent rolls
(or, in the case of a residential cooperative property, maintenance schedules).
Within 60 days (or, in the case of items received from a Special
Servicer with respect to Specially Serviced Mortgage Loans and REO Properties,
30 days) after receipt by the applicable Master Servicer of any quarterly or
annual operating statements with respect to any Mortgaged Property or REO
Property, such Master Servicer shall prepare or update and forward to the
Trustee, the applicable Special Servicer and the Controlling Class
Representative a CMSA NOI Adjustment Worksheet using the same format and ARCap
Naming Convention as the CMSA Operating Statement Analysis Report for such
Mortgaged Property or REO Property, together with the related quarterly or
annual operating statements (PROVIDED that the Co-op Master Servicer may deliver
such accompanying items in paper or electronic format until April 2003).
If, with respect to any Mortgage Loan (other than a Specially Serviced
Mortgage Loan), the applicable Special Servicer has any questions for the
related Borrower based upon the information received by the applicable Special
Servicer pursuant to SECTION 3.12(a) or 3.12(b), the applicable Master Servicer
shall, in this regard and without otherwise changing or modifying its duties
hereunder, reasonably cooperate with the applicable Special Servicer in
assisting such Special Servicer to contact and solicit information from such
Borrower.
-149-
(c) Not later than 2:00 p.m. (
New York City time) on the first
Business Day following each Determination Date, each Special Servicer shall
prepare and deliver or cause to be delivered to the Master Servicers (in each
case to the extent relevant thereto) and, upon request, the Controlling Class
Representative the following reports (or data files relating to reports of the
Master Servicer) with respect to those Specially Serviced Mortgage Loans and REO
Properties as to which such Special Servicer is the applicable Special Servicer,
providing the required information as of such Determination Date: (i) a CMSA
Property File; and (ii) a CMSA Loan Periodic Update File (which, in each case,
if applicable, will identify each subject Mortgage Loan(s) by loan number and
property name). At or before 2:00 p.m. (
New York City time) on the first
Business Day following each Determination Date, each Special Servicer shall
prepare and deliver or cause to be delivered to the Master Servicers (in each
case to the extent relevant thereto) the following reports or the related data
fields reflected in the reports reasonably requested with respect to those
Specially Serviced Mortgage Loans and REO Properties as to which such Special
Servicer is the applicable Special Servicer, providing the information required
of such Special Servicer pursuant to SECTION 3.12(e) as of such Determination
Date: (i) a CMSA Delinquent Loan Status Report; (ii) a CMSA Comparative
Financial Status Report; (iii) a CMSA Historical Liquidation Report; (iv) a CMSA
Historical Loan Modification Report; and (v) a CMSA REO Status Report. In
addition, the applicable Special Servicer shall from time to time provide the
applicable Master Servicer with such information in such Special Servicer's
possession regarding any Specially Serviced Mortgage Loan or REO Property as may
be requested by such Master Servicer and is reasonably necessary for such Master
Servicer to prepare each report and any supplemental information required to be
provided by such Master Servicer to the Trustee.
(d) Not later than 3:00 p.m. (New York City time) on the second
Business Day following each Determination Date, each Master Servicer, with
respect to those Mortgage Loans and REO Properties as to which it is the
applicable Master Servicer, shall prepare (if and to the extent necessary) and
deliver or cause to be delivered to the Trustee, in a computer-readable medium
downloadable by the Trustee (or, at the Trustee's written request, in a form
reasonably acceptable to the recipient, including on a loan-by-loan basis), each
of the files and reports comprising the CMSA Investor Reporting Package
(excluding any CMSA Operating Statement Analysis Report, any CMSA NOI Adjustment
Worksheet, the CMSA Bond Level File and the CMSA Collateral Summary File), in
each case providing the most recent information with respect to the subject
Mortgage Loans and REO Properties as of the related Determination Date (and
which, in each case, if applicable, will identify each subject Mortgage Loan by
loan number and property name); PROVIDED that a Master Servicer shall not be
required to prepare and deliver any of the files and reports comprising the CMSA
Investor Reporting Package (other than the CMSA Loan Periodic Update File)
before the second Business Day following the second Determination Date following
the Closing Date.
Each Master Servicer may, but is not required to, make any of the
reports or files comprising the CMSA Investor Reporting Package prepared by it
with respect to the Mortgage Loans and REO Properties as to which it is the
applicable Master Servicer, available each month on such Master Servicer's
internet website only with the use of a password, in which case such Master
Servicer shall provide such password to (i) the other parties to this Agreement,
who by their acceptance of such password shall be deemed to have agreed not to
disclose such password to any other Person, (ii) the Rating Agencies and the
Controlling Class Representative, and (iii) each Certificateholder and
Certificate Owner who requests such password, PROVIDED that any such
Certificateholder or Certificate Owner, as the case may be, has delivered a
certification substantially in the form of EXHIBIT K-1 to the Trustee (with a
copy to such Master Servicer). In connection with providing access to its
internet
-150-
website, a Master Servicer may require registration and the acceptance of a
disclaimer and otherwise (subject to the preceding sentence) adopt reasonable
rules and procedures, which may include, to the extent a Master Servicer deems
necessary or appropriate, conditioning access on execution of an agreement
governing the availability, use and disclosure of such information, and which
may provide indemnification to such Master Servicer for any liability or damage
that may arise therefrom.
Notwithstanding any other provision in this Agreement, the Master
Servicers, the Special Servicers and the Trustee shall deliver to the
Controlling Class Representative the reports (including the Payments Received
after Determination Date Report and the Mortgage Loans Delinquent Report) and
information set forth on EXHIBIT E-3 in the format and at the times set forth
therein.
(e) Each Special Servicer shall deliver to the Master Servicers
the reports set forth in SECTION 3.12(b) and SECTION 3.12(c), and the Master
Servicers shall deliver to the Trustee the reports set forth in SECTION 3.12(d),
in an electronic format reasonably acceptable to the Special Servicers, the
Master Servicers and the Trustee. Each Master Servicer may, absent manifest
error, conclusively rely on the reports to be provided by a Special Servicer
pursuant to SECTION 3.12(b) and SECTION 3.12(c). The Trustee may, absent
manifest error, conclusively rely on the reports to be provided by a Master
Servicer pursuant to SECTION 3.12(d). To the extent that any report to be
prepared and provided to the Trustee and/or the Controlling Class Representative
by a Master Servicer pursuant to SECTION 3.12(d) is dependent on information
from a Special Servicer, and such Special Servicer has not timely provided such
information to the Master Servicer, such Master Servicer shall on a timely basis
provide to the Trustee and/or the Controlling Class Representative, as
applicable, as complete a report as the information provided by such Special
Servicer permits and shall promptly update and provide to the Trustee and/or the
Controlling Class Representative, as applicable, a complete report when such
Special Servicer provides the Master Servicer with the requisite missing
information; and no Master Servicer shall be in breach hereunder for so
providing an incomplete report under SECTION 3.12(D) under the foregoing
circumstances. Furthermore, if any report to be provided to the Trustee and/or
the Controlling Class Representative by a Master Servicer pursuant to
SECTION 3.12(d) was to be prepared by a Special Servicer and delivered to such
Master Servicer, such Master Servicer shall not be in breach by reason of any
delay in its delivery of such report to the Trustee and/or the Controlling Class
Representative, as applicable, by reason of a delay on the part of such Special
Servicer to deliver such report to the Master Servicer; and the Master Servicer
shall deliver as promptly as reasonably practicable to the Trustee and/or the
Controlling Class Representative, as applicable, any such report that it
receives from a Special Servicer after the requisite delivery date.
(f) Notwithstanding the foregoing, however, the failure of a
Master Servicer or Special Servicer to disclose any information otherwise
required to be disclosed by this SECTION 3.12 shall not constitute a breach of
this SECTION 3.12 to the extent such Master Servicer or Special Servicer so
fails because such disclosure, in the reasonable belief of such Master Servicer
or Special Servicer, as the case may be, would violate any applicable law or any
provision of a Mortgage Loan Document prohibiting disclosure of information with
respect to the Mortgage Loans or Mortgaged Properties or would constitute a
waiver of the attorney-client privilege on behalf of the Trust. Each Master
Servicer and Special Servicer may disclose any such information or any
additional information to any Person so long as such disclosure is consistent
with applicable law, the related Mortgage Loan Documents and the Servicing
Standard. A Master Servicer or Special Servicer may affix to any information
provided by it any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).
-151-
(g) On or before the Closing Date, the Depositor shall provide to
the Master Servicers (in each case to the extent relevant thereto) and to the
Trustee and the Controlling Class Representative, the initial data (as of the
respective Due Dates for the Original Mortgage Loans in May 2002 or the most
recent earlier date for which such data is available) contemplated by the CMSA
Loan Setup File, the CMSA Loan Periodic Update File, the CMSA Operating
Statement Analysis Report and the CMSA Property File.
(h) If a Master Servicer or Special Servicer is required to
deliver any statement, report or information under any provision of this
Agreement, such Master Servicer or Special Servicer, as the case may be, may
satisfy such obligation by (x) physically delivering a paper copy of such
statement, report or information, (y) delivering such statement, report or
information in a commonly used electronic format or (z) making such statement,
report or information available on a Master Servicer's internet website or the
Trustee's internet website, unless this Agreement expressly specifies a
particular method of delivery. Notwithstanding the foregoing, the Trustee may
request delivery in paper format of any statement, report or information
required to be delivered to the Trustee and CLAUSE (Z) shall not apply to the
delivery of any information required to be delivered to the Trustee unless the
Trustee consents to such delivery.
SECTION 3.13. Annual Statement as to Compliance.
Each of the Master Servicers and Special Servicers shall deliver to
the Trustee, the Depositor, the Underwriters and the Controlling Class
Representative, on or before May 1 of each year, beginning in 2003, an Officer's
Certificate (the "ANNUAL PERFORMANCE CERTIFICATION") stating, as to the signer
thereof, that (i) a review of the activities of such Master Servicer or Special
Servicer, as the case may be, during the preceding calendar year and of its
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, such Master
Servicer or Special Servicer, as the case may be, has fulfilled all of 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), and (iii) such Master Servicer or Special Servicer, as the case may
be, has received no notice regarding the qualification, or challenging the
status, of any REMIC Pool as a REMIC or either Grantor Trust Pool as a Grantor
Trust from the IRS or any other governmental agency or body (or, if it has
received any such notice, specifying the details thereof); PROVIDED that each
Master Servicer and Special Servicer shall be required to deliver its Annual
Performance Certification by March 15 in 2003 or in any given year thereafter if
it has received written confirmation from the Trustee or the Depositor by
January 31 of that year that a Report on Form 10-K is required to be filed in
respect of the Trust for the preceding calendar year.
SECTION 3.14. Reports by Independent Public Accountants.
On or before May 1 of each year, beginning in 2003, each of the Master
Servicers and Special Servicers, at its expense, shall cause a firm of
independent public accountants that is a member of the American Institute of
Certified Public Accountants to furnish a statement (the "ANNUAL ACCOUNTANTS'
REPORT") to the Trustee, the Depositor, the Underwriters and the Controlling
Class Representative, to the effect that such firm has examined the servicing
operations of such Master Servicer or Special Servicer, as the case may be, for
the previous calendar year and that, on the basis of such examination, conducted
substantially in compliance with USAP, such firm confirms that such
-152-
Master Servicer or Special Servicer, as the case may be, has complied during
such previous calendar year with the minimum servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in USAP in
all material respects, except for such significant exceptions or errors in
records that, in the opinion of such firm, USAP requires it to report; PROVIDED
that each Master Servicer and Special Servicer shall be required to cause the
delivery of its Annual Accountants' Report by March 15 in 2003 or in any given
year thereafter if it has received written confirmation from the Trustee or the
Depositor by January 31 of that year that a Report on Form 10-K is required to
be filed in respect of the Trust for the preceding calendar year. In rendering
its report such firm may rely, as to matters relating to the direct servicing of
securitized commercial and multifamily mortgage loans by 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 those sub-servicers.
Each of the Master Servicers and Special Servicers will reasonably
cooperate with the Depositor in providing any other form of accountants' reports
as may be required by the Commission in connection with the Commission's
issuance of a no-action letter relating to the Depositor's reporting
requirements in respect of the Trust pursuant to the Exchange Act, and the
reasonable additional costs of providing such other forms of accountants'
reports shall be borne by the Depositor.
SECTION 3.15. Access to Certain Information.
(a) Each of the Master Servicers and Special Servicers shall
afford to the Trustee, any Fiscal Agent, the Depositor, each Rating Agency and
the Controlling Class Representative and to the OTS, the FDIC and any other
banking or insurance regulatory authority that may exercise authority over any
Certificateholder or Certificate Owner, access to any records regarding the
Mortgage Loans and the servicing thereof within its control, except to the
extent it is prohibited from doing so by applicable law, the terms of the
related Mortgage Loan Documents or contract entered into prior to the Closing
Date or to the extent such information is subject to a privilege under
applicable law to be asserted on behalf of the Certificateholders. Such access
shall be afforded without charge but only upon reasonable prior written request
and during normal business hours at the offices of the particular Master
Servicer or Special Servicer, as the case may be, designated by it. Each Master
Servicer and Special Servicer may affix a reasonable disclaimer to any
information provided by it for which it is not the original source (without
suggesting liability on the part of any other party hereto). In connection with
providing access to such records to the Controlling Class Representative, each
Master Servicer and Special Servicer may require registration (to the extent
access is provided via a Master Servicer's internet website) and the acceptance
of a reasonable and customary disclaimer and otherwise adopt reasonable rules
and procedures, which may include, to the extent a Master Servicer or Special
Servicer, as applicable, deems necessary or appropriate, conditioning access on
the execution and delivery of an agreement governing the availability, use and
disclosure of such information.
(b) No Master Servicer or Special Servicer shall be liable for
providing or disseminating information in accordance with the terms of this
Agreement.
(c) Upon the request of the Controlling Class Representative made
not more frequently than once a month, or at such mutually acceptable time each
month as the Controlling Class Representative shall reasonably designate, each
of the Master Servicers and Special Servicers shall, without charge, make a
knowledgeable Servicing Officer available, at the option of the Controlling
-153-
Class Representative either by telephone or at the office of such Servicing
Officer, to answer questions from the Controlling Class Representative regarding
the performance and servicing of the Mortgage Loans and/or REO Properties for
which such Master Servicer or Special Servicer, as the case may be, is
responsible.
SECTION 3.16. Title to REO Property; REO Account.
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued to the Trustee or its nominee, on behalf of
the Certificateholders or, subject to SECTION 3.09(b), to a single member
limited liability company of which the Trust is the sole member, which limited
liability company is formed or caused to be formed by the applicable Special
Servicer at the expense of the Trust for the purpose of taking title to one or
more REO Properties pursuant to this Agreement. Any such limited liability
company formed by a Special Servicer shall be a manager-managed limited
liability company, with such Special Servicer to serve as the initial manager to
manage the property of the limited liability company, including any applicable
REO Property, in accordance with the terms of this Agreement as if such property
was held directly in the name of the Trust or Trustee under this Agreement. The
applicable Special Servicer, on behalf of the Trust, shall sell any REO Property
in accordance with SECTION 3.18 by the end of the third calendar year (or, in
the case of a "qualified healthcare property" within the meaning of
Section 856(c)(6) of the Code, the end of the second calendar year) following
the year in which the Trust acquires ownership of such REO Property for purposes
of Section 860G(a)(8) of the Code, unless such Special Servicer either (i)
applies, more than 60 days prior to the expiration of such liquidation period,
and is granted an extension of time (an "REO EXTENSION") by the IRS to sell such
REO Property or (ii) obtains for the Trustee an Opinion of Counsel, addressed to
the Trustee, to the effect that the holding by the Trust of such REO Property
subsequent to the end of the third calendar year (or, in the case of a
"qualified healthcare property" within the meaning of Section 856(c)(6) of the
Code, the end of the second calendar year) following the year in which such
acquisition occurred will not result in an Adverse REMIC Event with respect to
any REMIC Pool or an Adverse Grantor Trust Event with respect to either Grantor
Trust Pool. Regardless of whether the applicable Special Servicer applies for or
is granted the REO Extension contemplated by CLAUSE (i) of the immediately
preceding sentence or obtains the Opinion of Counsel referred to in CLAUSE (ii)
of such sentence, the applicable Special Servicer shall act in accordance with
the Servicing Standard to liquidate the subject REO Property on a timely basis.
If the applicable Special Servicer is granted such REO Extension or obtains such
Opinion of Counsel with respect to any REO Property, such Special Servicer shall
(i) promptly forward a copy of such REO Extension or Opinion of Counsel to the
Trustee, and (ii) sell such REO Property within such extended period as is
permitted by such REO Extension or contemplated by such Opinion of Counsel, as
the case may be. Any expense incurred by a Special Servicer in connection with
its applying for and being granted the REO Extension contemplated by CLAUSE (i)
of the third preceding sentence or its obtaining the Opinion of Counsel
contemplated by CLAUSE (ii) of the third preceding sentence, and for the
creation of and the operating of a limited liability company, shall be covered
by, and be reimbursable as, a Servicing Advance.
(b) Each Special Servicer shall segregate and hold all funds
collected and received by it in connection with any REO Property separate and
apart from its own funds and general assets. If title to any REO Property is
acquired by or on behalf of the Trust, then the applicable Special Servicer
shall establish and maintain one or more accounts (collectively, an "REO
Account"), to be held on behalf of the Trustee in trust for the benefit of the
Certificateholders, for the retention of revenues and other proceeds derived
from such REO Property. Each account that constitutes an REO Account shall be an
-154-
Eligible Account. The applicable Special Servicer shall deposit, or cause to be
deposited, in its REO Account, within one Business Day following receipt, all
REO Revenues, Insurance Proceeds and Liquidation Proceeds received in respect of
an REO Property. Funds in an REO Account may be invested in Permitted
Investments in accordance with SECTION 3.06. Each Special Servicer shall be
entitled to make withdrawals from its REO Account to pay itself, as Additional
Special Servicing Compensation, interest and investment income earned in respect
of amounts held in such REO Account as provided in SECTION 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to such REO
Account for any Collection Period). Each Special Servicer shall give notice to
the other parties hereto of the location of its REO Account when first
established and of the new location of its REO Account prior to any change
thereof.
(c) The applicable Special Servicer shall withdraw from its REO
Account funds necessary for the proper operation, management, leasing,
maintenance and disposition of any REO Property, but only to the extent of
amounts on deposit in such REO Account relating to such REO Property. Five (5)
Business Days prior to each Determination Date, and again on the first Business
Day following such Determination Date, the applicable Special Servicer shall
withdraw from its REO Account and deposit into the applicable Master Servicer's
Collection Account, or deliver to the applicable Master Servicer for deposit
into such Collection Account, the aggregate of all amounts received in respect
of each REO Property during the Collection Period ending on such Determination
Date that are then on deposit in such REO Account, net of any withdrawals made
out of such amounts pursuant to the preceding sentence; PROVIDED that, in the
case of each REO Property, the applicable Special Servicer may retain in its REO
Account such portion of such proceeds and collections as may be necessary to
maintain a reserve of sufficient funds for the proper operation, management,
leasing, maintenance and disposition of such REO Property (including the
creation of a reasonable reserve for repairs, replacements, necessary capital
improvements and other related expenses), such reserve not to exceed an amount
sufficient to cover such items reasonably expected to be incurred during the
following 12-month period.
(d) Each Special Servicer shall keep and maintain separate
records, on a property-by-property basis, for the purpose of accounting for all
deposits to, and withdrawals from, its REO Account pursuant to SECTION 3.16(b)
or 3.16(c).
SECTION 3.17. Management of REO Property.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the applicable Special Servicer shall review
the operation of such Mortgaged Property and determine the nature of the income
that would be derived from such property if it were acquired by the Trust. If
the applicable Special Servicer determines from such review that:
(i) None of the income from Directly Operating such Mortgaged
Property would be subject to tax as "net income from foreclosure property"
within the meaning of the REMIC Provisions or to the tax imposed on
"prohibited transactions" under Section 860F of the Code (either such tax
referred to herein as an "REO TAX"), then such Mortgaged Property may be
Directly Operated by the applicable Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such property that would be subject to an REO
Tax, but that a lease of such property to another party to operate such
property, or the performance of some services by an
-155-
Independent Contractor with respect to such property, or another method of
operating such property would not result in income subject to an REO Tax,
then the applicable Special Servicer may (PROVIDED that in the judgment of
the applicable Special Servicer, exercised in accordance with the Servicing
Standard, it is commercially reasonable) so lease or otherwise operate such
REO Property; or
(iii) It is reasonable to believe that Directly Operating such
property as REO Property could result in income subject to an REO Tax and
that no commercially reasonable means exists to operate such property as
REO Property without the Trust incurring or possibly incurring an REO Tax
on income from such property, then the applicable Special Servicer shall
deliver to the Trustee and the Controlling Class Representative, in
writing, a proposed plan (the "PROPOSED PLAN") to manage such property as
REO Property. Such plan shall include potential sources of income and good
faith estimates of the amount of income from each such source. Within a
reasonable period of time after receipt of such plan, the Trustee shall
consult with the applicable Special Servicer and shall advise the
applicable Special Servicer of the Trust's federal income tax reporting
position with respect to the various sources of income that the Trust would
derive under the Proposed Plan. In addition, the Trustee shall (to the
maximum extent reasonably possible) advise the applicable Special Servicer
of the estimated amount of taxes that the Trust would be required to pay
with respect to each such source of income. After receiving the information
described in the two preceding sentences from the Trustee, the applicable
Special Servicer shall either (A) implement the Proposed Plan (after
acquiring the respective Mortgaged Property as REO Property) or (B) manage
and operate such property in a manner that would not result in the
imposition of an REO Tax on the income derived from such property.
Subject to SECTION 3.17(b), the applicable Special Servicer's decision
as to how each REO Property shall be managed and operated shall be in accordance
with the Servicing Standard. Neither the applicable Special Servicer nor the
Trustee shall be liable to the Certificateholders, the Trust, the other parties
hereto or each other for errors in judgment made in good faith in the exercise
of their discretion while performing their respective responsibilities under
this SECTION 3.17(a) with respect to any REO Property. Nothing in this SECTION
3.17(a) is intended to prevent the sale of any REO Property pursuant to the
terms and subject to the conditions of SECTION 3.18.
(b) If title to any REO Property is acquired, the applicable
Special Servicer shall manage, conserve, protect and operate such REO Property
for the benefit of the Certificateholders solely for the purpose of its prompt
disposition and sale in accordance with SECTION 3.18, in a manner that does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or, except as contemplated by
SECTION 3.17(a), result in the receipt by any REMIC Pool of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
in an Adverse REMIC Event with respect to any REMIC Pool or in an Adverse
Grantor Trust Event with respect to either Grantor Trust Pool. Except as
contemplated by SECTION 3.17(a), the applicable Special Servicer shall not enter
into any lease, contract or other agreement with respect to any REO Property
that causes the Trust to receive, and (unless required to do so under any lease,
contract or agreement to which the applicable Special Servicer or the Trust may
become a party or successor to a party due to a foreclosure, deed-in-lieu of
foreclosure or other similar exercise of a creditor's rights or remedies with
respect to the related Mortgage Loan) shall not, with respect to any REO
Property, cause or allow the Trust to receive, any "net income from foreclosure
property" that is subject to taxation under the REMIC Provisions. Subject to the
foregoing, however, the applicable Special Servicer shall
-156-
have full power and authority to do any and all things in connection with the
administration of any REO Property, as are consistent with the Servicing
Standard and, consistent therewith, shall withdraw from its REO Account, to the
extent of amounts on deposit therein with respect to such REO Property, funds
necessary for the proper operation, management, maintenance and disposition of
such REO Property, including:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property; and
(iv) all other costs and expenses necessary to maintain, lease,
sell, protect, manage, operate and restore such REO Property.
To the extent that amounts on deposit in the applicable Special Servicer's REO
Account with respect to any REO Property are insufficient for the purposes
contemplated by the preceding sentence with respect to such REO Property, the
applicable Master Servicer shall, at the direction of the applicable Special
Servicer, make a Servicing Advance of such amounts as are necessary for such
purposes unless such Master Servicer or Special Servicer determines, in its
reasonable judgment, that such advances would, if made, be Nonrecoverable
Servicing Advances; PROVIDED, HOWEVER, that such Master Servicer may in its sole
discretion make any such Servicing Advance without regard to recoverability if
it is a necessary fee or expense incurred in connection with the defense or
prosecution of legal proceedings.
(c) The applicable Special Servicer may contract with any
Independent Contractor for the operation and management of any REO Property,
PROVIDED that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be
expenses of the Trust) shall be reasonable and customary in consideration
of the nature and locality of the REO Property;
(iii) any such contract shall require, or shall be administered to
require, that the Independent Contractor, in a timely manner, (A) pay all
costs and expenses incurred in connection with the operation and management
of such REO Property, including those listed in SECTION 3.17(b) above, and
(B) remit all related revenues collected (net of its fees and such costs
and expenses) to the applicable Special Servicer upon receipt;
(iv) none of the provisions of this SECTION 3.17(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the applicable Special Servicer of any of its
duties and obligations hereunder with respect to the operation and
management of any such REO Property; and
-157-
(v) the applicable Special Servicer shall be obligated with
respect thereto to the same extent as if it alone were performing all
duties and obligations in connection with the operation and management of
such REO Property.
Each Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of such Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. To the extent the costs of any contract with any
Independent Contractor for the operation and management of any REO Property are
greater that the revenues available from such property, such excess costs shall
be covered by, and be reimbursable as, a Servicing Advance.
SECTION 3.18. Fair Value Option; Sale of REO Properties.
(a) The parties hereto may sell or purchase, or permit the sale or
purchase of, a Mortgage Loan or REO Property only on the terms and subject to
the conditions set forth in this SECTION 3.18 or as otherwise expressly provided
in or contemplated by: SECTION 2.03 and SECTION 9.01 of this Agreement; the
Mortgage Loan Purchase Agreements; the Column Performance Guarantee; the NCBCC
Performance Guarantee; the NCBFSB Performance Guarantee; and the related
Mortgage Loan Documents.
(b) If any Mortgage Loan becomes a Specially Designated Defaulted
Mortgage Loan, then the applicable Special Servicer shall so notify the Trustee,
the applicable Master Servicer, the Controlling Class Representative and the
Holder(s) of the Controlling Class, in writing. In addition, the applicable
Special Servicer shall determine (in accordance with the Servicing Standard,
taking into account the considerations contemplated by the following paragraph,
but without regard to the Purchase Option provided for in SECTION 3.18(c)
below), and report to the Trustee, the applicable Master Servicer, the
Controlling Class Representative and the Holder(s) of the Controlling Class, the
Fair Value of such Mortgage Loan. The applicable Special Servicer's
determination of the Fair Value of any Specially Designated Defaulted Mortgage
Loan shall be made as soon as reasonably practicable, but in no event later than
30 days after the applicable Special Servicer receives the requisite Appraisal
or any other third-party reports that it deems necessary to make the
determination. If at any time the applicable Special Servicer becomes aware of
any circumstances or conditions that have occurred or arisen with respect to any
Specially Designated Defaulted Mortgage Loan or the related Mortgaged Property
subsequent to, and that would, in the applicable Special Servicer's reasonable
judgment, materially affect, the applicable Special Servicer's most recent Fair
Value determination with respect to such Specially Designated Defaulted Mortgage
Loan, then the applicable Special Servicer shall redetermine (in a manner as is
permitted above, but taking into account any new circumstances or conditions
known to the applicable Special Servicer), and report to the Trustee, the
Controlling Class Representative and the applicable Master Servicer (and the
Trustee shall, in turn, report to the Holder(s) of the Controlling Class), the
updated Fair Value of the subject Specially Designated Defaulted Mortgage Loan.
In addition, if the applicable Special Servicer has not accepted a bid at the
Fair Value of the Mortgage Loan, as most recently determined by the applicable
Special Servicer, prior to the expiration of 90 days from such determination,
and thereafter the applicable Special Servicer receives a bid at such Fair Value
or a request from a holder of the Purchase Option for an updated determination
of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall
redetermine (in the same manner as provided above, but taking into account any
new circumstances or conditions known to the applicable Special
-158-
Servicer), and report to the Trustee, the Controlling Class Representative and
the applicable Master Servicer (and the Trustee shall, in turn, report to the
Holder(s) of the Controlling Class), the updated Fair Value of the subject
Specially Designated Defaulted Mortgage Loan; provided, however, that the
applicable Special Servicer may rely on the existing third-party information if
it deems such reliance to be reasonable.
In determining the Fair Value of any Specially Designated Defaulted
Mortgage Loan, the applicable Special Servicer shall take into account, among
other factors, the period and amount of the delinquency on such Mortgage Loan,
the occupancy level and physical condition of the related Mortgaged Property,
the state of the local economy in the area where the related Mortgaged Property
is located, and the time and expense associated with and the expected recovery
from a purchaser's foreclosing on the related Mortgaged Property or working out
such Mortgage Loan. In addition, the applicable Special Servicer shall refer to
all relevant information contained in the Servicing File, shall take into
account the most recent Appraisal obtained or conducted with respect to the
related Mortgaged Property in the preceding 12-month period in accordance with
this Agreement and shall not determine the Fair Value of any Specially
Designated Default Mortgage Loan without such an Appraisal; PROVIDED that the
applicable Special Servicer shall take account of any change in the
circumstances regarding or the condition of the related Mortgaged Property known
to the applicable Special Servicer that has occurred or arisen subsequent to,
and that would materially affect the value of the related Mortgaged Property
reflected in, such Appraisal. Furthermore, the applicable Special Servicer shall
consider available objective third-party information obtained from generally
available sources, as well as information obtained from vendors providing real
estate services to the applicable Special Servicer, concerning the market for
distressed real estate loans and the real estate market for the subject property
type in the area where the related Mortgaged Property is located. The applicable
Special Servicer may, to the extent it is reasonable to do so, conclusively rely
on any opinions or reports of Independent third parties in making such
determination. All reasonable costs and expenses incurred by a Special Servicer
pursuant to this SECTION 3.18(b) shall constitute, and be reimbursable as,
Servicing Advances. The other parties to this Agreement shall cooperate with all
reasonable requests for information made by a Special Servicer in order to allow
such Special Servicer to perform its duties pursuant to this SECTION 3.18(b).
(c) The Majority Controlling Class Certificateholder(s) or any
assignee thereof may, at its or their option, purchase from the Trust any
Specially Designated Defaulted Mortgage Loan (such option, the "PURCHASE
OPTION"), at a cash price (the "OPTION PRICE") equal to the Fair Value of such
Mortgage Loan (as most recently determined by the applicable Special Servicer
and reported to the Trustee, the Controlling Class Representative and the
applicable Master Servicer as provided in SECTION 3.18(b) above) or, if no such
Fair Value has yet been established as provided in SECTION 3.18(b) above or if
the applicable Special Servicer is in the process of redetermining such Fair
Value because of a change in circumstances, equal to the Purchase Price;
PROVIDED that:
(i) the Purchase Option with respect to any Specially Designated
Defaulted Mortgage Loan will remain in effect only for the period (the
"OPTION PERIOD") that commences on the date that such Mortgage Loan first
becomes a Specially Designated Defaulted Mortgage Loan and ends on the
earliest of (A) the date on which such Mortgage Loan becomes a Corrected
Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted
Mortgage Loan and (B) the date on which a Liquidation Event occurs with
respect to such Mortgage Loan or the related Mortgaged Property becomes an
REO Property.
-159-
(ii) the Purchase Option with respect to any Specially Designated
Defaulted Mortgage Loan will be assignable by the Majority Controlling
Class Certificateholder(s) during the Option Period to any third party
(PROVIDED that the parties hereto are notified in writing of the
assignment);
(iii) if the Purchase Option with respect to any Specially
Designated Defaulted Mortgage Loan is not exercised by the Majority
Controlling Class Certificateholder(s) or any assignee thereof within 60
days after the Fair Value of such Mortgage Loan has initially been
established as provided in SECTION 3.18(b) above, then the Majority
Controlling Class Certificateholder(s) shall be deemed to have assigned
such Purchase Option, for a 30-day period only, to the applicable Special
Servicer;
(iv) during the 30-day period following the assignment to it of the
Purchase Option with respect to any Specially Designated Defaulted Mortgage
Loan, the applicable Special Servicer shall be entitled to exercise such
Purchase Option or to assign such Purchase Option to any third party
(PROVIDED that the other parties hereto are notified in writing of the
assignment);
(v) if the Purchase Option with respect to any Specially
Designated Defaulted Mortgage Loan is not exercised by the applicable
Special Servicer or its assignee within the 30-day period following the
assignment of such Purchase Option to the applicable Special Servicer as
contemplated by CLAUSE (iii) above, then such Purchase Option will
automatically revert to the Majority Controlling Class
Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to
any Specially Designated Defaulted Mortgage Loan by the applicable Special
Servicer or any Affiliate or assignee thereof, subject to the following
paragraph, the General Master Servicer shall confirm and report to the
Trustee and the applicable Special Servicer (or, if the General Master
Servicer and the applicable Special Servicer are the same Person or
Affiliates, the Trustee, upon reasonable notice, shall confirm and report
to the applicable Special Servicer) that the applicable Special Servicer's
determination of the Fair Value of such Mortgage Loan is consistent with or
greater than what the General Master Servicer (or, if applicable, the
Trustee) considers to be the Fair Value of such Mortgage Loan; PROVIDED
that the applicable Special Servicer may revise any such Fair Value
determination that is rejected by the General Master Servicer (or, if
applicable, the Trustee).
Notwithstanding anything contained in CLAUSE (vi) of the preceding
paragraph to the contrary, if the General Master Servicer or the Trustee is
required to confirm or reject the applicable Special Servicer's Fair Value
determination as contemplated by such CLAUSE (vi), either such party may (at its
option) designate an Independent third party expert in real estate or commercial
mortgage loan matters with at least 5 years' experience in valuing or investing
in loans similar to the subject Specially Designated Defaulted Mortgage Loan,
that has been selected with reasonable care by the General Master Servicer (or,
if applicable, the Trustee) to confirm that the applicable Special Servicer's
Fair Value determination as contemplated by such CLAUSE (vi) is consistent with
or greater than what the Independent third party considers to be the Fair Value
of such Mortgage Loan. In the event that the General Master Servicer or the
Trustee, as the case may be, designates such a third party to make such
determination, the General Master Servicer or the Trustee, as applicable, shall
be entitled to rely upon such third party's determination. Such General Master
Servicer or the Trustee, as the case may be, may
-160-
pay, or direct the General Master Servicer to pay, such a third party (or, if
such General Master Servicer or the Trustee, as the case may be, makes the
confirmation of the applicable Special Servicer's Fair Value determination as
contemplated by CLAUSE (vi) of the preceding paragraph, may pay itself, or
direct the General Master Servicer to pay it) a fee of up to $2,500 plus
(subject to the next sentence) related costs and expenses out of the Collection
Account maintained by the General Master Servicer. The reasonable costs of all
appraisals, inspection reports and broker opinions of value, incurred by such
General Master Servicer, the Trustee or any such third party pursuant to this
paragraph or CLAUSE (vi) of the preceding paragraph shall be advanced by the
applicable Master Servicer and shall constitute, and be reimbursable as,
Servicing Advances.
Any party entitled to do so may exercise the Purchase Option with
respect to any Specially Designated Defaulted Mortgage Loan by providing to the
Trustee, the applicable Master Servicer and the applicable Special Servicer--
(i) written notice of its intention to purchase such Mortgage Loan
at the Option Price; and
(ii) if such party is the assignee of the applicable Special
Servicer or the Majority Controlling Class Certificateholder(s), evidence
of its right to exercise such Purchase Option.
The actual purchase of such Specially Designated Defaulted Mortgage Loan shall
occur (by delivery of cash in the amount of the applicable Option Price to the
applicable Special Servicer for deposit in the applicable Master Servicer's
Collection Account) no later than 10 days after the later of (i) such exercise
of the Purchase Option with respect to such Mortgage Loan and (ii) if
applicable, the confirmation of the applicable Special Servicer's Fair Value
determination with respect to such Mortgage Loan in accordance with CLAUSE (vi)
of the first paragraph of this SECTION 3.18(c) and/or in accordance with the
second paragraph of this SECTION 3.18(c).
Notwithstanding the Purchase Option provided for in this SECTION
3.18(c), the applicable Special Servicer shall proceed in respect of any
Specially Designated Defaulted Mortgage Loan in accordance with SECTION 3.09
and/or SECTION 3.20, without regard to such Purchase Option.
(d) The applicable Special Servicer shall use its reasonable
efforts, consistent with the Servicing Standard, to solicit cash bids for each
REO Property in such manner as will be reasonably likely to realize a fair price
(determined pursuant to SECTION 3.18(e) below) for any REO Property within a
customary and normal time frame for the sale of comparable properties (and, in
any event, within the time period provided for by SECTION 3.16(a)). The
applicable Special Servicer shall accept the first (and, if multiple cash bids
are received by a specified bid date, the highest) cash bid received from any
Person that constitutes a fair price (determined pursuant to SECTION 3.18(e)
below) for such REO Property. If the applicable Special Servicer reasonably
believes that it will be unable to realize a fair price (determined pursuant to
SECTION 3.18(e) below) with respect to any REO Property within the time
constraints imposed by SECTION 3.16(a), then the applicable Special Servicer
shall, consistent with the Servicing Standard, dispose of such REO Property upon
such terms and conditions as it shall deem necessary and desirable to maximize
the recovery thereon under the circumstances.
The applicable Special Servicer shall give the Trustee, the applicable
Master Servicer and the Controlling Class Representative not less than five (5)
Business Days' prior written notice of its intention to sell any REO Property
pursuant to this SECTION 3.18(d). No Interested Person shall be
-161-
obligated to submit a bid to purchase any REO Property, and notwithstanding
anything to the contrary herein, neither the Trustee, in its individual
capacity, nor any of its Affiliates may bid for or purchase any REO Property
pursuant hereto.
(e) Whether any cash bid constitutes a fair price for any REO
Property for purposes of SECTION 3.18(d), shall be determined by the applicable
Special Servicer or, if such cash bid is from an Interested Person, by the
Trustee. In determining whether any bid received from an Interested Person
represents a fair price for any REO Property, the Trustee shall be supplied with
and shall be entitled to rely on the most recent Appraisal in the related
Servicing File conducted in accordance with this Agreement within the preceding
12-month period (or, in the absence of any such Appraisal or if there has been a
material change at the subject property since any such Appraisal, on a new
Appraisal to be obtained by the applicable Special Servicer, the cost of which
shall be covered by, and be reimbursable as, a Servicing Advance). The appraiser
conducting any such new Appraisal shall be a Qualified Appraiser that is (i)
selected by the applicable Special Servicer if neither such Special Servicer nor
any Affiliate thereof is bidding with respect to the subject REO Property and
(ii) selected by the Trustee if either the applicable Special Servicer or any
Affiliate thereof is so bidding. Where any Interested Person is among those
bidding with respect to any REO Property, the applicable Special Servicer shall
require that all bids be submitted to it (or, if the applicable Special Servicer
or an Affiliate thereof is bidding, be submitted to the Trustee) in writing and
be accompanied by a refundable deposit of cash in an amount equal to 5% of the
bid amount. In determining whether any bid from a Person other than an
Interested Person constitutes a fair price for any REO Property, the applicable
Special Servicer shall take into account the results of any Appraisal or updated
Appraisal that it or the applicable Master Servicer may have obtained in
accordance with this Agreement within the prior twelve (12) months, as well as,
among other factors, the occupancy level and physical condition of the REO
Property, the state of the then current local economy and commercial real estate
market where the REO Property is located and the obligation to dispose of any
REO Property within a customary and normal time frame for the sale of comparable
properties (and, in any event, within the time period specified in
SECTION 3.16(a)). The Purchase Price for any REO Property shall in all cases be
deemed a fair price. Notwithstanding the other provisions of this SECTION 3.18,
no cash bid from the applicable Special Servicer or any Affiliate thereof shall
constitute a fair price for any REO Property unless such bid is the highest cash
bid received and at least two Independent bids (not including the bid of the
applicable Special Servicer or any Affiliate) have been received. In the event
the bid of the applicable Special Servicer or any Affiliate thereof is the only
bid received or is the higher of only two bids received, then additional bids
shall be solicited. If an additional bid or bids, as the case may be, are
received for any REO Property and the original bid of the applicable Special
Servicer or any Affiliate thereof is the highest of all bids received, then the
bid of the applicable Special Servicer or such Affiliate shall be accepted,
PROVIDED that the Trustee has otherwise determined, as provided above in this
SECTION 3.18(e), that such bid constitutes a fair price for the subject REO
Property. Any bid by the applicable Special Servicer for any REO Property shall
be unconditional; and, if accepted, the subject REO Property shall be
transferred to the applicable Special Servicer without recourse, representation
or warranty other than customary representations as to title given in connection
with the sale of a real property.
(f) Subject to SECTIONS 3.18(a) through 3.18(e) above, the
applicable Special Servicer shall act on behalf of the Trustee in negotiating
with Independent third parties in connection with the sale of any REO Property
and taking any other action necessary or appropriate in connection with the sale
of any Specially Designated Defaulted Mortgage Loan or REO Property, and the
collection of all amounts payable in connection therewith. In connection with
the sale of any REO Property, the
-162-
applicable Special Servicer may charge prospective bidders, and may retain, fees
that approximate such Special Servicer's actual costs in the preparation and
delivery of information pertaining to such sales or evaluating bids without
obligation to deposit such amounts into a Collection Account. Any sale of a
Specially Designated Defaulted Mortgage Loan or any REO Property shall be final
and without recourse to the Trustee or the Trust, and if such sale is
consummated in accordance with the terms of this Agreement, neither the
applicable Special Servicer nor the Trustee shall have any liability to any
Certificateholder with respect to the purchase price therefor accepted by the
applicable Special Servicer or the Trustee.
(g) Any sale of any Specially Designated Defaulted Mortgage Loan
or REO Property shall be for cash only.
(h) The purchase price for any Specially Designated Defaulted
Mortgage Loan or REO Property sold under this SECTION 3.18 shall be deposited
into the applicable Master Servicer's Collection Account, and the Trustee, upon
receipt of written notice from the applicable Master Servicer to the effect that
such deposit has been made (based upon notification by the applicable Special
Servicer to such Master Servicer of the amount of the purchase price), shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be provided to it and are reasonably necessary to
vest ownership of such Mortgage Loan or REO Property in the Person who purchased
such Mortgage Loan or REO Property.
SECTION 3.19. Additional Obligations of Master Servicers and the
Special Servicer.
(a) Each Master Servicer shall deliver to the Trustee for deposit
in the Distribution Account by 1:00 p.m. (New York City time) on each Master
Servicer Remittance Date, without any right of reimbursement therefor, a cash
payment (a "COMPENSATING INTEREST PAYMENT") in an amount equal to the sum of:
(i) the lesser of (A) the aggregate amount of Prepayment Interest
Shortfalls incurred in connection with Principal Prepayments received
during the most recently ended Collection Period with respect to Mortgage
Loans as to which such Master Servicer is the applicable Master Servicer,
and (B) the aggregate of (1) that portion of such Master Servicer's Master
Servicing Fees for the related Collection Period that is, in the case of
each and every Mortgage Loan and REO Loan for which such Master Servicing
Fees are being paid in such Collection Period, calculated at 0.02% per
annum, and (2) all Prepayment Interest Excesses and, to the extent earned
on such Principal Prepayments, all Net Investment Earnings related to such
Principal Prepayments received by such Master Servicer during the most
recently ended Collection Period; PROVIDED, HOWEVER, that if such a
Prepayment Interest Shortfall occurs as a result of the applicable Master
Servicer's allowing the related Borrower to deviate from the terms of the
related Mortgage Loan Documents regarding Principal Prepayments (other than
(S) subsequent to a material default under the related Mortgage Loan
Documents, (T) pursuant to applicable law or a court order, or (U) at the
request or with the consent of the Controlling Class Representative), then,
for purposes of calculating the Compensating Interest Payment for the
subject Collection Period, the rate referred to in CLAUSE (B)(1) above
shall be 0.05% per annum (except as to the Mortgage Loans for which NCBFSB
is the Designated Sub-Servicer and as to the Mortgage Loans secured by the
Mortgaged Properties identified on the Mortgage Loan
-163-
Schedule as Becket Office Building, Becket Retail Center, Xxxxx Office
Building and 700 KMS Building, for which it shall in each case be 0.02% per
annum); and
(ii) the lesser of (A) the aggregate amount of Prepayment Interest
Shortfalls incurred in connection with Insurance Proceeds and Condemnation
Proceeds received during the most recently ended Collection Period with
respect to Mortgage Loans as to which such Master Servicer is the
applicable Master Servicer, and (B) all Net Investment Earnings earned on
the portion of such Insurance Proceeds and Condemnation Proceeds that
represents an early recovery of principal, received by such Master Servicer
during the most recently ended Collection Period.
The rights of the Certificateholders to offset the aggregate
Prepayment Interest Shortfalls shall not be cumulative from Collection Period to
Collection Period.
(b) No later than 1:00 p.m. New York City time on the first
Determination Date that follows the date on which a Special Servicer makes any
Servicing Advance, such Special Servicer shall provide the applicable Master
Servicer an Officer's Certificate (via facsimile) setting forth the details of
the Servicing Advance upon which the Master Servicer shall conclusively rely in
reimbursing the Special Servicer. The applicable Master Servicer shall be
obligated, out of such Master Servicer's own funds, to reimburse such Special
Servicer for any unreimbursed Servicing Advances (other than Nonrecoverable
Servicing Advances) made by such Special Servicer with respect to Mortgage Loans
and/or REO Properties as to which such Master Servicer is the applicable Master
Servicer, together with interest thereon at the Reimbursement Rate from the date
made to, but not including, the date of reimbursement. Any such reimbursement,
together with any accompanying payment of interest, shall be made by the
applicable Master Servicer, by wire transfer of immediately available funds to
an account designated by the requesting Special Servicer, no later than the
first Master Servicer Remittance Date that is at least three (3) Business Days
after the date on which the applicable Master Servicer receives the
corresponding Officer's Certificate contemplated by the prior sentence; PROVIDED
that any such Officer's Certificate received after 1:00 p.m., New York City
time, on any particular date shall, for purposes of any such reimbursement, be
deemed received on the next succeeding Business Day. Upon a Master Servicer's
reimbursement to a Special Servicer of any Servicing Advance and payment to such
Special Servicer of interest thereon, all in accordance with this
SECTION 3.19(b), such Master Servicer shall for all purposes of this Agreement
be deemed to have made such Servicing Advance at the same time as such Special
Servicer actually made such Servicing Advance, and accordingly, such Master
Servicer shall be entitled to reimbursement for such Servicing Advance, together
with interest thereon in accordance with SECTIONS 3.05(a) and 3.11(g), at the
same time, in the same manner and to the same extent as such Master Servicer
would otherwise have been entitled if it had actually made such Servicing
Advance at the time such Special Servicer did.
Notwithstanding anything to the contrary contained in any other
Section of this Agreement, the applicable Special Servicer shall notify the
applicable Master Servicer whenever a Servicing Advance is required to be made
with respect to any Specially Serviced Mortgage Loan or REO Property, and, such
Master Servicer shall make such Servicing Advance; PROVIDED that the applicable
Special Servicer may make any Servicing Advance on a Specially Serviced Mortgage
Loan or REO Property only as may be required on an urgent or emergency basis.
Each such notice and request shall be made, in writing, in a timely manner that
does not adversely affect the interests of any Certificateholder (and, in any
event, to the extent reasonably practicable, at least five Business Days in
advance of the date on which the subject Servicing Advance is to be made) and
shall be accompanied by
-164-
such information and documentation regarding the subject Servicing Advance as
the applicable Master Servicer may reasonably request; provided, however, that a
Special Servicer shall not be entitled to make such a request (other than for
emergency Advances) more frequently than once per calendar month (although such
request may relate to more than one Servicing Advance). Each Master Servicer
shall have the obligation to make any such Servicing Advance (other than a
Nonrecoverable Servicing Advance) that it is so requested by a Special Servicer
to make, within five Business Days of such Master Servicer's receipt of such
request. If the request is timely and properly made, the requesting Special
Servicer shall be relieved of any obligations with respect to a Servicing
Advance that it so requests the applicable Master Servicer to make with respect
to any Mortgage Loan or REO Property (regardless of whether or not such Master
Servicer shall make such Servicing Advance). Each Master Servicer shall be
entitled to reimbursement for any Servicing Advance made by it at the direction
of a Special Servicer, together with Advance Interest in accordance with
SECTIONS 3.05(a) and 3.11(g), at the same time, in the same manner and to the
same extent as such Master Servicer is entitled with respect to any other
Servicing Advances made thereby.
Notwithstanding the foregoing provisions of this SECTION 3.19(b), a
Master Servicer shall not be required to reimburse a Special Servicer for, or to
make at the direction of a Special Servicer, any Servicing Advance if such
Master Servicer determines in its reasonable judgment that such Servicing
Advance, although not characterized by the requesting Special Servicer as a
Nonrecoverable Servicing Advance, is in fact a Nonrecoverable Servicing Advance.
Such Master Servicer shall notify the requesting Special Servicer in writing of
such determination and, if applicable, such Nonrecoverable Servicing Advance
shall be reimbursed to such Special Servicer pursuant to SECTION 3.05(a).
(c) Promptly following the occurrence of an Appraisal Trigger
Event with respect to any Mortgage Loan, the applicable Special Servicer shall
obtain (or, if such Mortgage Loan has a Stated Principal Balance of $2,000,000
or less, at such Special Servicer's option, conduct) an Appraisal of the related
Mortgaged Property, unless an Appraisal thereof had previously been obtained
(or, if applicable, conducted) within the preceding 12-month period and there
has been no subsequent material change in the circumstances surrounding the
related Mortgaged Property that, in the judgment of the applicable Special
Servicer, would materially affect the value of the property, and shall deliver a
copy of such Appraisal to the Trustee, the applicable Master Servicer and the
Controlling Class Representative. If such Appraisal is obtained from a Qualified
Appraiser, the cost thereof shall be covered by, and be reimbursable as, a
Servicing Advance. Promptly following the receipt of, and based upon, such
Appraisal, the applicable Special Servicer, in consultation with the Controlling
Class Representative, shall determine and report to the Trustee and the
applicable Master Servicer the then applicable Appraisal Reduction Amount, if
any, with respect to the subject Required Appraisal Loan.
For so long as any Mortgage Loan or REO Loan remains a Required
Appraisal Loan, the applicable Special Servicer shall, within 30 days of each
anniversary of such loan's having become a Required Appraisal Loan, obtain (or,
if such Required Appraisal Loan has a Stated Principal Balance of $2,000,000 or
less, at such Special Servicer's option, conduct) an update of the prior
Appraisal. If such update is obtained from a Qualified Appraiser, the cost
thereof shall be covered by, and be reimbursable as, a Servicing Advance.
Promptly following the receipt of, and based upon, such update, the applicable
Special Servicer shall redetermine, in consultation with the Controlling Class
Representative, and report to the Trustee and the applicable Master Servicer the
then applicable Appraisal Reduction Amount, if any, with respect to the subject
Required Appraisal Loan.
-165-
The Controlling Class Representative shall have the right at any time
within six months of the date of the receipt of any Appraisal to require that
the applicable Special Servicer obtain a new Appraisal of the subject Mortgaged
Property in accordance with MAI standards, at the expense of the Controlling
Class Certificateholders, and upon receipt of such Appraisal the applicable
Special Servicer shall redetermine the Appraisal Reduction Amount.
(d) The General Master Servicer shall pay, without any right of
reimbursement therefor, the post-Closing Date fees of the Rating Agencies for
ongoing surveillance of the Rated Certificates; PROVIDED that the General Master
Servicer shall not be required to pay without reimbursement the fees charged by
any Rating Agency for a confirmation as to the lack of an Adverse Rating Event
with respect to any Class of Rated Certificates in connection with any other
particular matter, unless the General Master Servicer was the applicable Master
Servicer in such circumstance and failed to use efforts consistent with the
Servicing Standard to collect such fees from the related Borrower, which shall
include, if it has the right to do so under the applicable Mortgage Loan,
conditioning its consent or approval on such payment by the related Borrower
unless such condition would be a violation of applicable law or the Servicing
Standard.
(e) In connection with each prepayment of principal received
hereunder, the applicable Master Servicer shall calculate any applicable
Prepayment Premium or Yield Maintenance Charge, as the case may be. Promptly
following its determination thereof, the applicable Master Servicer shall
disclose to the Trustee, the Controlling Class Representative and, upon request,
any Certificateholder its calculation of any such Prepayment Premium or Yield
Maintenance Charge, including, in the case of a Yield Maintenance Charge, the
U.S. Treasury rate and, if different, the discount rate used to calculate such
Yield Maintenance Charge.
(f) With respect to each Mortgage Loan that provides for
defeasance, the applicable Master Servicer shall, to the extent permitted by the
terms of such Mortgage Loan, require the related Borrower (i) to provide
replacement collateral consisting of U.S. government securities within the
meaning of Treasury regulation section 1.860G-2(a)(8)(i) in an amount sufficient
to make all scheduled payments under the Mortgage Loan (or defeased portion
thereof) when due (and assuming, in the case of an ARD Mortgage Loan, to the
extent consistent with the related Mortgage Loan Documents, that such Mortgage
Loan matures on its Anticipated Repayment Date), (ii) to deliver a certificate
from an independent certified public accounting firm certifying that the
replacement collateral is sufficient to make such payments, (iii) at the option
of the applicable Master Servicer, to designate a single purpose entity (which
may be a subsidiary of the applicable Master Servicer established for the
purpose of assuming all defeased Mortgage Loans) to assume the Mortgage Loan (or
defeased portion thereof) and own the defeasance collateral, (iv) to implement
such defeasance only after the second anniversary of the Closing Date, (v) to
provide an Opinion of Counsel that the Trustee has a perfected, first priority
security interest in the new collateral, and (vi) in the case of a partial
defeasance of the Mortgage Loan, to defease a principal amount equal to at least
125% of the allocated loan amount for the Mortgaged Property or Properties to be
released. If the subject Mortgage Loan has a Cut-off Date Principal Balance less
than $20,000,000 and an outstanding principal balance less than 2% of the then
aggregate Stated Principal Balance of the Mortgage Pool and is not one of the 10
largest Mortgage Loans then in the Trust Fund, and if either the terms of the
subject Mortgage Loan permit the applicable Master Servicer to impose the
foregoing requirements or the applicable Master Servicer satisfies such
requirements on its own, then confirmation that such defeasance will not result
in an Adverse Rating Event is not required so long as the applicable Master
Servicer delivers to S&P a certification in the form attached hereto as
-166-
EXHIBIT N. In such case, the applicable Master Servicer shall provide the Rating
Agencies and the Controlling Class Representative with notice that the foregoing
requirements have been met with respect to the subject Mortgage Loan. However,
if the subject Mortgage Loan has a Cut-off Date Principal Balance greater than
or equal to $20,000,000 or an outstanding principal balance greater than or
equal to 2% of the aggregate Stated Principal Balance of the Mortgage Pool or is
one of the 10 largest Mortgage Loans then in the Trust Fund, or if the terms of
the subject Mortgage Loan do not permit the applicable Master Servicer to impose
such requirements and the applicable Master Servicer does not satisfy such
requirements on its own, then the applicable Master Servicer shall so notify the
Rating Agencies and the Controlling Class Representative and, so long as such a
requirement would not violate applicable law or the Servicing Standard, obtain a
confirmation that such defeasance will not result in an Adverse Rating Event.
Subject to the related Mortgage Loan Documents and applicable law, the
applicable Master Servicer shall not execute a defeasance unless (i) the subject
Mortgage Loan requires the Borrower to pay all Rating Agency fees associated
with defeasance (if Rating Agency confirmation of no-downgrade is a specific
condition precedent thereto) and all expenses associated with defeasance or
other arrangements for payment of such costs are made at no expense to the Trust
Fund or the applicable Master Servicer (PROVIDED, HOWEVER, that in no event
shall such proposed "other arrangements" result in any liability to the Trust
Fund including any indemnification of the applicable Master Servicer or Special
Servicer which may result in legal expenses to the Trust Fund), and (ii) the
Borrower is required to provide all Opinions of Counsel, including Opinions of
Counsel that the defeasance will not cause an Adverse REMIC Event or an Adverse
Grantor Trust Event and that the Mortgage Loan Documents are fully enforceable
in accordance with their terms (subject to bankruptcy, insolvency and similar
standard exceptions), and any applicable rating confirmations.
(g) The applicable Master Servicer shall, as to each Mortgage Loan
which is secured by the interest of the related Borrower under a Ground Lease,
promptly (and in any event within 45 days) after the Closing Date notify the
related ground lessor of the transfer of such Mortgage Loan to the Trust
pursuant to this Agreement and inform such ground lessor that any notices of
default under the related Ground Lease should thereafter be forwarded to the
applicable Master Servicer.
(h) If a Mortgage Loan provides or allows that the related
Borrower's failure to make any Monthly Payment due thereunder on the applicable
Due Date will not result in an event of default for which such Mortgage Loan may
be accelerated and/or, except in the case of a Co-op Mortgage Loan, accrue
Default Charges unless and until the applicable Master Servicer notifies such
Borrower of the failure or the elapse of a specified number of days following
the applicable Master Servicer's delivery of such notice, then the applicable
Master Servicer shall promptly (and in any event within two Business Days
following the applicable Due Date) notify the related Borrower of such a
failure. If a Co-op Mortgage Loan provides or allows that the related Borrower's
failure to make any Monthly Payment due thereunder on the applicable Due Date
will not result in an event of default for which such Mortgage Loan may accrue
Default Charges unless and until the applicable Master Servicer notifies such
Borrower of the failure or the elapse of a specified number of days following
the applicable Master Servicer's delivery of such notice, then the applicable
Master Servicer shall, in accordance with such Master Servicer's customary
practices and in accordance with the Servicing Standard, notify the related
Borrower of such a failure.
(i) The General Master Servicer shall maintain and hold the
Paradise Island Letter of Credit and shall make draws on such letter of credit,
in accordance with the terms thereof, as follows:
-167-
(i) if a Realized Loss (calculated without regard to a draw under
the Paradise Island Letter of Credit) would otherwise arise with respect to
the Paradise Island Mortgage Loan or any related REO Property as a result
of a forgiveness of debt or a Liquidation Event, then such draw shall be
made on the Business Day following such forgiveness of debt or such
Liquidation Event, in an amount equal to the lesser of the drawable balance
of the Paradise Island Letter of Credit and the amount of the Realized Loss
(calculated without regard to a draw under the Paradise Island Letter of
Credit) that would otherwise occur; and
(ii) if a Realized Loss (calculated without regard to a draw under
the Paradise Island Letter of Credit) arises with respect to the Paradise
Island Mortgage Loan or any related REO Property as a result of a reduction
in the Mortgage Rate and, accordingly, in the Monthly Payment, then such
draw shall be made during the first ten days of December during the
calendar year in which such Realized Loss (calculated without regard to a
draw under the Paradise Island Letter of Credit) occurred, in an amount
equal to the lesser of the drawable balance of the Paradise Island Letter
of Credit and the amount of such Realized Loss (calculated without regard
to a draw under the Paradise Island Letter of Credit).
The General Master Servicer shall promptly deposit in its Collection
Account any amounts drawn on the Paradise Island Letter of Credit in accordance
with the prior paragraph.
If the Trustee receives notice from the Paradise Island Letter of
Credit Provider that the Paradise Island Letter of Credit Provider does not
intend to renew the Paradise Island Letter of Credit, then within five (5)
Business Days the Trustee shall notify the General Master Servicer, and upon
receipt of such notice the General Master Servicer shall, prior to the date upon
which the Paradise Island Letter of Credit is due to expire, make a draw on the
Paradise Island Letter of Credit in an amount equal to the entire then drawable
balance of the Paradise Island Letter of Credit; PROVIDED, however that if the
General Master Servicer does not receive notice from the Trustee as required by
the preceding sentence on or before a date that is at least five (5) Business
Days prior to the last day on which a draw can be made on the Paradise Island
Letter of Credit, the General Master Servicer's failure to make a timely draw
prior to the expiration of the Paradise Island Letter of Credit shall not
constitute a default or an Event of Default by the General Master Servicer under
this Agreement. In connection with the foregoing, the General Master Servicer
shall establish and maintain an account (the "PARADISE ISLAND SPECIAL ACCOUNT")
to be held in trust for the benefit of the Certificateholders and Column, as
their interests may appear. The General Master Servicer shall promptly deposit
in the Paradise Island Special Account the amount drawn on the Paradise Island
Letter of Credit pursuant to the first sentence of this paragraph. The Paradise
Island Special Account shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including without limitation, other moneys held by the General
Master Servicer pursuant to this Agreement.
The General Master Servicer shall make withdrawals from amounts in the
Paradise Island Special Account as follows:
(i) if a Realized Loss (calculated without regard to a withdrawal
from the Paradise Island Special Account) would otherwise arise with
respect to the Paradise Island Mortgage Loan or any related REO Property as
a result of a forgiveness of debt or a Liquidation Event, then such
withdrawal shall be made on the Business Day following such forgiveness of
debt or
-168-
such Liquidation Event, in an amount equal to the lesser of the amount
(exclusive of investment income) then on deposit in the Paradise Island
Special Account and the amount of the Realized Loss (calculated without
regard to a withdrawal from the Paradise Island Special Account) that would
otherwise occur; and
(ii) if a Realized Loss (calculated without regard to a withdrawal
from the Paradise Island Special Account) arises with respect to the
Paradise Island Mortgage Loan or any related REO Property as a result of a
reduction in the Mortgage Rate and, accordingly, in the Monthly Payment,
then such draw shall be made during the first ten days of December during
the calendar year in which such Realized Loss (calculated without regard to
a withdrawal from the Paradise Island Special Account) occurred, in an
amount equal to the lesser of the amount then on deposit in the Paradise
Island Special Account and the amount of such Realized Loss (calculated
without regard to a withdrawal from the Paradise Island Special Account).
The General Master Servicer shall promptly deposit in its Collection
Account all amounts withdrawn from the Paradise Island Special Account pursuant
to the prior paragraph.
As contemplated by SECTION 3.06, funds in the Paradise Island Special
Account may be invested by the General Master Servicer at the direction of
Column in (but only in) one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, no later than the
Business Day immediately preceding the earlier of the next succeeding date on
which such funds are required to be withdrawn from the Paradise Island Special
Account pursuant to this Agreement and the next succeeding Determination Date.
In the absence of any written investment direction by Column, all funds in the
Paradise Island Special Account shall remain uninvested. Any Net Investment
Earnings on such amounts shall be distributed by the General Master Servicer to
Column monthly on each Determination Date. The General Master Servicer shall,
upon receipt, deposit in the Paradise Island Special Account any amounts
required to be deposited by Column as contemplated by SECTION 3.06 in connection
with losses incurred with respect to Permitted Investments of funds held in the
Paradise Island Special Account. The General Master Servicer shall have no
liability for losses on investments in Permitted Investments made pursuant to
this SECTION 3.19(i) (other than as obligor on any such investments).
Upon termination of the Trust Fund, any funds or other assets
remaining in the Paradise Island Reserve Fund shall be distributed to Column.
The Trustee and the General Master Servicer shall account for the Paradise
Island Reserve Fund as an outside reserve fund within the meaning of Treasury
regulation section 1.860G-2(h) and not an asset of any REMIC Pool or Grantor
Trust Pool. Furthermore, for all federal tax purposes, the Trustee and the
General Master Servicer shall (i) treat amounts paid out of the Paradise Island
Reserve Fund to the Certificateholders as distributions by the REMIC Pools for
all federal tax purposes and (ii) treat any amounts transferred by a REMIC Pool
to the Paradise Island Reserve Fund as amounts distributed by such REMIC Pool to
the beneficial owner of the Paradise Island Reserve Fund. Column will be the
sole beneficial owner of the Paradise Island Reserve Fund for all income and
franchise tax purposes.
The General Master Servicer shall notify, and shall release the
Paradise Island Letter of Credit or distribute all amounts remaining in the
Paradise Island Special Account (as applicable) to, Column if and when the debt
service coverage ratio for the Paradise Island Mortgage Loan (based on the
financial performance of the Paradise Island Property on a trailing 12-month
basis) is at least 1.25x.
-169-
Such debt service coverage ratio shall be calculated by the General Master
Servicer, in consultation with the Controlling Class Representative, every six
months, commencing with the General Master Servicer's receipt of the relevant
financial information for the calendar quarter ended June 30, 2002. The General
Master Servicer also shall notify, and shall release the Paradise Island Letter
of Credit or distribute all amounts remaining in the Paradise Island Special
Account (as applicable) to, Column if and when the Paradise Island Mortgage Loan
is paid in full or, subject to having first made any requisite draw on the
Paradise Island Letter of Credit or withdrawal from the Paradise Island Special
Account as provided above in this SECTION 3.19(i) to cover or prevent Realized
Losses with respect to the Paradise Island Mortgage Loan or any related REO
Property, if and when any other Liquidation Event occurs with respect to the
Paradise Island Mortgage Loan or any related REO Property.
In calculating the debt service coverage ratio referred to in the
preceding paragraph, the General Master Servicer shall use actual net cash flow
generated by the Paradise Island Property on a trailing 12-month basis, with
such net cash flow normalized to reflect full reserves (the higher of actual
escrows or underwritten), full insurance premium and full real estate taxes.
SECTION 3.20. Modifications, Waivers, Amendments and Consents.
(a) The applicable Special Servicer, solely as to a Specially
Serviced Mortgage Loan, or the applicable Master Servicer, solely as to a
Performing Mortgage Loan, may (consistent with the Servicing Standard) agree to
any modification, waiver or amendment of any term of, extend the maturity of,
defer or forgive interest (including Default Interest and Post-ARD Additional
Interest) on and principal of, defer or forgive late payment charges, Prepayment
Premiums and Yield Maintenance Charges on, permit the release, addition or
substitution of collateral securing, and/or permit the release, addition or
substitution of the Borrower on or any guarantor of, any Mortgage Loan, subject,
however, to SECTIONS 3.08 and 3.24 and, further to each of the following
limitations, conditions and restrictions:
(i) other than as provided in SECTIONS 2.03(b), 3.02, 3.08,
3.20(f) and 3.20(g), the applicable Master Servicer shall not agree to any
modification, waiver or amendment of any term of, or take any of the other
acts referenced in this SECTION 3.20(a) with respect to, any Mortgage Loan,
that would affect the amount or timing of any related payment of principal,
interest or other amount payable under such Mortgage Loan or affect the
security for such Mortgage Loan, unless such Master Servicer has obtained
the consent of the applicable Special Servicer (it being understood and
agreed that (A) the applicable Master Servicer shall promptly provide the
applicable Special Servicer with notice of any Borrower request for such
modification, waiver or amendment, the applicable Master Servicer's
recommendations and analysis, and with all information reasonably available
to the applicable Master Servicer that the applicable Special Servicer may
reasonably request in order to withhold or grant any such consent, (B) the
applicable Special Servicer shall decide whether to withhold or grant such
consent in accordance with the Servicing Standard and (C) if any such
consent has not been expressly denied within 10 Business Days of the
applicable Special Servicer's receipt from the applicable Master Servicer
of such Master Servicer's recommendations and analysis and all information
reasonably requested thereby and reasonably available to the applicable
Master Servicer in order to make an informed decision (or, if the
applicable Special Servicer did not request any information, within 10
Business Days from such notice), such consent shall be deemed to have been
granted);
-170-
(ii) other than as provided in SECTIONS 3.02 and 3.08, the
applicable Special Servicer shall not agree to (or, in the case of a
Performing Mortgage Loan, consent to the applicable Master Servicer's
agreeing to) any modification, waiver or amendment of any term of, or take
(or, in the case of a Performing Mortgage Loan, consent to the applicable
Master Servicer's taking) any of the other acts referenced in this
SECTION 3.20(a) with respect to, any Mortgage Loan that would affect the
amount or timing of any related payment of principal, interest or other
amount payable thereunder or, in the reasonable judgment of the applicable
Special Servicer, would materially impair the security for such Mortgage
Loan, unless a material default on such Mortgage Loan has occurred or, in
the reasonable judgment of the applicable Special Servicer, a default in
respect of payment on such Mortgage Loan is reasonably foreseeable, and
such modification, waiver, amendment or other action is reasonably likely
to produce a greater recovery to Certificateholders (as a collective whole)
on a present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be done at
the related Net Mortgage Rate), than would liquidation;
(iii) the applicable Special Servicer shall not extend (or, in the
case of a Performing Mortgage Loan, consent to the applicable Master
Servicer's extending) the date on which any Balloon Payment is scheduled to
be due on any Mortgage Loan to a date beyond the earliest of (A) the fifth
anniversary of such Mortgage Loan's Stated Maturity Date, (B) two years
prior to the Rated Final Distribution Date, (C) if such Mortgage Loan is
secured by a Mortgage solely or primarily on the related Borrower's
leasehold interest in the related Mortgaged Property, 20 years (or, to the
extent consistent with the Servicing Standard, giving due consideration to
the remaining term of the Ground Lease, 10 years) prior to the end of the
then current term of the related Ground Lease (plus any unilateral options
to extend), and (D) if such Mortgage Loan is covered by an environmental
insurance policy, two years prior to the expiration of the term of such
policy unless the applicable Special Servicer shall have first determined
in its reasonable judgment, based upon a Phase I Environmental Assessment
(and any additional environmental testing that the applicable Special
Servicer deems necessary and prudent) conducted by an Independent Person
who regularly conducts Phase I Environmental Assessments, and at the
expense of the Borrower, that there are no circumstances or conditions
present at the related Mortgaged Property for which investigation, testing,
monitoring, containment, clean-up or remediation would be required under
any then applicable environmental laws or regulations;
(iv) neither the applicable Master Servicer nor the applicable
Special Servicer shall make or permit any modification, waiver or amendment
of any term of, or take any of the other acts referenced in this
SECTION 3.20(a) with respect to, any Mortgage Loan that would result in an
Adverse REMIC Event with respect to any REMIC Pool or an Adverse Grantor
Trust Event with respect to either Grantor Trust Pool;
(v) subject to applicable law, the related Mortgage Loan Documents
and the Servicing Standard, neither the applicable Master Servicer nor the
applicable Special Servicer shall permit any modification, waiver or
amendment of any term of any Performing Mortgage Loan unless all related
fees and expenses are paid by the Borrower;
(vi) the applicable Special Servicer shall not permit (or, in the
case of a Performing Mortgage Loan, consent to the applicable Master
Servicer's permitting) any Borrower to add or substitute any real estate
collateral for its Mortgage Loan unless the applicable Special Servicer
-171-
shall have first (A) determined in its reasonable judgment, based upon a
Phase I Environmental Assessment (and any additional environmental testing
that the applicable Special Servicer deems necessary and prudent) conducted
by an Independent Person who regularly conducts Phase I Environmental
Assessments, at the expense of the related Borrower, that such additional
or substitute collateral is in compliance with applicable environmental
laws and regulations and that there are no circumstances or conditions
present with respect to such new collateral relating to the use, management
or disposal of any Hazardous Materials for which investigation, testing,
monitoring, containment, clean-up or remediation would be required under
any then applicable environmental laws or regulations and (B) received, at
the expense of the related Borrower, written confirmation from each Rating
Agency that such addition or substitution of collateral will not, in and of
itself, result in an Adverse Rating Event with respect to any Class of
Rated Certificates; and
(vii) the applicable Special Servicer shall not release (or, in the
case of a Performing Mortgage Loan, consent to the applicable Master
Servicer's releasing), including in connection with a substitution
contemplated by CLAUSE (vi) above, any real property collateral securing an
outstanding Mortgage Loan, except as provided in SECTION 3.09(d), or except
where a Mortgage Loan (or, in the case of a Cross-Collateralized Group,
where such entire Cross-Collateralized Group) is satisfied, or except in
the case of a release where (A) the Rating Agencies have been notified in
writing, (B) either (1) the use of the collateral to be released will not,
in the reasonable judgment of the applicable Special Servicer, materially
and adversely affect the net operating income being generated by or the use
of the related Mortgaged Property, or (2) there is a corresponding
principal pay down of such Mortgage Loan in an amount at least equal to the
appraised value of the collateral to be released (or substitute real estate
collateral with an appraised value at least equal to that of the collateral
to be released, is delivered), (C) the remaining Mortgaged Property
(together with any substitute collateral) is, in the reasonable judgment of
the applicable Special Servicer, adequate security for the remaining
Mortgage Loan and (D) if the collateral to be released has an appraised
value in excess of $1,500,000, such release would not, in and of itself,
result in an Adverse Rating Event with respect to any Class of Rated
Certificates (as confirmed in writing to the Trustee by each Rating
Agency);
PROVIDED that the limitations, conditions and restrictions set forth in
CLAUSES (i) through (vii) above shall not apply to any act or event (including,
without limitation, a release, substitution or addition of collateral) in
respect of any Mortgage Loan that either occurs automatically, or results from
the exercise of a unilateral option by the related Borrower within the meaning
of Treasury regulations section 1.1001-3(c)(2)(iii), in any event under the
terms of such Mortgage Loan in effect on the Closing Date (or, in the case of a
Replacement Mortgage Loan, on the related date of substitution); and PROVIDED,
FURTHER, that, notwithstanding CLAUSES (i) through (vii) above, neither the
applicable Master Servicer nor the applicable Special Servicer shall be required
to oppose the confirmation of a plan in any bankruptcy or similar proceeding
involving a Borrower if, in its reasonable judgment, such opposition would not
ultimately prevent the confirmation of such plan or one substantially similar;
and PROVIDED, FURTHER, that, notwithstanding CLAUSE (vii) above, neither the
applicable Master Servicer nor the applicable Special Servicer shall be required
to obtain any confirmation of the Certificate ratings from the Rating Agencies
in order to grant easements or rights of way that do not materially affect the
use or value of a Mortgaged Property or the Borrower's ability to make any
payments with respect to the related Mortgage Loan.
-172-
(b) The applicable Special Servicer and applicable Master Servicer
shall not have any liability to the Trust, the Certificateholders or any other
Person if, in either case, its analysis and determination that the modification,
waiver, amendment or other action contemplated by SECTION 3.20(a) is reasonably
likely to produce a greater recovery to Certificateholders on a present value
basis than would liquidation should prove to be wrong or incorrect, so long as
the analysis and determination were made on a reasonable basis by the applicable
Special Servicer and/or the applicable Master Servicer, as appropriate,
consistent with the Servicing Standard.
(c) Any payment of interest, which is deferred pursuant to SECTION
3.20(a), shall not, for purposes of calculating monthly distributions and
reporting information to Certificateholders, be added to the unpaid principal
balance or Stated Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit or that such
interest may actually be capitalized; PROVIDED, HOWEVER, that this sentence
shall not limit the rights of the applicable Master Servicer or the applicable
Special Servicer on behalf of the Trust to enforce any obligations of the
related Borrower under such Mortgage Loan.
(d) Each of the applicable Master Servicer and the applicable
Special Servicer may, as a condition to its granting any request by a Borrower
for consent, modification, waiver or indulgence or any other matter or thing,
the granting of which is within such Master Servicer's or Special Servicer's, as
the case may be, discretion pursuant to the terms of the related Mortgage Loan
Documents and is permitted by the terms of this Agreement, require that such
Borrower pay to it a reasonable or customary fee (which shall in no event exceed
1.0% of the unpaid principal balance of the related Mortgage Loan) for the
additional services performed in connection with such request, together with any
related costs and expenses incurred by it. All such fees collected by the
applicable Master Servicer and/or the applicable Special Servicer with respect
to any Mortgage Loan shall be allocable between such parties, as Additional
Master Servicing Compensation and Additional Special Servicing Compensation,
respectively, as provided in SECTION 3.11.
(e) All modifications, amendments, material waivers and other
material actions entered into or taken in respect of the Mortgage Loans pursuant
to this SECTION 3.20 (other than waivers of Default Charges), and all consents,
shall be in writing. Each of the applicable Special Servicer and the applicable
Master Servicer shall notify the other such party, each Rating Agency, the
Trustee and the Controlling Class Representative, in writing, of any
modification, waiver, amendment or other action entered into or taken thereby in
respect of any Mortgage Loan pursuant to this SECTION 3.20 (other than waivers
of Default Charges) and the date thereof, and shall deliver to the Trustee or
the related Custodian for deposit in the related Mortgage File (with a copy to
the other such party), an original counterpart of the agreement relating to such
modification, waiver, amendment or other action, promptly (and in any event
within ten Business Days) following the execution thereof. In addition,
following the execution of any modification, waiver or amendment agreed to by
the applicable Special Servicer or the applicable Master Servicer, as
appropriate, pursuant to SECTION 3.20(a) above, the applicable Special Servicer
or the applicable Master Servicer, as applicable, shall deliver to the other
such party, the Trustee and the Rating Agencies an Officer's Certificate
certifying that all of the requirements of SECTION 3.20(a) have been met and, in
the case of the applicable Special Servicer, setting forth in reasonable detail
the basis of the determination made by it pursuant to SECTION 3.20(a)(ii);
PROVIDED that, if such modification, waiver or amendment involves an extension
of the maturity of any Mortgage Loan, such Officer's Certificate shall be so
delivered before the modification, waiver or amendment is agreed to.
-173-
(f) With respect to any ARD Mortgage Loan after its Anticipated
Repayment Date, the applicable Master Servicer shall be permitted, with the
consent of the applicable Special Servicer (which consent shall be deemed
granted if not denied in writing within 10 Business Days after receipt of the
applicable Master Servicer's request therefor), to waive (such waiver to be in
writing addressed to the related Borrower, with a copy to the Trustee) all or
any portion of the accrued Post-ARD Additional Interest in respect of such ARD
Mortgage Loan if (i) such ARD Mortgage Loan is a Performing Mortgage Loan, (ii)
the related Borrower has requested the right to prepay such ARD Mortgage Loan in
full together with all payments required by the related Mortgage Loan Documents
in connection with such prepayment except for such accrued Post-ARD Additional
Interest, and (iii) the applicable Master Servicer has determined, in its
reasonable judgment, that waiving such Post-ARD Additional Interest is in
accordance with the Servicing Standard. The applicable Master Servicer shall
prepare all documents necessary and appropriate to effect any such waiver and
shall coordinate with the related Borrower for the execution and delivery of
such documents.
(g) Notwithstanding anything in this SECTION 3.20 or in SECTION
3.08 or SECTION 3.24 to the contrary, the applicable Master Servicer shall not
be required to seek the consent of, or provide prior notice to, the applicable
Special Servicer or any Certificateholder or obtain any confirmation of the
Certificate ratings from the Rating Agencies in order to approve the following
modifications, waivers or amendments of the Mortgage Loans (but, in the case of
the actions described in CLAUSES (iii) and (iv) of this sentence, shall notify
the Controlling Class Representative thereof): (i) waivers of minor covenant
defaults (other than financial covenants), including late financial statements;
(ii) waiver of Default Charges, to the extent allowed under SECTION 3.02, and
permitting subordinate debt with respect to Co-op Mortgage Loans as to which the
NCBFSB Subordinate Debt Conditions have been satisfied, in accordance with
SECTION 3.08; (iii) releases of parcels of a Mortgaged Property (PROVIDED that
any such releases (A) are releases as to which the related Mortgage Loan
Documents expressly require the mortgagee thereunder to make such releases upon
the satisfaction of certain conditions and such releases shall be made as
required by the Mortgage Loan Documents, or (B) are related to any pending or
threatened condemnation action); (iv) grants of easements or rights of way that
do not materially affect the use or value of a Mortgaged Property or the
Borrower's ability to make any payments with respect to the related Mortgage
Loan; (v) routine leasing activities that affect less than the greater of 20% of
the net rentable area of the Mortgaged Property or 10,000 square feet of the
Mortgaged Property; and (vi) approval of annual budgets to operate the Mortgage
Property; PROVIDED that any such modification, waiver or amendment, or agreeing
to any such modification, waiver or amendment, (w) would not in any way affect a
payment term of the Certificates, (x) would not constitute a "significant
modification" of such Mortgage Loan pursuant to Treasury regulations section
1.860G-2(b) and would not otherwise constitute an Adverse REMIC Event with
respect to any REMIC Pool or an Adverse Grantor Trust Event with respect to
either Grantor Trust Pool, (y) would be consistent with the Servicing Standard,
and (z) shall not violate the terms, provisions or limitations of this Agreement
or any other document contemplated hereby.
(h) The applicable Master Servicer shall not terminate or replace,
or consent to the termination or replacement of, any property manager with
respect to any Mortgaged Property, and the applicable Master Servicer shall not
terminate or change or consent to the termination or change of the franchise for
any Mortgage Property operated as a hospitality property, in any event without
the prior written consent of the applicable Special Servicer (it being
understood and agreed that (A) the applicable Master Servicer shall promptly
provide the applicable Special Servicer with its analysis, recommendations and
all information that the applicable Special Servicer may reasonably request and
-174-
which information is in the possession of the applicable Master Servicer, in
order to withhold or grant any such consent, (B) subject to SECTION 3.24, the
applicable Special Servicer shall decide whether to withhold or grant such
consent in accordance with the Servicing Standard, (C) if any such consent has
not been expressly denied within 10 Business Days of the applicable Special
Servicer's receipt from the applicable Master Servicer of such analysis,
recommendation and all information reasonably requested thereby in order to make
an informed decision (or, if the applicable Special Servicer did not request any
information, within 10 Business Days from such notice), such consent shall be
deemed to have been granted and (D) such consent shall not be required with
respect to Co-op Mortgage Loans that are Performing Mortgage Loans).
(i) In connection with granting an extension of the maturity date
of any Mortgage Loan in accordance with SECTION 3.20(a), the applicable Special
Servicer, in the case of a Specially Serviced Mortgage Loan, and the applicable
Master Servicer, in the case of a Performing Mortgage Loan, shall each cause the
related Borrower to agree, if it has not already done so pursuant to the
existing Mortgage Loan Documents, to thereafter deliver to the applicable
Special Servicer, the Trustee and the Controlling Class Representative annual
audited operating statements and quarterly unaudited operating statements with
respect to the related Mortgaged Property, PROVIDED that the applicable Special
Servicer or the applicable Master Servicer, as the case may be, may, in its sole
discretion, waive the requirement that such statements be audited.
(j) Notwithstanding anything in this Agreement, including this
SECTION 3.20, to the contrary, for so long as the applicable Master Servicer and
the applicable Special Servicer are the same Person, the applicable Master
Servicer shall not be obligated to obtain the consent or approval of the
applicable Special Servicer as otherwise required in this Agreement but shall
instead be required to request the consent or approval of the Controlling Class
Representative (in respect of any matter as to which such consent is otherwise
required hereunder) to the extent, and on the same terms, subject to the same
limitations, restrictions and exclusions and within the same time periods as,
the applicable Special Servicer is required to request such consent or approval
of the Controlling Class Representative pursuant to SECTION 3.24 or any other
section or provision of this Agreement.
SECTION 3.21. Transfer of Servicing Between Applicable Master
Servicer and Applicable Special Servicer; Record
Keeping.
(a) Upon determining that a Servicing Transfer Event has occurred
with respect to any Mortgage Loan, the applicable Master Servicer shall
immediately give notice thereof to the Controlling Class Representative, and if
the applicable Master Servicer is not also the applicable Special Servicer, the
applicable Master Servicer shall immediately give notice thereof to the
applicable Special Servicer, the Trustee and the Controlling Class
Representative, shall deliver the related Servicing File to the applicable
Special Servicer and shall use its best efforts to provide the applicable
Special Servicer with all information, documents (or copies thereof) and records
(including records stored electronically on computer tapes, magnetic discs and
the like) relating to such Mortgage Loan and reasonably requested by the
applicable Special Servicer to enable it to assume its functions hereunder with
respect thereto without acting through a Sub-Servicer. To the extent such is in
the possession of the applicable Master Servicer or any Sub-Servicer thereof,
the information, documents and records to be delivered by the applicable Master
Servicer to the applicable Special Servicer pursuant to the prior sentence shall
include, but not be limited to, financial statements, appraisals,
environmental/engineering reports, leases, rent rolls (or, in the case of a
residential cooperative property, maintenance schedules), title insurance
-175-
policies, UCC's and tenant estoppels. The applicable Master Servicer shall use
its best efforts to comply with the preceding two sentences within five Business
Days of the occurrence of each related Servicing Transfer Event. No later than
ten Business Days before the applicable Master Servicer is required to deliver a
copy of the related Servicing File to the applicable Special Servicer, it shall
review such Servicing File and request from the Trustee any material documents
that it is aware are missing from such Servicing File.
Upon determining that a Specially Serviced Mortgage Loan has become a
Corrected Mortgage Loan and if the applicable Master Servicer is not also the
applicable Special Servicer, the applicable Special Servicer shall immediately
give notice thereof to the applicable Master Servicer, the Trustee and the
Controlling Class Representative and shall return the related Servicing File
within five Business Days, to the applicable Master Servicer. Upon giving such
notice and returning such Servicing File to the applicable Master Servicer, the
applicable Special Servicer's obligation to service such Mortgage Loan, and the
applicable Special Servicer's right to receive the Special Servicing Fee with
respect to such Mortgage Loan, shall terminate, and the obligations of the
applicable Master Servicer to service and administer such Mortgage Loan shall
resume.
Notwithstanding anything herein to the contrary, in connection with
the transfer to the applicable Special Servicer of the servicing of a
Cross-Collateralized Mortgage Loan as a result of a Servicing Transfer Event or
the re-assumption of servicing responsibilities by the applicable Master
Servicer with respect to any such Mortgage Loan upon its becoming a Corrected
Mortgage Loan, the applicable Master Servicer and the applicable Special
Servicer shall each transfer to the other, as and when applicable, the servicing
of all other Cross-Collateralized Mortgage Loans constituting part of the same
Cross-Collateralized Group; PROVIDED that no Cross-Collateralized Mortgage Loan
may become a Corrected Mortgage Loan at anytime that a continuing Servicing
Transfer Event exists with respect to another Cross-Collateralized Mortgage Loan
in the same Cross-Collateralized Group.
(b) In servicing any Specially Serviced Mortgage Loan, the
applicable Special Servicer shall provide to the Trustee originals of documents
contemplated by the definition of "Mortgage File" and generated while such
Mortgage Loan is a Specially Serviced Mortgage Loan, for inclusion in the
related Mortgage File (with a copy of each such original to the applicable
Master Servicer), and copies of any additional related Mortgage Loan
information, including correspondence with the related Borrower generated while
such Mortgage Loan is a Specially Serviced Mortgage Loan.
(c) The applicable Master Servicer and the applicable Special
Servicer shall each furnish to the other, upon reasonable request, such reports,
documents, certifications and information in its possession, and access to such
books and records maintained thereby, as may relate to any Mortgage Loan or REO
Property and as shall be reasonably required by the requesting party in order to
perform its duties hereunder.
(d) In connection with the performance of its obligations
hereunder with respect to any Mortgage Loan or REO Property, each of the
applicable Master Servicer and the applicable Special Servicer shall be entitled
to rely upon written information provided to it by the other.
SECTION 3.22. Sub-Servicing Agreements.
(a) Each Master Servicer and, subject to SECTION 3.22(f), Special
Servicer may enter into Sub-Servicing Agreements to provide for the performance
by third parties of any or all of their
-176-
respective obligations hereunder (including the performance on a regular basis
by third parties of discrete tasks in respect of a discrete number of assets),
PROVIDED that, in each case, the Sub-Servicing Agreement, including any
amendments thereto and modifications thereof: (i) insofar as it affects the
Trust, is consistent with this Agreement, including SECTION 7.01(a), in all
material respects and requires the subject Sub-Servicer to comply in all
material respects with all of the applicable conditions of this Agreement; (ii)
provides that if such Master Servicer or Special Servicer, as the case may be,
shall for any reason no longer act in such capacity hereunder (including by
reason of an Event of Default), the Trustee or its designee or any other
successor to such Master Servicer or Special Servicer, as the case may be, may
thereupon assume all of the rights and, except to the extent they arose prior to
the date of assumption, obligations of such Master Servicer or Special Servicer,
as the case may be, under such agreement or, alternatively, may terminate such
Sub-Servicing Agreement without cause and without payment of any penalty or
termination fee (PROVIDED, HOWEVER, that a Designated Sub-Servicer Agreement may
not be terminated except for cause, which will include the occurrence of any
Adverse Rating Event resulting from the subject Sub-Servicer's acting in such
capacity); (iii) provides that the Trustee, for the benefit of the
Certificateholders, shall be a third party beneficiary under such agreement, but
that (except to the extent the Trustee or its designee assumes the obligations
of such Master Servicer or Special Servicer, as the case may be, thereunder as
contemplated by the immediately preceding CLAUSE (ii), and except with respect
to the obligations of any successor to such Master Servicer under the Designated
Sub-Servicer Agreements) none of the Trustee, any successor to such Master
Servicer or Special Servicer, as the case may be, or any Certificateholder shall
have any duties under such agreement or any liabilities arising therefrom except
as explicitly set forth herein; (iv) permits any purchaser of a Mortgage Loan
pursuant to this Agreement to terminate such agreement with respect to such
purchased Mortgage Loan at its option and without penalty; (v) does not permit
the subject Sub-Servicer to foreclose on a Mortgaged Property or to enter into
or consent to any modification, waiver or amendment or otherwise take any action
on behalf of such Master Servicer or Special Servicer, as the case may be,
contemplated by SECTION 3.09 and/or SECTION 3.20 hereof, without the consent of
such Master Servicer or Special Servicer, as the case may be, and in any event
except on the same terms and conditions as would be applicable if such Master
Servicer or Special Servicer, as the case may be, took such action, PROVIDED,
HOWEVER, that the Sub-Servicing Agreement need not require a Designated
Sub-Servicer (or any Sub-Servicer otherwise approved in writing by the
Controlling Class Representative) to seek the consent of the applicable Master
Servicer or Special Servicer (whichever retained such Sub-Servicer) in order to
approve (A) waivers of minor (in the Sub-Servicer's reasonable judgment)
covenant defaults (other than financial covenants), including late financial
statements, (B) releases of non-material parcels of a Mortgaged Property
(PROVIDED that any such releases (X) are releases as to which the related
Mortgage Loan Documents expressly require the mortgagee thereunder to make such
releases upon the satisfaction of certain conditions and such releases shall be
made as required by the Mortgage Loan Documents, or (Y) are related to any
pending or threatened condemnation action), and (C) grants of easements or
rights of way that do not materially affect (in the Sub-Servicer's reasonable
judgment) the use or value of a Mortgaged Property or the Borrower's ability to
make any payment with respect to the related Mortgage Loan, PROVIDED that any
such modification, waiver, or amendment (X) would not in any way affect a
payment term of the subject Mortgage Loan or materially and adversely affect the
security for the subject Mortgage Loan, (Y) would not constitute a "significant
modification" of the subject Mortgage Loan pursuant to Treasury regulation
section 1.860G-2(b) and would not otherwise constitute an Adverse REMIC Event
with respect to any REMIC Pool or an Adverse Grantor Trust Event with respect to
either Grantor Trust Pool and (Z) would be consistent with the Servicing
Standard; and (vi) does not permit the subject Sub-Servicer any rights of
indemnification out of the Trust Fund except through such Master Servicer or
Special Servicer, as the case may be,
-177-
pursuant to SECTION 6.03; PROVIDED that the appointment by a Master Servicer or
Special Servicer of a third-party contractor for the purpose of performing
discrete, ministerial functions shall not be subject to this SECTION 3.22
(except that such Master Servicer or Special Servicer, as the case may be, shall
remain responsible for the actions of such third-party contractors and shall pay
all fees and expenses of such third-party contractors, unless otherwise
expressly provided herein). No Sub-Servicing Agreement entered into by a Master
Servicer shall purport to delegate or effectively delegate to the related
Sub-Servicer any of the rights or obligations of a Special Servicer with respect
to any Specially Serviced Mortgage Loan or otherwise. Each Sub-Servicing
Agreement entered into by a Special Servicer shall relate only to Specially
Serviced Mortgage Loans and any REO Properties as to which such Special Servicer
is the applicable Special Servicer and shall not purport to delegate or
effectively delegate to the related Sub-Servicer any of the rights or
obligations of a Master Servicer with respect to any Mortgage Loan, including
any Specially Serviced Mortgage Loan. Each Master Servicer and Special Servicer
shall notify the Trustee, the Controlling Class Representative and the Depositor
in writing promptly of the appointment by it of any Sub-Servicer. Each Master
Servicer and Special Servicer shall deliver to the Trustee copies of all
Sub-Servicing Agreements, and any amendments thereto and modifications thereof,
entered into by it promptly upon its execution and delivery of such documents.
References in this Agreement to actions taken or to be taken by a Master
Servicer or Special Servicer include actions taken or to be taken by a
Sub-Servicer on behalf of such Master Servicer or Special Servicer, as the case
may be; and, in connection therewith, all amounts advanced by any Sub-Servicer
to satisfy the obligations of a Master Servicer or Special Servicer hereunder to
make Advances shall be deemed to have been advanced by such Master Servicer or
Special Servicer, as the case may be, out of its own funds and, accordingly,
such Advances shall be recoverable by such Sub-Servicer in the same manner and
out of the same funds as if such Sub-Servicer were such Master Servicer or
Special Servicer, as the case may be. Such Advances shall accrue interest in
accordance with SECTIONS 3.11(g) and/or 4.03(d), such interest to be allocable
between such Master Servicer or Special Servicer, as the case may be, and such
Sub-Servicer as they may agree. For purposes of this Agreement, each Master
Servicer and Special Servicer shall be deemed to have received any payment when
a Sub-Servicer retained by it receives such payment.
(b) Each Sub-Servicer shall be authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law.
(c) Each Master Servicer and Special Servicer, for the benefit of
the Trustee and the Certificateholders, shall (at no expense to any other party
hereto or to the Certificateholders or the Trust) monitor the performance and
enforce the obligations of their respective Sub-Servicers under the related
Sub-Servicing Agreements. Such enforcement, including the legal prosecution of
claims, termination of Sub-Servicing Agreements in accordance with their
respective terms and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as such Master Servicer
or Special Servicer, as applicable, in its reasonable judgment, would require
were it the owner of the subject Mortgage Loans. Subject to the terms of the
related Sub-Servicing Agreement, including any provisions thereof limiting the
ability of a Master Servicer or Special Servicer, as applicable, to terminate a
Sub-Servicer, each Master Servicer and Special Servicer shall have the right to
remove a Sub-Servicer retained by it at any time it considers such removal to be
in the best interests of Certificateholders.
-178-
(d) If a Master Servicer or Special Servicer ceases to serve as
such under this Agreement for any reason (including by reason of an Event of
Default), then the Trustee or other successor to such Master Servicer or Special
Servicer, as the case may be, shall succeed to the rights and assume the
obligations of such Master Servicer or Special Servicer under any Sub-Servicing
Agreement to which such Master Servicer or Special Servicer, as the case may be,
are parties, unless the Trustee or other successor to such Master Servicer or
Special Servicer elects to terminate any such Sub-Servicing Agreement in
accordance with its terms and SECTION 3.22(a)(ii) hereof; PROVIDED that no
Designated Sub-Servicer Agreement may be so terminated except for cause, which
will include the occurrence of any Adverse Rating Event resulting from the
subject Sub-Servicer's acting in such capacity. In any event, if a Sub-Servicing
Agreement is to be assumed by the Trustee or other successor to a Master
Servicer or Special Servicer, then such Master Servicer or Special Servicer, as
applicable, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use reasonable efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding any Sub-Servicing Agreement entered into by
it, each Master Servicer and Special Servicer shall remain obligated and liable
to the Trustee and the Certificateholders for the performance of their
respective obligations and duties under this Agreement in accordance with the
provisions hereof to the same extent and under the same terms and conditions as
if it alone were servicing and administering the Mortgage Loans or REO
Properties for which it is responsible. No appointment of a Sub-Servicer shall
result in any additional expense to the Trustee, the Certificateholders or the
Trust other than those contemplated herein, and the fees of such Sub-Servicer
shall be payable by the Master Servicer or Special Servicer that retained it,
regardless of whether such Master Servicer's or Special Servicer's, as the case
may be, compensation hereunder is sufficient to cover such fees.
(f) No Special Servicer shall enter into any Sub-Servicing
Agreement unless either: (i) the Rating Agencies have confirmed in writing that
entering into such agreement will not result in an Adverse Rating Event; (ii)
such agreement relates to one or more Mortgage Loans (including any such
Mortgage Loan(s) previously sub-serviced in accordance with this SECTION 3.22)
that together represent less than 25% of the aggregate outstanding principal
balance of all Specially Serviced Mortgage Loans; or (iii) the Controlling Class
Representative has consented.
SECTION 3.23. Controlling Class Representative.
(a) The Holders (or, in the case of Book-Entry Certificates, the
Certificate Owners) of Certificates representing more than 50% of the Class
Principal Balance of the Controlling Class shall be entitled in accordance with
this SECTION 3.23 to select a representative (the "CONTROLLING CLASS
REPRESENTATIVE") having the rights and powers specified in this Agreement
(including those specified in SECTION 3.24) or to replace an existing
Controlling Class Representative; PROVIDED that, subject to the last sentence of
this SECTION 3.23(a), and the acquisition by ARCap REIT, Inc. of the
Certificates of the Controlling Class, ARCap REIT, Inc. shall serve as the
initial Controlling Class Representative. Upon (i) the receipt by the Trustee of
written requests for the selection of a successor Controlling Class
Representative from the Holders (or, in the case of Book-Entry Certificates, the
Certificate Owners) of Certificates representing more than 50% of the Class
Principal Balance of the Controlling Class, (ii) the resignation or removal of
the Person acting as Controlling Class Representative or (iii) a determination
-179-
by the Trustee that the Controlling Class has changed, the Trustee shall
promptly notify the Depositor and the Holders (and, in the case of Book-Entry
Certificates, to the extent actually known to a Responsible Officer of the
Trustee or identified thereto by the Depositary or the Depositary Participants,
the Certificate Owners) of the Controlling Class that they may select a
Controlling Class Representative. Such notice shall set forth the process
established by the Trustee for selecting a Controlling Class Representative,
which process shall include the designation of the Controlling Class
Representative by the Majority Controlling Class Certificateholder(s) by a
writing delivered to the Trustee. No appointment of any Person as a successor
Controlling Class Representative shall be effective until such Person provides
the Trustee with (i) written confirmation of its acceptance of such appointment,
(ii) written confirmation of its agreement to keep confidential, for so long as
reports are required to be filed with respect to the Trust under Section 15(d)
of the Exchange Act, all information received by it with respect to the Trust
and its assets that has not been filed with the Commission, (iii) an address and
telecopy number for the delivery of notices and other correspondence and (iv) a
list of officers or employees of such Person with whom the parties to this
Agreement may deal (including their names, titles, work addresses and telecopy
numbers).
(b) Within ten Business Days (or as soon thereafter as practicable
if the Controlling Class consists of Book-Entry Certificates) of any change in
the identity of the Controlling Class Representative of which a Responsible
Officer of the Trustee has actual knowledge and otherwise promptly upon request
from any Master Servicer or Special Servicer, the Trustee shall deliver to each
of the Master Servicers and Special Servicers the identity of the Controlling
Class Representative and a list of each Holder (or, in the case of Book-Entry
Certificates, to the extent actually known to a Responsible Officer of the
Trustee or identified thereto by the Depositary or the Depositary Participants,
each Certificate Owner) of the Controlling Class, including, in each case, names
and addresses. With respect to such information, the Trustee shall be entitled
to conclusively rely on information provided to it by the Holders (or, in the
case of Book-Entry Certificates, subject to SECTION 5.06, by the Depositary or
the Certificate Owners) of such Certificates, and each of the Master Servicers
and Special Servicers shall be entitled to rely on such information provided by
the Trustee with respect to any obligation or right hereunder that such Master
Servicer or Special Servicer, as the case may be, may have to deliver
information or otherwise communicate with the Controlling Class Representative
or any of the Holders (or, if applicable, Certificate Owners) of the Controlling
Class. In addition to the foregoing, within two Business Days of the selection,
resignation or removal of a Controlling Class Representative, the Trustee shall
notify the other parties to this Agreement of such event.
(c) A Controlling Class Representative may at any time resign as
such by giving written notice to the Trustee, each Special Servicer, each Master
Servicer and each Holder (or, in the case of Book-Entry Certificates,
Certificate Owner) of the Controlling Class. The Holders (or, in the case of
Book-Entry Certificates, the Certificate Owners) of Certificates representing
more than 50% of the Class Principal Balance of the Controlling Class shall be
entitled to remove any existing Controlling Class Representative by giving
written notice to the Trustee, each Special Servicer, each Master Servicer and
such existing Controlling Class Representative.
(d) Once a Controlling Class Representative has been selected
pursuant to this SECTION 3.23, each of the parties to this Agreement and each
Certificateholder (or Certificate Owner, if applicable) shall be entitled to
rely on such selection unless a majority of the Holders (or, in the case of
Book-Entry Certificates, the Certificate Owners) of the Controlling Class, by
aggregate Certificate Principal Balance, or such Controlling Class
Representative, as applicable, shall have notified the
-180-
Trustee and each other party to this Agreement and each Holder (or, in the case
of Book-Entry Certificates, Certificate Owner) of the Controlling Class, in
writing, of the resignation or removal of such Controlling Class Representative.
(e) Any and all expenses of the Controlling Class Representative
shall be borne by the Holders (or, if applicable, the Certificate Owners) of
Certificates of the Controlling Class, PRO RATA according to their respective
Percentage Interests in such Class, and not by the Trust. Notwithstanding the
foregoing, if a claim is made against the Controlling Class Representative by a
Borrower with respect to this Agreement or any particular Mortgage Loan, the
Controlling Class Representative shall immediately notify the Trustee, the
applicable Master Servicer and the applicable Special Servicer, whereupon (if
such Special Servicer, such Master Servicer, the Trustee or the Trust are also
named parties to the same action and, in the sole judgment of the applicable
Special Servicer, (i) the Controlling Class Representative had acted in good
faith, without negligence or willful misfeasance, with regard to the particular
matter, and (ii) there is no potential for a Special Servicer, a Master
Servicer, the Trustee or the Trust to be an adverse party in such action as
regards the Controlling Class Representative) the applicable Special Servicer on
behalf of the Trust shall, subject to SECTION 6.03, assume the defense of any
such claim against the Controlling Class Representative. This provision shall
survive the termination of this Agreement and the termination or resignation of
the Controlling Class Representative.
SECTION 3.24. Certain Rights and Powers of the Controlling Class
Representative.
(a) The applicable Special Servicer shall prepare a report (the
"ASSET STATUS REPORT") recommending the taking of certain actions for each
Mortgage Loan that becomes a Specially Serviced Mortgage Loan and deliver such
Asset Status Report to the Controlling Class Representative and the applicable
Master Servicer not later than 45 days after the servicing of such Mortgage Loan
is transferred to such Special Servicer. If (i) after 10 Business Days from
receipt of an Asset Status Report the Controlling Class Representative does not
object to such Asset Status Report or (ii) within 10 Business Days after receipt
of an Asset Status Report the Controlling Class Representative objects to such
Asset Status Report and the applicable Special Servicer makes a determination in
accordance with the Servicing Standard that such objection is not in the best
interest of all the Certificateholders, the applicable Special Servicer shall
take the recommended actions described in the Asset Status Report. If within 10
Business Days after receipt of an Asset Status Report the Controlling Class
Representative objects to such Asset Status Report and the applicable Special
Servicer does not make a determination in accordance with the Servicing Standard
that such objection is not in the best interest of all the Certificateholders,
the Special Servicer shall revise such Asset Status Report as soon as
practicable thereafter, but in no event later than 30 days after the objection
to the Asset Status Report by the Controlling Class Representative. The
applicable Special Servicer shall continue to revise the Asset Status Report
until, as provided above, (i) the Controlling Class Representative fails to
object to the revised Asset Status Report or (ii) the Controlling Class
Representative objects to the revised Asset Status Report and the applicable
Special Servicer makes a determination in accordance with the Servicing Standard
that such objection is not in the best interest of all the Certificateholders;
PROVIDED, HOWEVER, that if the applicable Special Servicer has not taken the
recommended actions described in an Asset Status Report in accordance with this
paragraph within 90 days of the Controlling Class Representative's receipt of
the initial Asset Status Report, the applicable Special Servicer shall take the
recommended actions described in the most recent Asset Status Report submitted
to the Controlling
-181-
Class Representative, which Asset Status Report shall be deemed to have been
approved by the Controlling Class Representative.
In addition, notwithstanding anything in any other Section of this
Agreement to the contrary, but in all cases subject to SECTION 3.24(b), the
applicable Special Servicer will not be permitted to take, or consent to the
applicable Master Servicer's taking, any of the actions identified in CLAUSES
(i) through (xi) of this sentence not otherwise specifically covered by an
approved Asset Status Report, unless and until the applicable Special Servicer
has notified the Controlling Class Representative in writing of such Special
Servicer's intent to take or permit the particular action and the Controlling
Class Representative has consented (or has failed to object) thereto in writing
within ten Business Days of having been notified thereof in writing and having
been provided with all reasonably requested information with respect thereto:
(i) any foreclosure upon or comparable conversion (which may
include acquisitions of an REO Property) of the ownership of the property
or properties securing any Specially Serviced Mortgage Loan as comes into
and continues in default;
(ii) any modification, amendment or waiver of a monetary term
(including a change in the timing of payments but excluding the waiver of
Default Charges) or any material non-monetary term (excluding the waiver of
any "due-on-sale" or "due-on-encumbrance" clause, which clauses are
addressed in CLAUSE (ix) below) of (A) any Performing Mortgage Loan with a
principal balance of $2,500,000 or more (or, if the proposed
modification/waiver is an extension of maturity or a waiver of Post-ARD
Additional Interest under the circumstances contemplated by SECTION
3.20(f), any Performing Mortgage Loan without regard to balance) or (B) any
Specially Serviced Mortgage Loan;
(iii) any acceptance of a discounted payoff with respect to any
Specially Serviced Mortgage Loan;
(iv) any determination to bring an REO Property into compliance
with applicable environmental laws or to otherwise address Hazardous
Materials located at an REO Property;
(v) any release of collateral for any Mortgage Loan (other than in
circumstances (A) involving a Performing Mortgage Loan with a principal
balance of less than $2,500,000 or (B) where the release of collateral is
not conditioned on obtaining the consent of the lender under the related
Mortgage Loan Documents (in which event the applicable Master Servicer or
Special Servicer, as appropriate, shall notify the Controlling Class
Representative in writing of such Master Servicer's or Special Servicer's,
as the case may be, intent to take such action), and other than upon
satisfaction of the subject Mortgage Loan);
(vi) any acceptance of substitute or additional collateral for a
Mortgage Loan (other than in circumstances involving a Performing Mortgage
Loan with a principal balance of less than $2,500,000 or where the
acceptance of the substitute or additional collateral is not conditioned on
obtaining the consent of the lender (in which event the applicable Master
Servicer or Special Servicer, as appropriate, shall notify the Controlling
Class Representative in writing of such Master Servicer's or Special
Servicer's, as the case may be, intent to take such action));
-182-
(vii) any releases of Earn-Out Reserve Funds or related Letters of
Credit with respect to a Mortgaged Property (other than in circumstances
involving a Performing Mortgage Loan with a principal balance of less than
$2,500,000 or where the release of Earn-Out Reserve Funds or related
Letters of Credit is not conditioned on obtaining the consent of the lender
(in which event the applicable Master Servicer or Special Servicer, as
appropriate, shall notify the Controlling Class Representative in writing
of such Master Servicer's or Special Servicer's, as the case may be, intent
to take such action));
(viii) any termination or replacement, or consent to the termination
or replacement, of a property manager with respect to any Mortgaged
Property, or any termination or change, or consent to the termination or
change, of the franchise for any Mortgaged Property operated as a
hospitality property (other than in circumstances involving a Performing
Mortgage Loan with a principal balance of less than $2,500,000, or where
the action is not conditioned on obtaining the consent of the lender, or
with respect to a termination or replacement of a property manager with
respect to any residential cooperative property (in each of which cases the
applicable Master Servicer or Special Servicer, as appropriate, shall
notify the Controlling Class Representative in writing of such Master
Servicer's or Special Servicer's, as the case may be, intent to take such
action));
(ix) any waiver of a "due-on-sale" or "due-on-encumbrance" clause
in any Mortgage Loan (other than in circumstances involving a Performing
Mortgage Loan with a principal balance of less than $2,500,000 or, in the
case of the waiver of a "due-on-encumbrance" clause, a Co-op Mortgage Loan
as to which the NCBFSB Subordinate Debt Conditions are satisfied (in which
event the applicable Master Servicer shall, at least five (5) days prior to
taking such action, provide the Controlling Class Representative with
written notice of such Master Servicer's intent to take such action, which
notice shall describe the circumstances of such action, including all
information necessary for the Controlling Class Representative to determine
whether the NCBFSB Subordinate Debt Conditions have been satisfied));
(x) any determination with respect to a Mortgage Loan with a
principal balance of $2,500,000 or more as to whether a default under the
related Mortgage Loan Documents arising by reason of any failure on the
part of the related Borrower to maintain specific insurance coverage with
respect to, or an all-risk casualty insurance policy that does not
specifically exclude, terrorist or similar acts, and/or any failure on the
part of the related Borrower to maintain insurance coverage with respect to
terrorist or similar acts upon terms no less favorable than those in place
as of May 11, 2002, constitutes an Acceptable Insurance Default; and
(xi) any waiver of Default Charges where there is no Additional
Master Servicing Compensation or Additional Special Servicing Compensation,
as applicable, to offset the outstanding Advance Interest, property
inspection costs or other Additional Trust Fund Expenses with respect to
the related Mortgage Loan that would otherwise be offset by such Default
Charges; PROVIDED that this CLAUSE (xi) shall not apply to the first such
waiver with respect to any Mortgage Loan;
PROVIDED that, in the event that the applicable Special Servicer determines that
immediate action is necessary to protect the interests of the Certificateholders
(as a collective whole), the applicable Special Servicer may take any such
action without waiting for the Controlling Class Representative's response.
-183-
In addition, subject to SECTION 3.24(b), the Controlling Class
Representative may direct each Special Servicer to take, or to refrain from
taking, such actions as the Controlling Class Representative may deem advisable
or as to which provision is otherwise made herein. Upon reasonable request, each
Special Servicer shall provide the Controlling Class Representative with any
information in such Special Servicer's possession with respect to such matters,
including, without limitation, its reasons for determining to take a proposed
action.
(b) Notwithstanding anything herein to the contrary: (i) no
Special Servicer shall have any right or obligation to consult with or to seek
and/or obtain consent or approval from any Controlling Class Representative
prior to acting during the period following any resignation or removal of a
Controlling Class Representative until a replacement is selected; and (ii) no
advice, direction or objection from or by the Controlling Class Representative,
as contemplated by SECTION 3.24(a), may (and each Master Servicer and Special
Servicer shall ignore and act without regard to any such advice, direction or
objection that such Master Servicer or Special Servicer, as the case may be, has
determined, in its reasonable, good faith judgment, would) (A) require or cause
a Master Servicer or such Special Servicer to violate applicable law, the terms
of any Mortgage Loan or any other Section of this Agreement, including such
Master Servicer's or Special Servicer's obligation to act in accordance with the
Servicing Standard, (B) result in an Adverse REMIC Event with respect to any
REMIC Pool or an Adverse Grantor Trust Event with respect to either Grantor
Trust Pool, (C) expose the Trust, the Depositor, a Master Servicer, a Special
Servicer, any Fiscal Agent, the Trustee or any of their respective Affiliates,
members, managers, officers, directors, employees or agents, to any material
claim, suit or liability, or (D) expand the scope of a Master Servicer's or
Special Servicer's responsibilities under this Agreement.
(c) Each Certificateholder acknowledges and agrees, by its
acceptance of its Certificates, that: (i) the Controlling Class Representative
may have special relationships and interests that conflict with those of Holders
of one or more Classes of Certificates; (ii) the Controlling Class
Representative may act solely in the interests of the Holders of the Controlling
Class; (iii) the Controlling Class Representative does not have any duties to
the Holders of any Class of Certificates other than the Controlling Class; (iv)
the Controlling Class Representative may take actions that favor interests of
the Holders of the Controlling Class over the interests of the Holders of one or
more other Classes of Certificates; and (v) the Controlling Class Representative
shall have no liability whatsoever for having so acted, and no Certificateholder
may take any action whatsoever against the Controlling Class Representative or
any director, officer, employee, agent or principal thereof for having so acted.
SECTION 3.25. Replacement of Special Servicers.
(a) Subject to SECTION 3.25(b), the Controlling Class
Representative may, upon not less than ten days' prior written notice to the
respective parties hereto, remove any existing Special Servicer hereunder (with
or without cause) and appoint a successor to such Special Servicer; PROVIDED
that, if any such removal is made without cause, then the costs of transferring
the special servicing responsibilities of the removed Special Servicer to a
successor thereto will be paid by the Certificateholders of the Controlling
Class.
(b) No removal of a Special Servicer and/or appointment of a
successor thereto pursuant to SECTION 3.25(a) shall be effective until: (i) the
Trustee shall have received (A) written confirmation from each of the Rating
Agencies that such removal and/or appointment will not result in
-184-
an Adverse Rating Event with respect to any Class of Rated Certificates, (B) an
Acknowledgment of Proposed Special Servicer in the form attached hereto as
EXHIBIT I-2, executed by the Person designated to be the successor to such
terminated Special Servicer, and (C) an Opinion of Counsel (which shall not be
an expense of the Trustee or the Trust) substantially to the effect that (1) the
removal of such terminated Special Servicer and/or the appointment of the Person
designated to serve as successor thereto is in compliance with this SECTION
3.25, (2) such designated Person is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (3) the
Acknowledgment of Proposed Special Servicer, the form of which is attached
hereto as EXHIBIT I-2, has been duly authorized, executed and delivered by such
designated Person and (4) upon the execution and delivery of the Acknowledgment
of Proposed Special Servicer, such designated Person shall be bound by the terms
of this Agreement and, subject to customary bankruptcy and insolvency exceptions
and customary equity exceptions, this Agreement shall be enforceable against
such designated Person in accordance with its terms; and (ii) if such terminated
Special Servicer has been removed by the Controlling Class Representative
without cause, the Certificateholders of the Controlling Class have delivered to
the Trustee and the terminated Special Servicer such Certificateholders' joint
and several undertaking to pay any expenses incurred by the Trustee and such
terminated Special Servicer in connection with the transfer of special servicing
responsibilities to a successor Special Servicer.
(c) Any Special Servicer terminated pursuant to SECTION 3.25(a)
shall be deemed to have been so terminated simultaneously with the designated
successor's becoming such Special Servicer hereunder; PROVIDED that (i) the
terminated Special Servicer shall be entitled to receive, in connection with its
termination, payment out of the Collection Accounts of all of its accrued and
unpaid Special Servicing Fees, as and to the extent provided in SECTION 3.05(a),
and reimbursement from the successor to such terminated Special Servicer of all
outstanding Servicing Advances made by such terminated Special Servicer and all
unpaid Advance Interest accrued on such outstanding Servicing Advances (in which
case the successor to such terminated Special Servicer shall be deemed to have
made such Servicing Advances at the same time that such terminated Special
Servicer had actually made them), (ii) such terminated Special Servicer shall
thereafter be entitled to Workout Fees, as and to the extent expressly permitted
by SECTION 3.11(c), and (iii) such terminated Special Servicer shall continue to
be entitled to the benefits of SECTION 6.03, notwithstanding any such
termination; and PROVIDED, FURTHER, that such terminated Special Servicer shall
continue to be obligated to pay (and entitled to receive) all other amounts
accrued to (or owing by) it under this Agreement on or prior to the effective
date of such termination. Such terminated Special Servicer shall cooperate with
the Trustee and the replacement to such terminated Special Servicer in effecting
the transfer of such terminated Special Servicer's responsibilities and rights
hereunder to its successor, including the transfer within two Business Days of
its termination becoming effective pursuant to SECTION 3.25, to the replacement
to such terminated Special Servicer for administration by it of all cash amounts
that at the time are or should have been credited by such terminated Special
Servicer to its REO Account or to any Servicing Account or Reserve Account or
should have been delivered to the Master Servicers or that are thereafter
received by or on behalf of such terminated Special Servicer with respect to any
Mortgage Loan or REO Property.
-185-
SECTION 3.26. Application of Default Charges.
(a) Any and all Default Charges that are actually received by or
on behalf of the Trust with respect to any Mortgage Loan or REO Loan, shall be
applied for the following purposes and in the following order, in each case to
the extent of the remaining portion of such Default Charges:
FIRST, to pay to any Fiscal Agent, the Trustee, the applicable Master
Servicer or the applicable Special Servicer, in that order, any Advance
Interest due and owing to such party on outstanding Advances made thereby
with respect to such Mortgage Loan or REO Loan, as the case may be;
SECOND, to reimburse the Trust for any Advance Interest paid to any
Fiscal Agent, the Trustee, the applicable Master Servicer or the applicable
Special Servicer since the Closing Date with respect to such Mortgage Loan
or REO Loan, as the case may be, which interest was paid from a source
other than Default Charges collected on such Mortgage Loan or REO Loan, as
the case may be;
THIRD, to pay any outstanding expense incurred by the applicable
Special Servicer in connection with inspecting the related Mortgaged
Property or REO Property, as applicable, pursuant to SECTION 3.12;
FOURTH, to reimburse the Trust for any expenses reimbursed to the
applicable Special Servicer since the Closing Date in connection with
inspecting the related Mortgaged Property or REO Property, as applicable,
pursuant to SECTION 3.12, which expenses were previously paid from a source
other than Default Charges collected on such Mortgage Loan or REO Loan, as
the case may be;
FIFTH, to pay the appropriate party for any other outstanding expense
(exclusive of Special Servicing Fees, Workout Fees and Liquidation Fees)
incurred thereby with respect to such Mortgage Loan or REO Loan, as the
case may be, which expense, if not paid out of Default Charges collected on
such Mortgage Loan or REO Loan, as the case may be, will likely become an
Additional Trust Fund Expense;
SIXTH, to reimburse the Trust for any other Additional Trust Fund
Expense (exclusive of Special Servicing Fees, Workout Fees and Liquidation
Fees) paid to the appropriate party since the Closing Date with respect to
such Mortgage Loan or REO Loan, as the case may be, which Additional Trust
Fund Expense was paid from a source other than Default Charges collected on
such Mortgage Loan or REO Loan, as the case may be; and
SEVENTH, to pay any remaining portion of such Default Charges as
Additional Master Servicing Compensation to the applicable Master Servicer,
if such Default Charges were collected when the loan was a Performing
Mortgage Loan, and otherwise to pay any remaining portion of such Default
Charges as Additional Special Servicing Compensation to the applicable
Special Servicer.
(b) Default Charges applied to reimburse the Trust pursuant to any
of CLAUSE SECOND, CLAUSE FOURTH or CLAUSE SIXTH of SECTION 3.26(a) are intended
to be available for distribution on the Certificates pursuant to SECTION 4.01(a)
and SECTION 4.01(b), subject to application pursuant to SECTION
-186-
3.05(a) or 3.05(b) for any items payable out of general collections on the
Mortgage Pool. Default Charges applied to reimburse the Trust pursuant to any of
CLAUSE SECOND, CLAUSE FOURTH or CLAUSE SIXTH of SECTION 3.26(a) shall be deemed
to offset payments of Advance Interest, costs of property inspections or, except
for Special Servicing Fees, Workout Fees and Liquidation Fees, other Additional
Trust Fund Expenses (depending on which clause is applicable) in the
chronological order in which they were made or incurred with respect to the
subject Mortgage Loan or REO Loan (whereupon such Advance Interest, costs of
property inspections or, except for Special Servicing Fees, Workout Fees and
Liquidation Fees, other Additional Trust Fund Expenses (depending on which
clause is applicable) shall thereafter be deemed to have been paid out of
Default Charges).
-187-
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, the Trustee shall apply amounts on
deposit in the Distribution Account for the following purposes and in the
following order of priority, in each case to the extent of the remaining portion
of the Standard Available Distribution Amount for such Distribution Date:
FIRST, to make distributions of interest to the Holders of the
respective Classes of the Senior Certificates, up to, and PRO RATA as among
such Classes of Certificateholders based on, their respective Interest
Distribution Amounts for such Distribution Date;
SECOND, to make distributions of principal to the Holders of the
respective Classes of the Class A-P&I Certificates as follows--
(i) prior to the occurrence of the Final Distribution Date
or any Senior Principal Distribution Cross-Over Date, sequentially to
the Holders of the Class A-1 Certificates, up to their Principal
Distribution Amount for such Distribution Date, and THEN to the
Holders of the Class A-2 Certificates, up to their Principal
Distribution Amount for such Distribution Date, and THEN to the
Holders of the Class A-3 Certificates, up to their Principal
Distribution Amount for such Distribution Date; and
(ii) on and after the occurrence of any Senior Principal
Distribution Cross-Over Date, and in any event on the Final
Distribution Date, to the Holders of the respective Classes of the
Class A-P&I Certificates, up to, and PRO RATA as among such Classes of
Certificateholders based on, their respective Principal Distribution
Amounts for such Distribution Date; and
THIRD, to reimburse the Holders of the Class A-1 Certificates, the
Holders of the Class A-2 Certificates and the Holders of the Class A-3
Certificates for any Unfunded Principal Balance Reductions previously
incurred thereby, up to, and PRO RATA as among such Classes of
Certificateholders based on, their respective Loss Reimbursement Amounts
for such Distribution Date.
Any distributions of interest made with respect to the Class A-SP
Certificates or the Class A-X Certificates on any Distribution Date pursuant to
CLAUSE FIRST of the prior paragraph of this SECTION 4.01(a) shall be deemed
allocated among the respective Components of such Class of Certificates on a PRO
RATA basis in accordance with the respective Interest Distribution Amounts of
such Components for such Distribution Date.
(b) On each Distribution Date, following the distributions on the
Senior Certificates to be made on such date pursuant to SECTION 4.01(a), the
Trustee shall apply any amounts remaining on deposit in the Distribution Account
to make distributions to the Holders of the respective Classes of the
Subordinate Principal Balance Certificates, in the following order and, in the
case of each such Class
-188-
(or, in the case of CLAUSE SECOND below, the subject pair of Classes) of
Subordinate Principal Balance Certificates, up to the lesser of (i) the total of
the Interest Distribution Amount, the Principal Distribution Amount and the Loss
Reimbursement Amount with respect to such Class of Certificates (or, in the case
of CLAUSE SECOND below, the total of such amounts for the two subject Classes of
Certificates) for such Distribution Date and (ii) the remaining portion of the
Standard Available Distribution Amount for such Distribution Date: FIRST, to the
Holders of the Class B Certificates; SECOND, to the Holders of the Class C-1 and
Class C-2 Certificates; THIRD, to the Holders of the Class D Certificates;
FOURTH, to the Holders of the Class E Certificates; FIFTH, to the Holders of the
Class F Certificates; SIXTH, to the Holders of the Class G Certificates;
SEVENTH, to the Holders of the Class H Certificates; EIGHTH, to the Holders of
the Class J Certificates; NINTH, to the Holders of the Class K Certificates;
TENTH, to the Holders of the Class L Certificates; ELEVENTH, to the Holders of
the Class M Certificates; TWELFTH, to the Holders of the Class N Certificates;
and THIRTEENTH, to the Holders of the Class O Certificates.
Amounts distributable to the Holders of any Class of Subordinate
Principal Balance Certificates (other than the Class C-1 and Class C-2
Certificates) on any Distribution Date pursuant to this SECTION 4.01(b) shall be
applied:
FIRST, to make distributions of interest to the Holders of such Class
of Certificates, up to their Interest Distribution Amount for such
Distribution Date;
SECOND, to make distributions of principal to the Holders of such
Class of Certificates, up to their Principal Distribution Amount for such
Distribution Date; and
THIRD, to reimburse the Holders of such Class of Certificates for any
Unfunded Principal Balance Reductions previously incurred thereby, up to
their Loss Reimbursement Amount for such Distribution Date.
Amounts distributable to the Holders of the Class C-1 Certificates and
the Holders of the Class C-2 Certificates on any Distribution Date pursuant to
this SECTION 4.01(b) shall be applied:
FIRST, to make distributions of interest to the Holders of the Class
C-1 Certificates and the Holders of the Class C-2 Certificates, up to, and
PRO RATA as between such Classes of Certificateholders based on, their
respective Interest Distribution Amounts for such Distribution Date;
SECOND, to make distributions of principal to the Holders of the Class
C-1 Certificates and the Holders of the Class C-2 Certificates, up to, and
PRO RATA as between such Classes of Certificateholders based on, their
respective Principal Distribution Amounts for such Distribution Date; and
THIRD, to reimburse the Holders of the Class C-1 Certificates and the
Holders of the Class C-2 Certificates for any Unfunded Principal Balance
Reductions previously incurred thereby, up to, and PRO RATA as between such
Classes of Certificateholders based on, their respective Loss Reimbursement
Amounts for such Distribution Date.
(c) On each Distribution Date, following the distributions on the
REMIC III Regular Interest Certificates to be made on such date pursuant to
SECTIONS 4.01(a) and 4.01(b), the Trustee shall withdraw any portion of the
Standard Available Distribution Amount for such Distribution Date then
-189-
remaining on deposit in the Distribution Account and shall distribute the full
amount of such remaining funds to the Holders of the Class R Certificates.
(d) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account and apply, for the following purposes and in the following
order of priority, any amount then on deposit in the Distribution Account that
represents a Prepayment Premium or Yield Maintenance Charge collected with
respect to any Mortgage Loan or deemed collected with respect to any REO Loan
during the related Collection Period:
FIRST, to make distributions of additional interest to the Holders of
the respective Classes of the Yield Maintenance Certificates, up to, and
PRO RATA as among such Classes of Certificateholders based on, their
respective applicable Additional Yield Amounts;
SECOND, if such Mortgage Loan is, or such REO Loan was, as the case
may be, a Specially Designated Co-op Mortgage Loan, then to make
distributions of additional interest to the Holders of the Class A-Y
Certificates, up to the product of (i) 75%, in the case of a Prepayment
Premium, and 50%, in the case of a Yield Maintenance Charge, multiplied by
(ii) the portion of such Prepayment Premium or Yield Maintenance Charge, as
the case may be, that remains after the distributions contemplated by the
immediately preceding CLAUSE FIRST; and
THIRD, to make distributions of additional interest to the Holders of
the Class A-X Certificates, up to the remaining portion of such Prepayment
Premium or Yield Maintenance Charge, as the case may be.
For purposes of determining the portion of any Prepayment Premium that
is distributable to the Holders of any Class of Yield Maintenance Certificates
on any Distribution Date, the applicable "ADDITIONAL YIELD AMOUNT" shall be an
amount equal to the product of: (i) 25% of the amount of such Prepayment Premium
that is so distributable; multiplied by (ii) a fraction (not greater than one or
less than zero), the numerator of which is equal to the Principal Distribution
Amount with respect to such Class of Yield Maintenance Certificates for such
Distribution Date, and the denominator of which is equal to the Total Principal
Distribution Amount for such Distribution Date.
For purposes of determining the portion of any Yield Maintenance
Charge that is distributable to the Holders of any Class of Yield Maintenance
Certificates on any Distribution Date, the applicable "ADDITIONAL YIELD AMOUNT"
shall be an amount equal to the product of: (i) the amount of such Yield
Maintenance Charge that is so distributable; multiplied by (ii) a fraction (not
greater than one or less than zero), the numerator of which is equal to the
excess, if any, of (A) the Pass-Through Rate applicable to such Class of Yield
Maintenance Certificates for the corresponding Interest Accrual Period, over (B)
the relevant Discount Rate, and the denominator of which is equal to the excess,
if any, of (X) the Mortgage Rate for the Mortgage Loan or REO Loan in respect of
which such Yield Maintenance Charge was received or deemed received, over (Y)
the relevant Discount Rate; multiplied by (iii) a fraction (not greater than one
or less than zero), the numerator of which is equal to the Principal
Distribution Amount with respect to such Class of Yield Maintenance Certificates
for such Distribution Date, and the denominator of which is equal to the Total
Principal Distribution Amount for such Distribution Date.
For purposes of determining the portion of any Yield Maintenance
Charge that is distributable to the Holders of any Class of Yield Maintenance
Certificates on any Distribution Date, the
-190-
relevant "DISCOUNT RATE" shall be the same discount rate (exclusive of any
applicable spread) used to calculate such Yield Maintenance Charge, with such
discount rate (exclusive of any applicable spread) converted to a monthly
equivalent rate (regardless of whether any similar conversion occurred at the
loan level). The relevant Discount Rate shall be provided promptly by the
applicable Master Servicer to the Trustee.
Any distributions of additional interest, in the form of Prepayment
Premiums and Yield Maintenance Charges, made with respect to the Class A-X
Certificates on any Distribution Date pursuant to this SECTION 4.01(d) shall be
allocated among the respective Components of such Class of Certificates on a PRO
RATA basis in accordance with the relative amounts by which their respective
Component Notional Amounts declined as a result of deemed distributions of
principal on the REMIC II Regular Interests on such Distribution Date pursuant
to SECTION 4.01(K) (or, if there were no such declines, then on a PRO RATA basis
in accordance with the relative sizes of their respective Component Notional
Amounts).
(e) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account any amounts then on deposit in the Class V Sub-Account of
the Distribution Account that represent Post-ARD Additional Interest collected
or deemed collected in respect of the ARD Mortgage Loans or any successor REO
Loans during the related Collection Period and shall distribute such amounts to
the Holders of the Class V Certificates.
(f) All distributions made with respect to each Class of
Certificates on each Distribution Date shall be allocated PRO RATA among the
Holders of such Certificates based on their respective Percentage Interests.
Except as otherwise provided below, all such distributions made with respect to
each Class of Certificates on each Distribution Date shall be made to the
Holders of such Certificates of record at the close of business on the related
Record Date and, in the case of each such Holder, shall be made by wire transfer
of immediately available funds to the account thereof at a bank or other entity
having appropriate facilities therefor, if such Holder shall have provided the
Trustee with wiring instructions no later than the related Record Date (which
wiring instructions may be in the form of a standing order applicable to all
subsequent Distribution Dates), and otherwise shall be made by check mailed to
the address of such Holder as it appears in the Certificate Register. The final
distribution on each Certificate (determined, in the case of a Principal Balance
Certificate, without regard to any possible future reimbursement of any portion
of a previously incurred Unfunded Principal Balance Reduction allocable to such
Certificate) will be made in like manner, but only upon presentation and
surrender of such Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to Certificateholders of such final
distribution. Any distribution that is to be made with respect to a Principal
Balance Certificate in reimbursement of any portion of an Unfunded Principal
Balance Reduction allocable to such Certificate, which reimbursement is to occur
after the date on which such Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the Holder that surrendered
such Certificate at the last address set forth for such Holder in the
Certificate Register or at any other address of which the Trustee was
subsequently notified in writing.
(g) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depositary, as Holder thereof, and the Depositary shall be
responsible for crediting the amount of such distribution to the accounts of its
Depositary Participants in accordance with its normal procedures. Each
Depositary Participant shall be responsible for disbursing such distribution to
the related Certificate Owners that it represents and to each indirect
participating brokerage firm for which it acts as
-191-
agent. Each such indirect participating brokerage firm shall be responsible for
disbursing funds to the related Certificate Owners that it represents. None of
the parties hereto shall have any responsibility therefor except as otherwise
provided by this Agreement or applicable law. The Trustee and the Depositor
shall perform their respective obligations under the Letters of Representations
Among the Depositor, the Trustee and the Initial Depositary, relating to the
Class A-SP, Class A-X, Class A-1, Class A-2, Class A-3, Class B, Class C-1,
Class C-2, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L, Class M, Class N and Class O Certificates, copies of which Letters of
Representations are attached hereto as EXHIBIT C.
(h) The rights of the Certificateholders to receive distributions
from the proceeds of the Trust Fund in respect of their Certificates, and all
rights and interests of the Certificateholders in and to such distributions,
shall be as set forth in this Agreement. Neither the Holders of any Class of
Certificates nor any party hereto shall in any way be responsible or liable to
the Holders of any other Class of Certificates in respect of amounts previously
distributed on the Certificates in accordance with this Agreement.
(i) Except as otherwise provided in SECTION 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates will be made on the next Distribution Date (such final distribution
to be determined, in the case of a Class of Principal Balance Certificates,
without regard to any possible future reimbursement of any portion of a
previously incurred Unfunded Principal Balance Reduction in respect of such
Class), the Trustee shall, as promptly as possible (and, in any event, no later
than three Business Days) after the related Determination Date, mail to each
Holder of such Class of Certificates of record on such date a notice to the
effect that:
(i) the Trustee expects that the final distribution with respect
to such Class of Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office of
the Certificate Registrar or at such other location therein specified, and
(ii) no interest shall accrue on such Certificates from and after
the end of the Interest Accrual Period for such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and
credited to, and shall be held uninvested in trust in, the account or accounts
of the appropriate non-tendering Holder or Holders. If any Certificates as to
which notice has been given pursuant to this SECTION 4.01(i) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, then the Trustee, directly or through an agent, shall take such
steps to contact the remaining non-tendering Certificateholders concerning the
surrender of their Certificates as it shall deem appropriate. The costs and
expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any former Holder on any amount
held in trust pursuant to this paragraph. If any Certificates as to which notice
has been given pursuant to this SECTION 4.01(i), shall not have been surrendered
for
-192-
cancellation by the second anniversary of the delivery of the second notice,
then, subject to applicable escheat laws, the Trustee shall distribute to the
Class R Certificateholders all unclaimed funds.
(j) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount that the
Trustee reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for such withholding. If the Trustee
does withhold any amount from payments or advances of interest or original issue
discount to any Certificateholder pursuant to federal withholding requirements,
the Trustee shall indicate the amount withheld to such Certificateholder.
(k) All distributions of accrued interest made with respect to the
Class A-SP Certificates or the Class A-X Certificates on each Distribution Date
pursuant to CLAUSE FIRST of SECTION 4.01(a), and allocable to any particular
Component of such Class of Certificates, shall be deemed to have first been
distributed from REMIC II to REMIC III on such Distribution Date as accrued
interest with respect to such Component's Corresponding Group XX XXXXX XX
Regular Interest as part of such REMIC II Regular Interest's Interest
Distribution Amount for such Distribution Date. In addition, all distributions
of additional interest (in the form of Prepayment Premiums and Yield Maintenance
Charges) made with respect to the Class A-SP Certificates or the Class A-X
Certificates on each Distribution Date pursuant to SECTION 4.01(d), and
allocable to any particular Component of such Class of Certificates, shall be
deemed to have first been distributed from REMIC II to REMIC III on such
Distribution Date as additional interest (in the form of Prepayment Premiums and
Yield Maintenance Charges) with respect to such Component's Corresponding Group
XX XXXXX XX Regular Interest. All distributions of accrued interest made with
respect to the Class A-Y Certificates on each Distribution Date pursuant to
CLAUSE FIRST of SECTION 4.01(a), shall be deemed to have first been distributed
from REMIC II to REMIC III on such Distribution Date as accrued interest with
respect to REMIC II Regular Interest A-Y as part of such REMIC II Regular
Interest's Interest Distribution Amount for such Distribution Date. In addition,
all distributions of additional interest (in the form of Prepayment Premiums and
Yield Maintenance Charges) made with respect to the Class A-Y Certificates on
each Distribution Date pursuant to SECTION 4.01(d), shall be deemed to have
first been distributed from REMIC II to REMIC III on such Distribution Date as
additional interest (in the form of Prepayment Premiums and Yield Maintenance
Charges) with respect to REMIC II Regular Interest A-Y.
All distributions made with respect to each Class of Principal Balance
Certificates on each Distribution Date pursuant to SECTION 4.01(a), SECTION
4.01(b) or SECTION 4.01(d) shall be deemed to have first been distributed from
REMIC II to REMIC III on such Distribution Date with respect to the
Corresponding Group XX XXXXX XX Regular Interest(s) for such Class of
Certificates. In each case, if such distribution on any such Class of Principal
Balance Certificates was a distribution of accrued interest (as part of the
related Interest Distribution Amount for the subject Distribution Date), of
principal, of additional interest (in the form of Prepayment Premiums and Yield
Maintenance Charges) or in reimbursement of any related Unfunded Principal
Balance Reductions with respect to such Class of Certificates, then the
corresponding distribution deemed to be made on the Corresponding Group XX XXXXX
XX Regular Interest(s) for such Class of Certificates pursuant to the preceding
sentence shall be deemed also to be a distribution of accrued interest (as part
of the Interest Distribution Amount(s) for such Group XX XXXXX XX Regular
Interest(s) for the subject Distribution Date), of principal, of additional
interest (in the form of Prepayment Premiums and Yield Maintenance Charges) or
in
-193-
reimbursement of any related Unfunded Principal Balance Reductions with respect
to such Group XX XXXXX XX Regular Interest(s).
Each Class of Principal Balance Certificates shall have one
Corresponding Group XX XXXXX XX Regular Interest, except for the Class A-3
Certificates, which shall have two Corresponding Group XX XXXXX XX Regular
Interests. Deemed distributions of accrued interest made on Group XX XXXXX XX
Regular Interest A-3-1 and Group XX XXXXX XX Regular Interest A-3-2 shall be
allocated between those two Group XX XXXXX XX Regular Interests on a PRO RATA
basis in accordance with their respective Interest Distribution Amounts for the
subject Distribution Date. Deemed distributions of principal made on Group XX
XXXXX XX Regular Interest A-3-1 and Group XX XXXXX XX Regular Interest A-3-2
shall be allocated first to Group XX XXXXX XX Regular Interest A-3-1, until its
Uncertificated Principal Balance is reduced to zero, and then to Group XX XXXXX
XX Regular Interest A-3-2. Deemed distributions of additional interest (in the
form of Prepayment Premiums and Yield Maintenance Charges) made on Group XX
XXXXX XX Regular Interest A-3-1 and Group XX XXXXX XX Regular Interest A-3-2
shall be allocated entirely to Group XX XXXXX XX Regular Interest A-3-1, for so
long as its Uncertificated Principal Balance is greater than zero, and then to
Group XX XXXXX XX Regular Interest A-3-2. Deemed distributions in reimbursement
of Unfunded Principal Balance Reductions made on Group XX XXXXX XX Regular
Interest A-3-1 and Group XX XXXXX XX Regular Interest A-3-2 shall be allocated
between those two Group XX XXXXX XX Regular Interests on a PRO RATA basis in
accordance with their respective Loss Reimbursement Amounts for the subject
Distribution Date.
The actual distributions made by the Trustee on each Distribution Date
with respect to the Certificates pursuant to SECTION 4.01(a), SECTION 4.01(b),
SECTION 4.01(c) (to the extent such distributions relate to the REMIC III
Residual Interest) or SECTION 4.01(d), as applicable, shall be deemed to have
been so made from the amounts deemed distributed with respect to the REMIC II
Regular Interests on such Distribution Date pursuant to this SECTION 4.01(k).
Notwithstanding the deemed distributions on the REMIC II Regular Interests
described in this SECTION 4.01(k), actual distributions of funds from the
Distribution Account shall be made only in accordance with SECTION 4.01(a),
SECTION 4.01(b), SECTION 4.01(c), SECTION 4.01(d) or SECTION 4.01(e), as
applicable.
(l) On each Distribution Date, immediately prior to making any
actual distributions on the Certificates pursuant to SECTION 4.01(a), SECTION
4.01(b) or SECTION 4.01(c), or the corresponding deemed distributions on the
REMIC II Regular Interests pursuant to SECTION 4.01(k), the Trustee shall be
deemed to have made out of the Standard Available Distribution Amount for such
Distribution Date, the following distributions to REMIC II in the following
order of priority, in each case to the extent of the remaining portion of such
Standard Available Distribution Amount:
FIRST, distributions of accrued interest with respect to all of the
REMIC I Regular Interests, up to, and PRO RATA as among the REMIC I Regular
Interests based on, their respective Interest Distribution Amounts for such
Distribution Date;
SECOND, distributions of principal with respect to all of the Group PB
REMIC I Regular Interests, up to, and PRO RATA as among such REMIC I
Regular Interests based on, their respective Principal Distribution Amounts
for such Distribution Date; and
THIRD, reimbursements of Unfunded Principal Balance Reductions with
respect to all of the Group PB REMIC I Regular Interests (including any
such REMIC I Regular Interests whose
-194-
Uncertificated Principal Balances have previously been reduced to zero), up
to, and PRO RATA as among such REMIC I Regular Interests based on, their
respective Loss Reimbursement Amounts for such Distribution Date.
In addition, on each Distribution Date, immediately prior to making
any actual distributions on the REMIC III Regular Interest Certificates pursuant
to SECTION 4.01(d), or the corresponding deemed distributions on the REMIC II
Regular Interests pursuant to SECTION 4.01(k), the Trustee shall be deemed to
have distributed to REMIC II each Prepayment Premium and Yield Maintenance
Charge then on deposit in the Distribution Account that was received by or on
behalf of the Trust with respect to any Mortgage Loan or REO Loan during or
prior to the related Collection Period, such distribution to be deemed made with
respect to the Group PB REMIC I Regular Interest that relates to such Mortgage
Loan or REO Loan, as the case may be.
The distributions deemed made by the Trustee on each Distribution Date
with respect to the REMIC II Regular Interests pursuant to SECTION 4.01(k), as
well as the distributions actually made by the Trustee on each Distribution Date
with respect to the Certificates pursuant to SECTION 4.01(a), SECTION 4.01(b),
SECTION 4.01(c) (to the extent such distributions relate to the REMIC II
Residual Interest or the REMIC III Residual Interest) or SECTION 4.01(d), shall
be deemed to have been so made from the amounts deemed distributed with respect
to the REMIC I Regular Interests on such Distribution Date pursuant to this
SECTION 4.01(l). Notwithstanding the deemed distributions on the REMIC I Regular
Interests described in this SECTION 4.01(l), actual distributions of funds from
the Distribution Account shall be made only in accordance with SECTION 4.01(a),
SECTION 4.01(b), SECTION 4.01(c), SECTION 4.01(d) or SECTION 4.01(e), as
applicable.
(m) On each Distribution Date, immediately prior to making any
actual distributions on the Certificates pursuant to SECTION 4.01(a), SECTION
4.01(b) or SECTION 4.01(c), or the corresponding deemed distributions on the
REMIC II Regular Interests pursuant to SECTION 4.01(k) or the REMIC I Regular
Interests pursuant to SECTION 4.01(l), the Trustee shall be deemed to have made
out of that portion of the Standard Available Distribution Amount for such
Distribution Date that is attributable to the 00 Xxxx Xxx Xxxxxx Mortgage Loan,
any Replacement Mortgage Loan substituted for the 00 Xxxx Xxx Xxxxxx Mortgage
Loan or any related REO Property with respect to the foregoing, the following
distributions to REMIC I, in the following order of priority, in each case to
the extent of the remaining portion of such Standard Available Distribution
Amount that is attributable to the 00 Xxxx Xxx Xxxxxx Mortgage Loan, any
Replacement Mortgage Loan substituted for the 00 Xxxx Xxx Xxxxxx Mortgage Loan
or any related REO Property:
FIRST, distributions of interest with respect to the Loan REMIC
Regular Interest, up to its Interest Distribution Amount for such
Distribution Date;
SECOND, distributions of principal with respect to the Loan REMIC
Regular Interest, up to the lesser of (i) the Uncertificated Principal
Balance of the Loan REMIC Regular Interest immediately prior to such
Distribution Date and (ii) the entire portion of the Total Principal
Distribution Amount for such Distribution Date allocable to the 00 Xxxx Xxx
Xxxxxx Mortgage Loan, any Replacement Mortgage Loan substituted for the 00
Xxxx Xxx Xxxxxx Mortgage Loan or any successor REO Loan with respect to the
foregoing; and
-195-
THIRD, reimbursements of Unfunded Principal Balance Reductions with
respect to the Loan REMIC Regular Interest, up to its Loss Reimbursement
Amount for such Distribution Date.
In addition, on each Distribution Date, immediately prior to making
any actual distributions on the REMIC III Regular Interest Certificates pursuant
to SECTION 4.01(d), or the corresponding deemed distributions on the REMIC II
Regular Interests pursuant to SECTION 4.01(k) or the REMIC I Regular Interests
pursuant to SECTION 4.01(l), the Trustee shall be deemed to have distributed to
REMIC I each Prepayment Premium and Yield Maintenance Charge then on deposit in
the Distribution Account that was received by or on behalf of the Trust with
respect to the 00 Xxxx Xxx Xxxxxx Mortgage Loan, any Replacement Mortgage Loan
substituted for the 00 Xxxx Xxx Xxxxxx Mortgage Loan or any successor REO Loan
with respect to the foregoing during or prior to the related Collection Period.
The distributions deemed made by the Trustee on each Distribution Date
with respect to the REMIC II Regular Interests pursuant to SECTION 4.01(k) or
the REMIC I Regular Interests pursuant to SECTION 4.01(l), as well as the
distributions actually made by the Trustee on each Distribution Date with
respect to the Certificates pursuant to SECTION 4.01(a), SECTION 4.01(b),
SECTION 4.01(c) (to the extent such distributions relate to the REMIC I Residual
Interest, the REMIC II Residual Interest or the REMIC III Residual Interest) or
SECTION 4.01(d), shall be deemed to have been so made from the amounts deemed
distributed with respect to the Loan REMIC Regular Interest on such Distribution
Date pursuant to this SECTION 4.01(m). Notwithstanding the deemed distributions
on the Loan REMIC Regular Interest described in this SECTION 4.01(m), actual
distributions of funds from the Distribution Account shall be made only in
accordance with SECTION 4.01(a), SECTION 4.01(b), SECTION 4.01(c), SECTION
4.01(d) or SECTION 4.01(e), as applicable.
SECTION 4.02. Statements to Certificateholders; Certain Other
Reports.
(a) Based solely on information provided to the Trustee by the
Master Servicers pursuant to SECTIONS 3.12, 4.02(b) and 4.02(c), the Trustee
shall prepare (or cause to be prepared) and, on each Distribution Date, provide
or make available electronically (or, upon request, by first class mail) to each
Privileged Person a statement substantially in the form of, and containing the
information set forth in, EXHIBIT E-1 hereto, including the CMSA Bond Level File
and the CMSA Collateral Summary File (the "TRUSTEE REPORT"), detailing the
distributions on such Distribution Date and the performance, both in the
aggregate and individually to the extent available, of the Mortgage Loans and
the Mortgaged Properties; PROVIDED that the Trustee need not deliver to the
Depositor, the Master Servicers, the Special Servicers, the Underwriters, the
Rating Agencies or the Controlling Class Representative any Trustee Report that
has been made available to such Person via the Trustee's internet website as
provided below; and PROVIDED, FURTHER, that the Trustee has no affirmative
obligation to discover the identities of Certificate Owners and need only react
to Persons claiming to be Certificate Owners in accordance with SECTION 5.06;
and PROVIDED, FURTHER, that during any period that reports are required to be
filed with the Commission with respect to the Trust pursuant to Section 15(d) of
the Exchange Act, each recipient of the Trustee Report shall be deemed to have
agreed to keep confidential the information therein until such Trustee Report is
filed with the Commission.
On each Distribution Date, the Trustee shall provide or make available
electronically (or, upon request, by first class mail) to each Privileged Person
each file and report comprising the CMSA
-196-
Investor Reporting Package, to the extent received by the Trustee since the
prior Distribution Date (or, in the case of the initial Distribution Date, since
the Closing Date); PROVIDED that during any period that reports are required to
be filed with the Commission with respect to the Trust pursuant to Section 15(d)
of the Exchange Act, each recipient of such files and reports shall be deemed to
have agreed to keep confidential the information in any such file or report
until such particular file or report is filed with the Commission.
The Trustee shall have no obligation to provide the information or
reports described in this SECTION 4.02(a) until it has received the requisite
information or reports from the Master Servicers provided for herein, and the
Trustee shall not be in default hereunder due to a delay in providing the
Certificateholder Reports caused by a Master Servicer's or Special Servicer's
failure to timely deliver any information or reports hereunder. None of the
Master Servicers, the Special Servicers or the Trustee shall be responsible for
the accuracy or completeness of any information supplied to it by a Borrower,
each other or a third party, and accepted by it in good faith, that is included
in any reports, statements, materials or information prepared or provided by
either Master Servicer, either Special Servicer or the Trustee, as applicable.
None of the Trustee, the Master Servicers or the Special Servicers shall have
any obligation to verify the accuracy or completeness of any information
provided by a Borrower, a third party or each other.
The Trustee shall make available each month, to any interested person,
the related Trustee Report via its internet website initially located at
"xxx.xxxxxxx.xxx/xxxx". In addition, the Trustee shall make available each
month, via its internet website on a restricted basis solely to Privileged
Persons, (i) the Unrestricted Servicer Reports, (ii) the CMSA Bond Level File
and the CMSA Collateral Summary File, and (iii) as a convenience to interested
persons (and not in furtherance of the distribution thereof under the securities
laws), the Prospectus and this Agreement. Upon notification by the Depositor
that CSFB Corporation has sold the Non-Registered Certificates to unaffiliated
third parties, the Trustee shall remove the restriction provided for in the
preceding sentence and shall make such reports and documents available to any
interested person. The Trustee shall also make available each month, on a
restricted basis to any Privileged Person via its internet website, (i) the
Restricted Servicer Reports, and (ii) any other report at the direction of the
Depositor. During any period that reports are required to be filed with the
Commission with respect to the Trust pursuant to Section 15(d) of the Exchange
Act, access to information regarding the Trust on the Trustee's internet website
will be conditioned to the party attempting to gain such access electronically
agreeing to keep confidential any such information that has not been filed with
the Commission.
The Trustee makes no representations or warranties as to the accuracy
or completeness or any report, document or other information made available on
its internet website and assumes no responsibility therefor. In addition, the
Trustee may disclaim responsibility for any information distributed by the
Trustee for which it is not the original source.
In connection with providing access to the Trustee's internet website,
the Trustee may require registration and the acceptance of a disclaimer. The
Trustee shall not be liable for the dissemination of information in accordance
herewith. Questions regarding the Trustee's internet website can be directed to
the Trustee's CMBS customer service desk at (000) 000-0000 or such other number
as the Trustee may hereinafter specify.
-197-
The Trustee shall be entitled to rely on but shall not be responsible
for the content or accuracy of any information provided by third parties for
purposes of preparing the Trustee Report and may affix thereto any disclaimer it
deems appropriate in its reasonable discretion (without suggesting liability on
the part of any other party hereto).
(b) By 12:00 p.m. New York City time on the second Business Day
following each Determination Date, each Master Servicer shall, with respect to
the Mortgage Loans as to which it is the applicable Master Servicer, deliver to
the Trustee the CMSA Loan Periodic Update File, reflecting information as of the
close of business on the last day of the Collection Period, in a mutually
agreeable electronic format. Such CMSA Loan Periodic Update File and any written
information supplemental thereto shall include such information with respect to
the subject Mortgage Loans that is reasonably required by the Trustee for
purposes of making the calculations and preparing the reports for which the
Trustee is responsible pursuant to SECTION 4.01, this SECTION 4.02, SECTION 4.04
or any other section of this Agreement, as set forth in reasonable written
specifications or guidelines issued by the Trustee from time to time. Such
information may be delivered by each Master Servicer to the Trustee by telecopy
or in such electronic or other form as may be reasonably acceptable to the
Trustee and such Master Servicer.
Notwithstanding the foregoing, because the Master Servicers will not
receive the Servicing Files until the Closing Date and will not have sufficient
time to review and analyze such Servicing Files before the initial Distribution
Date, the parties agree that the CMSA Loan Periodic Update File required to be
delivered by each Master Servicer in June 2002 will be based solely upon
information generated from actual collections received by such Master Servicer
and from information the Depositor delivers or causes to be delivered to such
Master Servicer (including but not limited to information prepared by third
party servicers of the subject Mortgage Loans with respect to the period prior
to the Closing Date). Each Special Servicer shall from time to time (and, in any
event, upon request) provide each Master Servicer with such information in its
possession regarding the Specially Serviced Mortgage Loans and REO Properties as
may be necessary for such Master Servicer to prepare each report and any
supplemental information to be provided by such Master Servicer to the Trustee.
Notwithstanding the foregoing, the failure of a Master Servicer or
Special Servicer to disclose any information otherwise required to be disclosed
pursuant to SECTION 4.02(a), this SECTION 4.02(b) or SECTION 4.02(c) shall not
constitute a breach of SECTION 4.02(a), this SECTION 4.02(b) or SECTION 4.02(c)
to the extent that such Master Servicer or Special Servicer, as the case may be,
so fails because such disclosure, in the reasonable belief of such Master
Servicer or Special Servicer, as the case may be, would violate any applicable
law or any provision of a Mortgage Loan Document prohibiting disclosure of
information with respect to the Mortgage Loans or the Mortgaged Properties,
would constitute a waiver of the attorney-client privilege on behalf of the
Trust or would otherwise materially harm the Trust Fund. A Master Servicer or
Special Servicer may affix to any information provided by it any disclaimer it
deems appropriate in its reasonable discretion (without suggesting liability on
the part of any other party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare, or cause to be prepared, and mail to
each Person who at any time during the calendar year was a Certificateholder (i)
a statement containing the aggregate information set forth on page 2 of EXHIBIT
E-1 hereto for such calendar year or applicable portion thereof during which
such person was a Certificateholder and (ii) such other customary information as
the Trustee deems necessary or desirable
-198-
for Certificateholders to prepare their federal, state and local income tax
returns, including the amount of original issue discount accrued on the
Certificates, if applicable. The obligations of the Trustee in the immediately
preceding sentence shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code. As soon as practicable following the request of
any Certificateholder in writing, the Trustee shall furnish to such
Certificateholder such information regarding the Mortgage Loans and the
Mortgaged Properties as such Certificateholder may reasonably request and, as
has been furnished to, or may otherwise be in the possession of, the Trustee.
Each Master Servicer and Special Servicer shall promptly provide to the
Depositor and the Trustee such information regarding the Mortgage Loans and the
Mortgaged Properties as such party may reasonably request and that has been
furnished to, or may otherwise be in the possession of, such Master Servicer or
Special Servicer, as the case may be.
SECTION 4.03. P&I Advances.
(a) On or before 1:00 p.m., New York City time, on each P&I
Advance Date, each Master Servicer shall, subject to SECTION 4.03(c), either (i)
remit from its own funds to the Trustee for deposit into the Distribution
Account an amount equal to the aggregate amount of P&I Advances, if any, to be
made by such Master Servicer in respect of the related Distribution Date, (ii)
apply amounts held in such Master Servicer's Collection Account for future
distribution to Certificateholders in subsequent months in discharge of any such
obligation to make such P&I Advances, or (iii) make such P&I Advances in the
form of any combination of (i) and (ii) aggregating the total amount of P&I
Advances to be made by such Master Servicer. Any amounts held in either Master
Servicer's Collection Account for future distribution and so used to make P&I
Advances shall be appropriately reflected in such Master Servicer's records and
replaced by such Master Servicer by deposit in its Collection Account prior to
the next succeeding Master Servicer Remittance Date (to the extent not
previously replaced through the deposit of Late Collections of the delinquent
principal and interest in respect of which such P&I Advances were made). If, as
of 3:30 p.m., New York City time, on any P&I Advance Date, either Master
Servicer shall not have made any P&I Advance required to be made by it on such
date pursuant to this SECTION 4.03(a) (and shall not have delivered to the
Trustee the Officer's Certificate and other documentation related to a
determination of nonrecoverability of a P&I Advance pursuant to SECTION 4.03(c))
or shall not have remitted any portion of the Master Servicer Remittance Amount
required to be remitted by such Master Servicer on such date, then the Trustee
shall provide notice of such failure to such Master Servicer by facsimile
transmission as soon as possible, but in any event before 4:30 p.m., New York
City time, on such P&I Advance Date. If after such notice the Trustee does not
receive the full amount of such P&I Advances by 6:00 p.m., New York City time,
on such P&I Advance Date, then the Trustee (or any Fiscal Agent on its behalf)
shall (not later than 12:00 noon, New York City time, on the related
Distribution Date) make the portion of such P&I Advances that was required to
be, but was not, made or remitted, as the case may be, by such Master Servicer
with respect to the related Distribution Date.
(b) The aggregate amount of P&I Advances to be made by each Master
Servicer in respect of any Distribution Date, subject to SECTION 4.03(c) below,
shall equal the aggregate of all Monthly Payments (other than Balloon Payments)
and any Assumed Monthly Payments, in each case net of any related Master
Servicing Fees, due or deemed due, as the case may be, in respect of the
Mortgage Loans (including Balloon Mortgage Loans delinquent as to their
respective Balloon Payments) as to which such Master Servicer is the applicable
Master Servicer and any successor REO Loans on their respective Due Dates during
the related Collection Period, in each case to the extent such
-199-
amount was not paid by or on behalf of the related Borrower or otherwise
collected by or on behalf of the Trust as of the close of business on the
related Determination Date; PROVIDED that, if an Appraisal Reduction Amount
exists with respect to any Required Appraisal Loan, then the interest portion of
any P&I Advance required to be made in respect of such Required Appraisal Loan
for the related Distribution Date shall be reduced (it being herein acknowledged
that there shall be no reduction in the principal portion of such P&I Advance)
to equal the product of (i) the amount of the interest portion of such P&I
Advance that would otherwise be required to be made in respect of such Required
Appraisal Loan for such Distribution Date without regard to this proviso,
multiplied by (ii) a fraction, expressed as a percentage, the numerator of which
shall equal the Stated Principal Balance of such Required Appraisal Loan
immediately prior to such Distribution Date, net of the related Appraisal
Reduction Amount, and the denominator of which shall equal the Stated Principal
Balance of such Required Appraisal Loan immediately prior to such Distribution
Date.
(c) Notwithstanding anything herein to the contrary, no P&I
Advance shall be required to be made hereunder if such P&I Advance would, if
made, constitute a Nonrecoverable P&I Advance. The determination by a Master
Servicer (or, if applicable, the Trustee or any Fiscal Agent) that it has made a
Nonrecoverable P&I Advance or that any proposed P&I Advance, if made, would
constitute a Nonrecoverable P&I Advance, shall be made by such Person in its
reasonable judgment and shall be evidenced by an Officer's Certificate delivered
to the Depositor, to the applicable Special Servicer, to the Controlling Class
Representative and, if made by a Master Servicer, to the Trustee (on or before
the related P&I Advance Date in the case of a proposed P&I Advance), setting
forth the basis for such determination, accompanied by a copy of an Appraisal of
the related Mortgaged Property or REO Property performed within the 12 months
preceding such determination by a Qualified Appraiser, and further accompanied
by any other information, including engineers' reports, environmental surveys or
similar reports, that the Person making such determination may have obtained and
that support such determination. The Trustee and any Fiscal Agent shall be
entitled to conclusively rely on any nonrecoverability determination made by a
Master Servicer with respect to a particular P&I Advance. Each Special Servicer
shall promptly furnish any party required to make P&I Advances hereunder with
any information in its possession regarding the Specially Serviced Mortgage
Loans and REO Properties as such party required to make P&I Advances may
reasonably request.
(d) The Master Servicers, the Trustee and any Fiscal Agent shall
each be entitled to receive interest at the Reimbursement Rate in effect from
time to time, accrued on the amount of each P&I Advance made thereby (with its
own funds), for so long as such P&I Advance is outstanding (or, if such P&I
Advance was made prior to the end of any grace period applicable to the subject
delinquent Monthly Payment, for so long as such P&I Advance is outstanding
following the end of such grace period). Such interest with respect to any P&I
Advance shall be payable: (i) FIRST, in accordance with SECTIONS 3.05 and 3.26,
out of any Default Charges subsequently collected on the particular Mortgage
Loan or REO Loan as to which such P&I Advance relates; and (ii) THEN, after such
P&I Advance is reimbursed, but only if and to the extent that such Default
Charges are insufficient to cover such Advance Interest, out of general
collections on the Mortgage Loans and REO Properties on deposit in the
applicable Master Servicer's Collection Account. The applicable Master Servicer
shall reimburse itself, the Trustee or any Fiscal Agent, as applicable, for any
outstanding P&I Advance made thereby with respect to any Mortgage Loan or REO
Loan as soon as practicable after funds available for such purpose are deposited
in such Master Servicer's Collection Account, and in no event shall interest
accrue in accordance with this SECTION 4.03(d) on any P&I Advance as to which
the corresponding Late Collection was received by or on behalf of the Trust as
of the related P&I Advance Date. A Master
-200-
Servicer shall not be entitled to Advance Interest on any particular P&I Advance
made thereby to the extent a payment is received but is being held by or on
behalf of such Master Servicer in suspense.
SECTION 4.04. Allocation of Realized Losses and Additional Trust Fund
Expenses.
(a) On each Distribution Date, following the distributions to
Certificateholders to be made on such date pursuant to SECTIONS 4.01, the
Trustee shall determine the amount, if any, by which (i) the then aggregate of
the Class Principal Balances of all the Classes of Principal Balance
Certificates, exceeds (ii) the aggregate Stated Principal Balance of the
Mortgage Pool that will be outstanding immediately following such Distribution
Date. If such excess does exist, then the respective Class Principal Balances of
the Principal Balance Certificates will be reduced sequentially, in the
following order, until such excess is reduced to zero: FIRST, the Class
Principal Balance of the Class O Certificates, until such Class Principal
Balance is reduced to zero; SECOND, the Class Principal Balance of the Class N
Certificates, until such Class Principal Balance is reduced to zero; THIRD, the
Class Principal Balance of the Class M Certificates, until such Class Principal
Balance is reduced to zero; FOURTH, the Class Principal Balance of the Class L
Certificates, until such Class Principal Balance is reduced to zero; FIFTH, the
Class Principal Balance of the Class K Certificates, until such Class Principal
Balance is reduced to zero; SIXTH, the Class Principal Balance of the Class J
Certificates, until such Class Principal Balance is reduced to zero; SEVENTH,
the Class Principal Balance of the Class H Certificates, until such Class
Principal Balance is reduced to zero; EIGHTH, the Class Principal Balance of the
Class G Certificates, until such Class Principal Balance is reduced to zero;
NINTH, the Class Principal Balance of the Class F Certificates, until such Class
Principal Balance is reduced to zero; TENTH, the Class Principal Balance of the
Class E Certificates, until such Class Principal Balance is reduced to zero;
ELEVENTH, the Class Principal Balance of the Class D Certificates, until such
Class Principal Balance is reduced to zero; TWELFTH, the respective Class
Principal Balances of the Class C-1 Certificates and Class C-2 Certificates (on
a PRO RATA basis in accordance with the relative sizes of such Class Principal
Balances then outstanding), until such Class Principal Balances are reduced to
zero; THIRTEENTH, the Class Principal Balance of the Class B Certificates, until
such Class Principal Balance is reduced to zero; and FOURTEENTH, the respective
Class Principal Balances of the Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates (on a PRO RATA basis in accordance
with the relative sizes of such Class Principal Balances), until such Class
Principal Balances are reduced to zero. All such reductions in the Class
Principal Balances of the respective Classes of the Principal Balance
Certificates shall constitute allocations of Realized Losses and Additional
Trust Fund Expenses.
(b) On each Distribution Date, the Uncertificated Principal
Balance of each REMIC II Regular Interest shall be deemed to have been reduced
in the same amount as any reduction in the Class Principal Balance of the
Corresponding Class of Principal Balance Certificates for such REMIC II Regular
Interest that occurred on such Distribution Date pursuant to SECTION 4.04(a);
PROVIDED that any reduction in the Class Principal Balance of the Class A-3
Certificates shall be deemed to have first been applied in reduction of the
Uncertificated Principal Balance of REMIC II Regular Interest A-3-1 and, once
such Uncertificated Principal Balance is reduced to zero, then in reduction of
the Uncertificated Principal Balance of REMIC II Regular Interest A-3-2. All
such reductions in the Uncertificated Principal Balances of the respective REMIC
II Regular Interests shall be deemed to constitute allocations of Realized
Losses and Additional Trust Fund Expenses.
-201-
(c) On each Distribution Date, following the deemed distributions
to be made in respect of the REMIC I Regular Interests pursuant to SECTION
4.01(l), the Uncertificated Principal Balance of each Group PB REMIC I Regular
Interest (after taking account of such deemed distributions) shall be reduced to
the extent necessary to equal the Stated Principal Balance of the related
Mortgage Loan or REO Loan, as the case may be (or, if applicable in cases
involving the substitution of multiple Replacement Mortgage Loans, the aggregate
Stated Principal Balance of each and every related Mortgage Loan and/or REO
Loan, as the case may be), that will be outstanding immediately following such
Distribution Date. All such reductions in the Uncertificated Principal Balances
of the respective Group PB REMIC I Regular Interests shall be deemed to
constitute allocations of Realized Losses and Additional Trust Fund Expenses.
(d) On each Distribution Date, following the deemed distributions
to be made in respect of the Loan REMIC Regular Interest pursuant to SECTION
4.01(m), the Uncertificated Principal Balance of the Loan REMIC Regular Interest
(after taking account of such deemed distributions) shall be reduced to the
extent necessary (if at all) to equal the Stated Principal Balance of the 00
Xxxx Xxx Xxxxxx Mortgage Loan, any Replacement Mortgage Loan(s) substituted for
the 00 Xxxx Xxx Xxxxxx Mortgage Loan and/or any successor REO Loan(s) with
respect to the foregoing. All such reductions in the Uncertificated Principal
Balance of the Loan REMIC Regular Interest shall be deemed to constitute
allocations of Realized Losses and Additional Trust Fund Expenses.
SECTION 4.05. Calculations.
Provided that the Trustee receives the necessary information from the
Master Servicers and/or the Special Servicers, the Trustee shall be responsible
for performing all calculations necessary in connection with the actual and
deemed distributions to be made pursuant to SECTION 4.01, the preparation of the
Trustee Reports pursuant to SECTION 4.02(a) and the actual and deemed
allocations of Realized Losses and Additional Trust Fund Expenses to be made
pursuant to SECTION 4.04. The Trustee shall calculate the Standard Available
Distribution Amount for each Distribution Date and shall allocate such amount
among Certificateholders in accordance with this Agreement. Absent actual
knowledge of an error therein, the Trustee shall have no obligation to
recompute, recalculate or otherwise verify any information provided to it by a
Master Servicer. The calculations by the Trustee contemplated by this SECTION
4.05 shall, in the absence of manifest error, be presumptively deemed to be
correct for all purposes hereunder.
-202-
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates shall consist of twenty-two (22) Classes with
the following respective alphabetic or alphanumeric Class designations: "A-X",
"A-Y", "A-SP", "X-0", "X-0", "X-0", "X", "C-1", "C-2", "D", "E", "F", "G", "H",
"J", "K", "L", "M", "N", "O", "R" and "V", respectively. Any reference in any
other section or subsection of this Agreement to any Certificate or Certificates
preceded by a Class designation shall be to a Certificate or Certificates of the
Class so designated in this SECTION 5.01(a).
(b) The Certificates will be substantially in the respective forms
attached hereto as EXHIBITS A-1 through A-5; PROVIDED, HOWEVEr, that any of the
Certificates may be issued with appropriate insertions, omissions, substitutions
and variations, and may have imprinted or otherwise reproduced thereon such
legend or legends, not inconsistent with the provisions of this Agreement, as
may be required to comply with any law or with rules or regulations pursuant
thereto, or with the rules of any securities market in which the Certificates
are admitted to trading, or to conform to general usage. The Certificates will
be issuable in registered form only; PROVIDED, HOWEVER, that in accordance with
SECTION 5.03 beneficial ownership interests in the Class A-X, Class A-SP, Class
A-1, Class A-2, Class A-3, Class B, Class C-1, Class C-2, Class D, Class E,
Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N and Class
O Certificates initially shall (and, at the option of the Depositor, following
the Closing Date, all or a portion of any other Class of Certificates may) be
held and transferred through the book-entry facilities of the Depositary. The
REMIC III Regular Interest Certificates will be issuable only in denominations
corresponding to initial Certificate Principal Balances (or, in the case of the
Interest Only Certificates, initial Certificate Notional Amounts) as of the
Closing Date of not less than $10,000 and any whole dollar denomination in
excess thereof. The Class R and Class V Certificates will be issuable only in
denominations representing Percentage Interests in the related Class of not less
than 10.0%.
(c) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by an
authorized signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized signatory of the Trustee shall
be entitled to all benefits under this Agreement, subject to the following
sentence, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, however, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
-203-
SECTION 5.02. Registration of Transfer and Exchange of Certificates.
(a) At all times during the term of this Agreement, there shall be
maintained at the office of the Certificate Registrar a Certificate Register in
which, subject to such reasonable regulations as the Certificate Registrar
(located as of the Closing Date at Xxxxx Fargo Center, Sixth and Marquette, MAC#
X0000-000, Xxxxxxxxxxx, Xxxxxxxxx 55479-0113) may prescribe, the Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee is hereby
initially appointed (and hereby agrees to act in accordance with the terms
hereof) as Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided. The Trustee may
appoint, by a written instrument delivered to the other parties hereto, any
other bank or trust company to act as Certificate Registrar under such
conditions as the Trustee may prescribe, PROVIDED that the Trustee shall not be
relieved of any of its duties or responsibilities hereunder as Certificate
Registrar by reason of such appointment. If the Trustee resigns or is removed in
accordance with the terms hereof, the successor trustee shall immediately
succeed to its predecessor's duties as Certificate Registrar. The Depositor, the
Master Servicers and the Special Servicers shall each have the right to inspect
the Certificate Register or to obtain a copy thereof at all reasonable times,
and to rely conclusively upon a certificate of the Certificate Registrar as to
the information set forth in the Certificate Register.
If three or more Certificateholders make a written request to the
Trustee, and such request states that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and is accompanied by a copy of the
communication that such requesting Certificateholders propose to transmit, then
the Trustee shall, within 30 days after the receipt of such request, afford (or
cause any other Certificate Registrar to afford) the requesting
Certificateholders access during normal business hours to, or deliver to the
requesting Certificateholders a copy of, the most recent list of
Certificateholders held by the Certificate Registrar (which list shall be
current as of a date no earlier than 30 days prior to the Trustee's receipt of
such request). Every Certificateholder, by receiving such access, acknowledges
that neither the Certificate Registrar nor the Trustee will be held accountable
in any way by reason of the disclosure of any information as to the names and
addresses of any Certificateholder regardless of the source from which such
information was derived.
(b) No transfer, sale, pledge or other disposition of any
Non-Registered Certificate or interest therein shall be made unless that
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 (other than a
Book-Entry Non-Registered 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 an Affiliate of the Depositor or, in the case of a Global Certificate, any
transfer of such Certificate to a successor Depository or, in the case of a
Definitive Certificate issued with respect to a Global Certificate, any transfer
of such Certificate to the applicable Certificate Owner in accordance with
SECTION 5.03(c)), 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 hereto as EXHIBIT F-1A; or (ii) a
certificate from the Certificateholder desiring to effect such transfer
substantially in the form attached
-204-
hereto as EXHIBIT F-1B and a certificate from such Certificateholder's
prospective Transferee substantially in the form attached hereto either as
EXHIBIT F-2A or as EXHIBIT F-2B; or (iii) an Opinion of Counsel satisfactory to
the Trustee to the effect that such transfer may be made without registration
under the Securities Act (which Opinion of Counsel shall not be an expense of
the Trust or of the Depositor, either Master Servicer, either Special Servicer,
the Trustee, any Fiscal Agent or the Certificate Registrar in their respective
capacities as such), 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.
Each Global Certificate shall be deposited with the Trustee as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.
If a transfer of an interest in any Rule 144A Global 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 an interest in
such Rule 144A Global Certificate by the Depositor or an Affiliate of the
Depositor), then (except as provided in the next succeeding paragraph or in the
penultimate paragraph of this SECTION 5.02(b)) the Certificate Owner desiring to
effect such transfer shall require from its prospective Transferee: (i) a
certificate substantially in the form attached as EXHIBIT F-2C hereto; or (ii)
an Opinion of Counsel to the effect that the prospective Transferee is a
Qualified Institutional Buyer and such transfer may be made without registration
under the Securities Act. Except as provided in the next succeeding paragraph or
in the penultimate paragraph of this SECTION 5.02(b), any interest in a Rule
144A Global Certificate shall not be transferred to any Person other than a
Qualified Institutional Buyer that takes delivery in the form of an interest in
such Rule 144A Global Certificate. If any Transferee of an interest in a Rule
144A Global Certificate does not, in connection with the subject transfer,
deliver to the Transferor the Opinion of Counsel or the certification described
in the second preceding sentence, then such Transferee shall be deemed to have
represented and warranted that all the certifications set forth in EXHIBIT F-2C
hereto are, with respect to the subject transfer, true and correct.
Notwithstanding the preceding paragraph, any interest in the Rule 144A
Global Certificate with respect to the Class A-X, Class A-SP, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N or Class O
Certificates may be transferred (without delivery of any certificate or Opinion
of Counsel described in CLAUSES (i) and (ii) of the first sentence of the
preceding paragraph) to any Person who takes delivery in the form of a
beneficial interest in the Regulation S Global Certificate for the same Class as
such Rule 144A Global Certificate upon delivery to the Certificate Registrar and
the Trustee of (i) a certificate from the Certificate Owner desiring to effect
such transfer substantially in the form attached hereto as EXHIBIT F-1D and a
certificate from such Certificate Owner's prospective Transferee substantially
in the form attached hereto as EXHIBIT F-2D and (ii) such written orders and
instructions as are required under the applicable procedures of the Depository,
Clearstream and/or Euroclear to direct the Trustee to debit the account of a
Depository Participant by a denomination of interests in such Rule 144A Global
Certificate, and credit the account of a Depository Participant by a
denomination of interests in such Regulation S Global Certificate, that is equal
to the denomination of beneficial interests in the Class A-X, Class A-SP, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N or
Class O Certificates to be transferred. Upon delivery to the Trustee of such
certifications and such orders and instructions, the Trustee, subject to and in
accordance with the applicable procedures of the Depository, shall reduce the
denomination of the Rule 144A Global Certificate with respect to the Class A-X,
Class A-SP, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class
M, Class N or Class O Certificates, and increase the denomination of the
-205-
Regulation S Global Certificate for such Class, by the denomination of the
beneficial interest in such Class specified in such orders and instructions.
Except as provided in the next succeeding paragraph or in the
penultimate paragraph of this SECTION 5.02(b), beneficial interests in any
Regulation S Global Certificate shall not be transferred to any Person other
than a non-United States Securities Person that takes delivery in the form of a
beneficial interest in such Regulation S Global Certificate, and the Certificate
Owner desiring to effect such transfer shall be required to obtain from such
prospective Transferee a certification substantially in the form attached hereto
as EXHIBIT F-2D. On or prior to the Release Date, beneficial interests in any
Regulation S Global Certificate may be held only through Euroclear or
Clearstream.
Notwithstanding the preceding paragraph, any interest in the
Regulation S Global Certificate with respect to the Class A-X, Class A-SP, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N or
Class O Certificates may be transferred (without delivery of any certificate
described in the first sentence of the preceding paragraph) to any Person who
takes delivery in the form of a beneficial interest in the Rule 144A Global
Certificate for the same Class as such Regulation S Global Certificate upon
delivery to the Certificate Registrar and the Trustee of (i) a certificate from
the Certificate Owner desiring to effect such transfer substantially in the form
attached hereto as EXHIBIT F-1C and a certificate from such Certificate Owner's
prospective Transferee substantially in the form attached hereto as EXHIBIT F-2C
and (ii) such written orders and instructions as are required under the
applicable procedures of the Depository, Clearstream and/or Euroclear to direct
the Trustee to debit the account of a Depository Participant by a denomination
of interests in such Regulation S Global Certificate, and credit the account of
a Depository Participant by a denomination of interests in such Rule 144A Global
Certificate, that is equal to the denomination of beneficial interests in the
Class A-X, Class A-SP, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N or Class O Certificates to be transferred. Upon
delivery to the Trustee of such certifications and such orders and instructions,
the Trustee, subject to and in accordance with the applicable procedures of the
Depository, shall reduce the denomination of the Regulation S Global Certificate
with respect to the Class A-X, Class A-SP, Class E, Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N or Class O Certificates, and
increase the denomination of the Rule 144A Global Certificate for such Class, by
the denomination of the beneficial interest in such Class specified in such
orders and instructions.
Notwithstanding the foregoing, any interest in a Global Certificate
with respect to the Class A-X, Class A-Y, Class A-SP, Class E, Class F, Class G,
Class H, Class J, Class K, Class L, Class M, Class N or Class O Certificates may
be transferred by any Certificate Owner holding such interest to any
Institutional Accredited Investor (other than a Qualified Institutional Buyer)
that takes delivery in the form of a Definitive Certificate of the same Class as
such Global Certificate upon delivery to the Certificate Registrar and the
Trustee of (i) such certifications and/or opinions as are contemplated by the
second paragraph of this SECTION 5.02(b) and (ii) such written orders and
instructions as are required under the applicable procedures of the Depository,
Clearstream and/or Euroclear to direct the Trustee to debit the account of a
Depository Participant by the denomination of the transferred interests in such
Global Certificate. Upon delivery to the Certificate Registrar of the
certifications and/or opinions contemplated by the second paragraph of this
SECTION 5.02(b), the Trustee, subject to and in accordance with the applicable
procedures of the Depository, shall reduce the denomination of the subject
Global Certificate, and cause a Definitive Certificate of the same Class as such
Global Certificate, and in a
-206-
denomination equal to the reduction in the denomination of such Global
Certificate, to be executed, authenticated and delivered in accordance with this
Agreement to the applicable Transferee.
None of the Depositor, the Trustee 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
Non-Registered Certificate or interest therein without registration or
qualification. Any Certificateholder or Certificate Owner desiring to effect a
transfer, sale, pledge or other disposition of any Non-Registered Certificate or
interest therein shall, and does hereby agree to, indemnify the Depositor, CSFB
Corporation, the Trustee, any Fiscal Agent, the Master Servicers, the Special
Servicers and the Certificate Registrar against any liability that may result if
such transfer, sale, pledge or other disposition is not exempt from the
registration and/or qualification requirements of the Securities Act and any
applicable state securities laws or is not made in accordance with such federal
and state laws.
(c) No transfer of any Certificate or interest therein shall be
made to a Plan or 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 assets of a Plan, if the purchase and holding of such Certificate or
interest therein by the prospective Transferee would result in a violation of
Section 406 or 407 of ERISA or Section 4975 of the Code or would result in the
imposition of an excise tax under Section 4975 of the Code.
Except in connection with the initial issuance of the Certificates or
any transfer of a Non-Registered Certificate by the Depositor or an Affiliate of
the Depositor or, in the case of a Global Certificate, any transfer of such
Certificate to a successor Depositary or, in the case of a Definitive
Certificate issued with respect to a Global Certificate, any transfer of such
Certificate to the applicable Certificate Owner in accordance with SECTION
5.03(c), the Certificate Registrar shall refuse to register the transfer of a
Non-Registered Certificate unless it has received from the prospective
Transferee one of the following: (i) a certification to the effect that such
prospective Transferee is not a Plan and is not directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan; or (ii) a certification to the
effect that the purchase and continued holding of such Certificate by such
prospective Transferee is exempt from the prohibited transaction provisions of
Section 406 and 407 of ERISA and Section 4975 of the Code by reason of Sections
I and III of Prohibited Transaction Class Exemption 95-60; or (iii) in the case
of a Non-Registered Certificate (other than a Class A-Y, Class R or Class V
Certificate) that is rated investment grade by at least one of the Rating
Agencies and is being acquired by or on behalf of a Plan in reliance on PTE
89-90, a certification to the effect that such Plan (X) is an accredited
investor as defined in Rule 501(a)(1) of Regulation D of the Securities Act, (Y)
is not sponsored (within the meaning of Section 3(16)(B) of ERISA) by the
Trustee, any Exemption-Favored Party, the Depositor, any Mortgage Loan Seller,
either Master Servicer, either Special Servicer, any Sub-Servicer or any
Borrower with respect to Mortgage Loans constituting more than 5% of the
aggregate unamortized principal of all the Mortgage Loans determined as of the
Closing Date, or by any Affiliate of such Person, and (Z) agrees that it will
obtain from each of its Transferees a written representation that such
Transferee, if a Plan, satisfies the requirements of the immediately preceding
CLAUSES (iii)(X) and (iii)(Y), together with a written agreement that such
Transferee will obtain from each of its Transferees that are Plans a similar
written representation regarding satisfaction of the requirements of the
immediately preceding CLAUSES (iii)(X) and (iii)(Y); or (iv) a certification of
facts and an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee, the Certificate Registrar or the Trust) which otherwise
establish to the
-207-
reasonable satisfaction of the Trustee that such transfer will not result in a
violation of Section 406 or 407 of ERISA or Section 4975 of the Code or result
in the imposition of an excise tax under Section 4975 of the Code. It is hereby
acknowledged that the form of certification attached hereto as EXHIBIT G-1 is
acceptable for purposes of the preceding sentence.
Except in connection with the initial issuance of the Certificates or
any transfer of an interest in a Book-Entry Non-Registered Certificate by the
Depositor or an Affiliate of the Depositor, the Certificate Owner desiring to
effect a transfer of an interest in a Book-Entry Non-Registered Certificate
shall obtain from its prospective Transferee one of the following: (i) a
certification to the effect that such prospective Transferee is not a Plan and
is not directly or indirectly purchasing such interest in such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) a certification to the effect that the purchase and continued holding of an
interest in such Certificate by such prospective Transferee is exempt from the
prohibited transaction provisions of Sections 406 and 407 of ERISA and Section
4975 of the Code by reason of Sections I and III of Prohibited Transaction Class
Exemption 95-60; or (iii) if such Certificate is not a Class A-Y, Class R or
Class V Certificate, if such Certificate is rated investment grade by at least
one of the Rating Agencies and if the interest in such Certificate is being
acquired by or on behalf of a Plan in reliance on PTE 89-90, a certification to
the effect that such Plan (X) is an accredited investor as defined in Rule
501(a)(1) of Regulation D of the Securities Act, (Y) is not sponsored (within
the meaning of Section 3(16)(B) of ERISA) by the Trustee, the Depositor, any
Mortgage Loan Seller, either Master Servicer, either Special Servicer, any
Sub-Servicer or any Borrower with respect to Mortgage Loans constituting more
than 5% of the aggregate unamortized principal of all the Mortgage Loans
determined as of the Closing Date, or by any Affiliate of such Person, and (Z)
agrees that it will obtain from each of its Transferees a written representation
that such Transferee, if a Plan, satisfies the requirements of the immediately
preceding CLAUSES (ii)(X) and (ii)(Y), together with a written agreement that
such Transferee will obtain from each of its Transferees that are Plans a
similar written representation regarding satisfaction of the requirements of the
immediately preceding CLAUSES (ii)(X) and (ii)(Y); or (iv) a certification of
facts and an Opinion of Counsel to the effect that such transfer will not result
in a violation of Section 406 or 407 of ERISA or Section 4975 of the Code or
result in the imposition of an excise tax under Section 4975 of the Code. It is
hereby acknowledged that the form of certification attached hereto as EXHIBIT
G-2 is acceptable for purposes of the preceding sentence.
Each Transferee of any Registered Certificate or interest therein or
of an interest in any Book-Entry Non-Registered Certificate shall be deemed to
have represented and warranted that either: (i) such Transferee is not a Plan
and is not directly or indirectly purchasing such Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan; or (ii) the purchase and continued holding of such Certificate or interest
therein by such Transferee is exempt from the prohibited transaction provisions
of Section 406 and 407 of ERISA and Section 4975 of the Code.
(d) (i) Each Person who has or acquires any Ownership Interest
in a Class R 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 Trustee under CLAUSE
(d)(ii) below to deliver payments to a Person other than such Person and,
further, to negotiate the terms of any mandatory disposition and to execute
all instruments of Transfer and do all other things necessary in connection
with any such disposition. The rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
-208-
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change
in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Certificate Registrar
shall require delivery to it, and shall not register the
Transfer of any Class R Certificate until its receipt, of an
affidavit and agreement substantially in the form attached
hereto as EXHIBIT H-1 (a "TRANSFER AFFIDAVIT AND AGREEMENT"),
from the proposed Transferee, representing and warranting,
among other things, that such Transferee is a Permitted
Transferee, that it is not acquiring its Ownership Interest in
the Class R 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 Class R Certificate it will endeavor
to remain a Permitted Transferee, and that it has reviewed the
provisions of this SECTION 5.02(d) 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
a Responsible Officer of either the Trustee or the Certificate
Registrar has actual knowledge that the proposed Transferee is
not a Permitted Transferee, no Transfer of an Ownership
Interest in a Class R Certificate to such proposed Transferee
shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (1) to require a Transfer
Affidavit and Agreement in the form attached hereto as EXHIBIT
H-1 from any prospective Transferee to whom such Person
attempts to transfer its Ownership Interest in such Class R
Certificate and (2) not to transfer its Ownership Interest in
such Class R Certificate unless it provides to the Certificate
Registrar and the Trustee a certificate substantially in the
form attached hereto as EXHIBIT H-2 stating that, among other
things, it has no actual knowledge that such prospective
Transferee is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing such Ownership Interest,
agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of temporary
Treasury regulation section 1.67-3T(a)(2)(i)(A) immediately
upon acquiring an Ownership Interest in a Class R Certificate
if it is, or is holding an Ownership Interest in a Class R
Certificate on behalf of, a "pass-through interest holder".
(ii) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the provisions of this SECTION 5.02(d), then the
last preceding Holder of such Class R Certificate that was in compliance with
the provisions of this SECTION 5.02(d) shall be restored,
-209-
to the extent permitted by law, to all rights as Holder thereof retroactive to
the date of registration of such Transfer of such Class R Certificate. None of
the Depositor, the Trustee or the Certificate Registrar shall be under any
liability to any Person for any registration of Transfer of a Class R
Certificate that is in fact not permitted by this SECTION 5.02(d) 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.
If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this SECTION 5.02(d), then, to
the extent that retroactive restoration of the rights of the preceding Holder of
such Class R Certificate as described in the preceding paragraph of this CLAUSE
(d)(ii) shall be invalid, illegal or unenforceable, the Trustee shall have the
right, but not the obligation, to cause the transfer of such Class R Certificate
to a Permitted Transferee selected by the Trustee on such terms as the Trustee
may choose, and the Trustee shall not be liable to any Person having an
Ownership Interest in such Class R Certificate or any other Person as a result
of its exercise of such discretion. Such purported Transferee shall promptly
endorse and deliver such Class R Certificate in accordance with the instructions
of the Trustee. Such Permitted Transferee may be the Trustee itself or any
Affiliate of the Trustee.
(iii) The Trustee shall make available to the IRS and to those
Persons specified by the REMIC Provisions all information furnished to it by the
other parties hereto necessary to compute any tax imposed (A) as a result of the
Transfer of an Ownership Interest in a Class R Certificate to any Person who is
a Disqualified Organization, including the information described in Treasury
regulation sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the
"excess inclusions" for the Loan REMIC Residual Interest, the REMIC I Residual
Interest, the REMIC II Residual Interest and the REMIC III Residual Interest 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 Class R
Certificate having as among its record holders at any time any Person which is a
Disqualified Organization, and each of the other parties hereto shall furnish to
the Trustee all information in its possession necessary for the Trustee to
discharge such obligation. The Person holding such Ownership Interest shall be
responsible for the reasonable compensation of the Trustee for providing such
information.
(iv) The provisions of this SECTION 5.02(d) set forth prior to this
CLAUSE (iv) may be modified, added to or eliminated, PROVIDED that there shall
have been delivered to the Trustee the following:
(A) written confirmation from each Rating Agency to the effect
that the modification of, addition to or elimination of such
provisions will not result in an Adverse Rating Event with
respect to any Class of Rated Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory to
the Trustee, obtained at the expense of the party seeking such
modification of, addition to or elimination of such provisions
(but in no event at the expense of the Trustee or the Trust),
to the effect that doing so will not (1) cause any REMIC Pool
to cease to qualify as a REMIC or be subject to an
entity-
-210-
level tax caused by the Transfer of any Class R Certificate to
a Person which is not a Permitted Transferee or (2) cause a
Person other than the prospective Transferee to be subject to
a REMIC-related tax caused by the Transfer of a Class R
Certificate to a Person that is not a Permitted Transferee.
(e) If a Person is acquiring any Non-Registered Certificate as a
fiduciary or agent for one or more accounts, such Person shall be required to
deliver to the Certificate Registrar a certification to the effect that, and
such other evidence as may be reasonably required by the Trustee to confirm
that, it has (i) sole investment discretion with respect to each such account
and (ii) full power to make the applicable foregoing acknowledgments,
representations, warranties, certifications and/or agreements with respect to
each such account as set forth in SUBSECTIONS (b), (c) and/or (d), as
appropriate, of this SECTION 5.02.
(f) Subject to the preceding provisions of this SECTION 5.02, upon
surrender for registration of transfer of any Certificate at the offices of the
Certificate Registrar maintained for such purpose, the Trustee shall execute and
the Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized
denominations of the same Class evidencing a like aggregate Percentage Interest.
(g) At the option of any Holder, its Certificates may be exchanged
for other Certificates of authorized denominations of the same Class evidencing
a like aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(h) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(i) No service charge shall be imposed for any transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
(j) All Certificates surrendered for transfer and exchange shall
be physically canceled by the Certificate Registrar, and the Certificate
Registrar shall dispose of such canceled Certificates in accordance with its
standard procedures.
(k) The Certificate Registrar or the Trustee shall provide to each
of the other parties hereto, upon reasonable written request and at the expense
of the requesting party, an updated copy of the Certificate Register.
-211-
SECTION 5.03. Book-Entry Certificates.
(a) The Class A-X, Class A-SP, Class A-1, Class A-2, Class A-3,
Class B, Class C-1, Class C-2, Class D, Class E, Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N and Class O Certificates shall, in
the case of each Class thereof, initially be issued (and, at the option of the
Depositor, subsequent to the Closing Date, all or any portion of any other Class
of Certificates may be issued) as one or more Certificates registered in the
name of the Depositary or its nominee and, except as provided in SECTION 5.02(b)
or SECTION 5.03(c), transfer of such Certificates may not be registered by the
Certificate Registrar unless such transfer is to a successor Depositary that
agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. Such Certificate Owners shall hold and, subject to
SECTION 5.02, transfer their respective Ownership Interests in and to such
Certificates through the book-entry facilities of the Depositary; and, except as
provided in SECTION 5.02(b) or SECTION 5.03(c) below, such Certificate Owners
shall not be entitled to fully registered, physical Certificates ("DEFINITIVE
CERTIFICATES") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depositary Participant or indirect participating brokerage firm representing
each such Certificate Owner. Each Depositary Participant shall only transfer the
Ownership Interests in the Book-Entry Certificates of Certificate Owners it
represents or of indirect participating brokerage firms for which it acts as
agent in accordance with the Depositary's normal procedures.
(b) Except as expressly provided to the contrary herein, the
Depositor, each Master Servicer, each Special Servicer, the Trustee, any Fiscal
Agent and the Certificate Registrar may for all purposes, including the making
of payments due on the Book-Entry Certificates, deal with the Depositary as the
authorized representative of the Certificate Owners with respect to such
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. Except as expressly provided to the contrary herein, the rights of
Certificate Owners with respect to the Book-Entry Certificates shall be limited
to those established by law and agreements between such Certificate Owners and
the Depositary Participants and indirect participating brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depositary as Holder of the Book-Entry Certificates with respect
to any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depositary of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the
Certificate Registrar in writing that the Depositary is no longer willing or
able to discharge properly its responsibilities with respect to any Class of
Book-Entry Certificates, and (B) the Depositor is unable to locate a qualified
successor, or (ii) the Depositor at its option advises the Trustee and the
Certificate Registrar in writing that it elects to terminate the book-entry
system through the Depositary with respect to all or any portion of any Class of
Book-Entry Certificates, the Certificate Registrar shall notify all affected
Certificate Owners, through the Depositary, of the occurrence of any such event
and of the availability of Definitive Certificates to such Certificate Owners
requesting the same. Upon surrender to the Certificate Registrar of any Class of
Book-Entry Certificates (or any portion of any Class thereof) by the Depositary,
accompanied by registration instructions from the Depositary for registration of
transfer, the Trustee shall execute, and the Certificate Registrar shall
authenticate and deliver, the Definitive Certificates in respect of such Class
(or portion thereof) to the Certificate Owners identified in such instructions.
None of the
-212-
Depositor, either Master Servicer, either Special Servicer, the Trustee or the
Certificate Registrar 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 for purposes of
evidencing ownership of any Book-Entry Certificates, the registered holders of
such Definitive Certificates shall be recognized as Certificateholders hereunder
and, accordingly, shall be entitled directly to receive payments on, to exercise
Voting Rights with respect to, and to transfer and exchange such Definitive
Certificates.
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee and the Certificate Registrar such security or indemnity as may
be reasonably required by them to save each of them harmless, then, in the
absence of actual notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a BONA FIDE purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and like Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee and 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 reasonable expenses (including the reasonable fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
SECTION 5.05. Persons Deemed Owners.
Prior to due presentment for registration of transfer, the Depositor,
each Master Servicer, each Special Servicer, the Trustee, any Fiscal Agent, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to SECTION 4.01 and for all other
purposes whatsoever, and none of the Depositor, either Master Servicer, either
Special Servicer, the Trustee, any Fiscal Agent, the Certificate Registrar or
any agent of any of them shall be affected by notice to the contrary.
SECTION 5.06. Certification by Certificateholders and Certificate
Owners.
(a) Each Certificate Owner is hereby deemed by virtue of its
acquisition of an Ownership Interest in the Book-Entry Certificates to agree to
comply with the transfer requirements of SECTION 5.02.
(b) To the extent that under the terms of this Agreement, it is
necessary to determine whether any Person is a Certificateholder or a
Certificate Owner, the Trustee shall make such determination based on a
certificate of such Person, which certificate shall be substantially in the form
of paragraph 1 of EXHIBIT K-1 hereto (or such other form as shall be reasonably
acceptable to the Trustee) and shall specify the Class and Certificate Principal
Balance or Certificate Notional Amount, as the case may be, of the Book-Entry
Certificate beneficially owned; PROVIDED, HOWEVER, that the Trustee shall not
knowingly recognize such Person as a Certificate Owner if such Person, to the
knowledge of a Responsible Officer of the Trustee, acquired its Ownership
Interest in a Book-Entry Certificate in
-213-
violation of SECTION 5.02, or if such Person's certification that it is a
Certificate Owner is in direct conflict with information obtained by the Trustee
from the Depositary, Depositary Participants and/or indirect participating
brokerage firms for which Depositary Participants act as agents, with respect to
the identity of a Certificate Owner. The Trustee shall exercise its reasonable
discretion in making any determination under this SECTION 5.06(b) and shall
afford any Person providing information with respect to its beneficial ownership
of any Book-Entry Certificate an opportunity to resolve any discrepancies
between the information provided and any other information available to the
Trustee.
-214-
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICERS AND
THE SPECIAL SERVICERS
SECTION 6.01. Liability of the Depositor, the Master Servicers and
the Special Servicers.
The Depositor, the Master Servicers and the Special Servicers shall be
liable in accordance herewith only to the extent of the respective obligations
specifically imposed upon and undertaken by the Depositor, each Master Servicer
and each Special Servicer.
SECTION 6.02. Merger, Consolidation or Conversion of the Depositor, a
Master Servicer or a Special Servicer.
(a) Subject to SECTION 6.02(b), the Depositor, the Master
Servicers and the Special Servicers shall each keep in full effect its
existence, rights and franchises as a corporation, bank, trust company,
partnership, limited liability company, association or other legal entity under
the laws of the jurisdiction wherein it was organized, and each shall obtain and
preserve its qualification to do business as a foreign entity in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
(b) Each of the Depositor, the Master Servicers and the Special
Servicers may be merged or consolidated with or into any Person, or transfer all
or substantially all of its assets to any Person, in which case any Person
resulting from any merger or consolidation to which the Depositor, a Master
Servicer or a Special Servicer shall be a party, or any Person succeeding to the
business of the Depositor, a Master Servicer, a Special Servicer, shall be the
successor of the Depositor, such Master Servicer or such Special Servicer, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; PROVIDED, HOWEVER, that no successor or surviving
Person shall succeed to the rights of any Master Servicer or Special Servicer
unless (i) such succession will not result in an Adverse Rating Event with
respect to any Class of Rated Certificates (as confirmed in writing to the
Trustee by each Rating Agency) and (ii) such successor or surviving Person makes
the applicable representations and warranties set forth in SECTION 2.05 (in the
case of a successor or surviving Person to the General Master Servicer), SECTION
2.06 (in the case of a successor or surviving Person to the General Special
Servicer), SECTION 2.07 (in the case of a successor or surviving Person to the
Co-op Master Servicer) or SECTION 2.08 (in the case of a successor or surviving
Person to the Co-op Special Servicer), as applicable.
SECTION 6.03. Limitation on Liability of the Depositor, the Master
Servicers and the Special Servicers.
Neither the Depositor nor any Master Servicer or Special Servicer
shall be under any liability to the Trust, the Trustee or the Certificateholders
for any action taken or not taken in good faith pursuant to this Agreement or
for errors in judgment; PROVIDED, HOWEVER, that this provision shall not protect
the Depositor, a Master Servicer or a Special Servicer against any liability to
the Trust, the Trustee or the Certificateholders for the breach of a
representation or warranty made by such party
-215-
herein, or against any expense or liability specifically required to be borne by
such party without right of reimbursement pursuant to the terms hereof, or
against any liability which would otherwise be imposed by reason of misfeasance,
bad faith or negligence in the performance of, or negligent disregard of, such
party's obligations or duties hereunder. The Depositor, each Master Servicer,
each Special Servicer and any director, member, manager, officer, employee or
agent of any such party may rely in good faith on any document of any kind
which, PRIMA FACIE, is properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor, each Master Servicer, each Special
Servicer and any director, member, manager, officer, employee or agent of any
such party, shall be indemnified and held harmless by the Trust out of the
relevant Collection Account, as provided in SECTION 3.05(a), or the Distribution
Account, as provided in SECTION 3.05(b), against any loss, liability, cost or
expense (including reasonable legal fees and expenses) incurred in connection
with any legal action or claim relating to this Agreement or the Certificates,
other than any loss, liability, cost or expense: (i) specifically required to be
borne thereby pursuant to the terms hereof; (ii) that constitutes (or, but for
the failure of the subject expense to be customary, reasonable or necessary,
would constitute) a Servicing Advance that is otherwise reimbursable under this
Agreement; or (iii) incurred in connection with any legal action or claim
against such party resulting from any breach of a representation or warranty
made herein, any misfeasance, bad faith or negligence in the performance of, or
negligent disregard of, obligations or duties hereunder or any willful or
negligent violation of applicable law. Neither the Depositor nor any Master
Servicer or Special Servicer shall be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, except in the case of a legal action
the costs of which such party is specifically required hereunder to bear, in its
opinion does not involve it in any ultimate expense or liability for which it
would not be reimbursed hereunder; PROVIDED, HOWEVER, that the Depositor, a
Master Servicer or a Special Servicer may in its discretion undertake any such
action which it may reasonably deem necessary or desirable with respect to the
enforcement and/or protection of the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action, and any liability resulting therefrom, shall
be expenses, costs and liabilities of the Trust, and the Depositor, such Master
Servicer or such Special Servicer, as the case may be, shall be entitled to be
reimbursed therefor from the relevant Collection Account, as provided in SECTION
3.05(a), or the Distribution Account, as provided in SECTION 3.05(b).
In addition, no Master Servicer or Special Servicer shall have any
liability with respect to, and each Master Servicer and Special Servicer shall
be entitled to rely as to the truth of the statements made and the correctness
of the opinions expressed therein on, any certificates or opinions furnished to
such Master Servicer or Special Servicer, as the case may be, and conforming to
the requirements of this Agreement. Each of the Master Servicers and Special
Servicers may rely in good faith on information provided to it by the other
parties hereto (unless the provider and the recipient of such information are
the same Person or Affiliates) and by the Borrowers, and will have no duty to
investigate or verify the accuracy thereof.
SECTION 6.04. Resignation of Master Servicers and Special Servicers.
(a) Each of the Master Servicers and Special Servicers may resign
from the obligations and duties hereby imposed on it, upon a determination that
its 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 (the other activities of such Master Servicer or Special Servicer, as
the case may be, so causing such a conflict being of a type and nature carried
on by such Master Servicer or
-216-
Special Servicer, as the case may be, at the date of this Agreement). Any such
determination requiring the resignation of a Master Servicer or Special Servicer
shall be evidenced by an Opinion of Counsel to such effect which shall be
delivered to the Trustee and the Controlling Class Representative. Unless
applicable law requires a Master Servicer's or Special Servicer's (as the case
may be) resignation to be effective immediately, and the Opinion of Counsel
delivered pursuant to the prior sentence so states, no such resignation shall
become effective until the Trustee or other successor shall have assumed the
responsibilities and obligations of the resigning party in accordance with
SECTION 3.25 or SECTION 7.02 hereof; PROVIDED that, if no successor to such
Master Servicer or Special Servicer, as applicable, shall have been so appointed
and have accepted appointment within 90 days after such Master Servicer or
Special Servicer, as the case may be, has given notice of such resignation, the
resigning Master Servicer or Special Servicer, as applicable, may petition any
court of competent jurisdiction for the appointment of a successor thereto; and
PROVIDED, FURTHER, that such Master Servicer or Special Servicer, as the case
may be, shall, at least 10 days prior to resigning and assigning or transferring
any of its rights, benefits or privileges hereunder, inform the Controlling
Class Representative in writing of its intent to resign and disclose to the
Controlling Class Representative the name of such assignee or transferee and the
date of the proposed resignation and transfer of servicing.
(b) In addition, each Master Servicer and Special Servicer shall
each have the right to resign at any other time, PROVIDED that (i) a willing
successor thereto (including any such successor proposed by the resigning party)
reasonably acceptable to the Depositor, the Controlling Class Representative and
the Trustee has been found, (ii) each of the Rating Agencies confirms to the
Trustee in writing that the successor's appointment will not result in an
Adverse Rating Event with respect to any Class of Rated Certificates, (iii) the
resigning party pays all costs and expenses in connection with such transfer,
and (iv) the successor accepts appointment prior to the effectiveness of such
resignation.
(c) No Master Servicer or Special Servicer shall be permitted to
resign except as contemplated in SUBSECTIONS (a) and (b) of this SECTION 6.04.
Consistent with the foregoing, no Master Servicer or Special Servicer shall
(except in connection with any resignation thereby permitted above in this
SECTION 6.04 or as otherwise expressly provided herein, including the provisions
of SECTION 3.22 and/or SECTION 6.02) assign or transfer any of its rights,
benefits or privileges hereunder to any other Person or delegate to, subcontract
with, or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by it hereunder. If, pursuant to any
provision hereof, the duties of a Master Servicer or Special Servicer are
transferred to a successor thereto, the entire amount of compensation payable to
such Master Servicer or Special Servicer, as the case may be, that accrues
pursuant hereto from and after the date of such transfer shall be payable to
such successor, except to the extent provided in SECTION 3.11(c).
SECTION 6.05. Rights of the Depositor and the Trustee in Respect of
the Master Servicers and the Special Servicers.
Each of the Master Servicers and Special Servicers shall afford the
Depositor, the Trustee, the Controlling Class Representative and each Rating
Agency, upon reasonable notice, during normal business hours access to all
records maintained by it in respect of its rights and obligations hereunder and
access to such of its officers as are responsible for such obligations. Upon
reasonable request, each of the Master Servicers and Special Servicers shall
furnish the Depositor and the Trustee with its most recent publicly available
annual audited financial statements (or, if not available, the most recent
publicly available audited annual financial statements of its corporate parent)
and such other
-217-
information as is publicly available regarding its business, affairs, property
and condition, financial or otherwise; PROVIDED that neither the Depositor nor
the Trustee may disclose the contents of such financial statements or other
information to non-affiliated third parties (other than accountants, attorneys,
financial advisors and other representatives retained to help it evaluate such
financial statements or other information), unless it is required to do so under
applicable securities laws or is otherwise compelled to do so as a matter of
law. Each Master Servicer and Special Servicer may affix to any such information
described in this SECTION 6.05 provided by it any disclaimer it deems
appropriate in its reasonable discretion. The Depositor may, but is not
obligated to, enforce the obligations of any Master Servicer or Special Servicer
hereunder and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of a Master Servicer or Special Servicer
hereunder or exercise the rights of a Master Servicer or Special Servicer
hereunder; PROVIDED, HOWEVER, that no Master Servicer or Special Servicer shall
be relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. The Depositor shall not have any responsibility
or liability for any action or failure to act by a Master Servicer or Special
Servicer and is not obligated to supervise the performance of any Master
Servicer or Special Servicer under this Agreement or otherwise.
SECTION 6.06. Master Servicers and Special Servicers May Own
Certificates.
Any Master Servicer, Special Servicer or Affiliate thereof may become
the Holder of (or, in the case of a Book-Entry Certificate, Certificate Owner
with respect to) any Certificate with (except as otherwise set forth in the
definition of "Certificateholder") the same rights it would have if it were not
a Master Servicer, a Special Servicer or an Affiliate thereof. If, at any time
during which any Master Servicer, Special Servicer or Affiliate of a Master
Servicer or Special Servicer is the Holder of (or, in the case of a Book-Entry
Certificate, Certificate Owner with respect to) any Certificate, such Master
Servicer or Special Servicer, as the case may be, proposes to take any action
(including for this purpose, omitting to take a particular action) that is not
expressly prohibited by the terms hereof and would not, in such Master
Servicer's or Special Servicer's, as the case may be, reasonable judgment,
violate the Servicing Standard, but that, if taken, might nonetheless, in such
Master Servicer's or Special Servicer's, as the case may be, reasonable
judgment, be considered by other Persons to violate the Servicing Standard, then
such Master Servicer or Special Servicer, as the case may be, may (but need not)
seek the approval of the Certificateholders to such action by delivering to the
Trustee a written notice that (a) states that it is delivered pursuant to this
SECTION 6.06, (b) identifies the Percentage Interest in each Class of
Certificates beneficially owned by such Master Servicer or Special Servicer, as
the case may be, or by an Affiliate thereof and (c) describes in reasonable
detail the action that such Master Servicer or Special Servicer, as the case may
be, proposes to take. The Trustee, upon receipt of such notice, shall forward it
to the Certificateholders (other than such Master Servicer and its Affiliates or
such Special Servicer and its Affiliates, as appropriate), together with a
request for approval by the Certificateholders of each such proposed action. If
at any time Certificateholders holding greater than 50% of the Voting Rights of
all Certificateholders (calculated without regard to the Certificates
beneficially owned by such Master Servicer or its Affiliates or such Special
Servicer or its Affiliates, as the case may be) shall have consented in writing
to the proposal described in the written notice, and if such Master Servicer or
Special Servicer, as the case may be, shall act as proposed in the written
notice, such action shall be deemed to comply with the Servicing Standard. The
Trustee shall be entitled to reimbursement from the subject Master Servicer or
Special Servicer, as applicable, for the reasonable expenses of the Trustee
incurred pursuant to this paragraph. It is not the intent of the foregoing
provision that any Master
-218-
Servicer or Special Servicer be permitted to invoke the procedure set forth
herein with respect to routine servicing matters arising hereunder, but rather
in the case of unusual circumstances.
-219-
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "EVENT OF DEFAULT", wherever used herein, means any one of the
following events:
(i) any failure by a Master Servicer to deposit into its
Collection Account any amount required to be so deposited under this
Agreement, which failure continues unremedied for three Business Days
following the date on which such deposit was first required to be made; or
(ii) any failure by a Special Servicer to deposit into its REO
Account or to deposit, or remit to the applicable Master Servicer for
deposit, into the applicable Master Servicer's Collection Account, any
amount required to be so deposited or remitted under this Agreement, which
failure continues unremedied for three Business Days following the date on
which such deposit or remittance, as the case may be, was first required to
be made; or
(iii) any failure by a Master Servicer to remit to the Trustee for
deposit into the Distribution Account, on any P&I Advance Date, the full
amount of P&I Advances required to be made by such Master Servicer on such
date or, on any Master Servicer Remittance Date, the full amount of the
Master Servicer Remittance Amount and any Compensating Interest Payment
required to be remitted by such Master Servicer on such date, which failure
continues unremedied until 6:00 p.m. (New York City time) on such P&I
Advance Date or Master Servicer Remittance Date, as the case may be; or
(iv) any failure by a Master Servicer to timely make any Servicing
Advance required to be made by it hereunder, which Servicing Advance
remains unmade for a period of three Business Days following the date on
which notice shall have been given to such Master Servicer by the Trustee
as provided in SECTION 3.11(f); or
(v) any failure by a Special Servicer to timely make (or request
the applicable Master Servicer to make) any Servicing Advance required to
be made by it hereunder, which Servicing Advance remains unmade for a
period of three Business Days following the date on which notice has been
given to such Special Servicer by the Trustee as provided in
SECTION 3.11(f); or
(vi) any failure on the part of a Master Servicer or Special
Servicer duly to observe or perform in any material respect any other of
the covenants or agreements on the part of such Master Servicer or Special
Servicer, as the case may be, contained in this Agreement, including a
Master Servicer's unauthorized consent to subordinate debt, which failure
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to such Master Servicer or Special Servicer, as the case
may be, by any other party hereto or to such Master Servicer or Special
Servicer, as the case may be, with a copy to each other party hereto, by
the Controlling Class Representative or the Holders of Certificates
entitled to at least 25% of the Voting Rights; PROVIDED, HOWEVER, that,
with respect to any such failure that is not curable within such 30-day
period, such Master Servicer or Special
-220-
Servicer, as the case may be, shall have an additional cure period of 30
days to effect such cure so long as such Master Servicer or Special
Servicer, as the case may be, has commenced to cure such failure within the
initial 30-day period and has provided the Trustee with an Officer's
Certificate certifying that it has diligently pursued, and is continuing to
pursue, a full cure; or
(vii) any breach on the part of a Master Servicer or Special
Servicer of any representation or warranty contained in this Agreement that
materially and adversely affects the interests of any Class of
Certificateholders and which continues unremedied for a period of 30 days
after the date on which notice of such breach, requiring the same to be
remedied, shall have been given to such Master Servicer or Special
Servicer, as the case may be, by any other party hereto or to such Master
Servicer or Special Servicer, as the case may be, with a copy to each other
party hereto, by the Controlling Class Representative or the Holders of
Certificates entitled to at least 25% of the Voting Rights; PROVIDED,
HOWEVER, that, with respect to any such breach that is not curable within
such 30-day period, such Master Servicer or Special Servicer, as the case
may be, shall have an additional cure period of 30 days to effect such cure
so long as such Master Servicer or Special Servicer, as the case may be,
has commenced to cure such breach within the initial 30-day period and has
provided the Trustee with an Officer's Certificate certifying that it has
diligently pursued, and is continuing to pursue, a full cure; or
(viii) 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 a
Master Servicer or Special Servicer and such decree or order shall have
remained in force undischarged, undismissed or unstayed for a period of 30
days; PROVIDED, HOWEVER, that, with respect to any such decree or order
that cannot be discharged, dismissed or stayed within such 30-day period,
such Master Servicer or Special Servicer, as the case may be, shall have an
additional period of 30 days to effect such discharge, dismissal or stay so
long as such Master Servicer or Special Servicer, as the case may be, has
commenced proceedings to have such decree or order dismissed, discharged or
stayed within the initial 30-day period and has provided the Trustee with
an Officer's Certificate certifying that it has diligently pursued, and is
continuing to pursue, such discharge or stay; or
(ix) a Master Servicer or Special 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 it or of
or relating to all or substantially all of its property; or
(x) a Master Servicer or Special Servicer shall admit in writing
its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable 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
(xi) Xxxxx'x has (A) qualified, downgraded or withdrawn its rating
or ratings of one or more Classes of Certificates, or (B) placed one or
more Classes of Certificates on "watch
-221-
status" in contemplation of possible rating downgrade or withdrawal (and
such "watch status" placement shall not have been withdrawn by Xxxxx'x
within 60 days of such placement), and, in case of either of CLAUSE (A) or
(B), citing servicing concerns with a Master Servicer or a Special Servicer
as the sole or a material factor in such rating action; or
(xii) a Master Servicer (other than NCBFSB) is removed from S&P's
approved master servicer list or a Special Servicer (other than NCB) is
removed from S&P's approved special servicer list, and such Master Servicer
or Special Servicer, as the case may be, is not restored to such list
within 60 days after its removal therefrom; or
(xiii) either Rating Agency has notified the Trustee in writing that
NCBFSB or NCB, as applicable, is no longer an acceptable Master Servicer or
Special Servicer, respectively, with respect to the Co-op Mortgage Loans,
and such Rating Agency has not, within 60 days thereafter, notified the
Trustee in writing that NCBFSB or NCB is again acceptable to act in that
capacity.
When a single entity acts as General Master Servicer, Co-op Master
Servicer, General Special Servicer and Co-op Special Servicer, or in any two or
more of the foregoing capacities, an Event of Default (other than an event
described in CLAUSES (xi), (xii) and (xiii) above) in one capacity shall
constitute an Event of Default in both or all such capacities.
(b) If any Event of Default with respect to any Master Servicer or
Special Servicer (in either case, for purposes of this SECTION 7.01(b), the
"DEFAULTING PARTY") shall occur and be continuing, then, and in each and every
such case, so long as the Event of Default shall not have been remedied, the
Depositor and Trustee each may, and at the written direction of either the
Holders of Certificates entitled to not less than 25% of the Voting Rights or
the Controlling Class Representative, the Trustee shall (subject to applicable
bankruptcy or insolvency law in the case of CLAUSES (viii) through (x) of
SECTION 7.01(a)), terminate, by notice in writing to the Defaulting Party (with
a copy of such notice to each other party hereto), all of the rights and
obligations (accruing from and after such notice) of the Defaulting Party under
this Agreement and in and to the Trust Fund (other than as a Holder of any
Certificate). From and after the receipt by the Defaulting Party of such written
notice, all authority and power of the Defaulting Party under this Agreement,
whether with respect to the Certificates (other than as a Holder of any
Certificate) or the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section, and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
and at the expense of the Defaulting Party, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise (PROVIDED, HOWEVER, that
each Master Servicer and Special Servicer shall, if terminated pursuant to this
SECTION 7.01(b), continue to be obligated to pay and entitled to receive all
amounts accrued or owing by or to it under this Agreement on or prior to the
date of such termination, whether in respect of Advances or otherwise, and it
and its members, managers, directors, officers, employees and agents shall
continue to be entitled to the benefits of SECTION 6.03 notwithstanding any such
termination). Each Master Servicer and Special Servicer agrees that, if it is
terminated pursuant to this SECTION 7.01(b), it shall promptly (and in any event
no later than 20 days subsequent to its receipt of the notice of termination)
provide the Trustee with all documents and records requested thereby to enable
the Trustee to assume such Master Servicer's or Special Servicer's, as the case
may be, functions
-222-
hereunder, and shall otherwise cooperate with the Trustee in effecting the
termination of such Master Servicer's or Special Servicer's, as the case may be,
responsibilities and rights hereunder, including the transfer within five
Business Days to the Trustee for administration by it of all cash amounts that
at the time are or should have been credited by a Master Servicer to its
Collection Account, the Distribution Account or any Servicing Account or Reserve
Account held by it (if it is the Defaulting Party) or by a Special Servicer to
its REO Account, a Collection Account or any Servicing Account or Reserve
Account held by it (if it is the Defaulting Party) or that are thereafter
received by or on behalf of it with respect to any Mortgage Loan or REO Property
(PROVIDED, HOWEVER, that each Master Servicer and Special Servicer shall, if
terminated pursuant to this SECTION 7.01(b), continue to be obligated to pay and
entitled to receive all amounts accrued or owing by or to it under this
Agreement on or prior to the date of such termination, whether in respect of
Advances or otherwise, and it and its members, managers, directors, officers,
employees and agents shall continue to be entitled to the benefits of SECTION
6.03 notwithstanding any such termination). Any costs or expenses (including
those of any other party hereto) incurred in connection with any actions to be
taken by a terminated Master Servicer or Special Servicer pursuant to this
paragraph shall be borne by such Master Servicer or Special Servicer, as the
case may be (and, in the case of the Trustee's costs and expenses, if not paid
within a reasonable time, shall be borne by the Trust out of the Collection
Account).
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time any Master Servicer or Special Servicer resigns
pursuant to SECTION 6.04(a) or receives a notice of termination pursuant to
SECTION 7.01, the Trustee shall, subject to SECTION 3.25, be the successor in
all respects to such Master Servicer or Special Servicer, as the case may be, in
its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on such Master
Servicer or Special Servicer, as the case may be, by the terms and provisions
hereof, including, if a Master Servicer is the resigning or terminated party,
such Master Servicer's obligation to make Advances; PROVIDED, HOWEVER, that any
failure to perform such duties or responsibilities caused by a Master Servicer's
or Special Servicer's, as the case may be, failure to cooperate or to provide
information or monies as required by SECTION 7.01 shall not be considered a
default by the Trustee hereunder. Neither the Trustee nor any other successor
shall be liable for any of the representations and warranties of the resigning
or terminated party or for any losses incurred by the resigning or terminated
party pursuant to SECTION 3.06 hereunder nor shall the Trustee or any other
successor be required to purchase any Mortgage Loan hereunder. As compensation
therefor, the Trustee shall be entitled to all fees and other compensation which
the resigning or terminated party would have been entitled to for future
services rendered if the resigning or terminated party had continued to act
hereunder. Notwithstanding the above, if it is unwilling to so act, the Trustee
may (and, if it is unable to so act, or if the Trustee is not approved as an
acceptable master servicer or special servicer, as the case may be, by each
Rating Agency, or if the Holders of Certificates entitled to a majority of all
the Voting Rights or the Controlling Class Representative so request in writing,
the Trustee shall), subject to SECTION 3.25, promptly appoint, or petition a
court of competent jurisdiction to appoint, any established and qualified
institution as the successor to the resigning or terminated Master Servicer or
Special Servicer, as the case may be, hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of such Master Servicer or
Special Servicer, as the case may be, hereunder; PROVIDED, HOWEVER, that such
appointment does not result in an Adverse Rating Event with respect to any Class
of Rated Certificates (as confirmed in writing to the Trustee by each Rating
Agency); and, PROVIDED, FURTHER, that such successor is reasonably acceptable to
the Controlling Class Representative. No appointment of a
-223-
successor to any Master Servicer or Special Servicer hereunder shall be
effective until the assumption by such successor of all its responsibilities,
duties and liabilities hereunder, and pending such appointment and assumption,
the Trustee shall act in such capacity as hereinabove provided. In connection
with any such appointment and assumption, the Trustee may make such arrangements
for the compensation of such successor out of payments on the Mortgage Loans or
otherwise as it and such successor shall agree; PROVIDED, HOWEVER, that no such
compensation shall be in excess of that permitted the resigning or terminated
party hereunder. The Depositor, the Trustee, such successor and each other party
hereto shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
If the Trustee or an Affiliate acts pursuant to this SECTION 7.02 as
successor to a Master Servicer, it may reduce the related Excess Servicing Fee
Rate to the extent that its or such Affiliate's compensation as successor to
such Master Servicer would otherwise be below the market rate servicing
compensation. If the Trustee elects to appoint a successor to a Master Servicer
other than itself or an Affiliate pursuant to this SECTION 7.02, it may reduce
the related Excess Servicing Fee Rate to the extent reasonably necessary (in the
sole discretion of the Trustee) for the Trustee to appoint a qualified successor
to such Master Servicer that meets the requirements of this SECTION 7.02.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any resignation of a Master Servicer or Special Servicer
pursuant to SECTION 6.04, any termination of a Master Servicer or Special
Servicer pursuant to SECTION 7.01, any appointment of a successor to a Master
Servicer or Special Servicer pursuant to SECTION 6.02, 6.04 or 7.02 or the
effectiveness of any designation of a new Special Servicer pursuant to SECTION
3.25, the Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence
of any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after a Responsible Officer of
the Trustee has actual knowledge of the occurrence of such an event, the Trustee
shall transmit by mail to the Depositor and all Certificateholders notice of
such occurrence, unless such default shall have been cured.
SECTION 7.04. Waiver of Events of Default.
The Holders of Certificates representing at least 66-2/3% of the
Voting Rights allocated to each Class of Certificates affected by any Event of
Default hereunder may waive such Event of Default; PROVIDED that an Event of
Default under CLAUSE (i), CLAUSE (ii), CLAUSE (iii), CLAUSE (xi), CLAUSE (xii)
or CLAUSE (xiii) of SECTION 7.01(a) may be waived only by all of the
Certificateholders of the affected Classes. Upon any such waiver of an Event of
Default, and payment to the Trustee of all reasonable costs and expenses
incurred by the Trustee in connection with such default prior to its waiver
(which costs shall be paid by the party requesting such waiver), such Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereon except to the extent expressly
so waived. Notwithstanding any other provisions of this Agreement, for purposes
of waiving any Event of Default pursuant to this SECTION 7.04, Certificates
registered in the name of the Depositor or any Affiliate of the Depositor shall
be entitled to the same Voting Rights with respect to the matters described
above as they would if registered in the name of any other Person.
-224-
SECTION 7.05. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in SECTION 7.01, shall have the right (exercisable subject to SECTION
8.01(a)), in its own name and as trustee of an express trust, to take all
actions now or hereafter existing at law, in equity or by statute to enforce its
rights and remedies and to protect the interests, and enforce the rights and
remedies, of the Certificateholders (including the institution and prosecution
of all judicial, administrative and other proceedings and the filings of proofs
of claim and debt in connection therewith). Except as otherwise expressly
provided in this Agreement, no remedy provided for by this Agreement shall be
exclusive of any other remedy, and each and every remedy shall be cumulative and
in addition to any other remedy, and no delay or omission to exercise any right
or remedy shall impair any such right or remedy or shall be deemed to be a
waiver of any Event of Default.
-225-
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. Any permissive right of the Trustee contained in this Agreement
shall not be construed as a duty.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement (other than the Mortgage Files, the review of which
is specifically governed by the terms of ARTICLE II), the Trustee shall examine
them to determine whether they conform to the requirements of this Agreement. If
any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Trustee shall take such action as it deems
appropriate to have the instrument corrected. The Trustee shall not be
responsible or liable for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Depositor, a Master Servicer, a Special Servicer, any actual or
prospective Certificateholder or Certificate Owner or either Rating Agency, and
accepted by the Trustee in good faith, pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement.
(ii) The Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates entitled to at least 25% (or,
as to any particular matter, any higher percentage as may be
-226-
specifically provided for hereunder) of the Voting Rights relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Agreement.
(iv) The Trustee shall not be required to take action with respect
to, or be deemed to have notice or knowledge of, any default or Event of
Default (except an Event of Default under SECTION 7.01(a)(xi), SECTION
7.01(a)(xii) or SECTION 7.01(a)(xiii) or the Master Servicer's failure to
deliver any monies, including P&I Advances, or to provide any report,
certificate or statement, to the Trustee when required pursuant to this
Agreement) unless a Responsible Officer of the Trustee shall have received
written notice or otherwise have actual knowledge thereof. Otherwise, the
Trustee may conclusively assume that there is no such default or Event of
Default.
(v) Subject to the other provisions of this Agreement and without
limiting the generality of this SECTION 8.01, the Trustee shall have no
duty, except as expressly provided in SECTION 2.01(c) or SECTION 2.01(e) or
in its capacity as a successor Master Servicer or successor Special
Servicer, (A) to cause any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to cause the
maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (B) to cause the
maintenance of any insurance, and (C) to confirm or verify the truth,
accuracy or contents of any reports or certificates of a Master Servicer, a
Special Servicer, any actual or prospective or any Certificateholder or
Certificate Owner or either Rating Agency, delivered to the Trustee
pursuant to this Agreement reasonably believed by the Trustee to be genuine
and without error and to have been signed or presented by the proper party
or parties.
(vi) For as long as the Person that serves as Trustee hereunder
also serves as a Custodian or as Certificate Registrar, the protections,
immunities and indemnities afforded to the Trustee hereunder shall also be
afforded to such Person in its capacity as Custodian and/or Certificate
Registrar, as the case may be.
SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in SECTION 8.01:
(i) the Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and without error
and to have been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any written advice or
opinion of such 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 therewith;
(iii) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or
-227-
direction of any of the Certificateholders, unless (in the Trustee's
reasonable opinion) such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the Trustee shall not
be required 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; PROVIDED,
HOWEVER, that nothing contained herein shall relieve the Trustee of the
obligation, upon the occurrence of an Event of Default which has not been
waived or cured, to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs;
(iv) neither the Trustee nor any Fiscal Agent appointed thereby
shall be personally liable for any action reasonably taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Agreement;
(v) prior to the occurrence of an Event of Default and after the
waiver or curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by Holders of
Certificates entitled to at least 25% of the Voting Rights; PROVIDED,
HOWEVER, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require a reasonable indemnity against such
expense or liability as a condition to taking any such action;
(vi) except as contemplated by SECTION 8.06, the Trustee shall not
be required to give any bond or surety in respect of the execution of the
trusts created hereby or the powers granted hereunder;
(vii) the Trustee may execute any of the trusts or powers vested in
it by this Agreement or perform any of its duties hereunder either directly
or by or through agents or attorneys-in-fact, PROVIDED that the use of
agents or attorneys-in-fact shall not be deemed to relieve the Trustee of
any of its duties and obligations hereunder (except as expressly set forth
herein);
(viii) neither the Trustee nor any Fiscal Agent appointed thereby
shall be responsible for any act or omission of a Master Servicer or
Special Servicer (unless the Trustee is acting as such Master Servicer or
Special Servicer, as the case may be) or of the Depositor.
(ix) neither the Trustee nor the Certificate Registrar shall have
any obligation or duty to monitor, determine or inquire as to compliance
with any restriction on transfer imposed under ARTICLE V under this
Agreement or under applicable law with respect to any transfer of any
Certificate or any interest therein, other than to require delivery of the
certification(s) and/or Opinions of Counsel described in said Article
applicable with respect to changes in registration or record ownership of
Certificates in the Certificate Register and to examine the same to
determine substantial compliance with the express requirements of this
Agreement; and the Trustee and Certificate Registrar shall have no
liability for transfers, including transfers made
-228-
through the book-entry facilities of the Depositary or between or among
Depositary Participants or beneficial owners of the Certificates, made in
violation of applicable restrictions except for its failure to perform its
express duties in connection with changes in registration or record
ownership in the Certificate Register.
SECTION 8.03. Trustee and Fiscal Agent not Liable for Validity or
Sufficiency of Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
statements attributed to, and the representations and warranties of, the Trustee
and/or any Fiscal Agent in ARTICLE II, and the signature of the Trustee set
forth on each outstanding Certificate) shall not be taken as the statements of
the Trustee or any Fiscal Agent, and neither the Trustee nor any Fiscal Agent
assumes any responsibility for their correctness. Neither the Trustee nor any
Fiscal Agent makes any representation as to the validity or sufficiency of this
Agreement (except as regards the enforceability of this Agreement against it) or
of any Certificate (other than as to the signature of the Trustee set forth
thereon) or of any Mortgage Loan or related document. Neither the Trustee nor
any Fiscal Agent shall be accountable for the use or application by the
Depositor of any of the Certificates issued to it or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor
in respect of the assignment of the Mortgage Loans to the Trust, or any funds
deposited in or withdrawn from a Collection Account or any other account by or
on behalf of the Depositor, a Master Servicer or a Special Servicer (in each
case, unless the Trustee is acting in such capacity). Neither the Trustee nor
any Fiscal Agent shall be responsible for the legality or validity of this
Agreement (other than insofar as it relates to the obligations of the Trustee or
such Fiscal Agent, as the case may be, hereunder) or the validity, priority,
perfection or sufficiency of any security, lien or security interest granted to
it hereunder or the filing of any financing statements or continuation
statements, except to the extent set forth in SECTION 2.01(c) and SECTION
2.01(e) or to the extent the Trustee is acting as a Master Servicer or Special
Servicer and such Master Servicer or Special Servicer, as the case may be, would
be so responsible hereunder. The Trustee shall not be required to record this
Agreement, except as provided in SECTION 11.02(a).
SECTION 8.04. Trustee and Fiscal Agent May Own Certificates.
The Trustee (in its individual or any other capacity), any Fiscal
Agent or any Affiliate of either of them may become the owner or pledgee of
Certificates with (except as otherwise provided in the definition of
"Certificateholder") the same rights it would have if it were not the Trustee,
such Fiscal Agent or an Affiliate of either of them, as the case may be.
SECTION 8.05. Fees and Expenses of Trustee; Indemnification of and by
Trustee and Fiscal Agent.
(a) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account, prior to any distributions to be made therefrom to
Certificateholders on such date, and pay to itself all earned but unpaid
Trustee's Fees in respect of the Mortgage Loans and any REO Loans through the
end of the most recently ended calendar month, as compensation for all services
rendered by the Trustee in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties of the Trustee
hereunder. As to each Mortgage Loan and REO Loan, the Trustee's Fee shall accrue
during each calendar month, commencing with May 2002, at the Trustee's Fee Rate
on a principal amount equal to the Stated Principal Balance of such Mortgage
Loan or REO Loan immediately following the Distribution Date in such calendar
month (or, in the case of May 2002, on a
-229-
principal amount equal to the Cut-off Date Principal Balance of the particular
Mortgage Loan), whether or not interest is actually collected on each Mortgage
Loan and REO Loan. With respect to each Mortgage Loan and REO Loan, the
Trustee's Fee shall accrue from time to time on the same Interest Accrual Basis
as is applicable to such Mortgage Loan or REO Loan. Except as otherwise
expressly provided herein, the Trustee's Fees (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
shall constitute the Trustee's sole compensation for such services to be
rendered by it. The Trustee shall also be entitled to all interest or other
income earned on deposits in the Accounts maintained by the Trustee, in
accordance with SECTION 3.06(b) (but only to the extent of the Net Investment
Earnings, if any, with respect to any such Account for each Collection Period).
(b) The Trustee and any director, officer, employee or agent of
the Trustee shall be entitled to be indemnified and held harmless out of the
Trust Fund for and against any loss, liability, claim or expense (including
costs and expenses of litigation, and of investigation, counsel fees, damages,
judgments and amounts paid in settlement) arising out of, or incurred in
connection with, this Agreement, the Certificates, the Mortgage Loans (unless it
incurs any such expense or liability in the capacity of a successor Master
Servicer or Special Servicer, in which case such expense or liability will be
reimbursable thereto in the same manner as it would be for any other Person
acting as such Master Servicer or Special Servicer, as the case may be) or any
act or omission of the Trustee relating to the exercise and performance of any
of the powers and duties of the Trustee hereunder, if (but only if) such loss,
liability, claim or expense constitutes an "unanticipated expense" within the
meaning of Treasury regulation section 1.860G-1(b)(3)(ii); PROVIDED, HOWEVER,
that neither the Trustee nor any of the other above specified Persons shall be
entitled to indemnification pursuant to this SECTION 8.05(b) for (1) allocable
overhead, such as costs for office space, office equipment, supplies and related
expenses, employee salaries and related expenses and similar internal costs and
expenses, (2) any expense or liability specifically required to be borne thereby
pursuant to the terms hereof or (3) any loss, liability, claim or expense
incurred by reason of any breach on the part of the Trustee of any of its
representations, warranties or covenants contained herein or any willful
misfeasance, bad faith or negligence in the performance of, or reckless
disregard of, the Trustee's obligations and duties hereunder.
(c) Each Master Servicer and Special Servicer shall indemnify the
Trustee and any Fiscal Agent for and hold each of them harmless against any
loss, liability, claim or expense that is a result of such Master Servicer's or
Special Servicer's, as the case may be, negligent acts or omissions in
connection with this Agreement, including the negligent use by such Master
Servicer or Special Servicer, as the case may be, of any powers of attorney
delivered to it by the Trustee pursuant to the provisions hereof and the
Mortgage Loans serviced by such Master Servicer or Special Servicer, as the case
may be; PROVIDED, HOWEVER, that, if the Trustee has been reimbursed for such
loss, liability, claim or expense pursuant to SECTION 8.05(b), or any Fiscal
Agent has been reimbursed for such loss, liability, claim or expense pursuant to
SECTION 8.13, then the indemnity in favor of such Person provided for in this
SECTION 8.05(c) with respect to such loss, liability, claim or expense shall be
for the benefit of the Trust.
(d) Each of the Trustee and any Fiscal Agent shall indemnify the
Master Servicers and the Special Servicers for and hold each of them harmless
against any loss, liability, claim or expense that is a result of the Trustee's
or such Fiscal Agent's, as the case may be, negligent acts or omissions in
connection with this Agreement; PROVIDED, HOWEVER, that if a Master Servicer or
Special Servicer has
-230-
been reimbursed for such loss, liability, claim or expense pursuant to SECTION
6.03, then the indemnity in favor of such Person provided for in this SECTION
8.05(d) with respect to such loss, liability, claim or expense shall be for the
benefit of the Trust.
(e) This SECTION 8.05 shall survive the termination of this
Agreement or the resignation or removal of the Trustee, any Fiscal Agent, a
Master Servicer or a Special Servicer as regards rights and obligations prior to
such termination, resignation or removal.
SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation, bank, trust
company or association organized and doing business under the laws of the United
States of America or any State thereof or the District of Columbia, authorized
under such laws to exercise trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation, bank, trust company or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation,
bank, trust company or association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
addition, the Trustee shall at all times meet the requirements of Section
26(a)(1) of the Investment Company Act, and the affiliations of the Trustee
shall not adversely affect the availability of PTE 89-90 with respect to any
Class of investment grade rated Certificates. Furthermore, the Trustee shall at
all times maintain a long-term unsecured debt rating of no less than "Aa3" from
Xxxxx'x and "AA" from S&P (or, in the case of either Rating Agency, such lower
rating as will not result in an Adverse Rating Event with respect to any Class
of Rated Certificates, as confirmed in writing to the Trustee and the Depositor
by such Rating Agency); PROVIDED that the Trustee shall not cease to be eligible
to serve as such based on a failure to satisfy such rating requirements so long
as the Trustee maintains a long-term unsecured debt rating of no less than
"Baa2" from Xxxxx'x and "BBB" from S&P (or, in the case of either Rating Agency,
such lower rating as will not result in an Adverse Rating Event with respect to
any Class of Rated Certificates, as confirmed in writing to the Trustee and the
Depositor by such Rating Agency) and a Fiscal Agent meeting the requirements of
SECTION 8.13 has been appointed by the Trustee and is then currently serving in
such capacity. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this SECTION 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in SECTION 8.07. The
corporation, bank, trust company or association serving as Trustee may have
normal banking and trust relationships with the Depositor, any Mortgage Loan
Seller, each Master Servicer, each Special Servicer and their respective
Affiliates; PROVIDED, HOWEVER, that none of (i) the Depositor, (ii) any Person
involved in the organization or operation of the Depositor or the Trust, (iii)
any Master Servicer or Special Servicer (except during any period when the
Trustee has assumed the duties of such Master Servicer or Special Servicer, as
the case may be, pursuant to SECTION 7.02), (iv) any Mortgage Loan Seller or (v)
any Affiliate of any of them, may be the Trustee hereunder.
SECTION 8.07. Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Controlling Class Representative, the Master Servicers, the Special Servicers
and all the Certificateholders. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee reasonably acceptable to
the
-231-
Controlling Class Representative meeting the eligibility requirements of SECTION
8.06, by written instrument, in duplicate, which instrument shall be delivered
to the resigning Trustee and to the successor trustee. A copy of such instrument
shall be delivered to other parties hereto and to the Certificateholders by the
Depositor. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of SECTION 8.06 and shall fail to resign after
written request therefor by the Depositor or a Master Servicer or if at any time
the Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or if the Trustee's continuing to act in such capacity would (as
confirmed in writing to any party hereto by either Rating Agency) result in an
Adverse Rating Event with respect to any Class of Rated Certificates, then the
Depositor may (and, if it fails to do so within ten Business Days, the General
Master Servicer shall as soon as practicable) remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the other parties hereto and to the
Certificateholders by the Depositor (or the General Master Servicer, as the case
may be).
(c) The Holders of Certificates entitled to not less than 51% of
the Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Depositor (with copies to each Master
Servicer and Special Servicer), one complete set to the Trustee so removed and
one complete set to the successor so appointed. All expenses incurred by the
Trustee in connection with its transfer of the Mortgages Files to a successor
trustee following the removal of the Trustee without cause pursuant to this
SECTION 8.07(c), shall be reimbursed to the removed Trustee within 30 days of
demand therefor, such reimbursement to be made by the Certificateholders that
terminated the Trustee. A copy of such instrument shall be delivered to the
other parties hereto and to the remaining Certificateholders by the successor so
appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this SECTION 8.07 shall
not become effective until (i) acceptance of appointment by the successor
trustee as provided in SECTION 8.08 and (ii) if neither the successor trustee
nor any Fiscal Agent appointed by it has a long-term unsecured debt rating of at
least "Aa3" from Xxxxx'x and "AA" from S&P, the Trustee and the Depositor have
received written confirmation from each Rating Agency that has not so assigned
such a rating, to the effect that the appointment of such successor trustee
shall not result in an Adverse Rating Event with respect to any Class of Rated
Certificates.
SECTION 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in SECTION 8.07
shall execute, acknowledge and deliver to the Depositor, each Master Servicer,
each Special Servicer and its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation
-232-
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to the successor trustee all Mortgage Files
and related documents and statements held by it hereunder (other than any
Mortgage Files at the time held on its behalf by a Custodian, which Custodian
shall become the agent of the successor trustee), and the Depositor, each Master
Servicer, each Special Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
to more fully and certainly vest and confirm in the successor trustee all such
rights, powers, duties and obligations, and to enable the successor trustee to
perform its obligations hereunder.
(b) No successor trustee shall accept appointment as provided in
this SECTION 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of SECTION 8.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this SECTION 8.08, such successor trustee shall mail notice of the
succession of such trustee hereunder to the Depositor and the
Certificateholders.
SECTION 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated or any entity resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any entity succeeding
to the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, PROVIDED such entity shall be eligible under the provisions
of SECTION 8.06, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the applicable Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity, such
title to the Trust Fund, or any part thereof, and, subject to the other
provisions of this SECTION 8.10, such powers, duties, obligations, rights and
trusts as the applicable Master Servicer and the Trustee may consider necessary
or desirable. If the applicable Master Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request to do so, or in
case an Event of Default in respect of the applicable Master Servicer shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under SECTION 8.06, and no
notice to Holders of Certificates of the appointment of co-trustee(s) or
separate trustee(s) shall be required under SECTION 8.08.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this SECTION 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be
-233-
conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee 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 when acting as a Master Servicer or Special
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this ARTICLE VIII. 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.
(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee under this
SECTION 8.10 shall not relieve the Trustee of its duties and responsibilities
hereunder.
SECTION 8.11. Appointment of Custodians.
The Trustee may, upon prior written notice to the General Master
Servicer, General Special Servicer, Co-op Master Servicer and Co-op Special
Servicer, appoint at the Trustee's own expense one or more Custodians to hold
all or a portion of the Mortgage Files as agent for the Trustee; PROVIDED that
each Custodian shall be a depositary institution supervised and regulated by a
federal or state banking authority, shall have combined capital and surplus of
at least $10,000,000, shall be qualified to do business in the jurisdiction in
which it holds any Mortgage File, shall not be the Depositor, any Mortgage Loan
Seller or any Affiliate of the Depositor or any Mortgage Loan Seller, and shall
have in place a fidelity bond and errors and omissions policy, each in such form
and amount as is customarily required of custodians acting on behalf of Xxxxxxx
Mac or Xxxxxx Mae. Each Custodian shall be subject to the same obligations,
standard of care, protection and indemnities as would be imposed on, or would
protect, the Trustee hereunder in connection with the retention of Mortgage
Files directly by the Trustee. The appointment of one or more Custodians shall
not relieve the Trustee from any of its obligations hereunder, and the Trustee
shall remain responsible for all acts and omissions of any Custodian.
-234-
SECTION 8.12. Access to Certain Information.
(a) The Trustee shall afford to the Depositor, each Master
Servicer, each Special Servicer the Controlling Class Representative and each
Rating Agency and to the OTS, the FDIC and any other banking or insurance
regulatory authority that may exercise authority over any Certificateholder or
Certificate Owner, access to any documentation regarding the Mortgage Loans or
the other assets of the Trust Fund that are in its possession or within its
control. Such access shall be afforded without charge but only upon reasonable
prior written request and during normal business hours at the offices of the
Trustee designated by it.
(b) The Trustee shall maintain at its offices and, upon reasonable
prior written request and during normal business hours, shall make available for
review by the Depositor, the Underwriters, the Rating Agencies, the Controlling
Class Representative and, subject to the succeeding paragraph, any
Certificateholder, Certificate Owner or Person identified to the Trustee as a
prospective Transferee of a Certificate or an interest therein, originals and/or
copies of the following items (to the extent such items were prepared by or
delivered to the Trustee): (i) the Prospectus, the Confidential Offering
Circular and any other disclosure document relating to the Certificates, in the
form most recently provided to the Trustee by the Depositor or by any Person
designated by the Depositor; (ii) this Agreement, each Mortgage Loan Purchase
Agreement, any amendment to any such agreement, each Sub-Servicing Agreement
delivered to the Trustee since the Closing Date and any amendments and exhibits
hereto or thereto; (iii) all Trustee Reports and any files and reports
comprising the CMSA Investor Reporting Package actually delivered or otherwise
made available to Certificateholders pursuant to SECTION 4.02(a) since the
Closing Date; (iv) all Annual Performance Certifications delivered by the
respective Master Servicers and the Special Servicers to the Trustee since the
Closing Date; (v) all Annual Accountants' Reports caused to be delivered by the
respective Master Servicers and Special Servicers to the Trustee since the
Closing Date; (vi) the most recent inspection report prepared by any Master
Servicer or Special Servicer and delivered to the Trustee in respect of each
Mortgaged Property pursuant to SECTION 3.12(a) or this SECTION 8.12(b); (vii)
the most recent quarterly and annual operating statement and rent roll (or, in
the case of a residential cooperative property, maintenance schedule) of each
related Mortgaged Property and financial statements of the related Borrower
collected by any Master Servicer or Special Servicer and delivered to the
Trustee pursuant to SECTION 3.12(b) or this SECTION 8.12(b); (viii) any and all
notices and reports delivered to the Trustee with respect to any Mortgaged
Property as to which the environmental testing contemplated by SECTION 3.09(c)
revealed that neither of the conditions set forth in CLAUSES (i) and (ii) of the
first sentence thereof was satisfied; (ix) each of the Mortgage Files, including
any and all modifications, waivers and amendments of the terms of a Mortgage
Loan entered into or consented to by the applicable Master Servicer or the
applicable Special Servicer and delivered to the Trustee pursuant to SECTION
3.20; (x) the most recent Appraisal for each Mortgage Loan and REO Property that
has been delivered to the Trustee (all Appraisals of Mortgaged Properties and/or
REO Properties shall be delivered to the Trustee by the respective Master
Servicers and Special Servicers, in each case promptly following the subject
Appraisal's having been obtained or formulated); (xi) any and all Officer's
Certificates and other evidence delivered to or by the Trustee to support its, a
Master Servicer's, a Special Servicer's or any Fiscal Agent's, as the case may
be, determination that any Advance was (or, if made, would be) a Nonrecoverable
Advance; (xii) a current report from the Trustee listing all outstanding
exceptions to the Mortgage File review conducted pursuant to SECTION 2.02; and
(xiii) any other information that may be necessary to satisfy the requirements
of subsection (d)(4)(i) of Rule 144A under the Securities Act. The Trustee shall
provide copies of any and all of the foregoing items upon request of any of the
parties set forth in the previous sentence; however, except in the case of
-235-
the Rating Agencies and the Controlling Class Representative, the Trustee shall
be permitted to require payment of a sum sufficient to cover the reasonable
costs and expenses of providing such copies. If necessary, the Trustee shall
request from the applicable Master Servicer, and within a reasonable period
following its receipt of such request, the applicable Master Servicer shall
deliver, copies of the items listed in CLAUSES (vi) and (vii) above to the
Trustee.
In connection with providing access to or copies of the items
described in the preceding paragraph pursuant to this SECTION 8.12(b), the
Trustee shall require: (a) in the case of Certificateholders or Certificate
Owners, a written confirmation executed by the requesting Person substantially
in the form of EXHIBIT K-1 hereto (or such other form as may be reasonably
acceptable to the Trustee) generally to the effect that such Person is a holder
or a beneficial holder of Certificates and, subject to the last sentence of this
paragraph, will keep such information confidential, except that such
Certificateholder or Certificate Owner may provide such information to its
auditors, legal counsel and regulators and to any other Person that holds or is
contemplating the purchase of any Certificate or interest therein (PROVIDED that
such other Person confirms in writing such ownership interest or prospective
ownership interest and agrees to keep such information confidential); and (b) in
the case of a prospective purchaser of a Certificate or an interest therein,
confirmation executed by the requesting Person substantially in the form of
EXHIBIT K-2 hereto (or such other form as may be reasonably acceptable to the
Trustee) generally to the effect that such Person is a prospective purchaser of
a Certificate or an interest therein, is requesting the information for use in
evaluating a possible investment in Certificates and, subject to the last
sentence of this paragraph, will otherwise keep such information confidential.
Notwithstanding the foregoing, no Certificateholder, Certificate Owner or
prospective Certificateholder or Certificate Owner need keep confidential any
information received from the Trustee pursuant to this SECTION 8.12(b) that has
previously been filed with the Commission, and the Trustee shall not require
either of the certifications contemplated by the second preceding sentence in
connection with providing any information pursuant to this SECTION 8.12(b) that
has previously been filed with the Commission.
(c) Neither the Trustee nor any Master Servicer or Special
Servicer shall be liable for providing or disseminating information in
accordance with the terms of this Agreement.
SECTION 8.13. Appointment of Fiscal Agent.
(a) Insofar as the Trustee would not otherwise satisfy the rating
requirements of SECTION 8.06, the Trustee may appoint, at the Trustee's own
expense, a Fiscal Agent for purposes of making Advances hereunder that are
otherwise required to be made by the Trustee. Any Fiscal Agent shall at all
times maintain a long-term unsecured debt rating of no less than "Aa3" from
Xxxxx'x and "AA" from S&P (or, in the case of either Rating Agency, such lower
rating as will not result in an Adverse Rating Event with respect to any Class
of Rated Certificates (as confirmed in writing to the Trustee and the Depositor
by such Rating Agency)). Any Person so appointed by the Trustee pursuant to this
SECTION 8.13(a) shall become the Fiscal Agent on the date as of which the
Trustee and the Depositor have received: (i) if the long-term unsecured debt of
the designated Person is not rated at least "Aa3" by Xxxxx'x and "AA" by S&P,
written confirmation from each Rating Agency that the appointment of such
designated Person will not result in an Adverse Rating Event with respect to any
Class of Rated Certificates; (ii) a written agreement whereby the designated
Person is appointed as, and agrees to assume and perform the duties of, Fiscal
Agent hereunder, executed by such designated Person and the Trustee (such
agreement, the "FISCAL AGENT AGREEMENT"); and (iii) an Opinion of Counsel
-236-
(which shall be paid for by the designated Person or the Trustee) substantially
to the effect that (A) the appointment of the designated Person to serve as
Fiscal Agent is in compliance with this SECTION 8.13, (B) the designated Person
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (C) the related Fiscal Agent Agreement has
been duly authorized, executed and delivered by the designated Person and (D)
upon execution and delivery of the related Fiscal Agent Agreement, the
designated Person shall be bound by the terms of this Agreement and, subject to
customary bankruptcy and insolvency exceptions and customary equity exceptions,
that this Agreement shall be enforceable against the designated Person in
accordance with its terms. Any Person that acts as Fiscal Agent shall, for so
long as it so acts, be deemed a party to this Agreement for all purposes hereof.
Pursuant to the related Fiscal Agent Agreement, each Fiscal Agent, if any, shall
make representations and warranties with respect to itself that are comparable
to those made by the Trustee pursuant to SECTION 2.09. Notwithstanding anything
contained in this Agreement to the contrary, any Fiscal Agent shall be entitled
to all limitations on liability, rights of reimbursement and indemnities to
which the Trustee is entitled hereunder (including pursuant to SECTIONS 8.05(b)
and 8.05(c)) as if it were the Trustee.
(b) To the extent that the Trustee is required, pursuant to the
terms of this Agreement, to make any Advance, whether as a successor Master
Servicer or otherwise, and has failed to do so in accordance with the terms
hereof, the Fiscal Agent (if any) shall make such Advance when and as required
by the terms of this Agreement on behalf the Trustee as if such Fiscal Agent
were the Trustee hereunder. To the extent that the Fiscal Agent (if any) makes
an Advance pursuant to this SECTION 8.13 or otherwise pursuant to this
Agreement, the obligations of the Trustee under this Agreement in respect of
such Advance shall be satisfied.
(c) Notwithstanding anything contained in this Agreement to the
contrary, any Fiscal Agent shall be entitled to all limitations on liability,
rights of reimbursement and indemnities to which the Trustee is entitled
hereunder (including pursuant to SECTIONS 8.05(b) and 8.05(c)) as if it were the
Trustee, except that all fees and expenses of any Fiscal Agent (other than
interest owed to such Fiscal Agent in respect of unreimbursed Advances) incurred
by such Fiscal Agent in connection with the transactions contemplated by this
Agreement shall be borne by the Trustee, and neither the Trustee nor such Fiscal
Agent shall be entitled to reimbursement therefor from any of the Trust, the
Depositor or any Master Servicer or Special Servicer.
(d) The obligations of any Fiscal Agent set forth in this
SECTION 8.13 or otherwise pursuant to this Agreement shall exist only for so
long as the Trustee that appointed it shall act as Trustee hereunder. Any Fiscal
Agent may resign or be removed by the Trustee only if and when the existence of
such Fiscal Agent is no longer necessary for such Trustee to satisfy the
eligibility requirements of SECTION 8.06; PROVIDED that any Fiscal Agent shall
be deemed to have resigned at such time as the Trustee that appointed it resigns
or is removed as Trustee hereunder (in which case the responsibility for
appointing a successor Fiscal Agent in accordance with this SECTION 8.13(a)
shall belong to the successor Trustee insofar as such appointment is necessary
for such successor Trustee to satisfy the eligibility requirements of SECTION
8.06).
(e) The Trustee shall promptly notify the other parties hereto and
the Certificateholders in writing of the appointment, resignation or removal of
any Fiscal Agent.
-237-
SECTION 8.14. Filings with the Securities and Exchange Commission.
(a) With respect to the Trust's fiscal year 2002 (and, if as of
the beginning of any other fiscal year for the Trust, the Registered
Certificates are held (directly or, in the case of Registered Certificates held
in book-entry form, through the Depositary) by at least 300 Holders and/or
Depositary Participants having accounts with the Depositary), the Trustee shall:
(i) during such fiscal year, in accordance with the Exchange Act,
the rules and regulations promulgated thereunder and applicable "no-action
letters" issued by the Commission, prepare for filing, execute and properly
file with the Commission monthly, with respect to the Trust, a Current
Report on Form 8-K with copies of the Trustee Reports;
(ii) during such fiscal year, (A) monitor for and promptly notify
the Depositor of the occurrence or existence of any of the matters
identified in SECTION 11.09(a) and/or SECTION 8.14(b) (in each case to the
extent that a Responsible Officer of the Trustee has actual knowledge
thereof), (B) cooperate with the Depositor in obtaining all necessary
information in order to enable the Depositor to prepare a Current Report on
Form 8-K reporting any such matter in accordance with the Exchange Act, the
rules and regulations promulgated thereunder and applicable "no-action
letters" issued by the Commission, and (C) execute and promptly file with
the Commission any such Current Report on Form 8-K prepared by or on behalf
of the Depositor and delivered to the Trustee; and
(iii) within 90 days following the end of such fiscal year, prepare,
execute and properly file with the Commission, with respect to the Trust,
an Annual Report on Form 10-K which complies in all material respects with
the requirements of the Exchange Act, the rules and regulations promulgated
thereunder and applicable "no-action letters" issued by the Commission;
PROVIDED that (x) the Trustee shall not have any responsibility to file any
items (other than those generated by it) that have not been received in a format
suitable for electronic filing via the XXXXX system (or in "ASCII", "Microsoft
Word", "Microsoft Excel" or another format reasonably acceptable to the Trustee)
and shall not have any responsibility to convert any such items to such format
(other than those items generated by it and those items delivered to it in a
format readily convertible to a format suitable for electronic filing via the
XXXXX system) and (y) the Depositor shall be responsible for preparing,
executing and filing (via the XXXXX system within 15 days following the Closing
Date) a Current Report on Form 8-K reporting the establishment of the Trust and
whereby this Agreement is filed as an exhibit. Each of the other parties to this
Agreement shall deliver to the Trustee or the applicable Master Servicer, as
appropriate, in a format suitable for electronic filing via the XXXXX system (or
in "ASCII", "Microsoft Word", "Microsoft Excel" or another format reasonably
acceptable to the Trustee) any and all items contemplated to be filed with the
Commission pursuant to this SECTION 8.14(a), to the extent it is otherwise
required to deliver such items to the Trustee or such Master Servicer, as
applicable.
(b) At all times during the Trust's fiscal year 2002 (and, if as
of the beginning of any other fiscal year for the Trust, the Registered
Certificates are held (directly or, in the case of Registered Certificates held
in book-entry form, through the Depositary) by at least 300 Holders and/or
Depositary Participants having accounts with the Depositary, at all times during
such other fiscal year), the Trustee shall monitor for and promptly notify the
Depositor of the occurrence or existence of any of the following matters of
which a Responsible Officer of the Trustee has actual knowledge:
-238-
(i) any failure of the Trustee to make any monthly distributions
to the Holders of any Class of Certificates, which failure is not otherwise
reflected in the Certificateholder Reports filed with the Commission or has
not otherwise been reported to the Depositor pursuant to any other Section
of this Agreement;
(ii) any acquisition or disposition by the Trust of a Mortgage Loan
or an REO Property, which acquisition or disposition has not otherwise been
reflected in the Certificateholder Reports filed with the Commission or has
not otherwise been reported to the Depositor pursuant to any other Section
of this Agreement;
(iii) any other acquisition or disposition by the Trust of a
significant amount of assets (other than Permitted Investments, Mortgage
Loans and REO Properties), other than in the normal course of business;
(iv) any change in the fiscal year of the Trust;
(v) any material legal proceedings, other than ordinary routine
litigation incidental to the business of the Trust, to which the Trust (or
any party to this Agreement on behalf of the Trust) is a party or of which
any property included in the Trust Fund is subject, or any threat by a
governmental authority to bring any such legal proceedings;
(vi) any event of bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings in respect of
or pertaining to the Trust or any party to this Agreement, or any actions
by or on behalf of the Trust or any party to this Agreement indicating its
bankruptcy, insolvency or inability to pay its obligations; and
(vii) any change in the rating or ratings assigned to any Class of
Certificates not otherwise reflected in the Certificateholder Reports filed
with the Commission;
PROVIDED that (x) the actual knowledge of a Responsible Officer of the Trustee
of any material legal proceedings of which property included in the Trust Fund
is subject or of any material legal proceedings threatened by a governmental
authority is limited to circumstances where it would be reasonable for the
Trustee to identify such property as an asset of, or as securing an asset of,
the Trust or such threatened proceedings as concerning the Trust and (y) no
Responsible Officer of the Trustee shall be deemed to have actual knowledge of
the matters described in CLAUSES (vi) and (vii) of this SECTION 8.14(b) unless
such Responsible Officer was notified in writing.
(c) If as of the beginning of any fiscal year for the Trust (other
than fiscal year 2002), the Registered Certificates are held (directly or, in
the case of Registered Certificates held in book-entry form, through the
Depositary) by less than 300 Holders and/or Depositary Participants having
accounts with the Depositary, the Trustee shall, in accordance with the Exchange
Act and the rules and regulations promulgated thereunder, timely file a Form 15
with respect to the Trust.
-239-
ARTICLE IX
TERMINATION
SECTION 9.01. Termination Upon Repurchase or Liquidation of All
Mortgage Loans.
(a) Subject to SECTION 9.02, the Trust and the respective
obligations and responsibilities under this Agreement of the parties hereto
(other than the obligations of the Trustee to provide for and make payments to
Certificateholders as hereafter set forth) shall terminate upon payment (or
provision for payment) to the Certificateholders of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid on the Distribution
Date following the earlier to occur of: (i) the purchase by the Co-op Master
Servicer, the Co-op Special Servicer, the General Master Servicer, the General
Special Servicer, or any single Controlling Class Certificateholder or group of
Controlling Class Certificateholders of all Mortgage Loans and each REO Property
remaining in the Trust Fund at a price (the "TERMINATION PRICE") equal to (A)
the aggregate Purchase Price of all the Mortgage Loans remaining in the Trust
Fund (exclusive of any REO Loan(s)), plus (B) the appraised value of each REO
Property, if any, included in the Trust Fund, such appraisal to be conducted by
a Qualified Appraiser selected by the applicable Special Servicer and approved
by the Trustee and the applicable Master Servicer, minus (C) if the purchaser is
a Master Servicer or Special Servicer, the aggregate amount of unreimbursed
Advances made by such Person, together with any unpaid Advance Interest in
respect of such unreimbursed Advances and any unpaid servicing compensation
payable to such Person (which items shall be deemed to have been paid or
reimbursed to such Master Servicer or Special Servicer, as the case may be, in
connection with such purchase); (ii) the exchange by the Sole
Certificateholder(s) of all the Certificates for all Mortgage Loans and each REO
Property remaining in the Trust Fund; and (iii) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
REO Property remaining in the Trust Fund; PROVIDED, HOWEVER, that in no event
shall the Trust continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the Court of St. Xxxxx, living on the date hereof.
(b) Any single Controlling Class Certificateholder or group of
Controlling Class Certificateholders, the Co-op Master Servicer, the Co-op
Special Servicer, the General Master Servicer or the General Special Servicer,
in that order of preference, may at its option elect to purchase all the
Mortgage Loans and each REO Property remaining in the Trust Fund as contemplated
by CLAUSE (i) of SECTION 9.01(a) by giving written notice to the other parties
hereto (and, in the case of an election by a Master Servicer or Special
Servicer, to the Holders of the Controlling Class) no later than 60 days prior
to the anticipated date of purchase; PROVIDED, HOWEVER, that the aggregate
Stated Principal Balance of the Mortgage Pool at the time of such election is
less than 1.0% of the Initial Pool Balance; and PROVIDED, FURTHER, that within
30 days after written notice of such election is so given, no Person with a
higher right of priority to make such an election does so; and PROVIDED,
FURTHER, that if more than one Controlling Class Certificateholder or group of
Controlling Class Certificateholders desire to purchase all of the Mortgage
Loans and any REO Properties, preference shall be given to the Controlling Class
Certificateholder or group of Controlling Class Certificateholders with the
largest Percentage Interest in the Controlling Class; and PROVIDED, FURTHER,
that if any single Controlling Class Certificateholder or group of Controlling
Class Certificateholders, the Co-op Special Servicer, the General Master
Servicer or the General Special Servicer makes such an election, then the Co-op
Master Servicer will have the
-240-
option, by giving written notice to the other parties hereto and to the Holders
of the Controlling Class no later than 30 days prior to the anticipated date of
purchase, to purchase all of the Co-op Mortgage Loans and each related REO
Property remaining in the Trust Fund, as well as (assuming it remains in the
Trust Fund) the 00 Xxxx Xxx Xxxxxx Mortgage Loan or any related REO Property,
and the other party will then have the option to purchase only the non-Co-op
Mortgage Loans (other than the 00 Xxxx Xxx Xxxxxx Mortgage Loan) and each
related REO Property remaining in the Trust Fund. If the Trust is to be
terminated in connection with the purchase of all the Mortgage Loans and each
REO Property remaining in the Trust Fund by a Master Servicer, a Special
Servicer and/or any Controlling Class Certificateholder(s), such Person(s)
shall: (i) deposit, or deliver to each of the Master Servicers for deposit in
the Master Servicers' respective Collection Accounts (after the Determination
Date, and prior to the Master Servicer Remittance Date, relating to the
anticipated Final Distribution Date) an amount in immediately available funds
equal to the Termination Price (the portion thereof allocable to all the Trust
Assets (other than the Co-op Trust Assets) to be deposited in the General Master
Servicer's Collection Account and the portion thereof allocable to the Co-op
Trust Assets to be deposited in the Co-op Master Servicer's Collection Account);
and (ii) shall reimburse all of the parties hereto (other than itself, if
applicable) for all reasonable out-of-pocket costs and expenses incurred by such
parties in connection with such purchase. On the Master Servicer Remittance Date
for the Final Distribution Date, each Master Servicer shall transfer to the
Distribution Account all amounts required to be transferred by it to such
account on such Master Servicer Remittance Date from such Master Servicer's
Collection Account pursuant to the first paragraph of SECTION 3.04(b), together
with any other amounts on deposit in such Collection Account that would
otherwise be held for future distribution. Upon confirmation that the deposit of
the Termination Price has been made to the Collection Account(s) and the
reimbursement contemplated by the second preceding sentence has been made to the
parties hereto, the Trustee shall release or cause to be released to the
purchasing party (or its designee) the Mortgage Files for the remaining Mortgage
Loans and shall execute all assignments, endorsements and other instruments
furnished to it by the purchasing party as shall be necessary to effectuate
transfer of the Mortgage Loans and REO Properties to the purchasing party (or
its designee).
Following the date on which the aggregate Certificate Principal
Balance of the Registered Certificates is reduced to zero, the Sole
Certificateholder(s) shall have the right to exchange all of the Certificates
for all of the Mortgage Loans and each REO Property remaining in the Trust Fund
as contemplated by CLAUSE (ii) of SECTION 9.01(a) by giving written notice to
all the parties hereto no later than 60 days prior to the anticipated date of
exchange. In the event that the Sole Certificateholder(s) elect(s) to exchange
all of the Certificates for all of the Mortgage Loans and each REO Property
remaining in the Trust Fund in accordance with the preceding sentence, such Sole
Certificateholder(s), not later than the Business Day prior to the Distribution
Date on which the final distribution on the Certificates is to occur, shall
deposit in each Collection Account an amount in immediately available funds
equal to all amounts then due and owing to the Depositor, a Master Servicer, a
Special Servicer, the Trustee and/or any Fiscal Agent hereunder that may be
withdrawn from such Collection Account, pursuant to SECTION 3.05(a), or that may
be withdrawn from the Distribution Account, pursuant to SECTION 3.05(b), but
only to the extent that such amounts are not already on deposit in such
Collection Account. In addition, each Master Servicer shall transfer to the
Distribution Account all amounts required to be transferred by it to such
account on such Master Servicer Remittance Date from such Master Servicer's
Collection Account pursuant to the first paragraph of SECTION 3.04(b). Upon
confirmation that such final deposits have been made and following the surrender
of all the Certificates on the Final Distribution Date, the Trustee shall
release or cause to be released to the Sole Certificateholder(s) or any designee
thereof, the Mortgage Files for the remaining Mortgage Loans and
-241-
shall execute all assignments, endorsements and other instruments furnished to
it by the Sole Certificateholder(s) as shall be necessary to effectuate transfer
of the Mortgage Loans and REO Properties remaining in the Trust Fund.
(c) Notice of any termination shall be given promptly by the
Trustee by letter to Certificateholders mailed (x) if such notice is given in
connection with the purchase of all the Mortgage Loans and each REO Property
remaining in the Trust Fund by a Master Servicer, a Special Servicer and/or any
Controlling Class Certificateholder(s), not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of the final
distribution on the Certificates and (y) otherwise during the month of such
final distribution on or before the Master Servicer Remittance Date in such
month, in any event specifying (i) the Distribution Date upon which the Trust
Fund will terminate and final payment on the Certificates will be made, (ii) the
amount of any such final payment in respect of each Class of Certificates and
(iii) that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein designated. The
Trustee shall give such notice to the other parties hereto at the time such
notice is given to Certificateholders.
(d) Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates such
Certificateholder's Percentage Interest of that portion of the amounts on
deposit in the Distribution Account that is allocable to payments on the
relevant Class in accordance with SECTION 4.01. Any funds not distributed to any
Holder or Holders of Certificates of any Class on the Final Distribution Date
because of the failure of such Holder or Holders to tender their Certificates
shall, on such date, be set aside and held uninvested in trust and credited to
the account or accounts of the appropriate non-tendering Holder or Holders. If
any Certificates as to which notice has been given pursuant to this SECTION 9.01
shall not have been surrendered for cancellation within six months after the
time specified in such notice, the Trustee shall mail a second notice to the
remaining non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final distribution with respect thereto. If
within one year after the second notice all such Certificates shall not have
been surrendered for cancellation, the Trustee, directly or through an agent,
shall take such reasonable steps to contact the remaining non-tendering
Certificateholders concerning the surrender of their Certificates as it shall
deem appropriate. The costs and expenses of holding such funds in trust and of
contacting such Certificateholders following the first anniversary of the
delivery of such second notice to the non-tendering Certificateholders shall be
paid out of such funds. No interest shall accrue or be payable to any former
Holder on any amount held in trust hereunder. If by the second anniversary of
the delivery of such second notice, all of the Certificates shall not have been
surrendered for cancellation, then, subject to applicable escheat laws, the
Trustee shall distribute to the Class R Certificateholders all unclaimed funds
and other assets which remain subject hereto.
(e) Pursuant to SECTION 3.19, any amounts remaining in the
Paradise Island Reserve Fund shall be distributed to Column upon termination of
the Trust Fund.
SECTION 9.02. Additional Termination Requirements.
(a) If a Master Servicer, a Special Servicer and/or a Controlling
Class Certificateholder purchases or the Sole Certificateholder(s) exchange all
of the Certificates for, all the Mortgage Loans and each REO Property remaining
in the Trust Fund as provided in SECTION 9.01, the
-242-
Trust and each REMIC Pool shall be terminated in accordance with the following
additional requirements, unless the purchasing party obtains at its own expense
and delivers to the Trustee an Opinion of Counsel, addressed to the Trustee, to
the effect that the failure of the Trust to comply with the requirements of this
SECTION 9.02 will not result in an Adverse REMIC Event with respect to any REMIC
Pool:
(i) the Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to the final Tax Return for each
REMIC Pool, pursuant to Treasury regulation section 1.860F-1 and shall
satisfy all requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder (as evidenced by an Opinion of
Counsel to such effect delivered on behalf and at the expense of the
purchasing party);
(ii) during such 90-day liquidation period and at or prior to the
time of making the final payment on the Certificates, the Trustee shall
sell or otherwise transfer all the Mortgage Loans and each REO Property to
the applicable Person, in exchange for cash and/or Certificates in
accordance with SECTION 9.01; and
(iii) immediately following the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Class R Certificates all
remaining cash on hand (other than cash retained to meet claims), and each
REMIC Pool shall terminate at that time.
(b) By their acceptance of Certificates, the Holders hereby
authorize the Trustee to prepare and adopt, on behalf of the Trust, a plan of
complete liquidation of each REMIC Pool in accordance with the terms and
conditions of this Agreement, which authorization shall be binding upon all
successor Certificateholders.
-243-
ARTICLE X
ADDITIONAL TAX PROVISIONS
SECTION 10.01. Tax Administration.
(a) The Trustee shall elect to treat each REMIC Pool as a REMIC
under the Code and, if necessary, under applicable state law. Each such election
will be made on IRS Form 1066 or other appropriate federal tax or information
return or any appropriate state Tax Returns for the taxable year ending on the
last day of the calendar year in which the Certificates are issued.
(b) The Plurality Class R Certificateholder is hereby designated
as the Tax Matters Person of each REMIC Pool and, in such capacity, shall be
responsible to act on behalf of such REMIC Pool in relation to any tax matter or
controversy, to represent such REMIC Pool in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority, to request an administrative adjustment as to any taxable year of
such REMIC Pool, to enter into settlement agreements with any governmental
taxing agency with respect to such REMIC Pool, to extend any statute of
limitations relating to any tax item of such REMIC Pool and otherwise to act on
behalf of such REMIC Pool in relation to any tax matter or controversy involving
such REMIC Pool; PROVIDED that the Trustee is hereby irrevocably appointed and
agrees to act (in consultation with the Tax Matters Person for each REMIC Pool)
as agent and attorney-in-fact for the Tax Matters Person for each REMIC Pool in
the performance of its duties as such. The legal expenses and costs of any
action described in this SECTION 10.01(b) and any liability resulting therefrom
shall be expenses, costs and liabilities of the Trust payable out of amounts on
deposit in the Distribution Account as provided by SECTION 3.05(b) unless such
legal expenses and costs are incurred by reason of a Tax Matters Person's or the
Trustee's misfeasance, bad faith or negligence in the performance of, or such
Person's reckless disregard of, its obligations or are expressly provided by
this Agreement to be borne by any party hereto.
(c) The Trustee shall prepare or cause to be prepared, execute and
file all of the Tax Returns in respect of each REMIC Pool (other than Tax
Returns required to be filed by a Master Servicer and/or a Special Servicer
pursuant to SECTION 3.09(g)) and all of the applicable income tax and other
information returns for each Grantor Trust Pool and, if required on any future
date pursuant to a change in applicable law, the Paradise Island Reserve Fund.
The expenses of preparing and filing such returns shall be borne by the Trustee
without any right of reimbursement therefor.
(d) The Trustee shall perform on behalf of each REMIC Pool all
reporting and other tax compliance duties that are the responsibility of such
REMIC Pool under the Code, the REMIC Provisions or other compliance guidance
issued by the IRS or any state or local taxing authority. Included among such
duties, the Trustee shall provide: (i) to any Transferor of a Class R
Certificate, such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee; (ii) to the Certificateholders, such information or
reports as are required by the Code or the REMIC Provisions, including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required); and (iii) to the IRS, the name,
title, address and telephone number of the Person who will serve as the
representative of each REMIC Pool.
-244-
(e) The Trustee shall take such action and shall cause each REMIC
Pool to take such action as shall be necessary to create or maintain the status
thereof as a REMIC under the REMIC Provisions (and the other parties hereto
shall assist it, to the extent reasonably requested by the Trustee), to the
extent that the Trustee has actual knowledge that any particular action is
required; PROVIDED that the Trustee shall be deemed to have knowledge of
relevant tax laws. The Trustee shall not knowingly take or fail to take any
action, or cause any REMIC Pool to take or fail to take any action, that under
the REMIC Provisions, if taken or not taken, as the case may be, could result in
an Adverse REMIC Event in respect of any REMIC Pool or an Adverse Grantor Trust
Event with respect to either Grantor Trust Pool, unless the Trustee has received
an Opinion of Counsel to the effect that the contemplated action or non-action,
as the case may be, will not result in an Adverse REMIC Event or an Adverse
Grantor Trust Event. None of the other parties hereto shall take or fail to take
any action (whether or not authorized hereunder) as to which the Trustee has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event or an Adverse Grantor Trust Event could occur with
respect to such action. In addition, prior to taking any action with respect to
any REMIC Pool or the assets thereof, or causing any REMIC Pool to take any
action, which is not contemplated by the terms of this Agreement, each of the
other parties hereto will consult with the Trustee, in writing, with respect to
whether such action could cause an Adverse REMIC Event or an Adverse Grantor
Trust Event to occur, and no such other party shall take any such action or
cause any REMIC Pool to take any such action as to which the Trustee has advised
it in writing that an Adverse REMIC Event or an Adverse Grantor Trust Event
could occur. The Trustee may consult with counsel to make such written advice,
and the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement.
(f) If any tax is imposed on any REMIC Pool, including "prohibited
transactions" taxes as defined in Section 860F(a)(2) of the Code, any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, any taxes on contributions to any REMIC Pool after the Startup Day
pursuant to Section 860G(d) of the Code, and any other tax imposed by the Code
or any applicable provisions of state or local tax laws (other than any tax
permitted to be incurred by a Special Servicer on behalf of the Trust pursuant
to SECTION 3.17(a)), then such tax, together with all incidental costs and
expenses (including penalties and reasonable attorneys' fees), shall be charged
to and paid by: (i) the Trustee, if such tax arises out of or results from a
breach of any of its obligations under ARTICLE IV, ARTICLE VIII or this ARTICLE
X; (ii) any Fiscal Agent, if such tax arises out of or results from a breach of
any of its obligations under ARTICLE IV or this ARTICLE X; (iii) a Master
Servicer, if such tax arises out of or results from a breach by such Master
Servicer of any of its obligations under ARTICLE III or this ARTICLE X; (iv) a
Special Servicer, if such tax arises out of or results from a breach by such
Special Servicer of any of its obligations under ARTICLE III or this ARTICLE X;
or (v) the Trust, out of the Trust Fund (exclusive of the Grantor Trust Pools),
in all other instances. If any tax is imposed on either Grantor Trust Pool, such
tax, together with all incidental costs and expenses (including, without
limitation, penalties and reasonable attorneys' fees), shall be charged to and
paid by: (i) a Special Servicer, if such tax arises out of or results from a
breach by such Special Servicer of any of its obligations under ARTICLE III or
this ARTICLE X; (ii) a Master Servicer, if such tax arises out of or results
from a breach by such Master Servicer of any of its obligations under ARTICLE
III or this ARTICLE X; (iii) the Trustee, if such tax arises out of or results
from a breach by the Trustee of any of its obligations under ARTICLE IV, ARTICLE
VIII or this ARTICLE X; (iv) any Fiscal Agent, if such tax arises out of or
results from a breach of any of its obligations under ARTICLE IV or this ARTICLE
X; or (v) the Trust, out of the portion of the Trust Fund constituting such
Grantor Trust Pool, in all other instances. Consistent with the foregoing, any
tax permitted to be incurred by a Special Servicer pursuant to SECTION 3.17(a)
shall be
-245-
charged to and paid by the Trust. Any such amounts payable by the Trust in
respect of taxes shall be paid by the Trustee out of amounts on deposit in the
Distribution Account.
(g) The Trustee and, to the extent that records are maintained
thereby in the normal course of its business, each of the other parties hereto
shall, for federal income tax purposes, maintain books and records with respect
to each REMIC Pool and each Grantor Trust Pool on a calendar year and an accrual
basis.
(h) Following the Startup Day for each REMIC Pool, the Trustee
shall not (except as contemplated by SECTION 2.03) accept any contributions of
assets to any REMIC Pool unless it shall have received an Opinion of Counsel (at
the expense of the party seeking to cause such contribution) to the effect that
the inclusion of such assets in such REMIC Pool will not result in an Adverse
REMIC Event in respect of such REMIC Pool or an Adverse Grantor Trust Event with
respect to either Grantor Trust Pool.
(i) None of the Master Servicers, the Special Servicers, the
Trustee or any Fiscal Agent shall consent to or, to the extent it is within the
control of such Person, permit: (i) the sale or disposition of any Mortgage Loan
(except in connection with (A) a breach of any representation or warranty
regarding any Mortgage Loan set forth in or made pursuant to the related
Mortgage Loan Purchase Agreement, (B) the foreclosure, default or reasonably
foreseeable material default of a Mortgage Loan, including the sale or other
disposition of a Mortgaged Property acquired by foreclosure, deed in lieu of
foreclosure or otherwise, (C) the bankruptcy of any REMIC Pool, or (D) the
termination of the Trust pursuant to ARTICLE IX of this Agreement); (ii) the
sale or disposition of any investments in any Account for gain; or (iii) the
acquisition of any assets for the Trust (other than a Mortgaged Property
acquired through foreclosure, deed in lieu of foreclosure or otherwise in
respect of a defaulted Mortgage Loan, other than a Replacement Mortgage Loan
substituted for a Deleted Mortgage Loan and other than Permitted Investments
acquired in connection with the investment of funds in an Account or an interest
in a single member limited liability company, as provided in SECTION 3.16); in
any event unless it has received an Opinion of Counsel (at the expense of the
party seeking to cause such sale, disposition, or acquisition) to the effect
that such sale, disposition, or acquisition will not result in an Adverse REMIC
Event in respect of any REMIC Pool or an Adverse Grantor Trust Event with
respect to either Grantor Trust Pool.
(j) Except as otherwise permitted by SECTION 3.17(a), none of the
Master Servicers, the Special Servicers or the Trustee shall enter into any
arrangement by which any REMIC Pool will receive a fee or other compensation for
services or, to the extent it is within the control of such Person, permit any
REMIC Pool to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code. At all times as may be required by the Code,
each of the respective parties hereto (to the extent it is within its control)
shall ensure that substantially all of the assets of each REMIC Pool will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) Within 30 days after the related Startup Day, the Trustee
shall prepare and file with the IRS, with respect to each REMIC Pool, IRS Form
8811 "Information Return for Real Estate Mortgage Investment Conduits (REMICs)
and Issuers of Collateralized Debt Obligations".
-246-
(l) The parties intend that the portion of the Trust Fund
consisting of Post-ARD Additional Interest on the ARD Mortgage Loans and the
Class V Sub-Account shall constitute, and that the affairs of such portion of
the Trust Fund shall be conducted so as to qualify as, a Grantor Trust, and the
provisions hereof shall be interpreted consistently with this intention. In
addition, the parties intend that the portion of the Trust Fund consisting of
the Loan REMIC Residual Interest, the REMIC I Residual Interest, the REMIC II
Residual Interest and the REMIC III Residual Interest shall constitute, and the
affairs of such portion of the Trust Fund shall be conducted so as to qualify
as, a Grantor Trust, and the provisions hereof shall be interpreted consistently
with this intention. The Trustee shall also perform on behalf of each Grantor
Trust Pool all reporting and other tax compliance duties that are the
responsibility of such Grantor Trust Pool under the Code or any compliance
guidance issued by the IRS or any state or local taxing authorities. The parties
also intend that the portion of the Trust Fund consisting of the Paradise Island
Reserve Fund shall constitute, and the affairs of such portion of the Trust Fund
shall be conducted so as to qualify as, an "outside reserve fund" within the
meaning of Treasury regulation section 1.860G-2(h) and the provisions hereof
shall be interpreted consistently with this intention. The Trustee shall also
perform on behalf of the Paradise Island Reserve Fund all reporting and other
tax compliance duties with respect to the Paradise Island Reserve Fund required
pursuant to a change in the Code or any compliance guidance issued by the IRS or
any state or local taxing authority. The expenses of preparing and filing such
returns shall be borne by the Trustee.
SECTION 10.02. Depositor, Master Servicers, Special Servicers and
Fiscal Agent to Cooperate with Trustee.
(a) The Depositor shall provide or cause to be provided to the
Trustee, within 10 days after the Closing Date, all information or data that the
Trustee reasonably determines to be relevant for tax purposes as to the
valuations and issue prices of the Certificates, including the price, yield,
prepayment assumption and projected cash flow of the Certificates.
(b) The Master Servicers, the Special Servicers and any Fiscal
Agent each shall furnish such reports, certifications and information in its
possession, and access to such books and records maintained thereby, as may
relate to the Certificates or the Trust Fund and as shall be reasonably
requested by the Trustee in order to enable it to perform its duties under this
ARTICLE X.
-247-
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the mutual
agreement of the parties hereto, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provision herein which may be inconsistent with any other
provision herein or to correct any error, (iii) to make any other provisions
with respect to matters or questions arising hereunder which shall not be
inconsistent with the then existing provisions hereof, (iv) as evidenced by an
Opinion of Counsel delivered to the Trustee, the Master Servicers and the
Special Servicers, to relax or eliminate (A) any requirement hereunder imposed
by the REMIC Provisions (if the REMIC Provisions are amended or clarified such
that any such requirement may be relaxed or eliminated) or (B) any transfer
restriction imposed on the Certificates pursuant to SECTION 5.02(b) or SECTION
5.02(c) (if applicable law is amended or clarified such that any such
restriction may be relaxed or eliminated), (v) as evidenced by an Opinion of
Counsel delivered to the Trustee, either (X) to comply with any requirements
imposed by the Code or any successor or amendatory statute or any temporary or
final regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to any REMIC
Pool or either Grantor Trust Pool at least from the effective date of such
amendment, or (Y) to avoid the occurrence of a prohibited transaction or to
reduce the incidence of any tax that would arise from any actions taken with
respect to the operation of any REMIC Pool or either Grantor Trust Pool, (vi)
subject to Section 5.02(d)(iv), to modify, add to or eliminate any of the
provisions of SECTION 5.02(d)(i), (ii) or (iii), or (vii) to avoid an Adverse
Rating Event with respect to any Class of Rated Certificates; PROVIDED that no
such amendment may significantly change the activities of the Trust; and
PROVIDED, FURTHER, that any such amendment for the specific purposes described
in CLAUSE (iii), (iv) or (vii) above shall not adversely affect in any material
respect the interests of any Certificateholder or any third-party beneficiary to
this Agreement or any provision hereof, as evidenced by the Trustee's receipt of
an Opinion of Counsel to that effect (or, alternatively, in the case of a Class
of Rated Certificates, written confirmation from each applicable Rating Agency
to the effect that such amendment shall not result in an Adverse Rating Event
with respect to any Class of Rated Certificates); and PROVIDED, FURTHER, that
with respect to any such amendment for the specific purposes described in CLAUSE
(iii) above, the Trustee shall receive written confirmation from each applicable
Rating Agency to the effect that such amendment shall not result in an Adverse
Rating Event with respect to any Class of Rated Certificates.
(b) This Agreement may also be amended from time to time by the
mutual agreement of the parties hereto, with the consent of the Holders of
Certificates entitled to not less than 51% of the Voting Rights allocated to all
of the Classes that are materially affected by the amendment, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; PROVIDED, HOWEVER, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received or
advanced on Mortgage Loans and/or REO Properties which are required to be
distributed on any Certificate, without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as
-248-
described in CLAUSE (i) above, without the consent of the Holders of all
Certificates of such Class, (iii) modify the provisions of this SECTION 11.01 or
the definition of "Servicing Standard", without the consent of the Holders of
all Certificates then outstanding, (iv) significantly change the activities of
the Trust, without the consent of the Holders of Certificates entitled to not
less than 51% of all the Voting Rights (not taking into account Certificates
held by the Depositor or any of its Affiliates or agents), or (v) adversely
affect in any material respect the interests of any third-party beneficiary to
this Agreement or any provision herein, without the consent of such third-party
beneficiary. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this SECTION 11.01,
Certificates registered in the name of the Depositor or any Affiliate of the
Depositor shall be entitled to the same Voting Rights with respect to the
matters described above as they would if registered in the name of any other
Person.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee, the Master Servicers and the Special Servicers shall not consent to any
amendment to this Agreement unless each of them shall first have obtained or
been furnished with an Opinion of Counsel to the effect that neither such
amendment nor the exercise of any power granted to any party hereto in
accordance with such amendment will result in an Adverse REMIC Event with
respect to any REMIC Pool or an Adverse Grantor Trust Event with respect to
either Grantor Trust Pool.
(d) Promptly after the execution and delivery of any amendment by
all parties thereto, the Trustee shall send a copy thereof to each
Certificateholder and to each Rating Agency.
(e) It shall not be necessary for the consent of
Certificateholders under this SECTION 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization, execution and delivery thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(f) The Trustee may but shall not be obligated to enter into any
amendment pursuant to this SECTION 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
(g) The cost of any Opinion of Counsel to be delivered pursuant to
SECTION 11.01(a) or (c) shall be borne by the Person seeking the related
amendment, except that if the Trustee requests any amendment of this Agreement
that it reasonably believes protects or is in furtherance of the rights and
interests of Certificateholders, the cost of any Opinion of Counsel required in
connection therewith pursuant to SECTION 11.01(a) or (c) shall be payable out of
the Distribution Account.
SECTION 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Trustee at the expense of the Trust (payable out of the
Distribution Account), but only if (i) a Master Servicer or Special Servicer, as
applicable, determines in its reasonable good faith judgment, that such
recordation materially and beneficially affects the interests of the
Certificateholders and so informs the Trustee in writing and (ii) the
Controlling Class Representative consents.
-249-
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any Mortgage
Loan, unless, with respect to any suit, action or proceeding upon or under or
with respect to this Agreement, such Holder previously shall have given to the
Trustee a written notice of default hereunder, and of the continuance thereof,
as hereinbefore provided, and unless also (except in the case of a default by
the Trustee) the Holders of Certificates entitled to at least 25% of the Voting
Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatsoever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of any other Holders of Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder (which priority
or preference is not otherwise provided for herein), or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this SECTION 11.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance
with the substantive laws of the State of New York applicable to agreements made
and to be performed entirely in said State, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws. The parties hereto intend that the provisions of Section 5-1401 of the New
York General Obligations Law shall apply to this Agreement.
-250-
SECTION 11.05. Notices.
Any communications provided for or permitted hereunder shall be in
writing (including by telecopy) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given when delivered to or, in the case of
telecopy notice, when received: (i) in the case of the Depositor, Credit Suisse
First Boston Mortgage Securities Corp., 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxx Xxxxx, telecopy number: (000) 000-0000; (ii) in
the case of the General Master Servicer, KeyCorp Real Estate Capital Markets,
Inc. d/b/a Key Commercial Mortgage, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx,
Xxxxxxxx 00000, telecopy number: (000) 000-0000, Attention: X.X. Xxxxx (with a
copy to Xxxxxx X. Xxxxx, KeyBank National Association, 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000, telecopy: (000) 000-0000); (iii) in the case of the
General Special Servicer, ARCap Special Servicing, Inc., 0000 X. XxxXxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, telecopy number (000) 000-0000,
Attention: Xxxxx Xxxxxxx (with a copy to Xxxxx Xxxxxx, ARCap Special Servicing,
Inc., 0000 X. XxxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, telecopy
number (000) 000-0000); (iv) in the case of the Trustee, Xxxxx Fargo Bank
Minnesota, N.A., to the Corporate Trust Office, telecopy number (000) 000-0000;
(v) in the case of the Co-op Master Servicer and the Co-op Special Servicer,
0000 Xxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxxx Xxxxx, Real
Estate Master Servicing, in the case of the Co-op Master Servicer, and Xxxxxxxx
Xxxxx, Real Estate Special Servicing, in the case of the Co-op Special Servicer,
telecopy number: (000) 000-0000; (vi) in the case of the NCBCC Performance
Guarantor and the NCBFSB Performance Guarantor, National Consumer Cooperative
Bank, 0000 Xxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx Xxxxxxxx,
telecopy number: 000-000-0000; (vii) in the case of the Rating Agencies, (A)
Xxxxx'x Investors Service Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Commercial MBS Monitoring Department, telecopy number (000) 000-0000
and (B) Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: CMBS
Surveillance Department, telecopy number: (000) 000-0000; (viii) in the case of
any Mortgage Loan Seller, the address for notices to such Mortgage Loan Seller
under the related Mortgage Loan Purchase Agreement; and (ix) in the case of the
Column Performance Guarantor, the address for notices to the Column Performance
Guarantor under the Column Performance Guarantee; or as to each such Person such
other address and/or telecopy number as may hereafter be furnished by such
Person to the parties hereto in writing. Any communication required or permitted
to be delivered to a Certificateholder shall be deemed to have been duly given
when mailed first class, postage prepaid, to the address of such Holder as shown
in the Certificate Register.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenant(s), agreement(s), provision(s) or term(s) shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Certificates or the rights of the Holders
thereof.
-251-
SECTION 11.07. Successors and Assigns; Beneficiaries.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective successors and assigns and,
as third party beneficiaries (with all right to enforce the obligations
hereunder intended for their benefit as if a party hereto), the Underwriters,
the Designated Sub-Servicers and the non-parties referred to in SECTIONS 6.03
and 8.05, and all such provisions shall inure to the benefit of the
Certificateholders. No other person, including any Borrower, shall be entitled
to any benefit or equitable right, remedy or claim under this Agreement.
SECTION 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
SECTION 11.09. Notices to and from the Rating Agencies and the
Depositor.
(a) The Trustee shall promptly provide notice to each Rating
Agency and the Depositor with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been
cured;
(iii) the resignation, termination, merger or consolidation of a
Master Servicer or Special Servicer and the appointment of a successor;
(iv) the appointment, resignation or removal of a Fiscal Agent;
(v) any change in the location of the Distribution Account, the
Interest Reserve Account or the Excess Liquidation Proceeds Account;
(vi) any repurchase or substitution of a Mortgage Loan by a
Mortgage Loan Seller, the Column Performance Guarantor, the NCBCC
Performance Guarantor or the NCBFSB Performance Guarantor as contemplated
by SECTION 2.03; and
(vii) the final payment to any Class of Certificateholders (or, in
the case of S&P, on all the Certificates).
(b) Each Master Servicer shall promptly provide notice to each
Rating Agency and the Depositor with respect to each of the following of which
it has actual knowledge:
(i) the resignation or removal of the Trustee and the appointment
of a successor; and
(ii) any change in the location of its Collection Account.
-252-
(c) Each of the Master Servicers and Special Servicers shall
furnish each Rating Agency such information with respect to the Mortgage Loans
as such Rating Agency shall reasonably request and which such Master Servicer or
Special Servicer, as the case may be, can reasonably provide to the extent
consistent with applicable law and the related Mortgage Loan Documents and
without waiving any attorney-client privilege relating to such information. In
any event, each Master Servicer and Special Servicer shall notify each Rating
Agency with respect to each of the following events of which it has actual
knowledge and which involves a Mortgage Loan as to which it is the applicable
Master Servicer or Special Servicer, as the case may be:
(i) any change in the lien priority of the Mortgage securing any
Mortgage Loan;
(ii) any assumption of, or release or substitution of collateral
for, a Mortgage Loan that represents greater than 2% of the then aggregate
Stated Principal Balance of the Mortgage Pool; and
(iii) any defeasance of a Mortgage Loan or material damage to a
Mortgaged Property.
(d) Each of the Master Servicers and Special Servicers shall
promptly furnish (in hard copy format or through use of a Master Servicer's
internet website), to each Rating Agency copies of the following items (in each
case, at or about the same time that it delivers or causes the delivery of such
item to the Trustee):
(i) each of its Annual Performance Certifications;
(ii) each of its Annual Accountants' Reports; and
(iii) each report prepared pursuant to SECTION 3.09(e).
(e) The Trustee shall promptly deliver or otherwise make available
to each Rating Agency (in hard copy format or through use of the Trustee's
internet website) a copy of each Certificateholder Report forwarded to the
Holders of the Certificates (in each case, at or about the same time that it
delivers such Certificateholder Report to such Holders). Any Restricted Servicer
Reports delivered electronically as aforesaid shall be accessible on the
Trustee's internet website only with the use of a password, which shall be
provided by the Trustee to each Rating Agency.
(f) The parties intend that each Rating Agency provide to the
Trustee, upon request, a listing of the then-current rating (if any) assigned by
such Rating Agency to each Class of Certificates then outstanding.
SECTION 11.10. Notices to Controlling Class Representative.
The Trustee, the Master Servicers and the Special Servicers shall each
deliver to the Controlling Class Representative a copy of each notice or other
item of information such Person is required to deliver to the Rating Agencies
pursuant to SECTION 11.09, in each case simultaneously with the delivery thereof
to the Rating Agencies, to the extent not already delivered pursuant to this
Agreement.
-253-
SECTION 11.11. Complete Agreement.
This Agreement embodies the complete agreement among the parties and
may not be varied or terminated except by a written agreement conforming to the
provisions of SECTION 11.01. All prior negotiations or representations of the
parties are merged into this Agreement and shall have no force or effect unless
expressly stated herein.
-254-
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized, in each
case as of the day and year first above written.
XXXXX FARGO BANK MINNESOTA, N.A.
Solely in its capacity as Trustee
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.
Depositor
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
KEYCORP REAL ESTATE CAPITAL MARKETS, INC.
d/b/a KEY COMMERCIAL MORTGAGE
General Master Servicer
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
ARCAP SPECIAL SERVICING, INC.
General Special Servicer
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
NCB, FSB
Co-op Master Servicer
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
NATIONAL CONSUMER COOPERATIVE BANK
Co-op Special Servicer
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxx, personally known to me to be a
Vice President of XXXXX FARGO BANK MINNESOTA, N.A., one of the entities that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 15th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxx, known to me to be a Vice
President of CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITES CORP., one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of such entity, and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF MISSOURI )
) ss.:
COUNTY OF XXXXXXX )
On the 14th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxxx X. Xxxxx, known to me to be a Senior Vice
President of KEYCORP REAL ESTATE CAPITAL MARKETS, INC. d/b/a KEY COMMERCIAL
MORTGAGE, one of the entities that executed the within instrument, and also
known to me to be the person who executed it on behalf of such entity, and
acknowledged to me that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxx X. Xxxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 15th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxx X. Xxxxxxx, known to me to be a President
of ARCAP SPECIAL SERVICING, INC., one of the entities that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such entity, and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxx, known to me to be a Vice
President of NATIONAL CONSUMER COOPERATIVE BANK, one of the entities that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such entity, and acknowledged to me that such entity
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 16th day of May 2002, before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxx, known to me to be a Vice
President of NCB, FSB, one of the entities that executed the within instrument,
and also known to me to be the person who executed it on behalf of such entity,
and acknowledged to me that such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [A-X] [A-SP] [A-Y] CERTIFICATES
CLASS [A-X] [A-SP] [A-Y] COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES 2002-CKN2
This is one of a series of commercial mortgage pass-through certificates
(collectively, the "Certificates"), issued in multiple classes (each, a
"Class"), which series of Certificates evidences the entire beneficial ownership
interest in a trust fund (the "Trust Fund") consisting primarily of a pool of
multifamily and commercial mortgage loans (the "Mortgage Loans"), such pool
being formed and sold by:
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Pass-Through Rate: Variable Class Notional Amount of the Class [A-X]
[A-SP] [A-Y] Certificates as of the
Closing Date:
$________________
Closing Date: May 16, 2002 Initial Certificate Notional Amount of
this Certificate as of the Closing Date:
First Distribution Date: June 17, 2002 $________________
General Master Servicer: Aggregate Stated Principal Balance of the
KeyCorp Real Estate Capital Markets, Mortgage Loans as of the Closing Date
Inc. d/b/a Key Commercial Mortgage ("Initial Pool Balance"): $918,137,952
General Special Servicer:
ARCap Special Servicing, Inc.
Co-op Master Servicer: Trustee:
NCB, FSB Xxxxx Fargo Bank Minnesota, N.A.
Co-op Special Servicer:
National Consumer Cooperative Bank
Certificate No. [A-X] [A-SP] [A-Y]-__ CUSIP No.: _____________
Common Code: _____________
ISIN No.: _____________
A-1-1
[FOR CLASS A-X AND CLASS A-SP CERTIFICATES--UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ANY AGENT THEREOF FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
ANY RESALE, PLEDGE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE OR ANY
INTEREST HEREIN WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A
TRANSACTION WHICH DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND WHICH
IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE (A) TO ANY
RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN OR ARRANGEMENT THAT IS SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
(B) TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR
SUCH INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN OR
ARRANGEMENT, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CREDIT
SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., XXXXX FARGO BANK MINNESOTA, N.A.,
KEYCORP REAL ESTATE CAPITAL MARKETS, INC. d/b/a KEY COMMERCIAL MORTGAGE, ARCAP
SPECIAL SERVICING, INC., NCB, FSB, NATIONAL CONSUMER COOPERATIVE BANK, OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR ANY OF THE UNDERLYING
MORTGAGE LOANS IS GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES OR ANY OTHER PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
A-1-2
THE OUTSTANDING CERTIFICATE NOTIONAL AMOUNT HEREOF AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ABOVE. THIS CERTIFICATE DOES NOT HAVE A CERTIFICATE PRINCIPAL
BALANCE AND WILL NOT ENTITLE THE HOLDER HEREOF TO DISTRIBUTIONS OF PRINCIPAL.
[LEGEND FOR REGULATION S GLOBAL CERTIFICATE FOR CLASS A-X AND CLASS A-SP
CERTIFICATES--PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF (A) THE
COMMENCEMENT OF THE OFFERING OF THE CERTIFICATES AND (B) MAY 16, 2002, THIS
CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED. NO
BENEFICIAL OWNERS OF THIS CERTIFICATE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN
DELIVERED PURSUANT TO THE TERMS OF THE
POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.]
This certifies that [________________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
notional amount of this Certificate (its "Certificate Notional Amount") as of
the Closing Date by the aggregate notional amount of all the Class [A-X] [A-SP]
[A-Y] Certificates (their "Class Notional Amount") as of the Closing Date) in
that certain beneficial ownership interest in the Trust Fund evidenced by all
the Class [A-X] [A-SP] [A-Y] Certificates. The Trust Fund was created and the
Certificates were issued pursuant to a
Pooling and Servicing Agreement, dated as
of May 16, 2002 (the "Agreement"), among Credit Suisse First Boston Mortgage
Securities Corp. as depositor (the "Depositor", which term includes any
successor entity under the Agreement), KeyCorp Real Estate Capital Markets, Inc.
d/b/a Key Commercial Mortgage as general master servicer (in such capacity, the
"General Master Servicer", which term includes any successor entity under the
Agreement), ARCap Special Servicing, Inc. as general special servicer (in such
capacity, the "General Special Servicer", which term includes any successor
entity under the Agreement), NCB, FSB as co-op master servicer (in such
capacity, the "Co-op Master Servicer", which term includes any successor entity
under the Agreement), National Consumer Cooperative Bank as co-op special
servicer (in such capacity, the "Co-op Special Servicer", which term includes
any successor entity under the Agreement), and Xxxxx Fargo Bank Minnesota, N.A.
as trustee (the "Trustee", which term includes any successor entity under the
Agreement), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, capitalized terms used herein
have the respective meanings assigned thereto in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, beginning on the First
Distribution Date specified above, distributions will be made on that date (the
"Distribution Date") each month that is the fourth Business Day following the
Determination Date in such month, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), in an
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to all the Holders of the
Class [A-X] [A-SP] [A-Y] Certificates on the applicable Distribution Date
pursuant to the Agreement. All distributions made under the Agreement on this
Certificate will be made by the Trustee by wire transfer of immediately
available funds to the account of the Person entitled thereto at a bank or
A-1-3
other entity having appropriate facilities therefor, if such Certificateholder
shall have provided the Trustee with wiring instructions no later than the
related Record Date (which wiring instructions may be in the form of a standing
order applicable to all subsequent distributions), or otherwise by check mailed
to the address of such Certificateholder as it appears in the Certificate
Register. Notwithstanding the foregoing, the final distribution on this
Certificate will be made in like manner, but only upon presentation and
surrender of this Certificate at the offices of the Certificate Registrar or
such other location specified in the notice to the Holder hereof of such final
distribution.
The Certificates are limited in right of distribution to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Distribution Account, the Collection Accounts
and, if established, the REO Accounts may be made from time to time for purposes
other than, and, in certain cases, prior to, distributions to
Certificateholders, such purposes including the reimbursement of advances made,
or certain expenses incurred, with respect to the Mortgage Loans and the payment
of interest on such advances and expenses.
This Certificate is issuable in fully registered form only without
coupons. As provided in the Agreement and subject to certain limitations therein
set forth, this Certificate is exchangeable for new Certificates of the same
Class in authorized denominations evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No transfer, sale, pledge or other disposition of this Certificate or
any interest herein shall be made unless that 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 t