EXECUTION COPY
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XXXXXX XXXXXXX CAPITAL I INC.
as Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer,
X.X. XXXXXX COMPANY, INC.,
as Special Servicer,
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee,
and
LASALLE BANK NATIONAL ASSOCIATION,
as Paying Agent, Certificate Registrar, Authenticating Agent and Custodian
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2006
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2006-HQ9
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................................................. 16
Section 1.2 Calculations Respecting Mortgage Loans...................................................... 98
Section 1.3 Calculations Respecting Accrued Interest.................................................... 99
Section 1.4 Interpretation.............................................................................. 99
Section 1.5 ARD Loans................................................................................... 99
Section 1.6 Certain Matters with respect to Loan Pairs and A/B Mortgage Loans........................... 100
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
Section 2.1 Conveyance of Mortgage Loans................................................................ 102
Section 2.2 Acceptance by Trustee and Custodian......................................................... 106
Section 2.3 Sellers' Repurchase of Mortgage Loans for Material Document Defects and Material Breaches of
Representations and Warranties.............................................................. 108
Section 2.4 Representations and Warranties.............................................................. 114
Section 2.5 Conveyance of Interests..................................................................... 115
Section 2.6 Certain Matters Relating to Non-Serviced Mortgage Loans and the 000 00xx Xxxxxx X Note...... 115
ARTICLE III
THE CERTIFICATES
Section 3.1 The Certificates............................................................................ 116
Section 3.2 Registration................................................................................ 117
Section 3.3 Transfer and Exchange of Certificates....................................................... 117
Section 3.4 Mutilated, Destroyed, Lost or Stolen Certificates........................................... 124
Section 3.5 Persons Deemed Owners....................................................................... 124
Section 3.6 Access to List of Certificateholders' Names and Addresses................................... 124
Section 3.7 Book-Entry Certificates..................................................................... 125
Section 3.8 Notices to Clearing Agency.................................................................. 128
Section 3.9 Definitive Certificates..................................................................... 128
ARTICLE IV
ADVANCES
Section 4.1 P&I Advances by Master Servicer............................................................. 129
Section 4.1A P&I Advances with Respect to Non-Serviced Mortgage Loans and Serviced Pari Passu Mortgage
Loans....................................................................................... 130
Section 4.2 Servicing Advances.......................................................................... 131
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Section 4.3 Advances by the Trustee..................................................................... 132
Section 4.4 Evidence of Nonrecoverability............................................................... 132
Section 4.5 Interest on Advances; Calculation of Outstanding Advances with Respect to a Mortgage Loan... 133
Section 4.6 Reimbursement of Advances and Advance Interest.............................................. 134
ARTICLE V
ADMINISTRATION OF THE TRUST
Section 5.1 Collections................................................................................. 136
Section 5.2 Application of Funds in the Certificate Account and Interest Reserve Account................ 141
Section 5.3 Distribution Account and Reserve Account.................................................... 151
Section 5.3A DCT Portfolio C Note Distribution Account................................................... 154
Section 5.3B 000 00xx Xxxxxx X Note Distribution Account................................................. 156
Section 5.4 Paying Agent Reports........................................................................ 158
Section 5.4A Statements to Certificateholders; Certain Other Reports Regarding the DCT Portfolio C Note.. 160
Section 5.4B Statements to Certificateholders; Certain Other Reports Regarding the 000 00xx Xxxxxx X
Note........................................................................................ 163
Section 5.5 Paying Agent Tax Reports.................................................................... 166
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions Generally..................................................................... 167
Section 6.2 REMIC I..................................................................................... 167
Section 6.3 REMIC II.................................................................................... 170
Section 6.4 Reserved.................................................................................... 171
Section 6.5 REMIC III and Excess Interest Grantor Trust................................................. 171
Section 6.5A Distributions on the Class DP Certificates.................................................. 180
Section 6.5B Distributions on the Class ST Certificates.................................................. 181
Section 6.6 Allocation of Realized Losses, Expense Losses and Shortfalls Due to Nonrecoverability....... 183
Section 6.7 Prepayment Interest Shortfalls and Net Aggregate Prepayment Interest Shortfalls............. 187
Section 6.8 Adjustment of Servicing Fees................................................................ 188
Section 6.9 Appraisal Reductions........................................................................ 188
Section 6.10 Compliance with Withholding Requirements.................................................... 190
Section 6.11 Prepayment Premiums......................................................................... 190
Section 6.12 Calculations with Respect to the 000 00xx Xxxxxx X Note and Class ST Certificates........... 193
Section 6.13 Other Distributions......................................................................... 194
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ARTICLE VII
CONCERNING THE TRUSTEE, THE CUSTODIAN, THE PAYING AGENT AND
THE LUXEMBOURG PAYING AGENT
Section 7.1 Duties of the Trustee, the Custodian and the Paying Agent................................... 197
Section 7.2 Certain Matters Affecting the Trustee, the Custodian and the Paying Agent................... 198
Section 7.3 The Trustee and the Paying Agent Not Liable for Certificates or Interests or Mortgage
Loans....................................................................................... 200
Section 7.4 The Trustee and the Paying Agent May Own Certificates....................................... 202
Section 7.5 Eligibility Requirements for the Trustee and the Paying Agent............................... 202
Section 7.6 Resignation and Removal of the Trustee or the Paying Agent.................................. 202
Section 7.7 Successor Trustee or Paying Agent........................................................... 204
Section 7.8 Merger or Consolidation of Trustee, Custodian or Paying Agent............................... 205
Section 7.9 Appointment of Co-Trustee, Separate Trustee, Agents or Custodian............................ 205
Section 7.10 Authenticating Agents....................................................................... 207
Section 7.11 Indemnification of Trustee, the Custodian and the Paying Agent.............................. 208
Section 7.12 Fees and Expenses of Trustee and the Paying Agent........................................... 210
Section 7.13 Collection of Moneys........................................................................ 210
Section 7.14 Trustee To Act; Appointment of Successor.................................................... 211
Section 7.15 Notification to Holders..................................................................... 213
Section 7.16 Representations and Warranties of the Trustee, the Custodian and the Paying Agent........... 213
Section 7.17 Fidelity Bond and Errors and Omissions Insurance Policy Maintained by the Trustee, the
Custodian and the Paying Agent.............................................................. 215
Section 7.18 Appointment of Luxembourg Paying Agent; Notification to Certificateholders.................. 215
ARTICLE VIII
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 8.1 Servicing Standard; Servicing Duties........................................................ 216
Section 8.1A Servicing of the DCT Portfolio A/B Mortgage Loan............................................ 219
Section 8.1B Servicing of the 000 00xx Xxxxxx A/B Mortgage Loan.......................................... 220
Section 8.2 Fidelity Bond and Errors and Omissions Insurance Policy Maintained by the Master Servicer... 221
Section 8.3 Master Servicer's General Power and Duties.................................................. 221
Section 8.4 Primary Servicing and Sub-Servicing......................................................... 228
Section 8.5 Servicers May Own Certificates.............................................................. 230
Section 8.6 Maintenance of Hazard Insurance, Other Insurance, Taxes and Other........................... 231
Section 8.7 Enforcement of Due-On-Sale Clauses; Assumption Agreements; Due-On-Encumbrance Clause........ 233
Section 8.8 Trustee and Custodian to Cooperate; Release of Custodian Mortgage Files..................... 239
Section 8.9 Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee
for the Benefit of the Certificateholders................................................... 240
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Section 8.10 Servicing Compensation...................................................................... 241
Section 8.11 Master Servicer Reports; Account Statements................................................. 242
Section 8.12 Reserved.................................................................................... 244
Section 8.13 Reserved.................................................................................... 244
Section 8.14 CMSA Operating Statement Analysis Reports Regarding the Mortgaged Properties................ 244
Section 8.15 Other Available Information and Certain Rights of the Master Servicer....................... 246
Section 8.16 Rule 144A Information....................................................................... 248
Section 8.17 Inspections................................................................................. 249
Section 8.18 Modifications, Waivers, Amendments, Extensions and Consents................................. 249
Section 8.19 Specially Serviced Mortgage Loans........................................................... 253
Section 8.20 Representations, Warranties and Covenants of the Master Servicer............................ 253
Section 8.21 Merger or Consolidation..................................................................... 255
Section 8.22 Resignation of Master Servicer.............................................................. 255
Section 8.23 Assignment or Delegation of Duties by Master Servicer....................................... 256
Section 8.24 Limitation on Liability of the Master Servicer and Others................................... 256
Section 8.25 Indemnification; Third-Party Claims......................................................... 259
Section 8.26 Reserved.................................................................................... 262
Section 8.27 Compliance with REMIC Provisions and Grantor Trust Provisions............................... 262
Section 8.28 Termination................................................................................. 262
Section 8.29 Procedure Upon Termination.................................................................. 265
Section 8.30 Operating Adviser Contact with Master Servicer and Special Servicer......................... 268
Section 8.31 Certain Matters with Respect to the G&L Portfolio Mortgage Loan............................. 268
Section 8.32 Swap Contract............................................................................... 272
ARTICLE IX
ADMINISTRATION AND SERVICING OF SPECIALLY SERVICED MORTGAGE LOANS BY
SPECIAL SERVICER
Section 9.1 Duties of Special Servicer.................................................................. 274
Section 9.2 Fidelity Bond and Errors and Omissions Insurance Policy of Special Servicer................. 276
Section 9.3 Sub-Servicers............................................................................... 276
Section 9.4 Special Servicer General Powers and Duties.................................................. 276
Section 9.5 "Due-on-Sale" Clauses; Assignment and Assumption Agreements; Modifications of Specially
Serviced Mortgage Loans; Due-On-Encumbrance Clauses......................................... 279
Section 9.6 Release of Mortgage Files................................................................... 284
Section 9.7 Documents, Records and Funds in Possession of Special Servicer To Be Held for the Trustee... 285
Section 9.8 Representations, Warranties and Covenants of the Special Servicer........................... 286
Section 9.9 Standard Hazard, Flood and Comprehensive General Liability Insurance Policies............... 287
Section 9.10 Presentment of Claims and Collection of Proceeds............................................ 289
Section 9.11 Compensation to the Special Servicer........................................................ 289
Section 9.12 Realization Upon Defaulted Mortgage Loans................................................... 291
Section 9.13 Foreclosure................................................................................. 293
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Section 9.14 Operation of REO Property................................................................... 293
Section 9.15 Sale of REO Property........................................................................ 297
Section 9.16 Realization on Collateral Security.......................................................... 298
Section 9.17 DCT Industrial Portfolio C Note Majority Holder Purchase Option............................. 298
Section 9.18 000 00xx Xxxxxx X Note Majority Holder Purchase Option...................................... 299
Section 9.19 Reserved.................................................................................... 299
Section 9.20 Merger or Consolidation..................................................................... 299
Section 9.21 Resignation of Special Servicer............................................................. 299
Section 9.22 Assignment or Delegation of Duties by Special Servicer...................................... 301
Section 9.23 Limitation on Liability of the Special Servicer and Others.................................. 301
Section 9.24 Indemnification; Third-Party Claims......................................................... 303
Section 9.25 Reserved.................................................................................... 305
Section 9.26 Special Servicer May Own Certificates....................................................... 305
Section 9.27 Tax Reporting............................................................................... 305
Section 9.28 Application of Funds Received............................................................... 306
Section 9.29 Compliance with REMIC Provisions and Grantor Trust Provisions............................... 306
Section 9.30 Termination................................................................................. 306
Section 9.31 Procedure Upon Termination.................................................................. 310
Section 9.32 Certain Special Servicer Reports............................................................ 311
Section 9.33 Special Servicer to Cooperate with the Master Servicer, the Trustee and Paying Agent........ 314
Section 9.34 Reserved.................................................................................... 315
Section 9.35 Reserved.................................................................................... 315
Section 9.36 Sale of Defaulted Mortgage Loans............................................................ 315
Section 9.37 Operating Adviser; Elections................................................................ 318
Section 9.38 Limitation on Liability of Operating Adviser................................................ 320
Section 9.39 Duties of Operating Adviser................................................................. 320
Section 9.40 Rights of the Holder of a B Note............................................................ 322
Section 9.41 Appointment of Class DP Certificateholder Representative; Powers of Class DP
Certificateholder Representative............................................................ 323
Section 9.42 Appointment of Class ST Certificateholder Representative; Powers of Class ST
Certificateholder Representative............................................................ 326
ARTICLE X
PURCHASE AND TERMINATION OF THE TRUST
Section 10.1 Termination of Trust Upon Repurchase or Liquidation of All Mortgage Loans................... 327
Section 10.2 Procedure Upon Termination of Trust......................................................... 330
Section 10.3 Additional Trust Termination Requirements................................................... 331
ARTICLE XI
RIGHTS OF CERTIFICATEHOLDERS
Section 11.1 Limitation on Rights of Holders............................................................. 333
Section 11.2 Access to List of Holders................................................................... 334
Section 11.3 Acts of Holders of Certificates............................................................. 334
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ARTICLE XII
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 12.1 REMIC Administration........................................................................ 335
Section 12.2 Prohibited Transactions and Activities...................................................... 341
Section 12.3 Modifications of Mortgage Loans............................................................. 341
Section 12.4 Liability with Respect to Certain Taxes and Loss of REMIC Status............................ 342
Section 12.5 Class A-4FL Grantor Trust and Excess Interest Grantor Trust................................. 342
ARTICLE XIII
EXCHANGE ACT REPORTING AND REGULATION AB COMPLIANCE
Section 13.1 Intent of the Parties; Reasonableness....................................................... 343
Section 13.2 Information to be Provided by the Master Servicer, the Special Servicer, any Primary
Servicer and the Paying Agent............................................................... 344
Section 13.3 Filing Obligations.......................................................................... 345
Section 13.4 Form 10-D Filings........................................................................... 345
Section 13.5 Form 10-K Filings........................................................................... 347
Section 13.6 Xxxxxxxx-Xxxxx Certification................................................................ 349
Section 13.7 Form 8-K Filings............................................................................ 350
Section 13.8 Form 15 Filing; Incomplete Exchange Act Filings; Amendments to Exchange Act Reports......... 352
Section 13.9 Annual Compliance Statements................................................................ 353
Section 13.10 Annual Reports on Assessment of Compliance with Servicing Criteria.......................... 355
Section 13.11 Annual Independent Public Accountants' Servicing Report..................................... 357
Section 13.12 Indemnification............................................................................. 358
Section 13.13 Amendments.................................................................................. 359
Section 13.14 Exchange Act Report Signatures.............................................................. 359
Section 13.15 Termination of the Paying Agent and Sub-Servicers........................................... 359
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1 Binding Nature of Agreement................................................................. 360
Section 14.2 Entire Agreement............................................................................ 360
Section 14.3 Amendment................................................................................... 360
Section 14.4 GOVERNING LAW............................................................................... 363
Section 14.5 Notices..................................................................................... 364
Section 14.6 Severability of Provisions.................................................................. 364
Section 14.7 Indulgences; No Waivers..................................................................... 364
Section 14.8 Headings Not to Affect Interpretation....................................................... 365
Section 14.9 Benefits of Agreement....................................................................... 365
Section 14.10 Special Notices to the Rating Agencies...................................................... 365
Section 14.11 Counterparts................................................................................ 367
Section 14.12 Intention of Parties........................................................................ 368
Section 14.13 Recordation of Agreement.................................................................... 369
Section 14.14 Rating Agency Monitoring Fees............................................................... 369
Section 14.15 Acknowledgement by Primary Servicer......................................................... 369
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EXHIBITS AND SCHEDULES
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-1A Certificate
EXHIBIT A-3 Form of Class A-2 Certificate
EXHIBIT A-4 Form of Class A-3 Certificate
EXHIBIT A-5 Form of Class A-AB Certificate
EXHIBIT A-6 Form of Class A-4 Certificate
EXHIBIT A-7 Form of Class A-4FL Certificate
EXHIBIT A-8 Form of Class A-M Certificate
EXHIBIT A-9 Form of Class A-J Certificate
EXHIBIT A-10 Form of Class B Certificate
EXHIBIT A-11 Form of Class C Certificate
EXHIBIT A-12 Form of Class D Certificate
EXHIBIT A-13 Form of Class E Certificate
EXHIBIT A-14 Form of Class F Certificate
EXHIBIT A-15 Form of Class G Certificate
EXHIBIT A-16 Form of Class H Certificate
EXHIBIT A-17 Form of Class J Certificate
EXHIBIT A-18 Form of Class K Certificate
EXHIBIT A-19 Form of Class L Certificate
EXHIBIT A-20 Form of Class M Certificate
EXHIBIT A-21 Form of Class N Certificate
EXHIBIT A-22 Form of Class O Certificate
EXHIBIT A-23 Form of Class P Certificate
EXHIBIT A-24 Form of Class Q Certificate
EXHIBIT A-25 Form of Class S Certificate
EXHIBIT A-26 Form of Class T Certificate
EXHIBIT A-27 Form of Class DP Certificate
EXHIBIT A-28 Form of Class ST-A Certificate
EXHIBIT A-29 Form of Class ST-B Certificate
EXHIBIT A-30 Form of Class ST-C Certificate
EXHIBIT A-31 Form of Class ST-D Certificate
EXHIBIT A-32 Form of Class ST-E Certificate
EXHIBIT A-33 Form of Class ST-F Certificate
EXHIBIT A-34 Form of Class R-I Certificate
EXHIBIT A-35 Form of Class R-II Certificate
EXHIBIT A-36 Form of Class R-III Certificate
EXHIBIT A-37 Form of Class X Certificate
EXHIBIT A-38 Form of Class X-MP Certificate
EXHIBIT A-39 Form of Class X-RC Certificate
EXHIBIT B-1 Form of Initial Certification of Custodian (Section 2.2)
EXHIBIT B-2 Form of Final Certification of Custodian (Section 2.2)
EXHIBIT C Form of Request for Release
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EXHIBIT D-1 Form of Transferor Certificate for Transfers to Definitive
Privately Offered Certificates (Section 3.3(c))
EXHIBIT D-2A Form I of Transferee Certificate for Transfers of Definitive
Privately offered Certificates (Section 3.3(c))
EXHIBIT D-2B Form II of Transferee Certificate for Transfers of Definitive
Privately offered Certificates (Section 3.3(c))
EXHIBIT D-3A Form I of Transferee Certificate for Transfers of Interests in
Book-Entry Privately Offered Certificates (Section 3.3(c))
EXHIBIT D-3B Form II of Transferee Certificate for Transfers of Interests in
Book-Entry Privately Offered Certificates (Section 3.3(c))
EXHIBIT E-1 Form of Transfer Affidavit and Agreement (Section 3.3(e))
EXHIBIT E-2 Form of Transfer Affidavit and Agreement (Section 3.3(e))
EXHIBIT F Form of Regulation S Certificate
EXHIBIT G-1 Form of Principal Global Investors, LLC Primary Servicing
Agreement
EXHIBIT G-2 Reserved
EXHIBIT H Form of Exchange Certification
EXHIBIT I Form of Euroclear Bank or Clearstream Bank Certificate
(Section 3.7(d))
EXHIBIT J List of Loans as to Which Excess Servicing Fees Are Paid
("Excess Servicing Fee")
EXHIBIT K-1 Form of Mortgage Loan Purchase Agreement I (LaSalle)
EXHIBIT K-2 Form of Mortgage Loan Purchase Agreement II (MSMC)
EXHIBIT K-3 Form of Mortgage Loan Purchase Agreement III (PCFII)
EXHIBIT L Form of Inspection Report
EXHIBIT M Form of Monthly Certificateholders Reports (Section 5.4(a))
EXHIBIT N Form of CMSA Operating Statement Analysis Report
EXHIBIT O Reserved
EXHIBIT P Reserved
EXHIBIT Q Reserved
EXHIBIT R Reserved
EXHIBIT S-1 Form of Power of Attorney to Master Servicer (Section 8.3(c))
EXHIBIT S-2 Form of Power of Attorney to Special Servicer (Section 9.4(a))
EXHIBIT T Form of Debt Service Coverage Ratio Procedures
EXHIBIT U Form of Assignment and Assumption Submission to Special
Servicer (Section 8.7(a))
EXHIBIT V Form of Additional Lien, Monetary Encumbrance and Mezzanine
Financing Submission Package to the Special Servicer
(Section 8.7(e))
EXHIBIT W Restricted Servicer Reports
EXHIBIT X Unrestricted Servicer Reports
EXHIBIT Y Investor Certificate (Section 5.4(a))
EXHIBIT Z Form of Notice and Certification Regarding Defeasance of
Mortgage Loans
EXHIBIT AA Form of Xxxxx Fargo primary servicing agreement
(Section 8.29(b))
EXHIBIT BB Controlling Class Certificateholder's Reports Checklist
EXHIBIT CC Form of Performance Certification (Section 13.6)
EXHIBIT CC-1 Reporting Servicer Form of Performance Certification
(Section 13.6)
EXHIBIT DD Form of Notice with respect to Non-Serviced Mortgage Loans
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SCHEDULE I LaSalle Loan Schedule
SCHEDULE II MSMC Loan Schedule
SCHEDULE III PCFII Loan Schedule
SCHEDULE IV Reserved
SCHEDULE V Reserved
SCHEDULE VI List of Escrow Accounts Not Currently Eligible Accounts
(Section 8.3(e))
SCHEDULE VII Certain Escrow Accounts for Which a Report Under Section 5.1(g)
is Required
SCHEDULE VIII List of Mortgagors that are Third-Party Beneficiaries Under
Section 2.3(a)
SCHEDULE IX Earn Out Reserves
SCHEDULE X Mortgage Loans Secured by Mortgaged Properties Covered by an
Environmental Insurance Policy
SCHEDULE XI List of Mortgage Loans that have Scheduled Payments after the
end of a Collection Period
SCHEDULE XII Loans that Accrue on an Actual/360 basis, but whose Servicing
Fees Accrue on a 30/360 Basis
SCHEDULE XIII Class A-AB Planned Principal Balance
SCHEDULE XIV Servicing Criteria to be Addressed in Assessment of Compliance
SCHEDULE XV Additional Form 10-D Disclosure
SCHEDULE XVI Additional Form 10-K Disclosure
SCHEDULE XVII Form 8-K Disclosure Information
SCHEDULE XVIII Additional Disclosure Notification
SCHEDULE XIX Seller Sub-Servicers
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THIS POOLING AND SERVICING AGREEMENT is dated as of August 1, 2006
(this "Agreement") between XXXXXX XXXXXXX CAPITAL I INC., a Delaware
corporation, as depositor (the "Depositor"), XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as master servicer (the "Master Servicer"), X.X. XXXXXX COMPANY,
INC., as special servicer (the "Special Servicer"), HSBC BANK USA, NATIONAL
ASSOCIATION, as trustee of the Trust (the "Trustee") and LASALLE BANK NATIONAL
ASSOCIATION, only in its capacity as paying agent (the "Paying Agent") and
certificate registrar.
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire the Mortgage Loans
from Xxxxxx Xxxxxxx Mortgage Capital Inc., as seller ("MSMC"), LaSalle Bank
National Association, as seller ("LaSalle") and Principal Commercial Funding II,
LLC, as seller ("PCFII"), and will be the owner of the Mortgage Loans and the
other property being conveyed by it to the Trustee for inclusion in the Trust
which is hereby created. On the Closing Date, the Depositor will acquire (i) the
REMIC I Regular Interests and the REMIC I Residual Interest as consideration for
its transfer to the Trust of the Majority Mortgage Loans (other than any Excess
Interest payable thereon) and the other property constituting REMIC I; (ii) the
REMIC II Regular Interests and the Class R-II Certificates as consideration for
its transfer of the REMIC I Regular Interests to the Trust; (iii) the REMIC III
Certificates and the Class A-4FL Regular Interest as consideration for its
transfer of the REMIC II Regular Interests to the Trust; (iv) the Class T
Certificates as consideration for its transfer to the Trust of the right to
receive any Excess Interest (other than with respect to the DCT Industrial
Portfolio C Note) (such right, and any amounts on deposit from time to time in
the Excess Interest Sub-account (as hereinafter defined), the "Excess Interest
Grantor Trust"); (v) the Class A-4FL Certificates as consideration for its
transfer of the Class A-4FL Regular Interest and the Swap Contract to the Trust;
(vi) the Class DP Certificates and the Class R-DP Residual Interest as
consideration for its transfer of all rights and interest in the DCT Industrial
Portfolio C Note (including any Excess Interest payable thereon) to the Trust;
and (vii) the Class ST Certificates and the Class R-ST Residual Interest as
consideration for its transfer of all rights and interests in the 000 00xx
Xxxxxx X Note to the Trust. The Depositor has duly authorized the execution and
delivery of this Agreement to provide for the foregoing and the issuance of (A)
the REMIC I Regular Interests and the REMIC I Residual Interest representing in
the aggregate the entire beneficial ownership of REMIC I, (B) the REMIC II
Regular Interests and the Class R-II Certificates representing in the aggregate
the entire beneficial ownership of REMIC II, (C) the REMIC III Certificates and
the Class A-4FL Regular Interest representing in the aggregate the entire
beneficial ownership of REMIC III, (D) the Class T Certificates representing in
the aggregate the entire beneficial interest in the Excess Interest Grantor
Trust, (E) the Class A-4FL Certificates representing in the aggregate the entire
beneficial ownership of the Class A-4FL Grantor Trust; (F) the Class DP
Certificates and the Class R-DP Residual Interest representing in the aggregate
the entire beneficial ownership of the Class DP REMIC and (G) the Class ST
Certificates and the Class R-ST Residual Interest representing in the aggregate
the entire beneficial ownership of the Class ST REMIC. All covenants and
agreements made by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust are for the benefit
of the Holders of the REMIC I Regular Interests, the REMIC II Regular Interests,
the REMIC III Regular Certificates, the Residual Certificates, the Class T
Certificates, the Class A-4FL Certificates, the Class A-4FL
1
Regular Interest, the Swap Counterparty, the Class DP Certificates and the Class
ST Certificates. The parties hereto are entering into this Agreement, and the
Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
The Class A Senior, Class A-M, Class A-J, Class B, Class C, Class D,
Class E and Class F Certificates (collectively, the "Registered Certificates")
will be offered for sale pursuant to the prospectus (the "Prospectus") dated
March 14, 2006, as supplemented by a free writing prospectus dated July 26,
2006, as further supplemented by the free writing prospectuses dated August 8,
2006 (together the "Free Writing Prospectus", and together with the Prospectus,
the "Preliminary Prospectus Supplement"), and as further supplemented by the
final prospectus supplement dated August 8, 2006 (the "Prospectus Supplement",
and together with the Prospectus, the "Final Prospectus Supplement"), and the
Class X, Class X-MP, Class X-RC, Class G, Class H, Class J, Class K, Class L,
Class M, Class N, Class O, Class P, Class Q, Class S, Class T, Class DP and
Class ST Certificates will be offered for sale pursuant to a Private Placement
Memorandum dated August 8, 2006.
REMIC I
Each REMIC I Regular Interest (a "Corresponding REMIC I Regular
Interest") will relate to a specific Majority Mortgage Loan. Each Corresponding
REMIC I Regular Interest (other than the REMIC I MP IO Component Regular
Interest, the REMIC I MP Non-IO Component Regular Interest, the REMIC I RC IO
Component Regular Interest and the REMIC I RC Non-IO Component Regular Interest)
will have a pass-through rate equal to the REMIC I Net Mortgage Rate of the
related Mortgage Loan, an initial principal amount (the initial "Certificate
Balance") equal to the Scheduled Principal Balance as of the Cut-Off Date of the
Mortgage Loan to which the Corresponding REMIC I Regular Interest relates, and a
"latest possible maturity date" set to the Maturity Date of the Majority
Mortgage Loan to which the Corresponding REMIC I Regular Interest relates. Each
of the REMIC I MP IO Component Regular Interest and the REMIC I MP Non-IO
Component Regular Interest (each of which are Corresponding REMIC I Regular
Interests with respect to the Millenium Portfolio Mortgage Loan) will have a
pass-through rate equal to the REMIC I Net Mortgage Rate of, and a "latest
possible maturity date" set to the Maturity Date of, the Millenium Portfolio
Mortgage Loan. The REMIC I MP IO Component Regular Interest and the REMIC I MP
Non-IO Component Regular Interest have an initial Certificate Balance equal to
the principal balance of the Millenium Portfolio IO Component and the Millenium
Portfolio Non-IO Component, respectively, in each case as of the Closing Date.
Each of the REMIC I RC IO Component Regular Interest and the REMIC I RC Non-IO
Component Regular Interest (each of which are Corresponding REMIC I Regular
Interests with respect to the Ritz-Xxxxxxx Xxxx Passu Loan) will have a
pass-through rate equal to the REMIC I Net Mortgage Rate of, and a "latest
possible maturity date" set to the Maturity Date of, the Ritz-Xxxxxxx Xxxx Passu
Loan. The REMIC I RC IO Component Regular Interest and the REMIC I RC Non-IO
Component Regular Interest have an initial Certificate Balance equal to the
principal balance of the Xxxx-Xxxxxxx IO Component and the Xxxx-Xxxxxxx Non-IO
Component, respectively, in each case as of the Closing Date. The REMIC I
Residual Interest will be designated as the sole Class of residual interests in
REMIC I and will have no Certificate Balance and no Pass-Through Rate, but will
be entitled to receive the proceeds of any
2
assets remaining in REMIC I after all Classes of REMIC I Regular Interests have
been paid in full.
REMIC II
The REMIC II Regular Interests have the Pass-Through Rates and
Certificate Balances or Notional Amounts set forth in the definition thereof.
The Class R-II Certificates will be designated as the sole Class of residual
interests in REMIC II and will have no Certificate Balance and no Pass-Through
Rate, but will be entitled to receive the proceeds of any assets remaining in
REMIC II after all Classes of REMIC II Regular Interests have been paid in full.
The following table sets forth the Class designation, the
corresponding REMIC II Regular Interest (the "CORRESPONDING REMIC II REGULAR
INTEREST") and the initial Certificate Balance or Notional Amount for the Class
of Principal Balance Certificates, Class X-MP Certificates or Class X-RC
Certificates to which it corresponds (the "CORRESPONDING CERTIFICATES").
INITIAL REMIC II REGULAR
CORRESPONDING INITIAL CLASS CERTIFICATE CORRESPONDING REMIC INTEREST CERTIFICATE
CERTIFICATES BALANCE OR NOTIONAL AMOUNT II REGULAR INTERESTS BALANCE OR NOTIONAL AMOUNT
------------- -------------------------- -------------------- --------------------------
Class A-1 $104,300,000 A-1 $104,300,000
Class A-1A $164,666,000 A-1A $164,666,000
Class A-2 $ 92,900,000 A-2 $ 92,900,000
Class A-3 $215,000,000 A-3 $215,000,000
Class A-AB $ 84,600,000 A-AB $ 84,600,000
Class A-4 $784,200,000 A-4 $784,200,000
Class A-4FL $350,000,000 A-4FL(1) $350,000,000
Class A-M $256,524,000 A-M $256,524,000
Class A-J $202,012,000 A-J $202,012,000
Class B $ 19,240,000 B $ 19,240,000
Class C $ 35,272,000 C $ 35,272,000
Class D $ 28,859,000 D $ 28,859,000
3
INITIAL REMIC II REGULAR
CORRESPONDING INITIAL CLASS CERTIFICATE CORRESPONDING REMIC INTEREST CERTIFICATE
CERTIFICATES BALANCE OR NOTIONAL AMOUNT II REGULAR INTERESTS BALANCE OR NOTIONAL AMOUNT
------------- -------------------------- -------------------- --------------------------
Class E $22,445,000 E $22,445,000
Class F $25,653,000 F $25,653,000
Class G $25,652,000 G $25,652,000
Class H $28,859,000 H $28,859,000
Class J $32,066,000 J $32,066,000
Class K $25,652,000 K $25,652,000
Class L $ 9,620,000 L $ 9,620,000
Class M $ 3,206,000 M $ 3,206,000
Class N $ 9,620,000 N $ 9,620,000
Class O $ 6,413,000 O $ 6,413,000
Class P $ 3,206,000 P $ 3,206,000
Class Q $ 9,620,000 Q $ 9,620,000
Class S $25,652,893 S $25,652,893
Class X-MP $42,700,000 X-MP $42,700,000
Class X-RC $ 7,600,000 X-RC $ 7,600,000
(1) REMIC II Regular Interest A-4FL corresponds to the Class A-4FL Regular
Interest, having an initial Certificate Balance of $350,000,000
REMIC III, CLASS DP REMIC AND CLASS ST REMIC
The following sets forth the Class designation, Pass-Through Rate,
initial Aggregate Certificate Balance (or initial Notional Amount) and Final
Scheduled Distribution Date for each Class of REMIC III Certificates (or, in the
case of the Class A-4FL Certificates, the Class A-4FL Regular Interest
represented thereby) comprising the interests in REMIC III created hereunder.
4
INITIAL AGGREGATE
REMIC INTEREST INITIAL PASS-THROUGH CERTIFICATE BALANCE FINAL SCHEDULED
DESIGNATION RATE(A) OR NOTIONAL AMOUNT DISTRIBUTION DATE(B)
-------------- -------------------- ------------------- --------------------
Class A-1 5.490% $ 104,300,000 6/12/2011
Class A-1A 5.728% $ 164,666,000 7/12/2016
Class A-2 5.618% $ 92,900,000 3/12/2012
Class A-3 5.712% $ 215,000,000 6/12/2013
Class A-AB 5.685% $ 84,600,000 9/12/2015
Class A-4 5.731% $ 784,200,000 6/12/2016
Class A-4FL(c) LIBOR + 0.1475% $ 350,000,000 6/12/2016
Class A-M 5.773% $ 256,524,000 7/12/2016
Class A-J 5.793% $ 202,012,000 7/12/2016
Class B 5.832% $ 19,240,000 7/12/2016
Class C 5.842% $ 35,272,000 7/12/2016
Class D 5.862% $ 28,859,000 8/12/2016
Class E 5.902% $ 22,445,000 8/12/2016
Class F 5.922% $ 25,653,000 8/12/2016
Class G 6.099% $ 25,652,000 8/12/2016
Class H 6.134% $ 28,859,000 8/12/2016
Class J 6.134% $ 32,066,000 8/12/2016
Class K 6.134% $ 25,652,000 8/12/2016
Class L 5.415% $ 9,620,000 8/12/2016
Class M 5.415% $ 3,206,000 8/12/2016
Class N 5.415% $ 9,620,000 9/12/2016
Class O 5.415% $ 6,413,000 3/12/2020
Class P 5.415% $ 3,206,000 3/12/2020
Class Q 5.415% $ 9,620,000 8/12/2020
Class S 5.415% $ 25,652,893 8/12/2026
Class DP 5.210% $ 18,500,000 3/12/2012
Class ST-A 6.386% $ 433,462 1/12/2016
Class ST-B 6.386% $ 2,917,959 1/12/2016
Class ST-C 6.386% $ 1,075,037 1/12/2016
Class ST-D 6.386% $ 2,329,248 1/12/2016
Class ST-E 6.386% $ 1,264,449 1/12/2016
Class ST-F 6.386% $ 9,979,845 1/12/2016
Class X 0.395% $2,565,237,893 --
Class X-MP 0.10% $ 42,700,000 --
Class X-RC 0.10% $ 7,600,000 --
Class R-III(d) N/A N/A N/A
(a) On each Distribution Date after the initial Distribution Date, the
Pass-Through Rate for each Class of Certificates (other than the Residual
Certificates) will be determined as described herein under the definition
of "Pass-Through Rate." The initial Pass-Through Rates shown above are
approximate for the Class A-1A, Class A-4, Class A-4FL, Class A-M,
5
Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q,
Class S, Class DP, Class ST, Class X, Class X-MP and Class X-RC
Certificates.
(b) The Final Scheduled Distribution Date for each Class of Certificates is the
Distribution Date on which such Class is expected to be paid in full,
assuming that timely payments (and no prepayments) will be made on the
Mortgage Loans in accordance with their terms (except that each ARD Loan
will be prepaid in full on its Anticipated Repayment Date). Each ARD Loan
is assumed to repay in full on its Anticipated Repayment Date.
(c) The Class A-4FL Certificates are not regular interests in a REMIC but
represent ownership of the beneficial interests in the Class A-4FL Grantor
Trust, which is comprised of (i) the Class A-4FL Regular Interest (bearing
a fixed rate of interest at 5.731% per annum subject, to a cap equal to the
Weighted Average REMIC I Net Mortgage Rate) and the Swap Contract and all
payments under the Class A-4FL Regular Interest and the Swap Contract, (ii)
all funds and assets on deposit from time to time in the Floating Rate
Account and (iii) proceeds of all of the foregoing. The parties intend that
the portion of the Trust representing the Class A-4FL Grantor Trust shall
be treated as a grantor trust under Subpart E of Part 1 of Subchapter J of
Chapter 1 of Subtitle A of the Code.
(d) The Class R-III Certificates will be entitled to receive the proceeds of
any remaining assets in REMIC III after the principal amounts of all
Classes of REMIC III Regular Interests have been reduced to zero and any
Realized Losses previously allocated thereto (and any interest thereon)
have been reimbursed. The Class R-DP Residual Interest will be entitled to
receive the proceeds of any remaining assets in the Class DP REMIC after
the principal amounts of all Class DP Certificates have been reduced to
zero and any Realized Losses previously allocated thereto (and any interest
thereon) have been reimbursed. The Class R-ST Residual Interest will be
entitled to receive the proceeds of any remaining assets in the Class ST
REMIC after the principal amounts of all Classes of Class ST Certificates
have been reduced to zero and any Realized Losses previously allocated
thereto (and any interest thereon) have been reimbursed.
As of the Cut-Off Date, the Mortgage Loans had an Aggregate Principal
Balance of $2,565,237,893.
As provided herein, with respect to the Trust, the Paying Agent on
behalf of the Trustee will make an election for the segregated pool of assets
described in the first paragraph of Section 12.1(a) hereof (including the DCT
Industrial Portfolio C Note (including the Excess Interest, if any, payable with
respect to such Mortgage Loan)) to be treated for federal income tax purposes as
a real estate mortgage investment conduit ("Class DP REMIC"). The Class DP
Certificates will be designated as the "regular interests" in the Class DP REMIC
and the Class R-DP Residual Interest will be designated as the sole Class of
"residual interests" in the Class DP REMIC for purposes of the REMIC Provisions.
As provided herein, with respect to the Trust, the Paying Agent on
behalf of the Trustee will make an election for the segregated pool of assets
described in the second paragraph of Section 12.1(a) hereof (including the 000
00xx Xxxxxx X Note (other than the Excess Interest, if any, payable with respect
to such Mortgage Loan)) to be treated for federal income tax purposes as a real
estate mortgage investment conduit ("Class ST REMIC"). The Class ST Certificates
will be designated as the "regular interests" in the Class ST REMIC and the
Class R-ST Residual Interest will be designated as the sole Class of "residual
interests" in the Class ST REMIC for purposes of the REMIC Provisions.
As provided herein, with respect to the Trust, the Paying Agent on
behalf of the Trustee will make an election for the segregated pool of assets
described in the third paragraph of Section 12.1(a) hereof (including the
Majority Mortgage Loans (other than any Excess Interest payable with respect to
the Majority Mortgage Loans)) to be treated for federal income tax purposes as a
real estate mortgage investment conduit ("REMIC I"). The REMIC I Regular
Interests will be designated as the "regular interests" in REMIC I and the REMIC
I Residual Interest will be designated as the sole Class of "residual interests"
in REMIC I for purposes of the REMIC Provisions.
6
As provided herein, with respect to the Trust, the Paying Agent on
behalf of the Trustee will make an election for the segregated pool of assets
described in the fourth paragraph of Section 12.1(a) hereof consisting of the
REMIC I Regular Interests to be treated for federal income tax purposes as a
real estate mortgage investment conduit ("REMIC II"). The REMIC II Regular
Interests will be designated as the "regular interests" in REMIC II and the
Class R-II Certificates will be designated as the sole Class of "residual
interests" in REMIC II for purposes of the REMIC Provisions.
As provided herein, with respect to the Trust, the Paying Agent on
behalf of the Trustee will make an election for the segregated pool of assets
described in the fifth paragraph of Section 12.1(a) hereof consisting of the
REMIC II Regular Interests to be treated for federal income tax purposes as a
real estate mortgage investment conduit ("REMIC III"). The REMIC III Regular
Interests will be designated as the "regular interests" in REMIC III and the
Class R-III Certificates (together with the REMIC III Regular Certificates, the
"REMIC III Certificates") will be designated as the sole Class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
EXCESS INTEREST GRANTOR TRUST AND CLASS A-4FL GRANTOR TRUST
The parties intend that the portions of the Trust consisting of (i)
Excess Interest (other than with respect to the DCT Industrial Portfolio C Note)
and the Excess Interest Sub-account (such portion of the Trust, the "Excess
Interest Grantor Trust") and (ii) the segregated pool of assets consisting of
the Class A-4FL Regular Interest, the Swap Contract and the Floating Rate
Account (such portion of the Trust, the "Class A-4FL Grantor Trust") will each
be treated as a separate grantor trust under Subpart E of Part 1 of Subchapter J
of the Code. The Class T Certificates represent pro rata undivided beneficial
interests in the Excess Interest Grantor Trust and will have no Certificate
Balance and no Pass-Through Rate. The Class A-4FL Certificates represent pro
rata undivided beneficial interests in the Class A-4FL Grantor Trust.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"120 BROADWAY A/B MORTGAGE LOAN" means the 000 Xxxxxxxx Mortgage Loan
and the 000 Xxxxxxxx X Note.
"120 BROADWAY B NOTE" means, with respect to the 000 Xxxxxxxx A/B
Mortgage Loan, the related subordinated B Note not included in the Trust, which
is subordinated in right of payment to the 000 Xxxxxxxx Mortgage Loan to the
extent set forth in the related Intercreditor Agreement.
"120 BROADWAY MORTGAGE" means the Mortgage securing the 000 Xxxxxxxx
A/B Mortgage Loan and any other note secured by the related Mortgaged Property.
7
"120 BROADWAY MORTGAGE LOAN" means the Mortgage Loan designated as
Mortgage Loan No. 3 on the Mortgage Loan Schedule and which is senior to the 000
Xxxxxxxx X Note and is secured by the related Mortgaged Property pursuant to the
000 Xxxxxxxx Mortgage. The 000 Xxxxxxxx Mortgage Loan is a "Mortgage Loan."
"633 00XX XXXXXX ADMINISTRATIVE COST RATE" means the servicing fee
rate and any trustee fee rate applicable to the 000 00xx Xxxxxx A/B/C Mortgage
Loan pursuant to the MLMT 2006-C1 Pooling and Servicing Agreement plus the
Trustee Fee Rate that is payable hereunder.
"633 00XX XXXXXX A NOTE" shall mean, with respect to the 000 00xx
Xxxxxx A/B/C Mortgage Loan, the mortgage note that is senior in right of payment
to the related B Note to the extent set forth in the related Intercreditor
Agreement. The 000 00xx Xxxxxx A Note is not a "Mortgage Loan."
"633 00XX XXXXXX A/B/C MORTGAGE LOAN" shall mean the 000 00xx Xxxxxx A
Note, together with the 000 00xx Xxxxxx X Note and the 000 00xx Xxxxxx C Note,
each of which is secured by the same Mortgage on the 000 00xx Xxxxxx Mortgaged
Property. References herein to the 000 00xx Xxxxxx A/B/C Mortgage Loan shall be
construed to refer to the aggregate indebtedness under the related 000 00xx
Xxxxxx A Note, the related 000 00xx Xxxxxx X Note and 000 00xx Xxxxxx C Note.
"633 00XX XXXXXX X NOTE" means, with respect to the 000 00xx Xxxxxx
A/B/C Mortgage Loan, the related subordinated B Note, which is subordinated in
right of payment to the 000 00xx Xxxxxx A Note and senior in right of payment to
the 000 00xx Xxxxxx C Note to the extent set forth in the related Intercreditor
Agreement. The 000 00xx Xxxxxx X Note is a "Mortgage Loan. "
"633 00XX XXXXXX X NOTE ACCRUED CERTIFICATE INTEREST" shall mean, with
respect to any Class of Class ST Certificates, for any Distribution Date,
interest for the related Interest Accrual Period accrued at the Pass-Through
Rate with respect to such Class of Class ST Certificates for such Interest
Accrual Period on the Aggregate Principal Balance of such Class of Class ST
Certificates outstanding immediately prior to such Distribution Date. The 000
00xx Xxxxxx X Note Accrued Certificate Interest with respect to each Class of
Class ST Certificates for each Interest Accrual Period shall be calculated on a
30/360 basis. The total amount of 000 00xx Xxxxxx X Note Accrued Certificate
Interest with respect to each Class of Class ST Certificates for each
Distribution Date shall equal the product of (i) the Pass-Through Rate with
respect to such Class of Class ST Certificates for such Interest Accrual Period,
multiplied by (ii) the Aggregate Principal Balance of such Class of Class ST
Certificates outstanding immediately prior to such Distribution Date, multiplied
by (iii) a fraction, the numerator of which is 30, and the denominator of which
is 360. Notwithstanding the foregoing, the distribution of Accrued Certificate
Interest to each Class of Class ST Certificates pursuant to Section 6.5B(a)
hereof shall be reduced by any expenses allocated to interest on the 000 00xx
Xxxxxx X Note pursuant to the related Intercreditor Agreement.
"633 00XX XXXXXX X NOTE AVAILABLE DISTRIBUTION AMOUNT" means, an
amount calculated as set forth in the definition of Available Distribution
Amount, but with respect to the
8
000 00xx Xxxxxx X Note only; provided that no Interest Reserve Amounts will be
deposited in the Interest Reserve Account with respect to the 000 00xx Xxxxxx X
Note.
"633 00XX XXXXXX X NOTE THRESHOLD EVENT" shall have the meaning given
to "Junior Threshold Event" in the related Intercreditor Agreement.
"633 00XX XXXXXX X NOTE DISTRIBUTION ACCOUNT" means an administrative
account deemed to be a sub-account of the Distribution Account.
"633 00XX XXXXXX X NOTE INSURANCE PROCEEDS" shall have the meaning
assigned to the term "Insurance Proceeds" in the MLMT 2006-C1 Pooling and
Servicing Agreement; provided that "633 00xx Xxxxxx X Note Insurance Proceeds"
hereunder shall not include amounts otherwise allocable to payments on or in
respect of the 000 00xx Xxxxxx A Note or the 000 00xx Xxxxxx C Note under the
related Mortgage Loan documents and/or the MLMT 2006-C1 Pooling and Servicing
Agreement.
"633 00XX XXXXXX X NOTE LIQUIDATION PROCEEDS" shall have the meaning
assigned to the term "Liquidation Proceeds" in the MLMT 2006-C1 Pooling and
Servicing Agreement; provided that "633 00xx Xxxxxx X Note Liquidation Proceeds"
hereunder shall not include amounts otherwise allocable to payments on or in
respect of the 000 00xx Xxxxxx A Note or the 000 00xx Xxxxxx C Note under the
related Mortgage Loan documents and/or the MLMT 2006-C1 Pooling and Servicing
Agreement.
"633 00XX XXXXXX X NOTE MAJORITY HOLDER" shall mean any single Holder
or group of Holders of the Class ST Certificates entitled to a majority of the
voting rights of the Class ST Controlling Class.
"633 00XX XXXXXX X NOTE MASTER SERVICER REMITTANCE DATE" shall mean
the date that the MLMT 2006-C1 Master Servicer is required to remit the 000 00xx
Xxxxxx X Note Remittance Amount pursuant to the related Intercreditor Agreement
and the MLMT 2006-C1 Pooling and Servicing Agreement.
"633 00XX XXXXXX X NOTE REMITTANCE AMOUNT" shall mean, with respect to
any 000 00xx Xxxxxx X Note Master Servicer Remittance Date, an amount equal to
any and all amounts to be distributed on such date with respect to 000 00xx
Xxxxxx X Note pursuant to the MLMT 2006-C1 Pooling and Servicing Agreement.
"633 00XX XXXXXX X NOTE SERVICING FEE RATE" means the "Master
Servicing Fee Rate" applicable to the 000 00xx Xxxxxx X Note as defined in the
MLMT 2006-C1 Pooling and Servicing Agreement.
"633 00XX XXXXXX C NOTE" means, with respect to the 000 00xx Xxxxxx
A/B/C Mortgage Loan, the related subordinated Note, which is subordinated in
right of payment to the 000 00xx Xxxxxx A Note and the 000 00xx Xxxxxx X Note to
the extent set forth in the related Intercreditor Agreement. The 000 00xx Xxxxxx
C Note is not a "Mortgage Loan. "
"633 17TH STREET DISTRIBUTABLE CERTIFICATE INTEREST AMOUNT" shall
mean, in respect of the Class ST Certificates for any Distribution Date, the sum
of (a) Accrued Certificate
9
Interest in respect of such Class or Classes of Certificates for such
Distribution Date, reduced (to not less than zero) by (i) any Prepayment
Interest Shortfalls allocated to such Class or Classes for such Distribution
Date; and (ii) Realized Losses and Expense Losses, in each case specifically
allocated with respect to such Distribution Date to reduce the 000 00xx Xxxxxx
Distributable Certificate Interest Amount payable in respect of such Class or
Classes in accordance with Section 6.6; plus (b) the portion of the
Distributable Certificate Interest Amount for such Class or Classes remaining
unpaid as of the close of business on the preceding Distribution Date.
"633 00XX XXXXXX NET MORTGAGE RATE" means, with respect to the 000
00xx Xxxxxx X Note, a per annum rate equal to the related Mortgage Rate
(excluding any default interest) minus the 000 00xx Xxxxxx Administrative Cost
Rate; provided that for purposes of calculating the Pass-Through Rate of the
Class ST Certificates from time to time, the 000 00xx Xxxxxx Net Mortgage Rate
shall be calculated without regard to any modification, waiver or amendment of
the terms of the 000 00xx Xxxxxx X Note subsequent to the Closing Date; and
provided further that, that, because the 000 00xx Xxxxxx X Note does not accrue
interest on the basis of a 360-day year consisting of twelve 30-day months
(which is the basis on which interest accrues in respect of the Class ST
Certificates), when calculating the Pass-Through Rate for the Class ST
Certificates for each Distribution Date, the 000 00xx Xxxxxx Net Mortgage Rate
on the 000 00xx Xxxxxx X Note will be adjusted to equal the annualized rate at
which interest would have to accrue on the basis of a 360-day year consisting of
twelve 30-day months in order to result in the accrual of the aggregate amount
of net interest actually accrued (exclusive of default interest) for the related
Interest Accrual Period.
"633 00XX XXXXXX NOTE A CMBS" shall mean, as of any date of
determination, any commercial mortgage-backed securities that are backed or
secured by, among other assets, a 000 00xx Xxxxxx A Note (or any portion
thereof) or by the related Mortgaged Property after it has become an REO
Property (as defined in the MLMT 2006-C1 Pooling and Servicing Agreement) and is
still an asset of a the related securitization trust.
"633 00XX XXXXXX REO INCOMES" shall have the meaning assigned to the
term "REO Revenues" in the MLMT 2006-C1 Pooling and Servicing Agreement;
provided, however, that "633 00xx Xxxxxx REO Incomes" shall exclude any portion
thereof allocable to payments on or in respect of the 000 00xx Xxxxxx A Note or
the 000 00xx Xxxxxx C Note.
"633 00XX XXXXXX VOTING RIGHTS" shall mean the voting rights evidenced
by the respective Class ST Certificates. At all times during the term of this
Agreement, all Voting Rights shall be allocated among the Class ST
Certificateholders in proportion to the Percentage Interests in the Aggregate
Principal Balances evidenced by the respective Certificates.
"A NOTE" means, with respect to any A/B Mortgage Loan, the mortgage
note (or notes) included in the Trust that is senior in right of payment to the
related B Note or any other related subordinated note(s) to the extent set forth
in the related Intercreditor Agreement.
"A/B LOAN CUSTODIAL ACCOUNT" means each of the custodial
sub-account(s) of the Certificate Account (but which are not included in the
Trust) created and maintained by the Master Servicer pursuant to Section 5.1(c)
on behalf of the holder of a related B Note. Any such sub-account(s) shall be
maintained as a sub-account of an Eligible Account.
10
"A/B MORTGAGE LOAN" means the 000 Xxxxxxxx A/B Mortgage Loan, the DCT
Industrial Portfolio A/B/C Loan and the Giant-Food Bucks County A/B Mortgage
Loan or any other Mortgage Loan serviced under this Agreement that is divided
into a senior mortgage note and one or more subordinated mortgage note(s), which
senior mortgage note is included in the Trust. References herein to an A/B
Mortgage Loan shall be construed to refer to the aggregate indebtedness under
the related A Note and the related subordinate note(s).
"ACCOUNTANT" means a person engaged in the practice of accounting who
is Independent.
"ACCRUED CERTIFICATE INTEREST" means with respect to each Distribution
Date and any Class of Interests or Principal Balance Certificates or the Class
X-MP or Class X-RC Certificates, other than the Class DP, Class ST and Residual
Certificates, interest accrued during the Interest Accrual Period relating to
such Distribution Date on the Aggregate Certificate Balance (or, in the case of
the Class X-MP Certificates, Class X-RC Certificates, REMIC II Regular Interest
X-MP or REMIC II Regular Interest X-RC, the Notional Amount) of such Class or
Interest as of the close of business on the immediately preceding Distribution
Date at the respective rates per annum set forth in the definition of the
applicable Pass-Through Rate for each such Class. Accrued Certificate Interest
on the Class X Certificates for each Distribution Date will equal the Class X
Interest Amount. Accrued Certificate Interest will be calculated on the basis of
a 360-day year consisting of twelve 30-day months, except in the case of the
Class A-4FL Certificates, where, subject to Section 6.13, it will be calculated
on the basis of the actual number of days elapsed in the related Interest
Accrual Period and a 360 day year.
"ACQUISITION DATE" means the date upon which, under the Code (and in
particular the REMIC Provisions and Section 856(e) of the Code), the Trust or a
REMIC Pool is deemed to have acquired a Mortgaged Property (or an interest
therein, in the case of the Mortgaged Properties securing any A/B Mortgage Loan,
the 000 00xx Xxxxxx A/B/C Mortgage Loan, Non-Serviced Mortgage Loan,
Non-Serviced Companion Mortgage Loan and Loan Pair and any Loan Group).
"ADDITIONAL DISCLOSURE NOTIFICATION" means the form of notification to
be included with any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information which is attached hereto as
Schedule XVIII.
"ADDITIONAL FORM 10-D DISCLOSURE" has the meaning set forth in Section
13.4.
"ADDITIONAL FORM 10-K DISCLOSURE" has the meaning set forth in Section
13.5.
"ADDITIONAL REVIEW PERIOD" has the meaning set forth in Section
9.4(d).
"ADDITIONAL SERVICER" means each Affiliate of the Master Servicer, the
Primary Servicer, MSMC, LaSalle, PCFII, the Depositor or any of the Underwriters
that Services any of the Mortgage Loans and each Person, other than the Special
Servicer, who is not an Affiliate of the Master Servicer, the Primary Servicer,
MSMC, LaSalle, PCFII, the Depositor or any of the Underwriters, and who Services
10% or more of the Mortgage Loans (based on their Principal Balance). For
clarification purposes, the Paying Agent is an Additional Servicer and the
Trustee is not an Additional Servicer.
11
"ADDITIONAL TRUST EXPENSE" means any of the following items: (i)
Special Servicing Fees, Work-Out Fees and Liquidation Fees (to the extent not
collected from the related Mortgagor or paid from Late Fees or default interest
as provided in Section 4.5); (ii) Advance Interest that cannot be paid from Late
Fees and default interest in accordance with Section 4.6(c); (iii) amounts paid
to indemnify the Master Servicer, the Special Servicer, any applicable
Non-Serviced Mortgage Loan Master Servicer, any applicable Non-Serviced Mortgage
Loan Special Servicer, the MLMT 2006-C1 Master Servicer, the XXXX 0000-X0
Special Servicer, any Primary Servicer, the Trustee, the Paying Agent (or any
other Person) pursuant to the terms of this Agreement; (iv) to the extent not
otherwise paid, any federal, state, or local taxes imposed on the Trust or its
assets and paid from amounts on deposit in the Certificate Account or
Distribution Account; and (v) to the extent not otherwise included in the
calculation of a Realized Loss and not covered by indemnification by one of the
parties hereto or otherwise, any other unanticipated cost, liability, or expense
(or portion thereof) of the Trust (including costs of collecting such amounts or
other Additional Trust Expenses) that the Trust has not recovered, and in the
judgment of the Master Servicer (or Special Servicer) will not, recover from the
related Mortgagor or Mortgaged Property or otherwise, including a Modification
Loss described in clause (ii) of the definition thereof; provided, however,
that, in the case of an A/B Mortgage Loan or the 000 00xx Xxxxxx A/B/C Mortgage
Loan, "Additional Trust Expense" shall not include any of the foregoing amounts
that have been recovered from the related Mortgagor or Mortgaged Property as a
result of the subordination of the related B Note or the 000 00xx Xxxxxx X Note,
as applicable, in accordance with the terms of the related Intercreditor
Agreement. Notwithstanding anything to the contrary, "Additional Trust Expenses"
shall not include allocable overhead of the Master Servicer, the Special
Servicer, any Non-Serviced Mortgage Loan Master Servicer, any Non-Serviced
Mortgage Loan Special Servicer, the MLMT 2006-C1 Master Servicer, the XXXX
0000-X0 Special Servicer, the Trustee, Authenticating Agent, the Custodian, the
Paying Agent or the Certificate Registrar, such as costs for office space,
office equipment, supplies and related expenses, employee salaries and related
expenses, and similar internal costs and expenses.
"ADMINISTRATIVE COST RATE" means, with respect to each Mortgage Loan,
the sum of the Master Servicing Fee Rate, the Primary Servicing Fee Rate, the
Excess Servicing Fee Rate, the Trustee Fee Rate and in the case of any
Non-Serviced Mortgage Loan, the related Pari Passu Loan Servicing Fee Rate.
"ADVANCE" means either a P&I Advance or a Servicing Advance.
"ADVANCE INTEREST" means interest payable to the Master Servicer, the
Special Servicer or the Trustee on outstanding Advances (other than Unliquidated
Advances) pursuant to Section 4.5 of this Agreement and any interest payable to
any Non-Serviced Mortgage Loan Master Servicer, any Non-Serviced Mortgage Loan
Trustee or any Non-Serviced Mortgage Loan Fiscal Agent with respect to Pari
Passu Loan Nonrecoverable Advances pursuant to Section 4.4(b) hereof.
"ADVANCE RATE" means a per annum rate equal to the Prime Rate as
published in the "Money Rates" section of The Wall Street Journal from time to
time or such other publication as determined by the Trustee in its reasonable
discretion.
12
"ADVANCE REPORT DATE" means the second Business Day prior to each
Distribution Date.
"ADVERSE GRANTOR TRUST EVENT" means any action that, under the Code,
if taken or not taken, as the case may be, would either (i) endanger the status
of the Excess Interest Grantor Trust as a grantor trust or (ii) result in the
imposition of a tax upon the income of the Excess Interest Grantor Trust or any
of its assets or transactions.
"ADVERSE REMIC EVENT" means any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, would either (i) endanger
the status of any REMIC Pool as a REMIC or (ii) subject to Section 9.14(e),
result in the imposition of a tax upon the income of any REMIC Pool or any of
their respective assets or transactions, including (without limitation) the tax
on prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on prohibited contributions set forth in Section 860G(d) of the Code.
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGGREGATE CERTIFICATE BALANCE" means the aggregate of the Certificate
Balances of the Principal Balance Certificates, the REMIC I Regular Interests,
the REMIC II Regular Interests (other than REMIC II Regular Interest X-MP and
REMIC II Regular Interest X-RC) or REMIC III Regular Interests (other than the
Class X, Class X-MP and Class X-RC Certificates), as the case may be, at any
date of determination. With respect to a Class of Principal Balance
Certificates, REMIC I Regular Interests, REMIC II Regular Interests (other than
REMIC II Regular Interest X-MP and REMIC II Regular Interest X-RC) or REMIC III
Regular Interests (other than the Class X, Class X-MP and Class X-RC
Certificates), Aggregate Certificate Balance shall mean the aggregate of the
Certificate Balances of all Certificates or Interests, as the case may be, of
that Class at any date of determination.
"AGGREGATE PRINCIPAL BALANCE" means, at the time of any determination
and as the context may require, the aggregate of the Scheduled Principal
Balances for all Mortgage Loans other than the DCT Industrial Portfolio C Note
and 000 00xx Xxxxxx X Note and, with respect to the DCT Industrial Portfolio C
Note and 000 00xx Xxxxxx X Note, the Principal Balance thereof.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"ANTICIPATED REPAYMENT DATE" means, with respect to each ARD Loan, the
anticipated maturity date set forth in the related Mortgage Note.
"APPRAISAL" means an appraisal by an Independent licensed MAI
appraiser having at least five years experience in appraising property of the
same type as, and in the same geographic area as, the Mortgaged Property being
appraised, which appraisal complies with the
13
Uniform Standards of Professional Appraisal Practices and states the "market
value" of the subject property as defined in 12 C.F.R. Section 225.62.
"APPRAISAL EVENT" means, with respect to any Mortgage Loan, A/B
Mortgage Loan or Loan Pair, not later than the earliest of (i) the date 120 days
after the occurrence of any delinquency in payment with respect to such Mortgage
Loan, A/B Mortgage Loan or Loan Pair if such delinquency remains uncured, (ii)
the date 30 days after receipt of notice that the related Mortgagor has filed a
bankruptcy petition or the related Mortgagor has become the subject of
involuntary bankruptcy proceedings or the related Mortgagor has consented to the
filing of a bankruptcy proceeding against it or a receiver is appointed in
respect of the related Mortgaged Property, provided such petition or appointment
is still in effect, (iii) the date that is 30 days following the date the
related Mortgaged Property becomes an REO Property and (iv) the effective date
of any modification to a Money Term of a Mortgage Loan, A/B Mortgage Loan or
Loan Pair, other than an extension of the date that a Balloon Payment is due for
a period of less than six months from the original due date of such Balloon
Payment.
"APPRAISAL REDUCTION" means, with respect to any Required Appraisal
Loan with respect to which an Appraisal or internal valuation is performed
pursuant to Section 6.9, an amount equal to the excess of (A) the sum of (i) the
Scheduled Principal Balance of such Mortgage Loan, Loan Pair or A/B Mortgage
Loan (or, in the case of an REO Property, the related REO Mortgage Loan) less
the principal amount of any guaranty or surety bond with a rating of at least
"BBB-" (or its equivalent) by a nationally recognized statistical rating
organization and the undrawn principal amount of any letter of credit or debt
service reserve, if applicable, that is then securing such Mortgage Loan or Loan
Pair, (ii) to the extent not previously advanced by the Master Servicer or the
Trustee, all accrued and unpaid interest on such Mortgage Loan, Loan Pair or A/B
Mortgage Loan at a per annum rate equal to the Mortgage Rate, (iii) all
unreimbursed Advances (including Unliquidated Advances) and interest on Advances
(other than Unliquidated Advances) at the Advance Rate with respect to such
Mortgage Loan, Loan Pair or A/B Mortgage Loan, and (iv) to the extent funds on
deposit in any applicable Escrow Accounts are not sufficient therefor, and to
the extent not previously advanced by the Master Servicer, the Special Servicer
or the Trustee, all currently due and unpaid real estate taxes and assessments,
insurance premiums and, if applicable, ground rents and other amounts which were
required to be deposited in any Escrow Account (but were not deposited) in
respect of such Mortgaged Property or REO Property, as the case may be, over (B)
90% of the Appraised Value (net of any prior mortgage liens) of such Mortgaged
Property or REO Property as determined by such Appraisal or internal valuation,
as the case may be, plus the full amount of any escrows held by or on behalf of
the Trustee as security for the Mortgage Loan, Loan Pair or A/B Mortgage Loan
(less the estimated amount of the obligations anticipated to be payable in the
next twelve months to which such escrows relate). Each Appraisal or internal
valuation for a Required Appraisal Loan shall be updated annually for so long as
an Appraisal Reduction exists. The Appraisal Reduction for each Required
Appraisal Loan will be recalculated annually based on subsequent Appraisals,
internal valuations or updates. In addition, the Operating Adviser (including,
without limitation, any request of a B Note holder, at its expense and to the
extent provided for in the related Intercreditor Agreement, with respect to the
related A/B Mortgage Loan (or Operating Adviser on their behalf) if there shall
have been a determination that such holder will no longer be the directing
holder) may at any time request the Special Servicer to obtain, at the Operating
Adviser's expense, an updated Appraisal, with a corresponding
14
adjustment to the amount of the Appraisal Reduction. Any Appraisal Reduction for
any Mortgage Loan, Loan Pair or A/B Mortgage Loan shall be reduced to reflect
any Realized Principal Losses on the Required Appraisal Loan, Loan Pair or A/B
Mortgage Loan. Each Appraisal Reduction will be reduced to zero as of the date
the related Mortgage Loan, Loan Pair or A/B Mortgage Loan is brought current
under the then current terms of the Mortgage Loan, Loan Pair or A/B Mortgage
Loan for at least three consecutive months, and no Appraisal Reduction will
exist as to any Mortgage Loan, Loan Pair or A/B Mortgage Loan after it has been
paid in full, liquidated, repurchased or otherwise disposed of. Any Appraisal
Reduction in respect of any Non-Serviced Mortgage Loan shall be calculated in
accordance with the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement based upon the applicable allocation of the items set forth in clauses
(A) and (B) above between the Non-Serviced Mortgage Loans and the related
Non-Serviced Companion Mortgage Loans and all other related pari passu loans.
Any Appraisal Reduction in respect of the 000 00xx Xxxxxx X Note shall be
calculated in accordance with the MLMT 2006-C1 Pooling and Servicing Agreement.
Any Appraisal Reduction in respect of any Loan Pair shall be allocated, as
between a Serviced Pari Passu Mortgage Loan and the related Serviced Companion
Mortgage Loan, pro rata according to their respective Principal Balances. Any
Appraisal Reduction with respect to an A/B Mortgage Loan shall be allocated
first to the related B Note (or, if there is more than one subordinated note, as
set forth in the related Intercreditor Agreement), up to the Principal Balance
thereof, and any excess shall be allocated to the related A Note.
"APPRAISED VALUE" means, (i) with respect to any Mortgaged Property
(other than the Mortgaged Property relating to a Non-Serviced Mortgage Loan),
the appraised value thereof determined by an Appraisal of the Mortgaged Property
securing such Mortgage Loan made by an Independent appraiser selected by the
Master Servicer or the Special Servicer, as applicable or, in the case of an
internal valuation performed by the Special Servicer pursuant to Section 6.9,
the value of the Mortgaged Property determined by such internal valuation and
(ii) with respect to the Mortgaged Property relating to a Non-Serviced Mortgage
Loan, the portion of the appraised value allocable thereto.
"ARD LOAN" means any Mortgage Loan designated as such on the Mortgage
Loan Schedule.
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage Loan, any
assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"ASSIGNMENT OF MORTGAGE" means an assignment of the Mortgage, notice
of transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties located
in the same jurisdiction, if permitted by law.
15
"ASSUMED SCHEDULED PAYMENT" means: (i) with respect to any Balloon
Mortgage Loan or any B Note as to which advancing is required hereunder for its
Maturity Date (provided that such Mortgage Loan or B Note has not been paid in
full, and no Final Recovery Determination or other sale or liquidation has
occurred in respect thereof, on or before the end of the Collection Period in
which such Maturity Date occurs) and for any subsequent Due Date therefor as of
which such Mortgage Loan or such B Note remains outstanding and part of the
Trust, if no Scheduled Payment (other than the related delinquent Balloon
Payment) is due for such Due Date, the scheduled monthly payment of principal
and/or interest deemed to be due in respect thereof on such Due Date equal to
the Scheduled Payment that would have been due in respect of such Mortgage Loan
or such B Note on such Due Date, if it had been required to continue to accrue
interest in accordance with its terms, and to pay principal in accordance with
the amortization schedule in effect immediately prior to, and without regard to
the occurrence of, its most recent Maturity Date (as such may have been extended
in connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan or such B
Note granted or agreed to by the Master Servicer or the Special Servicer
pursuant to the terms hereof), and (ii) with respect to any REO Mortgage Loan
for any Due Date therefor as of which the related REO Property remains part of
the Trust, the scheduled monthly payment of principal and interest deemed to be
due in respect thereof on such Due Date equal to the Scheduled Payment (or, in
the case of a Balloon Mortgage Loan or B Note described in the preceding clause
of this definition, the Assumed Scheduled Payment) that was due in respect of
the related Mortgage Loan or the related B Note on the last Due Date prior to
its becoming an REO Mortgage Loan. The amount of the Assumed Scheduled Payment
for any A Note or B Note shall be calculated solely by reference to the terms of
such A Note or B Note, as applicable (as modified in connection with any
bankruptcy or similar proceeding involving the related Mortgagor or pursuant to
a modification, waiver or amendment of such Mortgage Loan granted or agreed to
by the Master Servicer or the Special Servicer pursuant to the terms hereof) and
without regard to the remittance provisions of the related Intercreditor
Agreement.
"AUTHENTICATING AGENT" means any authenticating agent serving in such
capacity pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an Officer's
Certificate on behalf of the Depositor.
"AVAILABLE ADVANCE REIMBURSEMENT AMOUNT" has the meaning set forth in
Section 4.6(a).
"AVAILABLE DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, an amount equal to the aggregate of the following amounts
(other than any such amounts that relate to the DCT Industrial Portfolio C Note
or the 000 00xx Xxxxxx X Note) (a) all amounts on deposit in the Distribution
Account as of the commencement of business on such Distribution Date that
represent payments and other collections on or in respect of the Mortgage Loans
and any REO Properties that were received by the Master Servicer or the Special
Servicer through the end of the related Collection Period exclusive of (i) any
such amounts that were deposited in the Distribution Account in error, (ii)
amounts that are payable or reimbursable to any Person other than the
Certificateholders (including amounts payable to the Master Servicer in respect
of unpaid Master Servicing Fees, any Primary Servicer in respect of unpaid
Primary Servicing Fees,
16
the Special Servicer in respect of unpaid Special Servicer Compensation, the
Trustee in respect of unpaid Trustee Fees, the Paying Agent in respect of unpaid
Paying Agent Fees or to the parties entitled thereto in respect of the unpaid
Excess Servicing Fees), (iii) amounts that constitute Prepayment Premiums, (iv)
if such Distribution Date occurs during January, other than in a leap year, or
February of any year, the Interest Reserve Amounts with respect to Interest
Reserve Loans deposited in the Interest Reserve Account, (v) in the case of each
REO Property related to an A/B Mortgage Loan or Loan Pair, all amounts received
with respect to such A/B Mortgage Loan or Loan Pair that are required to be paid
to the holder of the related B Note or Serviced Companion Mortgage Loan, as
applicable, pursuant to the terms of the related B Note or Serviced Companion
Mortgage Loan, as applicable, and the related Intercreditor Agreement or Loan
Pair Intercreditor Agreement (which amounts will be deposited into the related
A/B Loan Custodial Account or Serviced Companion Mortgage Loan Custodial
Account, as applicable, pursuant to Section 5.1(c) and withdrawn from such
accounts pursuant to Section 5.2(a)) and (vi) Scheduled Payments collected but
due on a Due Date subsequent to the related Collection Period and (b) if and to
the extent not already among the amounts described in clause (a), (i) the
aggregate amount of any P&I Advances made by the Master Servicer or the Trustee
for such Distribution Date pursuant to Section 4.1 and/or Section 4.3, (ii) the
aggregate amount of any Compensating Interest payments made by the Master
Servicer for such Distribution Date pursuant to the terms hereof, and (iii) if
such Distribution Date occurs in March of any year, commencing March 2007, the
aggregate of the Interest Reserve Amounts then held on deposit in the Interest
Reserve Account in respect of each Interest Reserve Loan.
"B NOTE" means, with respect to any A/B Mortgage Loan, the related
subordinated Mortgage Note not included in the Trust, which is subordinated in
right of payment to the related A Note to the extent set forth in the related
Intercreditor Agreement and includes, in the case of the DCT Industrial
Portfolio A/B/C Loan, the DCT Industrial Portfolio C Note.
"BALLOON MORTGAGE LOAN" means a Mortgage Loan, a Serviced Companion
Mortgage Loan or a B Note that provides for Scheduled Payments based on an
amortization schedule that is significantly longer than its term to maturity and
that is expected to have a remaining principal balance equal to or greater than
5% of its original principal balance as of its stated maturity date, unless
prepaid prior thereto.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage Loan,
the Scheduled Payment payable on the Maturity Date of such Mortgage Loan.
"BANKING DAY" means any day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency) in
London, England.
"BANKRUPTCY LOSS" means a loss arising from a proceeding under the
United States Bankruptcy Code or any other similar state law or other proceeding
with respect to the Mortgagor of, or Mortgaged Property under, a Mortgage Loan,
including, without limitation, any Deficient Valuation Amount or losses, if any,
resulting from any Debt Service Reduction Amount for the month in which the
related Remittance Date occurs.
"BASE INTEREST FRACTION" means, with respect to any Principal
Prepayment of any Mortgage Loan that provides for payment of a Prepayment
Premium, and with respect to any
17
Class of Certificates (except for the Class A-4FL Certificates) and the Class
A-4FL Regular Interest, a fraction (A) whose numerator is the greater of (x)
zero and (y) the difference between (i) the Pass-Through Rate on that Class of
Certificates or the Class A-4FL Regular Interest and (ii) the Discount Rate used
in calculating the Prepayment Premium with respect to the Principal Prepayment
(or the current Discount Rate if not used in such calculation) and (B) whose
denominator is the difference between (i) the Mortgage Rate on the related
Mortgage Loan and (ii) the Discount Rate used in calculating the Prepayment
Premium with respect to that Principal Prepayment (or the current Discount Rate
if not used in such calculation), provided, however, that under no circumstances
will the Base Interest Fraction be greater than one. If the Discount Rate
referred to above is greater than the Mortgage Rate on the related Mortgage
Loan, then the Base Interest Fraction will equal zero; provided, however, that
if the Discount Rate referred to above is greater than or equal to the Mortgage
Rate on the related Mortgage Loan, but is less than the Pass-Through Rate on
that Class of Certificates or the Class A-4FL Regular Interest, then the Base
Interest Fraction shall be equal to 1.0.
"BENEFIT PLAN OPINION" means an Opinion of Counsel satisfactory to the
Paying Agent and the Master Servicer to the effect that any proposed transfer
will not (i) cause the assets of the Trust to be regarded as plan assets for
purposes of the Plan Asset Regulations or (ii) give rise to any fiduciary duty
on the part of the Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Paying Agent or the Certificate Registrar.
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a beneficial
interest in a Class of Certificates, ownership and transfer of which shall be
made through book entries as described in Section 3.7; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer authorized and Definitive Certificates are to be issued to the
Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"BUSINESS DAY" means any day other than (i) a Saturday or a Sunday,
(ii) a legal holiday in New York, New York, Chicago, Illinois, Des Moines, Iowa
(but only with respect to matters related to the performance of obligations of
Principal Global Investors, LLC as Primary Servicer under the Primary Servicing
Agreement), San Francisco, California or the principal cities in which the
Special Servicer, the Trustee, the Custodian, the Paying Agent or the Master
Servicer conducts servicing or trust operations, or (iii) a day on which banking
institutions or savings associations in Minneapolis, Minnesota, New York, New
York, Chicago, Illinois or San Francisco, California are authorized or obligated
by law or executive order to be closed.
"CASH LIQUIDATION" means, as to any Defaulted Mortgage Loan other than
a Mortgage Loan with respect to which the related Mortgaged Property became REO
Property, the sale of such Defaulted Mortgage Loan. The Master Servicer shall
maintain records in accordance with the Servicing Standard (and, in the case of
Specially Serviced Mortgage Loans, based on the written reports with respect to
such Cash Liquidation delivered by the Special Servicer to the Master Servicer),
of each Cash Liquidation.
"CATEGORY 1 REQUEST" means a "Category 1 Request" and a "Deemed
Category 1 Request" as such terms are defined in any applicable Primary
Servicing Agreement.
18
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.).
"CERTIFICATE ACCOUNT" means one or more separate accounts established
and maintained by the Master Servicer (or any Sub-Servicer or any Primary
Servicer on behalf of the Master Servicer) pursuant to Section 5.1(a), each of
which shall be an Eligible Account.
"CERTIFICATE BALANCE" means, with respect to any Certificate (other
than the Class T Certificates, the Class X Certificates, the Class X-MP
Certificates, the Class X-RC Certificates and the Residual Certificates) or
Interest (other than the REMIC II Regular Interest X-MP, the REMIC II Regular
Interest X-RC and the Residual Certificates) as of any Distribution Date, the
maximum specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount set
forth on the face of such Certificate (in the case of a Certificate), or as
ascribed thereto in the Preliminary Statement hereto (in the case of an
Interest), minus (A)(i) the amount of all principal distributions previously
made with respect to such Certificate pursuant to Section 6.5(a) or deemed to
have been made with respect to such Interest pursuant to Section 6.2 or Section
6.3(a), as the case may be, and (ii) all Realized Losses allocated or deemed to
have been allocated to such Interest or Certificate in reduction of Certificate
Balance pursuant to Section 6.6, plus (B) an amount equal to the amounts
identified in clause (I)(C) of the definition of Principal Distribution Amount
with respect to such Distribution Date, such increases to be allocated to the
Principal Balance Certificates or Interests in sequential order (i.e. to the
most senior Class first), in each case up to the amount of Realized Losses
previously allocated thereto and not otherwise reimbursed hereunder.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"CERTIFICATE REGISTER" has the meaning set forth in Section 3.2.
"CERTIFICATE REGISTRAR" means the registrar appointed pursuant to
Section 3.2 and initially shall be the Paying Agent.
"CERTIFICATEHOLDERS" has the meaning set forth in the definition of
"Holder."
"CERTIFICATES" means, collectively, the REMIC III Certificates, the
Class A-4FL Certificates, the Class T Certificates, the Class R-I Certificates,
the Class R-II Certificates, the Class DP Certificates and the Class ST
Certificates.
"CERTIFICATION PARTIES" has the meaning set forth in Section 13.6 and
shall also include such parties in an Other Securitization.
"CERTIFYING PERSON" has the meaning set forth in Section 13.6.
"CERTIFYING SERVICER" has the meaning set forth in Section 13.9.
19
"CHERRY CREEK COMPANION LOAN" means the loan that is secured by the
Cherry Creek Pari Passu Mortgage on a pari passu basis with the Cherry Creek
Pari Passu Loan. The Cherry Creek Companion Loan is not a "Mortgage Loan."
"CHERRY CREEK PARI PASSU LOAN" means Mortgage Loan No. 1, which is
secured on a pari passu basis with the Cherry Creek Companion Loan pursuant to
the Cherry Creek Pari Passu Mortgage.
"CHERRY CREEK PARI PASSU MORTGAGE" means the mortgage securing the
Cherry Creek Pari Passu Loan and the Cherry Creek Companion Loan.
"CLASS" means, with respect to the REMIC I Interests, REMIC II
Interests, REMIC III Certificates, Class A-4FL Regular Interest, Class A-4FL
Certificates, Class DP Certificates, or Class ST Certificates, any Class of such
Certificates or Interests.
"CLASS A-4FL AVAILABLE FUNDS" means, in respect of each Distribution
Date, (i) the sum of all previously undistributed payments or other receipts on
account of principal and interest and other sums on or in respect of the Class
A-4FL Regular Interest received by the Paying Agent (or the Master Servicer on
the Paying Agent's behalf) after the Cut-off Date and on or prior to such
Distribution Date and (ii) the sum of all previously undistributed amounts
received from the Swap Counterparty in respect of the Class A-4FL Regular
Interest pursuant to the Swap Contract, including, but not limited to, any
termination payment, but in the case of both (i) and (ii) excluding the
following: (a) all amounts of Prepayment Premiums allocated to the Class A-4FL
Regular Interest for so long as the Swap Contract is in effect; and (b) all
amounts required to be paid to the Swap Counterparty in respect of the Class
A-4FL Regular Interest pursuant to the Swap Contract.
"CLASS A-4FL INTEREST DISTRIBUTION AMOUNT" means, in respect of any
Distribution Date, the sum of (i) for so long as the Swap Contract is in effect,
the aggregate amount of interest received by the Paying Agent from the Swap
Counterparty in respect of the Class A-4FL Regular Interest pursuant to the
terms of the Swap Contract during the related Interest Accrual Period and (ii)
amounts in respect of interest (including reimbursement of any Prepayment
Interest Shortfalls) received on the Class A-4FL Regular Interest not required
to be paid to the Swap Counterparty (which will arise due to the netting
provisions of the Swap Contract or upon the termination or expiration of the
Swap Contract). If the Swap Counterparty defaults on its obligation to pay such
interest to the Paying Agent, or if a Swap Default occurs and is continuing or
if the Swap Contract is terminated, the Class A-4FL Interest Distribution Amount
will be an amount equal to the Distributable Certificate Interest in respect of
the Class A-4FL Regular Interest, until such time as the Swap Default is cured,
or such obligation is paid, as the case may be, or until a replacement Swap
Contract is obtained.
"CLASS A-4FL PRINCIPAL DISTRIBUTION AMOUNT" means, in respect of any
Distribution Date, an amount equal to the aggregate amount of the principal
payments made on the Class A-4FL Regular Interest on such Distribution Date.
"CLASS A-4FL GRANTOR TRUST" means the segregated pool of assets
consisting of (i) the Class A-4FL Regular Interest and the Swap Contract and all
payments under the Class X-
00
4FL Regular Interest and the Swap Contract, (ii) all funds and assets from time
to time on deposit in the Floating Rate Account and (iii) proceeds of all of the
foregoing.
"CLASS A-4FL REGULAR INTEREST" means the uncertificated interest
designated as a "regular interest" in REMIC III, which shall consist of an
Interest having a Certificate Balance equal to the Certificate Balance of the
Class A-4FL Certificates, and which has a Pass-Through Rate equal to the per
annum rate of the lesser of 5.731% and the Weighted Average REMIC I Net Mortgage
Rate in respect of each Distribution Date.
"CLASS A-1 CERTIFICATES," "CLASS A-1A CERTIFICATES," "CLASS A-2
CERTIFICATES," "CLASS A-3 CERTIFICATES," "CLASS A-AB CERTIFICATES," "CLASS A-4
CERTIFICATES," "CLASS A-4FL CERTIFICATES," "CLASS A-M CERTIFICATES," "CLASS A-J
CERTIFICATES," "CLASS B CERTIFICATES," "CLASS C CERTIFICATES," "CLASS D
CERTIFICATES," "CLASS E CERTIFICATES," "CLASS F CERTIFICATES," "CLASS G
Certificates," "CLASS H CERTIFICATES," "CLASS J CERTIFICATES," "CLASS K
CERTIFICATES," "CLASS L CERTIFICATES," "CLASS M CERTIFICATES," "CLASS N
CERTIFICATES," "CLASS O CERTIFICATES," "CLASS P CERTIFICATES," "CLASS Q
CERTIFICATES," "CLASS S CERTIFICATES," "CLASS T CERTIFICATES," "CLASS DP
CERTIFICATES," "CLASS ST-A CERTIFICATES," "CLASS ST-B CERTIFICATES," "CLASS ST-C
CERTIFICATES," "CLASS ST-D CERTIFICATES," "CLASS ST-E CERTIFICATES," "CLASS ST-F
CERTIFICATES," "CLASS X CERTIFICATES," "CLASS X-MP CERTIFICATES," "CLASS X-RC
CERTIFICATES," "CLASS R-I CERTIFICATES," "CLASS R-II CERTIFICATES" or "CLASS
R-III CERTIFICATES," mean the Certificates designated as "Class A-1," "Class
A-1A," "Class A-2," "Class X-0," "Xxxxx X-XX," "Class A-4," "Class A-4FL,"
"Class A-M," "Class A-J," "Class B," "Class C," "Class D," "Class E," "Class F,"
"Class G," "Class H," "Class J," "Class K," "Class L," "Class M," "Class N,"
"Class O," "Class P," "Class Q," "Class S," "Class T," "Class DP," "Class ST-A,"
"Class ST-B," "Class ST-C," "Class ST-D," "Class ST-E," "Class ST-F," "Class X,"
"Class X-MP," "Class X-RC," "Class R-I," "Class R-II" and "Class R-III"
respectively, on the face thereof, in substantially the form attached hereto as
Exhibits.
"CLASS A SENIOR CERTIFICATES" means the Class A-1 Certificates, the
Class A-1A Certificates, the Class A-2 Certificates, the Class A-3 Certificates,
the Class A-AB Certificates, the Class A-4 Certificates and the Class A-4FL
Certificates, collectively.
"CLASS DP CERTIFICATEHOLDER REPRESENTATIVE" shall have the meaning
assigned to such term in Section 9.41(a).
"CLASS DP REMIC" means that portion of the Trust consisting of the DCT
Industrial Portfolio C Note (including any Excess Interest payable thereon),
such amounts related thereto as shall from time to time be held in the
Certificate Account (including the DCT Industrial Portfolio C Note Custodial
Account), the Reserve Account, the DCT Industrial Portfolio C Note Distribution
Account and any REO Property related thereto (in each case to the extent
allocable to the DCT Industrial Portfolio C Note), for which a REMIC election
has been made pursuant to Section 12.1(a) hereof.
"CLASS R-DP RESIDUAL INTEREST" means the sole class of "residual
interests" in the Class DP REMIC and which shall be evidenced by the Class R-I
Certificates.
21
"CLASS R-ST RESIDUAL INTEREST" means the sole class of "residual
interests" in the Class ST REMIC and which shall be evidenced by the Class R-I
Certificates.
"CLASS ST CERTIFICATEHOLDER REPRESENTATIVE" shall have the meaning
assigned to such term in Section 9.42(a).
"CLASS ST CERTIFICATES" means the Class ST-A Certificates, the Class
ST-B Certificates, the Class ST-C Certificates, the Class ST-D Certificates, the
Class ST-E Certificates and the Class ST-F Certificates, collectively.
"CLASS ST CONTROLLING CLASS" shall mean the most subordinate Class of
Class ST Certificates then outstanding that has an outstanding Class Balance
that is not less than 25% of its initial Class Balance. For purposes of this
definition (i) the Class Balance of each Class shall be determined after giving
effect to Appraisal Reductions allocated to such Class in accordance with this
definition, (ii) a Class shall not be deemed to be outstanding if, after giving
effect to Appraisal Reductions allocated thereto, its Class Balance has been
reduced to zero, and (iii) the "most subordinate Class" is the Class having the
highest alphabetical Class designation that is then outstanding; i.e.,
initially, the most subordinate Class is the Class ST-F Certificates. For
purposes of this definition, the Appraisal Reductions with respect to the 000
00xx Xxxxxx X Note will be applied first to Class ST-F, then to Class ST-E, then
to Class ST-D, then to Class ST-C, then to Class ST-B, then to Class ST-A, in
that order, in each case until its outstanding Class Balance has been reduced to
zero.
"CLASS ST REMIC" means that portion of the Trust consisting of the 000
00xx Xxxxxx X Note (other than any Excess Interest payable thereon) such amounts
related thereto as shall from time to time be held in the Certificate Account,
the Reserve Account and the 000 00xx Xxxxxx X Note Distribution Account and any
REO Property related thereto (in each case to the extent allocable to the 000
00xx Xxxxxx X Note), for which a REMIC election has been made pursuant to
Section 12.1(a) hereof.
"CLASS X INTEREST AMOUNT" means, with respect to any Distribution Date
and the related Interest Accrual Period, interest equal to the product of (i)
one-twelfth of a per annum rate equal to the weighted average of the Class X
Strip Rates for the REMIC III Regular Interests (other than the Class X, Class
X-MP and Class X-RC Certificates), weighted on the basis of the respective
Aggregate Certificate Balances of such Classes, and (ii) the Class X Notional
Amount for such Distribution Date.
"CLASS X NOTIONAL AMOUNT" means, with respect to the Class X
Certificates and any date of determination, the aggregate of the outstanding
Certificate Balances of the Principal Balance Certificates other than the Class
DP and Class ST Certificates.
"CLASS X STRIP RATE" means, for any Distribution Date, with respect to
any Class of REMIC III Regular Interests (other than the Class X, Class X-MP and
Class X-RC Certificates), the excess, if any, of the Weighted Average REMIC I
Net Mortgage Rate for such Distribution Date over the Pass-Through Rate for such
Class of REMIC III Regular Certificates.
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"CLASS X-MP NOTIONAL AMOUNT" means, with respect to the Class X-MP
Certificates or the REMIC II Regular Interest X-MP, in each case for any date of
determination, the outstanding Principal Balance of the Millenium Portfolio IO
Component.
"CLASS X-MP STRIP AMOUNT" means, for any Distribution Date, the lesser
of (A) the Class X-MP Distributable Certificate Interest Amount for such
Distribution Date and (B) the portion of the Available Distribution Amount for
such Distribution Date that is attributable to payments of interest on the
Millenium Portfolio Mortgage Loan.
"CLASS X-MP STRIP RATE" means 0.10% per annum, multiplied by a
fraction, expressed as a percentage, the numerator of which is the number of
days in the subject Interest Accrual Period, and the denominator of which is 30.
"CLASS X-RC NOTIONAL AMOUNT" means, with respect to the Class X-RC
Certificates or the REMIC II Regular Interest X-RC, in each case for any date of
determination, the outstanding Principal Balance of the Xxxx-Xxxxxxx IO
Component.
"CLASS X-RC STRIP AMOUNT" means, for any Distribution Date, the lesser
of (A) the Class X-RC Distributable Certificate Interest Amount for such
Distribution Date and (B) the portion of the Available Distribution Amount for
such Distribution Date that is attributable to payments of interest on the
Ritz-Xxxxxxx Xxxx Passu Loan.
"CLASS X-RC STRIP RATE" means 0.10% per annum, multiplied by a
fraction, expressed as a percentage, the numerator of which is the number of
days in the subject Interest Accrual Period, and the denominator of which is 30.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act, which initially shall be
the Depository.
"CLEARSTREAM BANK" means Clearstream Bank, societe anonyme.
"CLOSING DATE" means August 17, 2006.
"CMSA" means the Commercial Mortgage Securities Association, or any
association or organization that is a successor thereto. If neither such
association nor any successor remains in existence, "CMSA" shall be deemed to
refer to such other association or organization as may exist whose principal
membership consists of servicers, trustees, certificateholders, issuers, the
placement agent and underwriters generally involved in the commercial mortgage
loan securitization industry, which is the principal such association or
organization in the commercial mortgage loan securitization industry and whose
principal purpose is the establishment of industry standards for reporting
transaction-specific information relating to commercial mortgage pass-through
certificates and commercial mortgage-backed bonds and the commercial mortgage
loans and foreclosed properties underlying or backing them to investors holding
or owning such certificates or bonds, and any successor to such other
association or organization. If an organization or association described in one
of the preceding sentences of this definition does not exist, "CMSA" shall be
deemed to refer to such other association or organization as shall be selected
by the Trustee and reasonably acceptable to the
23
Master Servicer, the Paying Agent, the Special Servicer, any Primary Servicer
and the majority certificateholder of the Controlling Class.
"CMSA ADVANCE RECOVERY REPORT" means a report substantially in the
form of, and containing the information called for in, the downloadable form of
the "Advance Recovery 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 approved by
the CMSA for commercial mortgage securities transactions generally.
"CMSA OPERATING STATEMENT ANALYSIS REPORT" means a report which is one
element of the CMSA Methodology for Analyzing and Reporting Property Income
Statements and which is substantially in the form of Exhibit N.
"CMSA REPORTS" means the Restricted Servicer Reports and the
Unrestricted Servicer Reports, collectively.
"CODE" means the Internal Revenue Code of 1986, as amended, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form and proposed
regulations thereunder, to the extent that, by reason of their proposed
effective date, such proposed regulations would apply to the Trust.
"COLLECTION PERIOD" means, with respect to any Distribution Date, the
period beginning on the day after the Determination Date in the month preceding
the month of such Distribution Date (or in the case of the first Distribution
Date, the Cut-Off Date) and ending on the Determination Date in the month in
which the Distribution Date occurs.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"COMPENSATING INTEREST" means with respect to any Distribution Date,
an amount equal to the excess of (A) Prepayment Interest Shortfalls incurred in
respect of the Mortgage Loans resulting from Principal Prepayments on such
Mortgage Loans (but not including the 000 00xx Xxxxxx X Xxxx, XXX Industrial
Portfolio C Note, any B Note, Non-Serviced Companion Mortgage Loan or Serviced
Companion Mortgage Loan) during the related Collection Period over (B) the
aggregate of the Prepayment Interest Excesses received in respect of the
Mortgage Loans serviced by the Master Servicer resulting from Principal
Prepayments on such Mortgage Loan (but not including the 000 00xx Xxxxxx X Xxxx,
XXX Industrial Portfolio C Note, any B Note, Non-Serviced Companion Mortgage
Loan or Serviced Companion Mortgage Loan) during the same related Collection
Period. Notwithstanding the foregoing, such Compensating Interest shall not (i)
exceed the portion of the aggregate Master Servicing Fee accrued at a rate per
annum equal to 2 basis points for the related Collection Period calculated in
respect of the Master Servicer's Mortgage Loans including REO Mortgage Loans
(but not including the 000 00xx Xxxxxx X Xxxx, XXX Industrial Portfolio C Note,
any B Notes, Non-Serviced Companion Mortgage Loan or Serviced Companion Mortgage
Loan), plus any investment income earned on the amount prepaid prior to such
Distribution Date, if the Master Servicer applied the subject Principal
Prepayment in accordance with the terms of the related Mortgage Loan documents
and (ii) be required to be paid on any Prepayment Interest Shortfalls to the
extent incurred in respect of any Specially Serviced Mortgage Loans.
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"CONDEMNATION PROCEEDS" means any awards resulting from the full or
partial condemnation or any eminent domain proceeding or any conveyance in lieu
or in anticipation thereof with respect to a Mortgaged Property by or to any
governmental, quasi-governmental authority or private entity with condemnation
powers other than amounts to be applied to the restoration, preservation or
repair of such Mortgaged Property or released to the related Mortgagor in
accordance with the terms of the Mortgage Loan and (if applicable) its related B
Note or Serviced Companion Mortgage Loan. With respect to the Mortgaged Property
securing any Non-Serviced Mortgage Loan or Non-Serviced Companion Mortgage Loan,
only the portion of such amounts payable to the holder of the related
Non-Serviced Mortgage Loan shall be included in Condemnation Proceeds, and with
respect to the Mortgaged Property securing any Loan Pair or A/B Mortgage Loan,
only the portion of such amounts payable to the holder of the related Serviced
Pari Passu Mortgage or A Note, as applicable, shall be included in Condemnation
Proceeds. With respect to the Mortgaged Property securing the DCT Industrial
Portfolio C Note, only the portion of such amounts payable to the holder of the
DCT Industrial Portfolio C Note shall be included in Condemnation Proceeds. With
respect to the Mortgaged Property securing the 000 00xx Xxxxxx X Note, only the
portion of such amounts payable to the holder of the 000 00xx Xxxxxx X Note
shall be included in Condemnation Proceeds.
"CONTROLLING CLASS" means the most subordinate Class of REMIC III
Regular Certificates or Class A-4FL Certificates outstanding at any time of
determination; provided, that, if the Aggregate Certificate Balance of such
Class is less than 25% of the initial Certificate Balance of such Class as of
the Closing Date, the Controlling Class shall be the next most subordinate Class
of REMIC III Regular Certificates or Class A-4FL Certificates outstanding. As of
the Closing Date, the Controlling Class will be the Class S Certificates.
"CONTROLLING PERSON" means, with respect to any Person, any other
Person who "controls" such Person within the meaning of the Securities Act.
"CORPORATE TRUST OFFICE" means, with respect to the presentment and
surrender of Certificates for the final distribution thereon or the presentment
and surrender of Certificates for any other purpose, the principal corporate
trust office of the Certificate Registrar. The principal corporate trust office
of the Trustee is presently located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust - Structured Finance, Attention: Xxxxxx
Xxxxxxx 2006-HQ9 and the office of the Certificate Registrar is presently
located for certificate transfer purposes at 000 X. XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Global Securities and Trust Services - Xxxxxx Xxxxxxx
Capital I Inc., Series 2006-HQ9, or at such other address as the Trustee or
Certificate Registrar may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Paying Agent and the
Special Servicer.
"CORRESPONDING CERTIFICATE" means the Class of Certificates (or, in
the case of the Class A-4FL Certificates, the Class A-4FL Regular Interest) as
set forth in the Preliminary Statement with respect to any Corresponding REMIC
II Regular Interest.
"CORRESPONDING REMIC I REGULAR INTEREST" means with respect to each
Majority Mortgage Loan other than the Millenium Portfolio Mortgage Loan and the
Ritz-Xxxxxxx Xxxx Passu Loan, the REMIC I Regular Interest having an initial
Certificate Balance equal to the
25
Principal Balance of such Mortgage Loan outstanding as of the Cut-Off Date,
after taking into account all principal and interest payments made or due prior
to the Cut-Off Date, and with respect to (i) the Millenium Portfolio Mortgage
Loan, each of the REMIC I MP IO Component Regular Interest and the REMIC I MP
Non-IO Component Regular Interest and (ii) the Ritz-Xxxxxxx Xxxx Passu Loan,
each of the REMIC I RC IO Component Regular Interest and the REMIC I RC Non-IO
Component Regular Interest.
"CORRESPONDING REMIC II REGULAR INTEREST" means the REMIC II Regular
Interest as defined in the Preliminary Statement with respect to any Class of
Corresponding Certificates (or, in the case of the Class A-4FL Certificates, the
Class A-4FL Regular Interest).
"CROSSED MORTGAGE LOAN" has the meaning set forth in Section 2.3(a).
"CUSTODIAN" means the Person acting as custodian for the Mortgage
Files hereunder. The initial Custodian shall be LaSalle Bank National
Association.
"CUSTODIAN MORTGAGE FILE" means the mortgage documents listed in the
definition of "Mortgage File" hereof pertaining to a particular Mortgage Loan
(and, if applicable, the related Serviced Companion Mortgage Loan and the
related B Note) and any additional documents required to be added to the
Mortgage File pursuant to this Agreement; provided that whenever the term
"Custodian Mortgage File" is used to refer to documents actually received by the
Trustee or a Custodian on its behalf, such terms shall not be deemed to include
such documents required to be included therein unless they are actually so
received.
"CUSTOMER" means a broker, dealer, bank, other financial institution
or other Person for whom the Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency.
"CUT-OFF DATE" means the end of business on August 1, 2006, or with
respect to the Ritz-Xxxxxxx Xxxx Passu Loan, July 31, 2006. The Cut-Off Date for
any Mortgage Loan that has a Due Date on a date other than the first day of each
month shall be the end of business on August 1, 2006, and Scheduled Payments due
in August 2006 with respect to Mortgage Loans not having Due Dates on the first
of each month have been deemed received on August 1, 2006, not the actual day on
which such Scheduled Payments were due.
"DCT INDUSTRIAL PORTFOLIO A/B/C LOAN" means, the DCT Industrial
Portfolio Mortgage Loan, the DCT Industrial Portfolio B Note and the DCT
Industrial Portfolio C Note.
"DCT INDUSTRIAL PORTFOLIO B NOTE" means, with respect to the DCT
Industrial Portfolio A/B/C Loan, the related subordinated B Note, which is not
included in the Trust, which is subordinated in right of payment to the DCT
Industrial Portfolio Mortgage Loan and senior in right of payment to the DCT
Industrial Portfolio C Note to the extent set forth in the related Intercreditor
Agreement. The DCT Industrial Portfolio B Note is not a "Mortgage Loan."
"DCT INDUSTRIAL PORTFOLIO C NOTE" means, with respect to the DCT
Industrial Portfolio A/B/C Loan, the related subordinated C Note, which is
included in the Trust and which is subordinated in right of payment to the DCT
Industrial Portfolio Mortgage Loan and the DCT Industrial Portfolio B Note to
the extent set forth in the related Intercreditor Agreement. The
26
DCT Industrial Portfolio C Note, together with the DCT Industrial Portfolio
Mortgage Loan, is a "Mortgage Loan."
"DCT INDUSTRIAL PORTFOLIO C NOTE AVAILABLE DISTRIBUTION AMOUNT" means,
an amount calculated as set forth in the definition of Available Distribution
Amount, but with respect to the DCT Industrial Portfolio C Note only; provided
that no Interest Reserve Amounts will be deposited in the Interest Reserve
Account with respect to the DCT Industrial Portfolio C Note.
"DCT INDUSTRIAL PORTFOLIO C NOTE CUSTODIAL ACCOUNT" means each of the
custodial sub-account(s) of the Certificate Account created and maintained by
the Master Servicer pursuant to Section 5.1(c) on behalf of the DCT Industrial
Portfolio C Note. Any such sub-account(s) shall be maintained as a sub-account
of an Eligible Account.
"DCT INDUSTRIAL PORTFOLIO C NOTE DISTRIBUTION ACCOUNT" means an
administrative account deemed to be a sub-account of the Distribution Account.
"DCT INDUSTRIAL PORTFOLIO C NOTE MAJORITY HOLDER" shall mean any
single Holder or group of Holders of the Class DP Certificates holding a
majority of the Certificate Principal Balance of the Class DP Certificates.
"DCT INDUSTRIAL PORTFOLIO C NOTE REMITTANCE AMOUNT" shall mean, with
respect to any Master Servicer Remittance Date, an amount equal to any and all
amounts to be distributed on such date with respect to the DCT Industrial
Portfolio C Note pursuant to Section 5.2(a).
"DCT INDUSTRIAL PORTFOLIO C NOTE THRESHOLD EVENT" shall have the
meaning given to "C-Loan Threshold Event" in the related Intercreditor
Agreement.
"DCT INDUSTRIAL PORTFOLIO C NOTE VOTING RIGHTS" shall mean the voting
rights evidenced by the respective Class DP Certificates. At all times during
the term of this Agreement, all Voting Rights shall be allocated among the Class
DP Certificateholders in proportion to the Percentage Interests in the Aggregate
Principal Balances evidenced by the respective Certificates.
"DCT INDUSTRIAL PORTFOLIO DISTRIBUTABLE CERTIFICATE INTEREST AMOUNT"
shall mean, in respect of the Class DP Certificates for any Distribution Date,
the sum of (a) Accrued Certificate Interest in respect of such Class of
Certificates for such Distribution Date, reduced (to not less than zero) by (i)
any Prepayment Interest Shortfalls allocated to such Class for such Distribution
Date; and (ii) Realized Losses and Expense Losses specifically allocated with
respect to such Distribution Date to reduce the DCT Industrial Portfolio
Distributable Certificate Interest Amount payable in respect of the Class DP
Certificates in accordance with Section 6.6; plus (b) the portion of the DCT
Industrial Portfolio Distributable Certificate Interest Amount for the Class DP
Certificated remaining unpaid as of the close of business on the preceding
Distribution Date.
"DCT INDUSTRIAL PORTFOLIO MORTGAGE" means the Mortgage securing the
DCT Industrial Portfolio A/B/C Loan.
27
"DCT INDUSTRIAL PORTFOLIO MORTGAGE LOAN" means the Mortgage Loan
designated as Mortgage Loan Nos. 18-23 on the Mortgage Loan Schedule and which
is senior to the DCT Industrial Portfolio B Note and DCT Industrial Portfolio C
Note and is secured by the related Mortgaged Property pursuant to the DCT
Industrial Portfolio Mortgage. The DCT Industrial Portfolio Mortgage Loan,
together with the DCT Industrial Portfolio C Note, is a "Mortgage Loan."
"DCT INDUSTRIAL PORTFOLIO NET MORTGAGE RATE" means, with respect to
the DCT Industrial Portfolio C Note, a per annum rate equal to the related
Mortgage Rate (excluding any Excess Interest or default interest) minus the
related Administrative Cost Rate; provided that for purposes of calculating the
Pass-Through Rate of the Class DP Certificates from time to time, the DCT
Industrial Portfolio Net Mortgage Rate shall be calculated without regard to any
modification, waiver or amendment of the terms of the DCT Industrial Portfolio C
Note subsequent to the Closing Date; and provided further that, because the DCT
Industrial Portfolio C Note does not accrue interest on the basis of a 360-day
year consisting of twelve 30-day months (which is the basis on which interest
accrues in respect of the Class DP Certificates), when calculating the
Pass-Through Rate for the Class DP Certificates for each Distribution Date, the
DCT Industrial Portfolio Net Mortgage Rate on the DCT Industrial Portfolio C
Note will be adjusted to equal the annualized rate at which interest would have
to accrue on the basis of a 360-day year consisting of twelve 30-day months in
order to result in the accrual of the aggregate amount of net interest actually
accrued (exclusive of Excess Interest and default interest) for the related
Interest Accrual Period.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any Mortgage
Loan, as of any date of determination and for any period, the amount calculated
for such date of determination in accordance with the procedures set forth in
Exhibit T, whether or not the Mortgage Loan has an interest only period that has
not expired as of the Cut-Off Date.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to a Due Date and
the related Determination Date, the amount of the reduction of the Scheduled
Payment which a Mortgagor is obligated to pay on such Due Date with respect to a
Mortgage Loan, a Serviced Companion Mortgage Loan or a B Note as a result of any
proceeding under bankruptcy law or any similar proceeding (other than a
Deficient Valuation Amount); provided, however, that in the case of an amount
that is deferred, but not forgiven, such reduction shall include only the net
present value (calculated at the related Mortgage Rate) of the reduction.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan or Serviced Companion
Mortgage Loan that is in default under the terms of the applicable Mortgage Loan
documentation and for which any applicable grace period has expired.
"DEFEASANCE COLLATERAL" means, with respect to any Defeasance Loan,
the United States Treasury obligations required to be pledged in lieu of
prepayment pursuant to the terms thereof.
"DEFEASANCE LOAN" means any Mortgage Loan, Serviced Companion Mortgage
Loan or B Note which requires or permits the related Mortgagor (or permits the
holder of such
28
Mortgage Loan, Serviced Companion Mortgage Loan or B Note to require the related
Mortgagor) to pledge Defeasance Collateral to such holder in lieu of prepayment.
"DEFECTIVE MORTGAGE LOAN" has the meaning set forth in Section 2.3(a).
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan (other
than an A Note or a Serviced Pari Passu Mortgage Loan), any A/B Mortgage Loan or
any Loan Pair, a valuation by a court of competent jurisdiction of the Mortgaged
Property (or, with respect to a Non-Serviced Mortgage Loan or a Serviced Pari
Passu Mortgage Loan or the 000 00xx Xxxxxx X Note, the pro rata portion of the
valuation allocable to such Non-Serviced Mortgage Loan or Serviced Pari Passu
Mortgage Loan or 000 00xx Xxxxxx X Note, as applicable) relating to such
Mortgage Loan, A/B Mortgage Loan or Loan Pair in an amount less than the then
outstanding indebtedness under such Mortgage Loan, A/B Mortgage Loan or Loan
Pair, which valuation results from a proceeding initiated under the United
States Bankruptcy Code, as amended from time to time, and that reduces the
amount the Mortgagor is required to pay under such Mortgage Loan, A/B Mortgage
Loan or Loan Pair.
"DEFICIENT VALUATION AMOUNT" means (i) with respect to each Mortgage
Loan (other than an A Note or a Serviced Pari Passu Mortgage Loan), any A/B
Mortgage Loan or any Loan Pair, the amount by which the total amount due with
respect to such Mortgage Loan, A/B Mortgage Loan or Loan Pair (excluding
interest not yet accrued), including the Principal Balance of such Mortgage
Loan, A/B Mortgage Loan or Loan Pair plus any accrued and unpaid interest
thereon and any other amounts recoverable from the Mortgagor with respect
thereto pursuant to the terms thereof, is reduced in connection with a Deficient
Valuation and (ii) with respect to any A Note or Serviced Pari Passu Mortgage
Loan, the portion of any Deficient Valuation Amount for the related A/B Mortgage
Loan or Loan Pair, as applicable, that is borne by the holder of the A Note or
Serviced Pari Passu Mortgage Loan, as applicable, under the related
Intercreditor Agreement or Loan Pair Intercreditor Agreement, as applicable.
"DEFINITIVE CERTIFICATES" means Certificates of any Class issued in
definitive, fully registered, certificated form without interest coupons.
"DELETED MORTGAGE LOAN" means a Mortgage Loan which is repurchased
from the Trust pursuant to the terms hereof or as to which one or more
Qualifying Substitute Mortgage Loans are substituted.
"DEPOSITOR" means Xxxxxx Xxxxxxx Capital I Inc., a Delaware
corporation, and its successors in interest.
"DEPOSITORY" has the meaning set forth in Section 3.7(a).
"DEPOSITORY AGREEMENT" means the Letter of Representations dated the
Closing Date and by and among the Depositor, the Paying Agent and the
Depository.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
8th day of the month in which such Distribution Date occurs or, if such day is
not a Business Day, the next succeeding Business Day, commencing September 8,
2006.
29
"DIRECTLY OPERATE" means, with respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management of
such REO Property, the holding of such REO Property primarily for sale to
customers (other than a sale of an REO Property pursuant to and in accordance
with Section 9.15) or the performance of any construction work thereon, in each
case other than through an Independent Contractor; provided, however, that the
Trustee (or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer on behalf of the Trustee) establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs, tenant improvements or capital expenditures with
respect to such REO Property (including, without limitation, construction
activity to effect repairs or in connection with leasing activity) or undertakes
any ministerial action incidental thereto.
"DISCLOSURE DOCUMENTS" means, collectively, the Free Writing
Prospectus, the Prospectus Supplement and the Private Placement Memorandum.
"DISCOUNT RATE" means the rate which, when compounded monthly, is
equivalent to the Treasury Rate when compounded semi-annually. The "Treasury
Rate," unless a different term methodology or source is otherwise set forth in
the Mortgage Loan documents, is the yield calculated by the linear interpolation
of the yields, as reported in Federal Reserve Statistical Release H.15--Selected
Interest Rates under the heading "U.S. government securities/Treasury constant
maturities" for the week ending prior to the date of the relevant principal
prepayment, of U.S. Treasury constant maturities with a maturity date (one
longer and one shorter) most nearly approximating the maturity date (or the
Anticipated Repayment Date, if applicable) of the Mortgage Loan prepaid. If
Release H.15 is no longer published, the Master Servicer will select a
comparable publication to determine the Treasury Rate.
"DISQUALIFIED ORGANIZATION" means any of (i) the United States, any
State or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for FHLMC, a majority of
its board of directors is not selected by any such governmental unit), (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381 of the Code,
and (v) any other Person so designated by the Master Servicer based upon an
Opinion of Counsel that the holding of an ownership interest in a Residual
Certificate by such Person may cause any of the REMICs, or any Person having an
Ownership Interest in any Class of Certificates, other than such Person, to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"DISTRIBUTABLE CERTIFICATE INTEREST" means, with respect to any
Distribution Date and any Class of Certificates (other than the Class A-4FL
Certificates, Class DP Certificates, Class ST Certificates, the Residual
Certificates and the Class T Certificates) or
30
Interests (including the Class A-4FL Regular Interest but not including the
Residual Certificates), the sum of (A) Accrued Certificate Interest in respect
of such Class or Classes or Interest, reduced (to not less than zero) by (i) any
Net Aggregate Prepayment Interest Shortfalls (or in the case of the Class X-MP
Certificates, the REMIC II Regular Interest X-MP, the REMIC I MP IO Component
Regular Interest, the Class X-RC Certificates, the REMIC II Regular Interest
X-RC, or the REMIC I RC IO Component Regular Interest, any Prepayment Interest
Shortfalls), for such Class or Classes of Certificates or Interests, allocated
on such Distribution Date to such Class or Classes or Interest pursuant to
Section 6.7, and (ii) Realized Losses allocated on such Distribution Date to
reduce the Distributable Certificate Interest payable to such Class or Classes
or Interest pursuant to Section 6.6, plus (B) the Unpaid Interest, plus (C) if
the Aggregate Certificate Balance is reduced because of a diversion of principal
in accordance with Section 5.2(a)(II)(iv), and there is a subsequent recovery of
amounts as described in Section 6.6(c)(i), then interest at the applicable
Pass-Through Rate that would have accrued and been distributable with respect to
the amount that the Aggregate Certificate Balance was so reduced, which interest
shall accrue from the date that the related Realized Loss is allocated through
the end of the Interest Accrual Period related to the Distribution Date on which
such amounts are subsequently recovered.
"DISTRIBUTION ACCOUNT" means the Distribution Account maintained by
the Paying Agent on behalf of the Trustee, in accordance with the provisions of
Section 5.3, which account shall be an Eligible Account.
"DISTRIBUTION DATE" means, with respect to any Determination Date, the
4th Business Day after the related Determination Date, commencing September 14,
2006.
"DUE DATE" means, with respect to a Mortgage Loan, a Serviced
Companion Mortgage Loan or a B Note, the date on which a Scheduled Payment is
due.
"XXXXX" means the Commission's Electronic Data Gathering, Analysis and
Retrieval system.
"ELIGIBLE ACCOUNT" means an account (or accounts) that is any of the
following: (i) maintained with a depository institution or trust company whose
(A) commercial paper, short-term unsecured debt obligations or other short-term
deposits are rated at least "F-1" by Fitch and "A-1" by S&P, if the deposits are
to be held in the account for 30 days or less, or (B) long-term unsecured debt
obligations are rated at least "AA-" by Fitch (or "A-" by Fitch so long as the
short-term unsecured debt obligations are rated not less than "F-1" by Fitch)
and at least "AA-" by S&P (or "A-", if the short-term unsecured debt obligations
are rated at least "A-1"), if the deposits are to be held in the account more
than 30 days or (ii) a segregated trust account or accounts maintained in the
trust department of the Trustee, the Paying Agent or other financial institution
having a combined capital and surplus of at least $50,000,000 and subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the Code
of Federal Regulations Section 9.10(b), or (iii) an account or accounts of a
depository institution acceptable to each Rating Agency, as evidenced by Rating
Agency Confirmation with respect to the use of any such account as the
Certificate Account, the Distribution Account, the DCT Industrial Portfolio C
Note Distribution Account or the 000 00xx Xxxxxx X Note Distribution Account.
Notwithstanding anything in the foregoing to the contrary, an account shall not
fail to be an
31
Eligible Account solely because it is maintained with Xxxxx Fargo Bank, National
Association, a wholly-owned subsidiary of Xxxxx Fargo & Co., provided that such
subsidiary's or its parent's (A) commercial paper, short-term unsecured debt
obligations or other short-term deposits are at least "F-1" in the case of
Fitch, and "A-1" in the case of S&P, if the deposits are to be held in the
account for 30 days or less, or (B) long-term unsecured debt obligations are
rated at least "A+" in the case of Fitch and at least "AA-" (or "A-", if the
short-term unsecured debt obligations are rated at least "A-1") in the case of
S&P, if the deposits are to be held in the account for more than 30 days.
"ELIGIBLE INVESTMENTS" means any one or more of the following
financial assets or other property:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America, FNMA,
FHLMC or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America; provided that any obligation of FNMA or FHLMC, other than an
unsecured senior debt obligation of FNMA or FHLMC, shall be an Eligible
Investment only if Rating Agency Confirmation is obtained with respect to such
investment;
(ii) demand or time deposits in, unsecured certificates of
deposit of, money market deposit accounts of, or bankers' acceptances issued by,
any depository institution or trust company (including the Trustee, the Master
Servicer, the Special Servicer, the Paying Agent or any Affiliate of the Master
Servicer, the Special Servicer, the Paying Agent or the Trustee, acting in its
commercial capacity) incorporated or organized under the laws of the United
States of America or any State thereof and subject to supervision and
examination by federal or state banking authorities, so long as the commercial
paper or other short-term debt obligations of such depository institution or
trust company are rated "A-1" by S&P and "F-1" by Fitch or the long-term
unsecured debt obligations of such depository institution or trust company have
been assigned a rating by each Rating Agency at least equal "AA-" by S&P and
"AA-" by Fitch or its equivalent or, in each case, if not rated by a Rating
Agency, then such Rating Agency has issued a Rating Agency Confirmation;
(iii) repurchase agreements or obligations with respect to any
security described in clause (i) above where such security has a remaining
maturity of one year or less and where such repurchase obligation has been
entered into with a depository institution or trust company (acting as
principal) described in clause (ii) above and where such repurchase obligation
will mature prior to the Business Day preceding the next date upon which, as
described in this Agreement, such amounts are required to be withdrawn from the
Certificate Account and which meets the minimum rating requirement for such
entity described above (or for which Rating Agency Confirmation is obtained with
respect to such ratings);
(iv) debt obligations (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof, which securities are rated "AA-" or its equivalent by each Rating
Agency, unless otherwise specified in writing by the Rating Agency; provided
that securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the
then-outstanding principal amount of securities issued by
32
such corporation and held in the Certificate Account to exceed 5% of the sum of
the aggregate Certificate Principal Balance of the Principal Balance
Certificates and the aggregate principal amount of all Eligible Investments in
the Certificate Account;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) rated
"A-1" by S&P and "F-1" by Fitch (or for which Rating Agency Confirmation is
obtained with respect to such ratings);
(vi) units of investment funds (including money market funds)
that are rated in the highest long-term category by Fitch, or if not rated by
Fitch then Fitch has issued a Rating Agency Confirmation, and "AAAm" by S&P;
(vii) guaranteed reinvestment agreements maturing within 365 days
or less issued by any bank, insurance company or other corporation whose
long-term unsecured debt rating is not less than "AA" by Fitch and "AA-" by S&P,
or for which Rating Agency Confirmation is obtained with respect to such
ratings;
(viii) any money market funds (including those managed or advised
by the Paying Agent or its affiliates) that maintain a constant asset value and
that are rated "AAAm" or "AAAm-G" (or its equivalent rating) by S&P and "AAA"
(or its equivalent) by Fitch, and any other demand, money-market or time
deposit, or any other obligation, security or investment, with respect to which
Rating Agency Confirmation has been obtained; and
(ix) such other investments bearing interest or sold at a
discount, earning a return "in the nature of interest" within the meaning of
Treasury Regulation Section 1.860G-2(g)(1)(i) (as evidenced by an Opinion of
Counsel delivered to the Trustee and the Paying Agent by the Master Servicer at
the Master Servicer's expense), as are acceptable to the Rating Agencies (as
evidenced by Rating Agency Confirmation) and treated as "permitted investments"
that are "cash flow investments" under Section 860G(a)(5) of the Code;
provided (A) such investment is held for a temporary period pursuant to Section
1.860G-2(g)(i) of the Treasury Regulations, (B) such investment is payable by
the obligor in U.S. dollars, and (C) that no such instrument shall be an
Eligible Investment (1) if such instrument evidences either (a) a right to
receive only interest payments or only principal payments with respect to the
obligations underlying such instrument or (b) a right to receive both principal
and interest payments derived from obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (2) if it may be redeemed at a price below the
purchase price or (3) if it is not treated as a "permitted investment" that is a
"cash flow investment" under Section 860G(a)(5) of the Code; and provided,
further, that any such instrument shall have a maturity date no later than the
date such instrument is required to be used to satisfy the obligations under
this Agreement, and, in any event, shall not have a maturity in excess of one
year; any such instrument must have a predetermined fixed dollar of principal
due at maturity that cannot vary or change; if rated, the obligation must not
have an "r" highlighter affixed to its rating; interest on any variable rate
instrument shall be tied to a single interest rate index plus a single fixed
spread (if any) and move proportionally with that index; and provided, further,
that no amount beneficially owned by any REMIC Pool (including any amounts
collected by the Master Servicer but not yet deposited in the Certificate
Account) may be invested in investments treated as equity interests for Federal
income tax purposes. No Eligible
33
Investments shall be purchased at a price in excess of par. For the purpose of
this definition, units of investment funds (including money market funds) shall
be deemed to mature daily.
"ENVIRONMENTAL INSURANCE POLICY" shall mean, with respect to any
Mortgage Loan or the related Mortgaged Property or REO Property, any insurance
policy covering pollution conditions and/or other environmental conditions that
is maintained from time to time in respect of such Mortgage Loan, Mortgaged
Property or REO Property, as the case may be, for the benefit of, among others,
the Trustee on behalf of the Certificateholders.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to health or the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, urea-formaldehyde insulation, radon, industrial,
toxic or hazardous substances or wastes, into the environment, including,
without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW ACCOUNT" means an account established by or on behalf of the
Master Servicer pursuant to Section 8.3(e).
"ESCROW AMOUNT" means any amount payable with respect to a Mortgage
Loan (including an A/B Mortgage Loan) for taxes, assessments, water rates,
Standard Hazard Insurance Policy premiums, ground lease payments, reserves for
capital improvements, deferred maintenance, repairs, tenant improvements,
leasing commissions, rental achievements, environmental matters and other
reserves or comparable items.
"EUROCLEAR BANK" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"EVENT OF DEFAULT" has the meaning set forth in Section 8.28(a).
"EXCESS INTEREST" means, with respect to an ARD Loan if such ARD Loan
is not prepaid in full on or before its Anticipated Repayment Date, the excess,
if any of (i) interest accrued at the rate of interest applicable to such
Mortgage Loan after such Anticipated Repayment Date (plus any interest on such
interest as may be provided for under the related Mortgage Loan documents) over
(ii) interest accrued at the rate of interest applicable to such Mortgage Loan
before such Anticipated Repayment Date. Excess Interest on an ARD Loan (other
than the DCT Industrial Portfolio C Note) is an asset of the Trust, but shall
not be an asset of any REMIC Pool formed hereunder.
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"EXCESS INTEREST GRANTOR TRUST" means that portion of the Trust that
evidences beneficial ownership of the Excess Interest (other than with respect
to the DCT Industrial Portfolio C Note) and the Excess Interest Sub-account, as
described in Section 12.5(a) hereof.
"EXCESS INTEREST SUB-ACCOUNT" means an administrative account deemed
to be a sub-account of the Distribution Account. The Excess Interest Sub-account
shall not be an asset of any REMIC Pool.
"EXCESS LIQUIDATION PROCEEDS" means, with respect to any Mortgage
Loan, the excess of (i) Liquidation Proceeds of a Mortgage Loan or related REO
Property, over (ii) the amount that would have been received if a Principal
Prepayment in full had been made with respect to such Mortgage Loan (or, in the
case of an REO Property related to an A/B Mortgage Loan, a Principal Prepayment
in full had been made with respect to both the related A Note and B Note, or, in
the case of an REO Property related to a Loan Pair, a Principal Prepayment in
full had been made with respect to both the Serviced Pari Passu Mortgage Loan
and the Serviced Companion Mortgage Loan) on the date such proceeds were
received plus accrued and unpaid interest with respect to such Mortgage Loan and
any and all expenses (including Additional Trust Expenses and Unliquidated
Advances) with respect to such Mortgage Loan. In the case of the DCT Industrial
Portfolio C Note and the 000 00xx Xxxxxx X Note, Excess Liquidation Proceeds
shall mean all amounts due to such Note pursuant to the terms of the related
Intercreditor Agreement pursuant to Sections 3(a)(xii) and 3(c)(xvi) with
respect to the DTC Industrial Portfolio C Note and Sections 3(a)(x) and
3(b)(xii) in the case of the 000 00xx Xxxxxx X Note.
"EXCESS SERVICING FEE" means, with respect to the Mortgage Loans or
the Serviced Companion Mortgage Loans for which an "excess servicing fee rate"
is designated on the Mortgage Loan Schedule, the monthly fee payable to Xxxxx
Fargo Bank, National Association or its successors and assigns as holder of
excess servicing rights, which fee shall accrue on the Scheduled Principal
Balance of each such Mortgage Loan immediately prior to the Due Date occurring
in each month at the per annum rate (determined in the same manner as the
applicable Mortgage Rate for such Mortgage Loan is determined for such month)
specified on the Mortgage Loan Schedule (the "Excess Servicing Fee Rate"). The
holder of excess servicing rights is entitled to Excess Servicing Fees only with
respect to the Mortgage Loans or Serviced Companion Mortgage Loans as indicated
on Exhibit J hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"EXCHANGE CERTIFICATION" means an Exchange Certification substantially
in the form set forth in Exhibit H hereto executed by a holder of an interest in
a Regulation S Global Certificate or a Rule 144A-IAI Global Certificate, as
applicable.
"EXEMPTION" means each of the individual prohibited transaction
exemptions relating to pass-through certificates and the operation of asset pool
investment trusts granted by the United States Department of Labor to the
Underwriters, as amended.
"EXPENSE LOSS" means a loss realized upon payment by the Trust of an
Additional Trust Expense.
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"EXTENSION" has the meaning set forth in Section 9.15(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"FINAL CERTIFICATION" has the meaning set forth in Section 2.2.
"FINAL JUDICIAL DETERMINATION" has the meaning set forth in Section
2.3(a).
"FINAL PROSPECTUS SUPPLEMENT" has the meaning set forth in the
Preliminary Statement hereto.
"FINAL RECOVERY DETERMINATION" means a determination with respect to
any Mortgage Loan, B Note, Specially Serviced Mortgage Loan or Serviced
Companion Mortgage Loan by the Special Servicer in consultation with the
Operating Adviser and the Master Servicer (including a Mortgage Loan, a Serviced
Companion Mortgage Loan or a B Note that became an REO Property), in each case,
in its good faith discretion, consistent with the Servicing Standard, that all
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, Purchase
Proceeds and other payments or recoveries that the Special Servicer expects to
be finally recoverable on such Mortgage Loan, Serviced Companion Mortgage Loan
or B Note, without regard to any obligation of the Master Servicer, the Special
Servicer or the Trustee, as the case may be, to make payments from its own funds
pursuant to Article IV hereof, have been recovered. The Special Servicer shall
be required to provide the Master Servicer with prompt written notice of any
Final Recovery Determination with respect to any Specially Serviced Mortgage
Loan upon making such determination. The Master Servicer shall notify the
Trustee and the Paying Agent of such determination and the Paying Agent shall
deliver a copy of such notice to each Rating Agency.
"FINAL SCHEDULED DISTRIBUTION DATE" means, for each Class of rated
Certificates, the Distribution Date on which such Class would be paid in full if
payments were made on the Mortgage Loans in accordance with their terms, except
that ARD Loans are assumed to be repaid on their Anticipated Repayment Dates.
"FINANCIAL MARKET PUBLISHERS" means Xxxxx, LLC and Intex Solutions,
Inc., or any successor entities thereof.
"FITCH" means Fitch, Inc. or its successor in interest.
"FIXED INTEREST DISTRIBUTION" means with respect to the Class A-4FL
Regular Interest, the payments of interest required to be made in respect of
each Distribution Date, commencing in September 2006, by the Master Servicer on
behalf of the Trustee to the Swap Counterparty pursuant to the Swap Contract at
a rate equal to the Pass-Through Rate of the Class A-4FL Regular Interest on the
Floating Rate Certificate Notional Amount subject to reduction in accordance
with the Swap Contract.
36
"FLOATING RATE ACCOUNT" means the Eligible Account or Accounts
established and maintained by the Paying Agent and the Master Servicer on behalf
of the Trustee with respect to the Class A-4FL Certificates, which shall be
entitled "LaSalle Bank National Association, as Paying Agent on behalf of HSBC
Bank USA, National Association, as Trustee, in trust for Holders of Xxxxxx
Xxxxxxx Capital I Trust 2006-HQ9, Floating Rate Account, Class A-4FL" and "Xxxxx
Fargo Bank, National Association, as Master Servicer for HSBC Bank USA, National
Association, as Trustee for the Holders of Xxxxxx Xxxxxxx Capital I Trust
2006-HQ9, Floating Rate Account, Class A-4FL", respectively; provided, that the
Floating Rate Account may be a subaccount of the Distribution Account or the
Certificate Account. The Floating Rate Account shall be an asset of the Class
A-4FL Grantor Trust.
"FLOATING RATE CERTIFICATE NOTIONAL AMOUNT" means a notional amount
equal to the Certificate Balance of the Class A-4FL Regular Interest.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
"FORM 8-K DISCLOSURE INFORMATION" has the meaning set forth in Section
13.7.
"FREE WRITING PROSPECTUS" has the meaning set forth in the Preliminary
Statement hereto.
"G&L PORTFOLIO MORTGAGE LOAN" means that certain Mortgage Loan
evidenced by two Mortgage Notes, both of which are assets of the Trust and
secured by the Mortgaged Properties identified on Schedule II and Schedule III
as the G&L Portfolio Mortgage Loan.
"GIANT FOOD-BUCKS COUNTY A/B MORTGAGE LOAN" means the Giant Food-Bucks
County Mortgage Loan and the Giant Food-Bucks County B Note.
"GIANT FOOD-BUCKS COUNTY B NOTE" means, with respect to the Giant
Food-Bucks County A/B Mortgage Loan, the related subordinated B Note not
included in the Trust, which is subordinated in right of payment to the Giant
Food-Bucks County Mortgage Loan to the extent set forth in the related
Intercreditor Agreement.
"GIANT FOOD-BUCKS COUNTY MORTGAGE" means the Mortgage securing the
Giant Food-Bucks County A/B Mortgage Loan and any other note secured by the
related Mortgaged Property.
"GIANT FOOD-BUCKS COUNTY MORTGAGE LOAN" means the Mortgage Loan
designated as Mortgage Loan No. 104 on the Mortgage Loan Schedule and which is
senior to the Giant Food-Bucks County B Note and is secured by the related
Mortgaged Property pursuant to the Giant Food-Bucks County Mortgage. The Giant
Food-Bucks County Mortgage Loan is a "Mortgage Loan."
"GLOBAL CERTIFICATE" means any Rule 144A-IAI Global Certificate,
Regulation S Temporary Global Certificate or Regulation S Permanent Global
Certificate.
37
"HOLDER" means the Person in whose name a Certificate is registered on
the Certificate Register.
"IAI DEFINITIVE CERTIFICATE" means, with respect to any Class of
Certificates sold to Institutional Accredited Investors who are not Qualified
Institutional Buyers, a Certificate in definitive, fully registered certificated
form without interest coupons.
"INDEPENDENT" means, when used with respect to any Accountants, a
Person who is "independent" within the meaning of Rule 2-01(B) of the Securities
and Exchange Commission's Regulation S-X. Independent means, when used with
respect to any other Person, a Person who (A) is in fact independent of another
specified Person and any Affiliate of such other Person, (B) does not have any
material direct or indirect financial interest in such other Person or any
Affiliate of such other Person, (C) is not connected with such other Person or
any Affiliate of such other Person as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions
and (D) is not a member of the immediate family of a Person defined in clause
(B) or (C) above.
"INDEPENDENT CONTRACTOR" means, either (i) with respect to any
Mortgage Loan (A) that is not a Specially Serviced Mortgage Loan, any Person
designated by the Master Servicer (other than the Master Servicer, but which may
be an Affiliate of the Master Servicer), or (B) that is a Specially Serviced
Mortgage Loan, any Person designated by the Special Servicer that would be an
"independent contractor" with respect to a REMIC Pool within the meaning of
Section 856(d)(3) of the Code if such REMIC Pool were a real estate investment
trust (except that the ownership test set forth in such Section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of the Aggregate Certificate Balance or Notional Amount, as the case may
be, of any Class of the Certificates (other than the Residual Certificates), a
Percentage Interest of 35% or more in the Residual Certificates or such other
interest in any Class of the Certificates or of the applicable REMIC Pool as is
set forth in an Opinion of Counsel, which shall be at no expense to the Trustee
or the Trust) so long as such REMIC Pool does not receive or derive any income
from such Person and provided that the relationship between such Person and such
REMIC is at arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer or the
Special Servicer) upon receipt by the Trustee of an Opinion of Counsel, which
shall be at the expense of the Person delivering such opinion to the Trustee, to
the effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"INITIAL CERTIFICATION" has the meaning set forth in Section 2.2.
"INITIAL DEPOSIT" means the amount of all collections made on the
Mortgage Loans from the Cut-Off Date to and excluding the Closing Date.
"INITIAL REVIEW PERIOD" has the meaning set forth in Section 9.4(d).
38
"INSPECTION REPORT" means the report delivered by the Master Servicer
or the Special Servicer, as the case may be, substantially in the form of
Exhibit L hereto.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional accredited
investor qualifying pursuant to Rule 501(a)(1), (2), (3) or (7) of Regulation D
of the Securities Act.
"INSURED ENVIRONMENTAL EVENT" has the meaning set forth in Section
9.1(f).
"INSURANCE POLICIES" means, collectively, any Standard Hazard
Insurance Policy, flood insurance policy, title insurance policy, terrorism
insurance policy or Environmental Insurance Policy relating to the Mortgage
Loans or the Mortgaged Properties in effect as of the Closing Date or thereafter
during the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under any
Insurance Policy, other than amounts required to be paid over to the Mortgagor
pursuant to law, the related Mortgage Loan, the related Serviced Companion
Mortgage Loan, the related B Note or the Servicing Standard. With respect to the
Mortgaged Property securing any Non-Serviced Mortgage Loan or Non-Serviced
Companion Mortgage Loan or 000 00xx Xxxxxx X Note, only the portion of such
amounts payable to the holder of the related Non-Serviced Mortgage Loan or 000
00xx Xxxxxx X Note, as applicable, shall be included in Insurance Proceeds, and
with respect to the Mortgaged Property securing any Loan Pair or A/B Mortgage
Loan, only the portion of such amounts payable to the holder of the related
Serviced Pari Passu Mortgage Loan or the related A Note, as applicable, shall be
included in Insurance Proceeds.
"INTERCREDITOR AGREEMENT" means, with respect to an A/B Mortgage Loan
or the 000 00xx Xxxxxx A/B/C Mortgage Loan, the related intercreditor agreement
by and between the holder of the related A Note(s) and the holder of the related
B Note relating to the relative rights of such holders of the respective A
Note(s) and B Note, as the same may be further amended from time to time in
accordance with the terms thereof.
"INTEREST" means a REMIC I Interest, a REMIC II Interest or the Class
A-4FL Regular Interest, as applicable.
"INTEREST ACCRUAL PERIOD" means, for any Distribution Date, with
respect to all Classes of Certificates (other than the Class A-4FL Certificates)
and Interests (including the Class A-4FL Regular Interest but other than the
Residual Certificates), the period beginning on the first day of the month
preceding the month in which such Distribution Date occurs and ending on the
last day of the month preceding the month in which such Distribution Date occurs
and with respect to the Class A-4FL Certificates, subject to Section 6.13, the
period from (and including) the prior Distribution Date (or the Closing Date, in
the case of the first such period) and ending on (and including) the day before
the current Distribution Date.
"INTEREST RESERVE ACCOUNT" means that Interest Reserve Account
maintained by the Master Servicer pursuant to Section 5.1(a), which account
shall be an Eligible Account.
"INTEREST RESERVE AMOUNT" has the meaning set forth in Section 5.1(d).
39
"INTEREST RESERVE LOANS" shall mean the Majority Mortgage Loans which
bear interest other than on the basis of a 360-day year consisting of twelve
(12) 30-day months.
"INTEREST RESET DATE" means the day that is two Banking Days prior to
the start of the related Interest Accrual Period.
"INTERESTED PERSON" means, as of any date of determination, the Master
Servicer, the Special Servicer, the Depositor, the holder of any related Junior
Indebtedness (with respect to any particular Mortgage Loan), a holder of 50% or
more of the Controlling Class, the Operating Adviser, any Independent Contractor
engaged by the Master Servicer or the Special Servicer pursuant to this
Agreement, or any Person actually known to a Responsible Officer of the Trustee
to be an Affiliate of any of them.
"JUNIOR INDEBTEDNESS" means any indebtedness of any Mortgagor that is
secured by a lien that is junior in right of payment to the lien of the Mortgage
securing the related Mortgage Note.
"LASALLE" has the meaning set forth in the Preliminary Statement
hereto.
"LASALLE LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to the Mortgage Loan Purchase Agreement I and shown on
Schedule I hereto.
"LATE COLLECTIONS" means, with respect to any Mortgage Loan, Serviced
Companion Mortgage Loan or B Note, all amounts received during any Collection
Period, whether as late payments or as Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, Purchase Proceeds or otherwise, that represent payments
or collections of Scheduled Payments due but delinquent for a previous
Collection Period and not previously recovered.
"LATE FEE" means a fee payable to the Master Servicer or the Special
Servicer, as the case may be, to the extent actually collected from the
Mortgagor as provided in the related Mortgage Loan, Serviced Companion Mortgage
Loan or the related B Note in connection with a late payment made by such
Mortgagor. References in this Agreement to Late Fees and default interest in
respect of any Loan Pair or in respect of any Non-Serviced Mortgage Loan and its
related Non-Serviced Companion Mortgage Loan shall mean only the portion thereof
that is received by the Trust in accordance with the applicable Loan Pair
Intercreditor Agreement or Non-Serviced Mortgage Loan Intercreditor Agreement.
"LIBOR" means with respect to each Interest Accrual Period, the per
annum rate for deposits in U.S. dollars for a period of one month, which appears
on the Telerate page 3750 as the "London Interbank Offering Rate" as of 11:00
a.m., London time, on the Interest Reset Date. If such rate does not appear on
said Telerate page 3750, LIBOR shall be the arithmetic mean of the offered
quotations obtained by the Paying Agent from the principal London office of four
major banks in the London interbank market selected by the Swap Counterparty in
its sole discretion (each, a "Reference Bank") for rates at which deposits in
U.S. dollars are offered to prime banks in the London interbank market for a
period of one month in an amount that is representative for a single transaction
in the relevant market at the relevant time as of approximately 11:00 a.m.,
London time, on the Interest Reset Date. If fewer than two Reference Banks
provide the Swap Counterparty with such quotations, LIBOR shall be the rate per
annum
40
which the Swap Counterparty determines to be the arithmetic mean of the rates
quoted by major banks in New York City, New York selected by the Swap
Counterparty at approximately 11:00 a.m. New York City time on the first day of
the Interest Accrual Period for loans in U.S. dollars to leading European banks
for a period of one month in an amount that is representative for a single
transaction in the relevant market at the relevant time. LIBOR for the initial
Interest Accrual Period is 5.3278%.
"LIQUIDATION EXPENSES" means reasonable and direct expenses incurred
by the Special Servicer on behalf of the Trust in connection with the
enforcement and liquidation of any Specially Serviced Mortgage Loan or REO
Property acquired in respect thereof including, without limitation, reasonable
legal fees and expenses, appraisal fees, committee or referee fees, property
manager fees, and, if applicable, brokerage commissions and conveyance taxes for
such Specially Serviced Mortgage Loan. All Liquidation Expenses relating to
enforcement and disposition of the Specially Serviced Mortgage Loan shall be (i)
paid out of income from the related REO Property, to the extent available, (ii)
paid out of related proceeds from liquidation or (iii) advanced by the Master
Servicer or the Special Servicer, subject to Section 4.4 and Section 4.6(e)
hereof, as a Servicing Advance.
"LIQUIDATION FEE" means a fee equal to the product of (x) 1.0% and (y)
the Liquidation Proceeds received in connection with a final disposition of a
Specially Serviced Mortgage Loan or B Note or related REO Property or portion
thereof and any Condemnation Proceeds and Insurance Proceeds received by the
Trust (net of any expenses incurred by the Special Servicer on behalf of the
Trust in connection with the collection of such Condemnation Proceeds and
Insurance Proceeds) other than Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds received in connection with any Non-Serviced Mortgage Loan or
the 000 00xx Xxxxxx X Note; provided, however, that (A) in the case of a final
disposition consisting of the repurchase of a Mortgage Loan or REO Property by a
Seller pursuant to Section 2.3, such fee will only be paid by such Seller and
due to the Special Servicer if repurchased after the date that is 180 days or
more after the applicable Seller receives notice of the breach or defect causing
the repurchase and (B) in the case of a repurchase of a Mortgage Loan by a
related B Note holder or mezzanine lender, such fee will only be due to the
Special Servicer if repurchased 60 days after the Master Servicer, the Special
Servicer or the Trustee receives notice of the default causing the repurchase.
For the avoidance of doubt, a Liquidation Fee will be payable in connection with
a repurchase of (i) an A Note by the holder of the related B Note or (ii) a
Mortgage Loan by the holder of the related mezzanine loan, only to the extent
set forth in the related Intercreditor Agreement.
"LIQUIDATION PROCEEDS" means proceeds from the sale or liquidation of
a Specially Serviced Mortgage Loan or related REO Property (net of Liquidation
Expenses). With respect to the mortgaged property or properties securing any
Non-Serviced Mortgage Loan or Non-Serviced Companion Mortgage Loan or the 000
00xx Xxxxxx X Note, only the portion of such amounts payable to the holder of
the related Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note, as
applicable, will be included in Liquidation Proceeds, and with respect to the
mortgaged property or properties securing any Loan Pair or A/B Mortgage Loan,
only an allocable portion of such Liquidation Proceeds will be distributable to
the Certificateholders.
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"LIQUIDATION REALIZED LOSS" means, with respect to each Mortgage Loan
or REO Property, as the case may be, as to which a Cash Liquidation or REO
Disposition has occurred, an amount equal to the sum, without duplication, of
(A) the Principal Balance (as increased by any Unliquidated Advance with respect
to such Mortgage Loan) of the Mortgage Loan (or such deemed Principal Balance,
in the case of an REO Mortgage Loan) as of the date of the Cash Liquidation or
REO Disposition (adjusted in accordance with Section 6.6(c)(i)), plus (B) unpaid
interest and interest accrued thereon at the applicable Mortgage Rate (including
interest accrued and unpaid on the portion of the Principal Balance added in
accordance with Section 6.6(c)(i), which interest shall accrue from the date of
the reduction in the Principal Balance resulting from the allocation of a
Realized Loss incurred pursuant to Section 6.6(b)(i)), plus (C) any expenses
(including Additional Trust Expenses, unpaid Servicing Advances and unpaid
Advance Interest) incurred in connection with such Mortgage Loan that have been
paid or are payable or reimbursable to any Person, other than amounts included
in the definition of Liquidation Expenses and amounts previously treated as
Expense Losses attributable to principal (and interest thereon) minus the sum of
(i) REO Income applied as recoveries of principal or interest on the related
Mortgage Loan or REO Property, and (ii) Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Late Collections and all other amounts recovered
from the related Mortgagor and received during the Collection Period in which
such Cash Liquidation or REO Disposition occurred and which are not required
under any Intercreditor Agreement, any Loan Pair Intercreditor Agreement or
Non-Serviced Mortgage Loan Intercreditor Agreement to be payable or reimbursable
to any holder of a B Note, a Serviced Companion Mortgage Loan or a Non-Serviced
Companion Mortgage Loan. REO Income and Liquidation Proceeds shall be applied
first to reimburse the Master Servicer, the Special Servicer and the Trustee, as
applicable, to the extent that Section 5.2(a)(I) otherwise entitles such party
to reimbursement, for any Nonrecoverable Advance with respect to the related
Mortgage Loan, and then for all Workout-Delayed Reimbursement Amounts with
respect to such related Mortgage Loan (but not any such amount that has become
Unliquidated Advances), and any remaining REO Income and Liquidation Proceeds
and any Condemnation Proceeds and Insurance Proceeds shall be applied first
against any Additional Trust Expenses (to the extent not included in the
definition of Liquidation Expenses) for such Mortgage Loan, next as a recovery
of any Nonrecoverable Advance (and interest thereon) with respect to such
Mortgage Loan previously paid from principal collections pursuant to Section
5.2(a)(II), next to any Unliquidated Advances with respect to such Mortgage
Loan, next to the unpaid interest on the Mortgage Loan, calculated as described
in clause (B) above, and then against the Principal Balance of such Mortgage
Loan, calculated as described in clause (A) above.
"LOAN GROUP" means either Loan Group 1 or Loan Group 2, as the case
may be.
"LOAN GROUP PRINCIPAL DISTRIBUTION AMOUNT" means the Loan Group 1
Principal Distribution Amount or the Loan Group 2 Principal Distribution Amount,
as applicable.
"LOAN GROUP 1" means all of the Mortgage Loans that are Loan Group 1
Mortgage Loans and any successor REO Mortgage Loans with respect thereto.
"LOAN GROUP 1 MORTGAGE LOAN" means any Mortgage Loan identified on the
Mortgage Loan Schedule as belonging to Loan Group 1.
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"LOAN GROUP 1 PRINCIPAL DISTRIBUTION AMOUNT" means, for any
Distribution Date, that portion, if any, of the Principal Distribution Amount
attributable to Mortgage Loans included in Loan Group 1.
"LOAN GROUP 2" means all of the Mortgage Loans that are Loan Group 2
Mortgage Loans and any successor REO Mortgage Loans with respect thereto.
"LOAN GROUP 2 MORTGAGE LOAN" means any Mortgage Loan identified on the
Mortgage Loan Schedule as belonging to Loan Group 2.
"LOAN GROUP 2 PRINCIPAL DISTRIBUTION AMOUNT" means, for any
Distribution Date, that portion, if any, of the Principal Distribution Amount
attributable to Mortgage Loans included in Loan Group 2.
"LOAN PAIR" means a Serviced Pari Passu Mortgage Loan and the related
Serviced Companion Mortgage Loan, collectively.
"LOAN PAIR INTERCREDITOR AGREEMENT" means, with respect to a Loan
Pair, the related intercreditor agreement by and between the holders of the
related Serviced Pari Passu Mortgage Loan and the related Serviced Companion
Mortgage Loan relating to the relative rights of such holders, as the same may
be further amended from time to time in accordance with the terms thereof.
"LOAN-TO-VALUE RATIO" means, as of any date with respect to a Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of such Mortgage Loan at the date of determination and the
denominator of which is the value of the Mortgaged Property as shown on the most
recent Appraisal or valuation of the Mortgaged Property which is available as of
such date or, in the case of any Non-Serviced Mortgage Loan, the 000 00xx Xxxxxx
X Note, or Loan Pair, the allocable portion thereof.
"LOCK-BOX ACCOUNT" has the meaning set forth in Section 8.3(g).
"LOCK-BOX AGREEMENT" means, with respect to any Mortgage Loan, any
lock-box agreement relating to such Mortgage Loan among the related Mortgagor, a
depositary institution and the Master Servicer (or the applicable Primary
Servicer or Sub-Servicer on its behalf) pursuant to which a Lock-Box Account is
created.
"LOSSES" has the meaning set forth in Section 12.4.
"LUXEMBOURG PAYING AGENT" has the meaning set forth in Section 7.18.
"LUXEMBOURG TRANSFER AGENT" has the meaning set forth in Section 7.18.
"MAI" means Member of the Appraisal Institute.
"MAJORITY MORTGAGE LOAN" means any Mortgage Loan other than the DCT
Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note.
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"MASTER SERVICER" means Xxxxx Fargo Bank, National Association and its
permitted successors or assigns.
"MASTER SERVICER CONSENT MATTERS" has the meaning set forth in Section
8.3(a).
"MASTER SERVICER INDEMNIFIED PARTIES" has the meaning set forth in
Section 8.25(a).
"MASTER SERVICER LOSSES" has the meaning set forth in Section 8.25(a).
"MASTER SERVICER REMITTANCE DATE" means, for each Distribution Date,
the Business Day immediately preceding such Distribution Date.
"MASTER SERVICER REMITTANCE REPORT" means a report prepared by the
Master Servicer and in such media as may be agreed upon by the Master Servicer
and the Paying Agent containing such information regarding the Mortgage Loans as
will permit the Paying Agent to calculate the amounts to be distributed to the
Certificateholders pursuant to this Agreement and to furnish the Monthly
Certificateholders Report to Certificateholders required to be delivered
hereunder and containing such additional information as the Master Servicer, the
Paying Agent and the Depositor may from time to time mutually agree.
"MASTER SERVICING FEE" means for each calendar month, as to each
Mortgage Loan, Serviced Companion Mortgage Loan and B Note (including REO
Mortgage Loans and Defeasance Loans) but not as to any Non-Serviced Mortgage
Loan or the 000 00xx Xxxxxx X Note (as to which there is no Master Servicing Fee
payable to the Master Servicer under this Trust), an amount equal to the Master
Servicing Fee Rate applicable to such month (determined in the same manner
(other than the rate of accrual) as the applicable Mortgage Rate is determined
for such Mortgage Loan, Serviced Companion Mortgage Loan or B Note for such
month) multiplied by the Scheduled Principal Balance of such Mortgage Loan,
Serviced Companion Mortgage Loan or B Note immediately before the Due Date
occurring in such month, subject to reduction in respect of Compensating
Interest, as set forth in Section 8.10(c).
"MASTER SERVICING FEE RATE" means, with respect to each Mortgage Loan,
Serviced Companion Mortgage Loan and B Note (including any Mortgage Loan
relating to an REO Property), the rate per annum specified as such on the
Mortgage Loan Schedule. With respect to a Non-Serviced Mortgage Loan, no Master
Servicing Fee Rate is charged by the Master Servicer, but the Pari Passu Loan
Servicing Fee Rate is charged by the applicable Non-Serviced Mortgage Loan
Master Servicer pursuant to the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement. With respect to the 000 00xx Xxxxxx X Note, no Master
Servicing Fee Rate is charged by the Master Servicer, but the applicable 000
00xx Xxxxxx X Note Servicing Fee Rate is charged by the MLMT 2006-C1 Master
Servicer pursuant to the MLMT 2006-C1 Pooling and Servicing Agreement.
"MATERIAL BREACH" has the meaning set forth in Section 2.3(a).
"MATERIAL DOCUMENT DEFECT" has the meaning set forth in Section
2.3(a).
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"MATURITY DATE" means, with respect to any Mortgage Loan, Serviced
Companion Mortgage Loan or B Note as of any date of determination, the date on
which the last payment of principal is due and payable thereunder, after taking
into account all Principal Prepayments received and any Deficient Valuation,
Debt Service Reduction Amount or modification of the Mortgage Loan, Serviced
Companion Mortgage Loan or B Note occurring prior to such date of determination,
but without giving effect to (i) any acceleration of the principal of such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note or (ii) any grace
period permitted by such Mortgage Loan, B Note or Serviced Companion Mortgage
Loan.
"MERS" means Mortgage Electronic Registration Systems, Inc.
"MILLENIUM PORTFOLIO IO COMPONENT" means a component of the beneficial
interest in the Millenium Portfolio Mortgage Loan with an initial principal
balance of $42,700,000 as of the Cut-Off Date, which principal balance will be
reduced by all principal payments made on the Millenium Portfolio Mortgage Loan
until such component is reduced to zero; provided that Realized Losses on the
Millenium Portfolio Mortgage Loan will reduce the principal balance of the
Millenium Portfolio IO Component and the Millenium Portfolio Non-IO Component
pro rata. Distributions in respect of a reimbursement of any Realized Losses in
respect of the Millenium Portfolio Mortgage Loan previously allocated to any
Class of Certificates or Interests shall not constitute distributions of
principal and shall not result in the reduction of the principal balance of the
Millenium Portfolio IO Component.
"MILLENIUM PORTFOLIO MORTGAGE LOAN" means Mortgage Loan Nos. 11-13.
"MILLENIUM PORTFOLIO NON-IO COMPONENT" means a component of the
beneficial interest in the Millenium Portfolio Mortgage Loan with an initial
principal balance of $67,092,488 as of the Cut-Off Date, which principal balance
will be reduced by all principal payments made on the Millenium Portfolio
Mortgage Loan after the principal balance of the Millenium Portfolio IO
Component has first been reduced to zero; provided that the Realized Losses on
the Millenium Portfolio Mortgage Loan will reduce the principal balance of the
Millenium Portfolio IO Component and the Millenium Portfolio Non-IO Component
pro rata. Distributions in respect of a reimbursement of any Realized Losses in
respect of the Millenium Portfolio Mortgage Loan previously allocated to any
Class of Certificates or Interests shall not constitute distributions of
principal and shall not result in the reduction of the principal balance of the
Millenium Portfolio Non-IO Component.
"MLMT 2006-C1 MASTER SERVICER" means the applicable "master servicer"
under the MLMT 2006-C1 Pooling and Servicing Agreement.
"MLMT 2006-C1 POOLING AND SERVICING AGREEMENT" means that certain
Pooling and Servicing Agreement, dated as of May 1, 2006, between Xxxxxxx Xxxxx
Mortgage Investors, Inc., as Depositor, Midland Loan Services, Inc., as Master
Servicer No. 1, Xxxxx Fargo Bank National Association, as Master Servicer No. 2,
Midland Loan Services, Inc., as Special Servicer, U.S. Bank, National
Association, as Trustee and LaSalle Bank National Association, as Certificate
Administrator and Custodian.
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"MLMT 2006-C1 SPECIAL SERVICER" means the applicable "special
servicer" under the MLMT 2006-C1 Pooling and Servicing Agreement.
"MODIFICATION FEE" means a fee, if any, collected from a Mortgagor by
the Master Servicer in connection with a modification of any Mortgage Loan
(other than a Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note),
Serviced Companion Mortgage Loan or B Note other than a Specially Serviced
Mortgage Loan or collected in connection with a modification by the Special
Servicer of a Specially Serviced Mortgage Loan.
"MODIFICATION LOSS" means, with respect to each Mortgage Loan, (i) a
decrease in the Principal Balance of such Mortgage Loan as a result of a
modification thereof in accordance with the terms hereof, (ii) any expenses
connected with such modification, to the extent (x) reimbursable to the Trustee,
the Special Servicer or the Master Servicer and (y) not recovered from the
Mortgagor or (iii) in the case of a modification of such Mortgage Loan that
reduces the Mortgage Rate thereof, the excess, on each Due Date, of the amount
of interest that would have accrued at a rate equal to the original Mortgage
Rate, over interest that actually accrued on such Mortgage Loan during the
preceding Collection Period.
"MONEY TERM" means with respect to any Mortgage Loan, Serviced
Companion Mortgage Loan or B Note, the Maturity Date, Mortgage Rate, Principal
Balance, amortization term or payment frequency thereof or any provision thereof
requiring the payment of a prepayment premium, yield maintenance charge or
percentage premium in connection with a principal prepayment (and shall not
include late fees or default interest provisions).
"MONTHLY CERTIFICATEHOLDERS REPORT" means a report provided pursuant
to Section 5.4 by the Paying Agent monthly as of the related Determination Date
generally in the form and substance of Exhibit M, which sets forth, to the
extent applicable: (i) the date of such Distribution Date, and of the Record
Date, Interest Accrual Period, and Determination Date for such Distribution
Date; (ii) the Available Distribution Amount for the Distribution Date, and any
other cash flows received on the Mortgage Loans and applied to pay fees and
expenses (including the components of the Available Distribution Amount or such
other cash flows); (iii) the aggregate amount of servicing fees, Special
Servicing Fees, other special servicing compensation and Trustee Fees paid to
the Master Servicer, the Primary Servicer, the Special Servicer, the holders of
the rights to Excess Servicing Fees, the Trustee and the Paying Agent with
respect to the Mortgage Loans; (iv) the amount of other fees and expenses
accrued and paid from the Trust Fund, including without limitation Advance
reimbursement and interest on Advances, and specifying the purpose of such fees
or expenses and the party receiving payment of those amounts, if applicable; (v)
the amount, if any, of such distributions to the Holders of each Class of
Principal Balance Certificates applied to reduce the respective Certificate
Balances thereof; (vi) the amount of such distribution to holders of each Class
of Certificates allocable to (A) interest accrued (including Excess Interest) at
the respective Pass-Through Rates, less any Net Aggregate Prepayment Interest
Shortfalls and (B) Prepayment Premiums (including Prepayment Premiums
distributed in respect of the Class A-4FL Regular Interest and paid to the Swap
Counterparty); (vii) the amount of any shortfall in principal distributions and
any shortfall in interest distributions to each applicable Class of
Certificates; (viii) the amount of excess cash flow, if any distributed to the
holder of the Residual Certificates; (ix) the Aggregate Certificate Balance or
Notional Amount of each Class of Certificates before and after giving effect to
the
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distribution made on such Distribution Date; (x) the Pass-Through Rate
applicable to each Class of Certificates for such Distribution Date; (xi) the
Weighted Average Mortgage Rate (and interest rates by distributional groups or
ranges) of the Mortgage Loans as of the related Determination Date; (xii) the
number of outstanding Mortgage Loans and the aggregate Principal Balance and
Scheduled Principal Balance of the Mortgage Loans and the weighted average
remaining term at the close of business on such Determination Date, with respect
to the Mortgage Loans or with respect to each Loan Group; (xiii) the number and
aggregate Scheduled Principal Balance of Mortgage Loans (A) delinquent 30-59
days, (B) delinquent 60-89 days, (C) delinquent 90 or more days, (D) as to which
foreclosure proceedings have been commenced, or (E) as to which bankruptcy
proceedings have been commenced; (xiv) the aggregate amount and general purpose
of Servicing Advances and P&I Advances outstanding, separately stated, that have
been made by the Master Servicer, the Special Servicer and the Trustee with
respect to the Mortgage Loans and the aggregate amount and general purpose of
Servicing Advances and P&I Advances made by the applicable Non-Serviced Mortgage
Loan Master Servicer in respect of the Non-Serviced Mortgage Loans; (xv) the
number and related Principal Balances of any Mortgage Loans modified, extended
or waived on a loan-by-loan basis since the previous Determination Date
(including a description of any modifications, extensions or waivers to mortgage
loan terms, fees, penalties or payments during the distribution period); (xvi)
with respect to any REO Property included in the Trust, the Principal Balance of
the related Mortgage Loan as of the date of acquisition of the REO Property and
the Scheduled Principal Balance thereof; (xvii) as of the related Determination
Date (A) as to any REO Property sold during the related Collection Period, the
date of the related determination by the Special Servicer that it has recovered
all payments which it expects to be finally recoverable and the amount of the
proceeds of such sale deposited into the Certificate Account, and (B) the
aggregate amount of other revenues collected by the Special Servicer with
respect to each REO Property during the related Collection Period and credited
to the Certificate Account, in each case identifying such REO Property by the
loan number of the related Mortgage Loan; (xviii) the aggregate amount of
Principal Prepayments made during the related Collection Period with respect to
the Mortgage Loans and with respect to each Loan Group; (xix) the amount of
Unpaid Interest and Realized Losses, if any, incurred with respect to the
Mortgage Loans, including a breakout by type of such Realized Losses with
respect to the Mortgage Loans and with respect to each Loan Group; (xx) any
Material Breaches of Mortgage Loan representations and warranties of which the
Trustee, the Master Servicer or the Special Servicer has received written
notice; (xxi) the amount of any Appraisal Reductions effected during the related
Collection Period on a loan-by-loan basis and the total Appraisal Reductions in
effect as of such Distribution Date (and in the case of the Non-Serviced
Mortgage Loans, the amount of any appraisal reductions effected under the
related Non-Serviced Mortgage Loan Pooling and Servicing Agreement and in the
case of the 000 00xx Xxxxxx X Note, the amount of any appraisal reductions
effected under the MLMT 2006-C1 Pooling and Servicing Agreement); (xxii) the
amounts received in respect of the Swap Contract or the amounts paid in respect
of the Swap Contract and, if any of such amounts are less than the full amount
required to be paid under the Swap Contract, the amount of the shortfall;
(xxiii) the identification of any Rating Agency Trigger Event or Swap Default as
of the close of business on the last day of the immediately preceding calendar
month with respect to the Swap Contract (including, if applicable, the notice
required by Section 6.13); (xxiv) the amount of any (1) payment by the Swap
Counterparty as a termination payment, (2) payment to any successor interest
rate swap counterparty to acquire a replacement interest rate swap agreement,
and (3)
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collateral posted in connection with any Rating Agency Trigger Event; and (xxv)
the amount of and identification of any payments on the Class A-4FL Certificates
in addition to the amount of principal and interest due thereon, such as any
payment received in connection with the Swap Contract or any payment of a
Prepayment Premium after the termination of the Swap Contract that is required
to be distributed on the Class A-4FL Certificates pursuant to the terms of this
Agreement. In the case of information furnished pursuant to subclauses (v), (vi)
and (ix) above, the amounts shall be expressed in the aggregate and as a dollar
amount per $1,000 of original principal amount of the Certificates for all
Certificates of each applicable Class.
"MOODY'S" means Xxxxx'x Investors Service Inc. or its successor in
interest.
"MORTGAGE" means the mortgage, deed of trust or other instrument
securing a Mortgage Note.
"MORTGAGE FILE" means the mortgage documents listed below:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of HSBC Bank USA, National Association, as Trustee
for Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2006-HQ9, without recourse, representation or warranty" or
if the original Mortgage Note is not included therein, then a lost note
affidavit with a copy of the Mortgage Note attached thereto;
(ii) the original Mortgage, with evidence of recording thereon, and,
if the Mortgage was executed pursuant to a power of attorney, a certified true
copy of the power of attorney certified by the public recorder's office, with
evidence of recording thereon (if recording is customary in the jurisdiction in
which such power of attorney was executed) or certified by a title insurance
company or escrow company to be a true copy thereof; provided that if such
original Mortgage cannot be delivered with evidence of recording thereon on or
prior to the 45th day following the Closing Date because of a delay caused by
the public recording office where such original Mortgage has been delivered for
recordation or because such original Mortgage has been lost, the Seller shall
deliver or cause to be delivered to the Custodian a true and correct copy of
such Mortgage, together with (A) in the case of a delay caused by the public
recording office, an Officer's Certificate of the applicable Seller stating that
such original Mortgage has been sent to the appropriate public recording
official for recordation or (B) in the case of an original Mortgage that has
been lost after recordation, a certification by the appropriate county recording
office where such Mortgage is recorded that such copy is a true and complete
copy of the original recorded Mortgage;
(iii) the originals of all agreements modifying a Money Term or other
material modification, consolidation and extension agreements, if any, with
evidence of recording thereon, or if any such original modification,
consolidation or extension agreements have been delivered to the appropriate
recording office for recordation and either have not yet been returned on or
prior to the 45th day following the Closing Date with evidence of recordation
thereon or have been lost after recordation, true copies of such modifications,
consolidations or extensions certified by the applicable Seller together with
(A) in the case of a delay caused by the public recording office, an Officer's
Certificate of the applicable Seller stating that such original modification,
consolidation or extension agreement has been dispatched or sent to the
48
appropriate public recording official for recordation or (B) in the case of an
original modification, consolidation or extension agreement that has been lost
after recordation, a certification by the appropriate county recording office
where such document is recorded that such copy is a true and complete copy of
the original recorded modification, consolidation or extension agreement, and
the originals of all assumption agreements, if any;
(iv) an original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except for recording information
not yet available if the instrument being recorded has not been returned from
the applicable recording office), signed by the holder of record in blank or in
favor of "HSBC Bank USA, National Association, as Trustee for Xxxxxx Xxxxxxx
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-HQ9";
provided, if the related Mortgage has been recorded in the name of MERS or its
designee, no Assignment of Mortgage in favor of the Trustee will be required to
be submitted for recording or filing and instead, the applicable Seller shall
take all actions as are necessary to cause the Trustee to be shown as, the owner
of the related Mortgage on the record of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS and
shall deliver to the Special Servicer, the Trustee and the Custodian evidence
confirming that the Trustee is shown as the owner on the record of MERS;
(v) originals of all intervening assignments of Mortgage (except with
respect to any Mortgage that has been recorded in the name of MERS or its
designees), if any, with evidence of recording thereon or, if such original
assignments of Mortgage have been delivered to the appropriate recorder's office
for recordation, certified true copies of such assignments of Mortgage certified
by the applicable Seller, or in the case of an original blanket intervening
assignment of Mortgage retained by the applicable Seller, a copy thereof
certified by the applicable Seller or, if any original intervening assignment of
Mortgage has not yet been returned on or prior to the 45th day following the
Closing Date from the applicable recording office or has been lost, a true and
correct copy thereof, together with (A) in the case of a delay caused by the
public recording office, an Officer's Certificate of the applicable Seller
stating that such original intervening assignment of Mortgage has been sent to
the appropriate public recording official for recordation or (B) in the case of
an original intervening assignment of Mortgage that has been lost after
recordation, a certification by the appropriate county recording office where
such assignment is recorded that such copy is a true and complete copy of the
original recorded intervening assignment of Mortgage;
(vi) if the related Assignment of Leases is separate from the
Mortgage, the original of such Assignment of Leases with evidence of recording
thereon or, if such Assignment of Leases has not been returned on or prior to
the 45th day following the Closing Date from the applicable public recording
office, a copy of such Assignment of Leases certified by the applicable Seller
to be a true and complete copy of the original Assignment of Leases submitted
for recording, together with (A) an original of each assignment of such
Assignment of Leases with evidence of recording thereon and showing a complete
recorded chain of assignment from the named assignee to the holder of record,
and if any such assignment of such Assignment of Leases has not been returned
from the applicable public recording office, a copy of such assignment certified
by the applicable Seller to be a true and complete copy of the original
assignment submitted for recording, and (B) an original assignment of such
Assignment of Leases, in recordable form, signed by the holder of record in
favor of "HSBC Bank USA,
49
National Association, as Trustee for Xxxxxx Xxxxxxx Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 2006-HQ9," which assignment may be
effected in the related Assignment of Mortgage; provided, if the related
Assignment of Leases has been recorded in the name of MERS or its designee, no
assignment of Assignment of Leases in favor of the Trustee will be required to
be recorded or delivered and instead, the applicable Seller shall take all
actions as are necessary to cause the Trustee to be shown as, the owner of the
related Assignment of Leases on the record of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS and
shall deliver to the Special Servicer, the Custodian and the Trustee evidence
confirming that the Trustee is shown as the owner on the record of MERS;
(vii) the original or a copy of each guaranty, if any, constituting
additional security for the repayment of such Mortgage Loan;
(viii) the original Title Insurance Policy or in the event such
original Title Insurance Policy has not been issued, an original binder or
actual title commitment or a copy thereof certified by the title company with
the original Title Insurance Policy to follow within 180 days of the Closing
Date or a preliminary title report with an original Title Insurance Policy to
follow within 180 days of the Closing Date;
(ix) (A) UCC financing statements (together with all assignments
thereof) and (B) UCC-2 or UCC-3 financing statements to the Custodian executed
and delivered in connection with the Mortgage Loan; provided, if the related
Mortgage has been recorded in the name of MERS or its designee, no such
financing statements will be required to be recorded or delivered and instead,
the applicable Seller shall take all actions as are necessary to cause the
Trustee to be shown as the owner of the related UCC financing statements on the
record of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS and shall deliver to the Special
Servicer and the Trustee and the Custodian evidence confirming that the Trustee
is shown as the owner on the record of MERS;
(x) copies of the related ground lease(s), if any, to any Mortgage
Loan where the Mortgagor is the lessee under such ground lease and there is a
lien in favor of the mortgagee in such lease;
(xi) copies of any loan agreements, lock-box agreements and
intercreditor agreements (including, without limitation, any Intercreditor
Agreement, any Non-Serviced Mortgage Loan Intercreditor Agreement and any Loan
Pair Intercreditor Agreement, and a copy (that is, not the original) of the
mortgage note evidencing the related Serviced Companion Mortgage Loan and B
Note), if any, related to any Mortgage Loan;
(xii) either (A) the original of each letter of credit, if any,
constituting additional collateral for such Mortgage Loan, which shall be
assigned to the Trustee and delivered to the Custodian on behalf of the Trust
with a copy to be held by the applicable Primary Servicer (or the Master
Servicer), and applied, drawn, reduced or released in accordance with documents
evidencing or securing the applicable Mortgage Loan, this Agreement and the
applicable Primary Servicing Agreement or (B) the original of each letter of
credit, if any, constituting additional collateral for such Mortgage Loan, which
shall be held by the applicable
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Primary Servicer (or the Master Servicer) on behalf of the Trustee, with a copy
to be held by the Custodian, and applied, drawn, reduced or released in
accordance with documents evidencing or securing the applicable Mortgage Loan,
this Agreement and the applicable Primary Servicing Agreement (it being
understood that each Seller has agreed (a) that the proceeds of such letter of
credit belong to the Trust, (b) to notify, on or before the Closing Date, the
bank issuing the letter of credit that the letter of credit and the proceeds
thereof belong to the Trust, and to use reasonable efforts to obtain within 30
days (but in any event to obtain within 90 days) following the Closing Date, an
acknowledgement thereof by the bank (with a copy of such acknowledgement to be
sent to the Custodian) or a reissued letter of credit and (c) to indemnify the
Trust for any liabilities, charges, costs, fees or other expenses accruing from
the failure of the Seller to assign all rights in and to the letter of credit
hereunder including the right and power to draw on the letter of credit). In the
case of clause (B) above, any letter of credit held by the applicable Primary
Servicer (or the Master Servicer) acknowledges that any letter of credit held by
it shall be held in its capacity as agent of the Trust, and if the applicable
Primary Servicer (or Master Servicer) sells its rights to service the applicable
Mortgage Loan, the applicable Primary Servicer (or Master Servicer) will assign
the applicable letter of credit to the Trust or at the direction of the Special
Servicer (with respect to any Specially Serviced Mortgage Loan) to such party as
the Special Servicer may instruct, in each case, at the expense of the
applicable Primary Servicer (or Master Servicer). The applicable Primary
Servicer (or Master Servicer) shall indemnify the Trust for any loss caused by
the ineffectiveness of such assignment;
(xiii) the original or a copy of any environmental indemnity
agreement, if any, related to any Mortgage Loan;
(xiv) third-party management agreements for all Mortgaged Properties
operated as hotels and for all Mortgaged Properties securing Mortgage Loans with
a Cut-Off Date Principal Balance equal to or greater than $20,000,000;
(xv) any Environmental Insurance Policy;
(xvi) any affidavit and indemnification agreement;
(xvii) with respect to any Non-Serviced Mortgage Loan, a copy of the
related Non-Serviced Mortgage Loan Pooling and Servicing Agreement; and
(xviii) with respect to the 000 00xx Xxxxxx X Note, a copy of the MLMT
2006-C1 Pooling and Servicing Agreement.
With respect to any Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx
X Note, the preceding document delivery requirements will be met by the delivery
by the Depositor of copies of the documents specified above (other than the
Mortgage Notes (and all intervening endorsements) respectively evidencing such
Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx X Note, respectively, with
respect to which the originals shall be required), including a copy of such
Non-Serviced Mortgage Loan Mortgage and the 000 00xx Xxxxxx Mortgage, as
applicable. Notwithstanding anything to the contrary contained herein, with
respect to the G&L Portfolio Mortgage Loan, delivery of the Mortgage File by
either MSMC or PCFII shall satisfy the delivery requirements for MSMC and PCFII.
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"MORTGAGE LOAN" means a Mortgage Note secured by a Mortgage, and all
amendments and modifications thereof, identified on the Mortgage Loan Schedule,
as amended from time to time, provided that the term "Mortgage Loan" shall
include any Defeasance Loan, the 000 00xx Xxxxxx X Note and any Non-Serviced
Mortgage Loan (but shall not include any Non-Serviced Companion Mortgage Loan)
but with respect to (i) any A/B Mortgage Loan, shall include the A Note (but
shall not include the related B Note) and, in the case of the DCT Industrial
Portfolio A/B/C Loan, shall include the DCT Industrial Portfolio C Note and (ii)
any Loan Pair, shall include the Serviced Pari Passu Mortgage Loan (but shall
not include the related Serviced Companion Mortgage Loan).
"MORTGAGE LOAN PURCHASE AGREEMENT" means Mortgage Loan Purchase
Agreement I, Mortgage Loan Purchase Agreement II or Mortgage Loan Purchase
Agreement III, as the case may be.
"MORTGAGE LOAN PURCHASE AGREEMENT I" means that certain Mortgage Loan
Purchase Agreement between LaSalle and the Depositor dated as of August 8, 2006
with respect to the LaSalle Loans, a form of which is attached hereto as Exhibit
K-1.
"MORTGAGE LOAN PURCHASE AGREEMENT II" means that certain Mortgage Loan
Purchase Agreement between MSMC and the Depositor dated as of August 8, 2006
with respect to the MSMC Loans, a form of which is attached hereto as Exhibit
K-2.
"MORTGAGE LOAN PURCHASE AGREEMENT III" means that certain Mortgage
Loan Purchase Agreement between PCFII and the Depositor dated as of August 8,
2006 with respect to the PCFII Loans, a form of which is attached hereto as
Exhibit K-3.
"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means collectively the
schedule attached hereto as Schedule I, which identifies each LaSalle Loan, the
schedule attached hereto as Schedule II, which identifies each MSMC Loan and the
schedule attached hereto as Schedule III, which identifies each PCFII Loan, as
such schedules may be amended from time to time pursuant to Section 2.3.
"MORTGAGE NOTE" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"MORTGAGE RATE" means, for a given Mortgage Loan, Serviced Companion
Mortgage Loan or B Note, the per annum rate at which interest accrues on such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note.
"MORTGAGED PROPERTY" means the real property, together with
improvements thereto, securing the indebtedness of the Mortgagor under the
related Mortgage Loan and, in the case of an A/B Mortgage Loan, the related B
Note and, in the case of a Loan Pair, the related Serviced Companion Mortgage
Loan.
"MORTGAGEE" means, with respect to any Mortgage as of any date of
determination, the mortgagee named therein as of such date.
"MORTGAGOR" means the obligor on a Mortgage Note.
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"MSMC" has the meaning set forth in the Preliminary Statement hereto.
"MSMC LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to the Mortgage Loan Purchase Agreement II and shown on
Schedule II hereto.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means, for the related
Distribution Date, the excess of all Prepayment Interest Shortfalls incurred in
respect of all (or, where specified, a portion) of the Majority Mortgage Loans
(including the Millenium Portfolio Non-IO Component but not the Millenium
Portfolio IO Component and including the Xxxx-Xxxxxxx Non-IO Component but not
the Xxxx-Xxxxxxx IO Component) (including Specially Serviced Mortgage Loans)
during any Collection Period over the Compensating Interest to be paid by the
Master Servicer (or any Primary Servicer or Sub Servicer, if applicable
according to the related Primary Servicing Agreement or Sub Servicing Agreement)
on such Distribution Date.
"NET SWAP PAYMENT" has the meaning set forth in Section 8.32(e).
"NEW LEASE" means any lease of any REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"NONDISQUALIFICATION OPINION" means a written Opinion of Counsel to
the effect that a contemplated action (i) will neither cause any REMIC Pool to
fail to qualify as a REMIC at any time that any Certificates are outstanding nor
cause a "prohibited transaction," "prohibited contribution" or any other tax
(other than a tax on "net income from foreclosure property" permitted to be
incurred under this Agreement) to be imposed on any REMIC Pool or the Trust and
(ii) will not cause the Class A-4FL Grantor Trust or the Excess Interest Grantor
Trust to fail to qualify as a grantor trust.
"NONECONOMIC RESIDUAL INTEREST" means a residual interest that is a
"noneconomic residual interest" within the meaning of Treasury Regulation
Section 1.860E-1(c).
"NON-INVESTMENT GRADE CERTIFICATES" means each Class of Certificates
that, at the time of transfer, is not rated in one of the four highest generic
rating categories by at least one of the Rating Agencies.
"NONRECOVERABLE ADVANCE" means any of the following: (i) any Pari
Passu Loan Nonrecoverable Advance (including interest accrued thereon at the
Advance Rate) and (ii) the portion of any Advance (including interest accrued
thereon at the Advance Rate) or Unliquidated Advance (not including interest
thereon) previously made (and, in the case of an Unliquidated Advance, not
previously reimbursed to the Trust) or proposed to be made by the Master
Servicer, the Special Servicer or the Trustee, that, in its respective sole
discretion, exercised in good faith and, with respect to the Master Servicer and
the Special Servicer, taking into account the Servicing Standard, will not be
or, in the case of a current delinquency, would not be, ultimately recoverable,
from Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or Purchase
Proceeds (or from any other collections) with respect to the related Mortgage
Loan or Serviced Companion Mortgage Loan (and taking into consideration any
Crossed Mortgage Loans) (in the case of Servicing Advances) or B Note (in the
case of Servicing Advances) or
53
REO Property (in the case of P&I Advances and Servicing Advances), as evidenced
by an Officer's Certificate delivered pursuant to Section 4.4. Such Officer's
Certificate shall be delivered to the Trustee (upon which the Trustee may
conclusively rely) or to the Depositor (if the Trustee is delivering such
Officer's Certificate) and (in either case) to the Special Servicer and the
Paying Agent in the time periods as specified in Section 4.4 and shall include
the information and reports set forth in Section 4.4. Absent bad faith, the
Master Servicer's determination as to the recoverability of any Advance shall be
conclusive and binding on the Certificateholders and, in the case of any B Note
or Serviced Companion Mortgage Loan, the holder of such B Note or Serviced
Companion Mortgage Loan, as applicable, and may, in all cases, be relied on by
the Trustee; provided, however, that the Special Servicer may, at its option,
make a determination in accordance with the Servicing Standard that any P&I
Advance or Servicing Advance, if made, would be a Nonrecoverable Advance and
shall deliver to the Master Servicer and the Trustee notice of such
determination. Any such determination shall be conclusive and binding on the
Certificateholders, the Master Servicer and the Trustee. Pursuant to Section
4.1A of this Agreement, any determination as to the recoverability of any
advance made with respect to any Non-Serviced Mortgage Loan by the Master
Servicer or any Other Master Servicer shall be conclusive and binding on the
Certificateholders and may, in all cases, be relied on by the Trustee and the
Master Servicer. In making any nonrecoverability determination as described
above, the relevant party shall be entitled (i) to consider (among other things)
the obligations of the Mortgagor under the terms of the Mortgage Loan as it may
have been modified, (ii) to consider (among other things) the related Mortgaged
Properties in their "as is" then-current conditions and occupancies and such
party's assumptions (consistent with the Servicing Standard in the case of the
Master Servicer or the Special Servicer) regarding the possibility and effects
of future adverse change with respect to such Mortgaged Properties, (iii) to
estimate and consider, consistent with the Servicing Standard in the case of the
Master Servicer or the Special Servicer (among other things), future expenses
and (iv) to estimate and consider, consistent with the Servicing Standard (among
other things), the timing of recovery to such party. In addition, the relevant
party may, consistent with the Servicing Standard in the case of the Master
Servicer or the Special Servicer, update or change its nonrecoverability
determinations at any time in accordance with the terms hereof and may,
consistent with the Servicing Standard in the case of the Master Servicer or the
Special Servicer, obtain from the Special Servicer any analysis, appraisals or
other information in the possession of the Special Servicer for such purposes.
"NON-REGISTERED CERTIFICATE" means unless and until registered under
the Securities Act, Class X, Class X-MP, Class X-RC, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class T,
Class DP, Class ST or Residual Certificate.
"NON-SERVICED COMPANION MORTGAGE LOAN" means a loan not included in
the Trust that is generally payable on a pari passu basis with the related
Non-Serviced Mortgage Loan. The Non-Serviced Companion Mortgage Loans are the
Xxxx-Xxxxxxx Companion Loan and the RLJ Portfolio Companion Loan.
"NON-SERVICED MORTGAGE LOAN" means a Mortgage Loan (other than the 000
00xx Xxxxxx X Note) included in the Trust but serviced under another agreement.
The Non-
54
Serviced Mortgage Loans in the Trust are the Ritz-Xxxxxxx Xxxx Passu Loan and
the RLJ Portfolio Pari Passu Loan.
"NON-SERVICED MORTGAGE LOAN FISCAL AGENT" means the applicable "fiscal
agent" under the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement.
"NON-SERVICED MORTGAGE LOAN INTERCREDITOR AGREEMENT" means, the
applicable intercreditor agreement with respect to a Non-Serviced Mortgage Loan.
"NON-SERVICED MORTGAGE LOAN MASTER SERVICER" means the applicable
"master servicer" under the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN MORTGAGE" means the mortgage securing a
Non-Serviced Mortgage Loan.
"NON-SERVICED MORTGAGE LOAN POOLING AND SERVICING AGREEMENT" means a
pooling and servicing agreement under which a Non-Serviced Mortgage Loan is
serviced.
"NON-SERVICED MORTGAGE LOAN SPECIAL SERVICER" means the applicable
"special servicer" under the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement.
"NON-SERVICED MORTGAGE LOAN TRUSTEE" means the applicable "trustee"
under the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
"NOTIONAL AMOUNT" means, as of any date of determination: (i) with
respect to all of the Class X Certificates as a Class, the Class X Notional
Amount as of such date of determination; (ii) with respect to any Class X
Certificate, the product of the Percentage Interest evidenced by such
Certificate and the Class X Notional Amount as of such date of determination;
(iii) with respect to all of the Class X-MP Certificates as a Class, the Class
X-MP Notional Amount as of such date of determination; (iv) with respect to any
Class X-MP Certificate, the product of the Percentage Interest evidenced by such
Certificate and the Class X-MP Notional Amount as of such date of determination;
(v) with respect to the REMIC II Regular Interest X-MP, the Class X-MP Notional
Amount; (vi) with respect to all of the Class X-RC Certificates as a Class, the
Class X-RC Notional Amount as of such date of determination; (vii) with respect
to any Class X-RC Certificate, the product of the Percentage Interest evidenced
by such Certificate and the Class X-RC Notional Amount as of such date of
determination; and (viii) with respect to the REMIC II Regular Interest X-RC,
the Class X-RC Notional Amount.
"OFFICER'S CERTIFICATE" means (u) in the case of the Depositor, a
certificate signed by one or more of the Chairman of the Board, any Vice
Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, (v) in the
case of the Master Servicer and the Special Servicer, any of the officers
referred to above or an employee thereof designated as a Servicing Officer or
Special Servicing Officer pursuant to this Agreement, (w) in the case of the
Trustee, a certificate signed by a Responsible Officer, (x) in the case of a
Seller, a certificate signed by one or more of the Chairman of the Board, any
Vice Chairman, any Managing Director or Director, the President, or any
Executive Vice President, any Senior Vice President, Vice President, Second Vice
President or Assistant Vice President,
55
any Treasurer, any Assistant Treasurer or any Secretary or Assistant Secretary
or any other authorized signatory, (y) in the case of the Paying Agent, a
certificate signed by a Responsible Officer, each with specific responsibilities
for the matters contemplated by this Agreement and (z) in the case of any other
Additional Servicer, a certificate signed by one or more of the Chairman of the
Board, any Vice Chairman, the President, or any Senior Vice President, Vice
President or Assistant Vice President or an employee thereof designated as a
Servicing Officer
"OPERATING ADVISER" shall mean the Person elected to serve as the
Operating Adviser pursuant to Section 9.37(a); provided, that, with respect to
an A/B Mortgage Loan, a holder of the related B Note, will, to the extent set
forth in the related Intercreditor Agreement, instead be entitled to the rights
and powers granted to the Operating Adviser to the extent such rights and powers
relate to the related A/B Mortgage Loan (but only so long as the holder of the
related B Note is the directing holder or controlling holder, as defined in the
related intercreditor agreement). The initial Operating Adviser will be JER
Investors Trust Inc.
"OPINION OF COUNSEL" means a written opinion of counsel addressed to
the Trustee and the Paying Agent, reasonably acceptable in form and substance to
the Trustee and the Paying Agent, and who is not in-house counsel to the party
required to deliver such opinion but who, in the good faith judgment of the
Trustee and the Paying Agent, is Independent outside counsel knowledgeable of
the issues occurring in the practice of securitization with respect to any such
opinion of counsel concerning the taxation, or status as a REMIC for tax
purposes, of any REMIC Pool or status as a "grantor trust" under the Code of the
Class A-4FL Grantor Trust or the Excess Interest Grantor Trust.
"OPTION PURCHASE PRICE" has the meaning set forth in Section 9.36(b)
hereof.
"OTHER ADVANCE REPORT DATE" means with respect to a Non-Serviced
Companion Mortgage Loan or a Serviced Companion Mortgage Loan, as applicable,
which has been deposited into a commercial mortgage securitization trust, the
date under the related Other Companion Loan Pooling and Servicing Agreement that
the related Other Master Servicer is required (pursuant to the terms thereof) to
make a determination as to whether it will make a P&I Advance as required under
such Other Companion Loan Pooling and Servicing Agreement.
"OTHER COMPANION LOAN POOLING AND SERVICING AGREEMENT" means a pooling
and servicing agreement relating to a Non-Serviced Companion Mortgage Loan or a
Serviced Companion Mortgage Loan that creates a commercial mortgage
securitization trust, as applicable.
"OTHER MASTER SERVICER" means applicable "master servicer" under an
Other Companion Loan Pooling and Servicing Agreement relating to a Non-Serviced
Companion Mortgage Loan or a Serviced Companion Mortgage Loan, as applicable.
"OTHER OPERATING ADVISER" has the meaning set forth in Section 9.4(d)
hereof.
"OTHER POOLING AND SERVICING AGREEMENT" has the meaning set forth in
Section 9.4(d) hereof.
"OTHER SECURITIZATION" has the meaning set forth in Section 9.4(d)
hereof.
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"OTHER SPECIAL SERVICER" has the meaning set forth in Section 9.4(d)
hereof.
"OWNERSHIP INTEREST" means, as to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I ADVANCE" shall mean (other than with respect to a Serviced
Companion Mortgage Loan, a B Note or the 000 00xx Xxxxxx X Note) (i) with
respect to any Mortgage Loan or Specially Serviced Mortgage Loan as to which all
or a portion of the Scheduled Payment (other than a Balloon Payment) due during
the related Collection Period was not received by the Master Servicer as of the
related Determination Date (subject to Section 5.1(h)), the portion of such
Scheduled Payment not received; (ii) with respect to any Mortgage Loan that is a
Balloon Mortgage Loan (including any REO Property as to which the related
Mortgage Loan provided for a Balloon Payment) as to which a Balloon Payment was
due during or prior to the related Collection Period but was delinquent, in
whole or in part, as of the related Determination Date, an amount equal to the
excess, if any, of the Assumed Scheduled Payment for such Balloon Mortgage Loan
for the related Collection Period, over any Late Collections received in respect
of such Balloon Payment during such Collection Period; and (iii) with respect to
each REO Property, an amount equal to the excess, if any, of the Assumed
Scheduled Payment for the Mortgage Loan related to such REO Property during the
related Collection Period, over remittances of REO Income to the Master Servicer
by the Special Servicer, reduced by any amounts required to be paid as taxes on
such REO Income (including taxes imposed pursuant to Section 860G(c) of the
Code); provided, however, that the interest portion of any Scheduled Payment or
Assumed Scheduled Payment shall be advanced at a per annum rate equal to the sum
of the REMIC I Net Mortgage Rate relating to such Mortgage Loan or such REO
Mortgage Loan and the Trustee Fee Rate, such that the Scheduled Payment or
Assumed Scheduled Payment to be advanced as a P&I Advance shall be net of the
Master Servicing Fee, the Excess Servicing Fee and the Primary Servicing Fee;
and provided, further, that the Scheduled Payment or Assumed Scheduled Payment
for any Mortgage Loan which has been modified shall be calculated based on its
terms as modified and provided, further, that the interest component of any P&I
Advance with respect to a Mortgage Loan as to which there has been an Appraisal
Reduction shall be an amount equal to the product of (i) the amount of interest
required to be advanced without giving effect to this proviso and (ii) a
fraction, the numerator of which is the Principal Balance of such Mortgage Loan
as of the immediately preceding Determination Date less any Appraisal Reduction
applicable to such Mortgage Loan (or, in the case of a Non-Serviced Mortgage
Loan or a Serviced Pari Passu Mortgage Loan, the portion of such Appraisal
Reduction allocable (based upon their respective Principal Balances) to such
Non-Serviced Mortgage Loan or Serviced Pari Passu Mortgage Loan under the
related Intercreditor Agreement or the related Loan Pair Intercreditor
Agreement, or in the case of an A/B Mortgage Loan, the portion of such Appraisal
Reduction allocable to the A Note pursuant to the definition of "Appraisal
Reduction") and the denominator of which is the Principal Balance of such
Mortgage Loan as of such Determination Date. All P&I Advances for any Mortgage
Loans that have been modified shall be calculated on the basis of their terms as
modified.
"P&I ADVANCE AMOUNT" means, with respect to any Mortgage Loan or any
REO Property, the amount of the P&I Advance for each Mortgage Loan computed for
any Distribution Date.
57
"PARI PASSU LOAN NONRECOVERABLE ADVANCE" means any "Nonrecoverable
Servicing Advance" (as defined in the related Non-Serviced Mortgage Loan Pooling
and Servicing Agreement) made with respect to any Non-Serviced Mortgage Loan
pursuant to and in accordance with the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement; provided that if the applicable Non-Serviced
Mortgage Loan Master Servicer shall have made a "Servicing Advance" (as defined
in the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement) in
the nature of an expenditure benefiting the related Mortgaged Property
generally, the portion thereof attributable to any Non-Serviced Mortgage Loan
shall be determined based on the outstanding balances of such Non-Serviced
Mortgage Loan and all the related pari passu loans secured by such Non-Serviced
Mortgage Loan Mortgage on a pari passu basis on the date such advance was made.
"PARI PASSU LOAN SERVICING FEE RATE" means the "Master Servicing Fee
Rate" (as defined in the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement) and any other servicing fee rate (other than those payable
to the applicable Non-Serviced Mortgage Loan Special Servicer) applicable to any
Non-Serviced Mortgage Loan; provided, however, that the Pari Passu Loan
Servicing Fee Rate for purposes of any Non-Serviced Mortgage Loan set forth on
Schedule XII as to which such fee is calculated on a 30/360 basis shall be (a)
the related "Master Servicing Fee Rate" set forth in the Non-Serviced Mortgage
Loan Pooling and Servicing Agreement, multiplied by (b) 30 divided by the actual
number of days in the loan accrual period with respect to such loan.
"PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"PASS-THROUGH RATE" or "PASS-THROUGH RATES" means with respect to any
Class of REMIC I Regular Interests or REMIC II Regular Interests or the Class
A-1, Class A-2, Class A-3 or Class A-AB Certificates, for the first Distribution
Date, the rate set forth in the Preliminary Statement hereto. For any
Distribution Date occurring thereafter (and with respect to the Class A-4FL
Regular Interest and the Class X, Class X-MP, Class X-RC, Class A-1A, Class A-4,
Class A-4FL, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P,
Class Q, Class S, Class DP and Class ST Certificates, for each Distribution
Date), the Pass-Through Rates for (i) the REMIC I Regular Interests shall equal
the REMIC I Net Mortgage Rate on the related Majority Mortgage Loan (which for
each of the REMIC I MP IO Component Regular Interest and the REMIC I MP Non-IO
Component Regular Interest, shall be the Millenium Portfolio Mortgage Loan, and
which for each of the REMIC I RC IO Component Regular Interest and the REMIC I
RC Non-IO Component Regular Interest, shall be the Ritz-Xxxxxxx Xxxx Passu Loan)
for such Distribution Date, (ii) the REMIC II Regular Interests (other than the
REMIC II Regular Interest X-MP and the REMIC II Regular Interest X-RC) shall
equal the Weighted Average REMIC I Net Mortgage Rate for such Distribution Date,
(iii) the REMIC II Regular Interest X-MP shall equal the Class X-MP Strip Rate;
(iv) the REMIC II Regular Interest X-RC shall equal the Class X-RC Strip Rate;
(v) the Class A-1 Certificates shall equal the fixed rate corresponding to such
Class set forth in the Preliminary Statement hereto, (vi) the Class A-1A
Certificates shall equal the lesser of (A) 5.728% per annum and (B) the Weighted
Average REMIC I Net Mortgage Rate for such Distribution Date, (vii) the Class
A-2 Certificates shall equal the fixed
58
rate corresponding to such Class set forth in the Preliminary Statement hereto,
(viii) the Class A-3 Certificates shall equal the fixed rate corresponding to
such Class set forth in the Preliminary Statement hereto, (ix) the Class A-AB
Certificates shall equal the fixed rate corresponding to such Class set forth in
the Preliminary Statement hereto, (x) the Class A-4 Certificates shall equal the
lesser of (A) 5.731% per annum and (B) the Weighted Average REMIC I Net Mortgage
Rate for such Distribution Date, (xi) the Class A-4FL Certificates, the per
annum rate equal to LIBOR plus 0.1475%, provided, however, that under the
circumstances set forth in Section 6.13 regarding defaults or terminations under
the Swap Contract, the Pass-Through Rate of the Class A-4FL Certificates shall
equal the Pass-Through Rate of the Class A-4FL Regular Interest subject to
reduction in accordance with the Swap Contract, (xii) the Class A-M Certificates
shall equal the lesser of (A) 5.773% per annum and (B) the Weighted Average
REMIC I Net Mortgage Rate for such Distribution Date, (xiii) the Class A-J
Certificates shall equal the lesser of (A) 5.793% per annum and (B) the Weighted
Average REMIC I Net Mortgage Rate for such Distribution Date, (xiv) the Class B
Certificates shall equal the the lesser of (A) 5.832% per annum and (B) the
Weighted Average REMIC I Net Mortgage Rate for such Distribution Date, (xv) the
Class C Certificates shall equal the the lesser of (A) 5.842% per annum and (B)
the Weighted Average REMIC I Net Mortgage Rate for such Distribution Date, (xvi)
the Class D Certificates shall equal the the lesser of (A) 5.862% per annum and
(B) the Weighted Average REMIC I Net Mortgage Rate for such Distribution Date,
(xvii) the Class E Certificates shall equal the the lesser of (A) 5.902% per
annum and (B) the Weighted Average REMIC I Net Mortgage Rate for such
Distribution Date, (xviii) the Class F Certificates shall equal the the lesser
of (A) 5.922% per annum and (B) the Weighted Average REMIC I Net Mortgage Rate
for such Distribution Date, (xix) the Class G Certificates shall equal the
Weighted Average REMIC I Net Mortgage Rate corresponding to such Class for such
Distribution Date less 0.035%, (xx) the Class H, Class J and Class K
Certificates shall equal the Weighted Average REMIC I Net Mortgage Rate for such
Distribution Date, (xxi) the Class L, Class M, Class N, Class O, Class P, Class
Q and Class S Certificates shall equal the lesser of (A) 5.415% per annum and
(B) the Weighted Average REMIC I Net Mortgage Rate for such Distribution Date,
(xxii) the Class DP Certificates shall equal the DCT Industrial Portfolio Net
Mortgage Rate, (xxiii) the Class ST-A, Class ST-B, Class ST-C, Class ST-D, Class
ST-D, Class ST-E and Class ST-F Certificates shall equal the 000 00xx Xxxxxx Net
Mortgage Rate, (xxiv) the Class X Certificates shall equal the per annum rate
equal to the quotient of the Accrued Certificate Interest thereon for such
Distribution Date and the Class X Notional Amount, times twelve, (xxv) the Class
X-MP Certificates shall equal the per annum rate equal to the Class X-MP Strip
Rate, (xxvi) the Class X-RC Certificates shall equal the per annum rate equal to
the Class X-RC Strip Rate and (xxvii) the Class A-4FL Regular Interest shall
equal the lesser of (A) 5.731% per annum and (B) the Weighted Average REMIC I
Net Mortgage Rate for such Distribution Date.
"PAYING AGENT" means LaSalle Bank National Association and any
successor or assign, as provided herein. The Luxembourg Paying Agent shall not
be the Paying Agent and the duties of the Luxembourg Paying Agent shall be
distinct from the duties of the Paying Agent.
"PAYING AGENT FEE" means the portion of the Trustee Fee payable to the
Paying Agent in an amount agreed to between the Trustee and the Paying Agent.
"PCAOB" means the Public Company Accounting Oversight Board.
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"PCFII" has the meaning set forth in the Preliminary Statement hereto.
"PCFII LOANS" means, collectively, those Mortgage Loans sold to the
Depositor pursuant to the Mortgage Loan Purchase Agreement III and shown on
Schedule III hereto.
"PERCENTAGE INTEREST" means with respect to each Class of Certificates
other than the Residual Certificates, the fraction of such Class evidenced by
such Certificate, expressed as a percentage (carried to four decimal places and
rounded, if necessary), the numerator of which is the Certificate Balance or
Notional Amount, as applicable, represented by such Certificate determined as of
the Closing Date (as stated on the face of such Certificate) and the denominator
of which is the Aggregate Certificate Balance or Notional Amount, as applicable,
of all of the Certificates of such Class determined as of the Closing Date. With
respect to each Residual Certificate, the percentage interest in distributions
(if any) to be made with respect to the relevant Class, as stated on the face of
such Certificate.
"PERFORMING PARTY" has the meaning set forth in Section 13.12.
"PERMITTED TRANSFEREE" means any Transferee other than a Disqualified
Organization.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PHASE I ENVIRONMENTAL REPORT" means a report by an Independent Person
who regularly conducts environmental site assessments in accordance with then
current standards imposed by institutional commercial mortgage lenders and who
has a reasonable amount of experience conducting such assessments.
"PLACEMENT AGENT" means Xxxxxx Xxxxxxx & Co. Incorporated or its
successor in interest.
"PLAN" has the meaning set forth in Section 3.3(d).
"PLANNED PRINCIPAL BALANCE" means for any Distribution Date, the
balance shown for such Distribution Date on Schedule XIII.
"PLAN ASSET REGULATIONS" means the Department of Labor regulations set
forth in 29 C.F.R. Section 2510.3-101.
"PRELIMINARY PROSPECTUS SUPPLEMENT" has the meaning set forth in the
Preliminary Statement hereto.
"PREPAYMENT INTEREST EXCESS" means for any Distribution Date and the
related Collection Period, during which a full or partial Principal Prepayment
of a Mortgage Loan (including payment of a Balloon Payment) is made after the
Due Date for such Mortgage Loan through and including the last day of the
Collection Period, the amount of interest that accrues on the amount of such
Principal Prepayment from such Due Date to the date such payment was
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made, plus (if made) any payment by the Mortgagor of interest that would have
accrued to the next succeeding Due Date (net of the Master Servicing Fee, the
Primary Servicing Fee, the Excess Servicing Fees, the Special Servicing Fee, the
Trustee Fee and the servicing fee and trustee fee payable in connection with any
Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note (in the case of any
Non-Serviced Mortgage Loan or 000 00xx Xxxxxx X Note), to the extent collected.
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any
Distribution Date, a shortfall in the collection of a full month's interest on
any Mortgage Loan, by reason of a full or partial Principal Prepayment
(including payment of a Balloon Payment) made during any Collection Period prior
to the Due Date for such Mortgage Loan in such Collection Period (including any
shortfall resulting from such a payment during the grace period relating to such
Due Date). The amount of any Prepayment Interest Shortfall shall equal the
excess of (A) the aggregate amount of interest which would have accrued on the
Scheduled Principal Balance of such Mortgage Loan, if the Mortgage Loan had paid
on its Due Date and such Principal Prepayment or Balloon Payment had not been
made (net of the Master Servicing Fee, the Primary Servicing Fee, the Excess
Servicing Fees, the Special Servicing Fee, the Trustee Fee and the servicing fee
payable in connection with any Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx
X Note (in the case of any Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X
Note)) over (B) the aggregate interest that did so accrue through the date such
payment was made (net of such fees).
"PREPAYMENT PREMIUM" means, with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note for any Distribution Date, the
prepayment premiums, yield maintenance charges or percentage premiums, if any,
received during the related Collection Period in connection with Principal
Prepayments on such Mortgage Loan, Serviced Companion Mortgage Loan or B Note.
"PRIMARY COLLATERAL" means the portion of the Mortgaged Property
securing the Repurchased Loan or Crossed Mortgage Loan, as applicable, that is
encumbered by a first mortgage lien.
"PRIMARY SERVICER" means Principal Global Investors, LLC and its
permitted successors and assigns with respect to the PCFII Loans.
"PRIMARY SERVICING AGREEMENT" means the agreement between the Primary
Servicer and the Master Servicer, dated as of August 1, 2006, a form of which is
attached hereto as Exhibit G-1, under which the Primary Servicer services the
Mortgage Loans set forth on the schedule attached thereto.
"PRIMARY SERVICING FEE" means, for each calendar month, as to each
Mortgage Loan, the applicable Primary Servicing Fee Rate multiplied by the
Scheduled Principal Balance of such Mortgage Loan immediately before the Due
Date occurring in such month, but prorated for the number of days during the
calendar month for such Mortgage Loan for which interest actually accrues on
such Mortgage Loan and payable only from collections on such Mortgage Loan.
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"PRIMARY SERVICING FEE RATE" means, the monthly fee payable to any
applicable Primary Servicer (or the Master Servicer, as applicable) based on the
per annum rate specified on the Mortgage Loan Schedule, as more specifically
described, in the case of the applicable Primary Servicer, in the applicable
Primary Servicing Agreement (determined in the same manner (other than the rate
of accrual) as the applicable Mortgage Rate is determined for such Mortgage Loan
for such month).
"PRINCIPAL BALANCE" means, with respect to any Mortgage Loan, Serviced
Companion Mortgage Loan, B Note or REO Mortgage Loan, for purposes of performing
calculations with respect to any Distribution Date, the principal balance of
such Mortgage Loan, Serviced Companion Mortgage Loan, B Note or the related REO
Mortgage Loan outstanding as of the Cut-Off Date after taking into account all
principal and interest payments made or due on or prior to the Cut-Off Date
(assuming, for any Mortgage Loan, Serviced Companion Mortgage Loan or B Note
with a Due Date in August 2006 that is not August 1, 2006, that principal and
interest payments for such month were paid on August 1, 2006), reduced (to not
less than zero) by (i) any payments or other collections of amounts allocable to
principal with respect to such Mortgage Loan, Serviced Companion Mortgage Loan,
B Note or any related REO Mortgage Loan that have been collected or received
during any preceding Collection Period, other than any Scheduled Payments due in
any subsequent Collection Period, and (ii) any Realized Principal Loss incurred
in respect of such Mortgage Loan or related REO Mortgage Loan during any related
Collection Period.
"PRINCIPAL BALANCE CERTIFICATES" means, collectively, the Class A-1,
Class A-1A, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-4FL, Class A-M,
Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class
DP, Class ST-A, Class ST-B, Class ST-C, Class ST-D, Class ST-E and Class ST-F
Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" means, except with respect to the
Class DP and Class ST Certificates, on any Distribution Date, the amount equal
to the excess, if any, of
(I) the sum of:
(A) the following (without duplication):
(i) the principal portion of all Scheduled Payments (other than the
principal portion of Balloon Payments) and any Assumed Scheduled Payments, in
each case, to the extent received or advanced, as the case may be, in respect of
the Mortgage Loans and any REO Mortgage Loans (but not in respect of any
Serviced Companion Mortgage Loan or B Note or its successor REO Mortgage Loan)
for their respective Due Dates occurring during the related Collection Period;
plus
(ii) all payments (including Principal Prepayments and the principal
portion of Balloon Payments but not in respect of any Serviced Companion
Mortgage Loan or B Note or its respective successor REO Mortgage Loan) and any
other collections (including Liquidation Proceeds (other than the portion
thereof, if any, constituting Excess Liquidation Proceeds), Condemnation
Proceeds, Insurance Proceeds, Purchase Proceeds and REO Income) received on
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or in respect of the Mortgage Loans during the related Collection Period and
that were identified and applied by the Master Servicer as recoveries of
principal thereof in accordance with this Agreement;
(B) the aggregate amount of any collections received on or in respect
of the Mortgage Loans during the related Collection Period that, in each case,
represents a delinquent amount as to which an Advance had been made, which
Advance (or interest thereon) was previously reimbursed during the Collection
Period for a prior Distribution Date as part of a Workout-Delayed Reimbursement
Amount for which a deduction was made under clause (II)(A) below with respect to
such Distribution Date (with respect to each such Mortgage Loan, allocated first
to the Loan Group Principal Distribution Amount related to the Loan Group that
does not include such Mortgage Loan, and then to the Loan Group Principal
Distribution Amount related to the Loan Group that includes such Mortgage Loan);
and
(C) the aggregate amount of any collections received on or in respect
of the Mortgage Loans during the related Collection Period that, in each case,
represents a recovery of an amount previously determined (in a Collection Period
for a prior Distribution Date) to have been a Nonrecoverable Advance (or
interest thereon) and for which a deduction was made under clause (II)(B) below
with respect to a prior Distribution Date (with respect to each such Mortgage
Loan, allocated first to the Loan Group Principal Distribution Amount related to
the Loan Group that does not include such Mortgage Loan, and then to the Loan
Group Principal Distribution Amount related to the Loan Group that includes such
Mortgage Loan), and which are applied pursuant to Section 6.6(c)(i); over
(II) the sum of (with respect to each such Mortgage Loan, allocated
first to the Loan Group Principal Distribution Amount applicable to such
Mortgage Loan, and then to the other Loan Group Principal Distribution Amount):
(A) the aggregate amount of Workout-Delayed Reimbursement Amounts (and
Advance Interest thereon) that was reimbursed or paid during the related
Collection Period to one or more of the Master Servicer, the Special Servicer
and the Trustee from amounts in the Collection Account allocable to principal
received or advanced with respect to the Mortgage Loans pursuant to subsection
(iii) of Section 5.2(a)(II); and
(B) the aggregate amount of Nonrecoverable Advances (and Advance
Interest thereon) that was reimbursed or paid during the related Collection
Period to one or more of the Master Servicer, the Special Servicer and the
Trustee during the related Collection Period from amounts in the Collection
Account allocable to principal received or advanced with respect to the Mortgage
Loans pursuant to subsection (iv) of Section 5.2(a)(II).
Notwithstanding the foregoing, the Principal Distribution Amount for the
Certificates, other than the Class DP Certificates and Class ST Certificates,
shall not include any amount received with respect to the DCT Industrial
Portfolio C Note or the 000 00xx Xxxxxx X Note. With respect to the Class DP
Certificates and Class ST Certificates, "Principal Distribution Amount" shall be
calculated in the same manner as is set forth in the first sentence of this
definition, except that such calculation shall be made as if the DCT Industrial
Portfolio C Note (in the case of the Class
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DP Certificates) or 000 00xx Xxxxxx X Note (in the case of the Class ST
Certificates) were the only Mortgage Loan.
"PRINCIPAL PREPAYMENT" means any voluntary or involuntary payment or
collection of principal on a Mortgage Loan, a Serviced Companion Mortgage Loan
or a B Note which is received or recovered in advance of its scheduled Due Date
and applied to reduce the Principal Balance of the Mortgage Loan, Serviced
Companion Mortgage Loan or B Note in advance of its scheduled Due Date,
including, without limitation, all proceeds, to the extent allocable to
principal, received from the payment of cash in connection with a substitution
shortfall pursuant to Section 2.3; provided, that the pledge by a Mortgagor of
Defeasance Collateral with respect to a Defeasance Loan shall not be deemed to
be a Principal Prepayment.
"PRIVATE PLACEMENT MEMORANDUM" means the Private Placement Memorandum
dated August 8, 2006, pursuant to which the Class X, Class X-MP, Class X-RC,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P,
Class Q, Class S, Class T, Class DP and Class ST Certificates will be offered
for sale.
"PROHIBITED PARTY" means (i) a Person that is a proposed Servicing
Function Participant that the Master Servicer, any Primary Servicer, the Paying
Agent, the Special Servicer or the Trustee, as applicable, seeks to retain as a
Servicing Function Participant and that the Master Servicer, any Primary
Servicer, the Paying Agent, the Special Servicer or the Trustee, as applicable,
has actual knowledge failed on any prior date to comply with its Exchange Act or
Regulation AB obligations with respect to the Trust or any other commercial
mortgage securitization or (ii) any Person identified in writing (delivered
prior to the date of retention) by the Depositor to the Master Servicer, any
Primary Servicer, the Paying Agent, the Special Servicer or the Trustee, as
applicable, as a Person that the Depositor has knowledge has failed on any prior
date to comply with its Exchange Act or Regulation AB obligations with respect
to the Trust or any other commercial mortgage securitization.
"PROSPECTUS" has the meaning set forth in the Preliminary Statement
hereto.
"PROSPECTUS SUPPLEMENT" has the meaning set forth in the Preliminary
Statement hereto.
"PURCHASE PRICE" means, with respect to the purchase by the Seller or
liquidation by the Special Servicer of (i) a Mortgage Loan or an REO Mortgage
Loan pursuant to Article II of this Agreement, (ii) an REO Mortgage Loan
pursuant to Section 9.15 or (iii) a Mortgage Loan pursuant to Section 9.36 under
the circumstances described therein, a price equal to the sum (without
duplication) of (A) 100% of the unpaid Principal Balance of such Mortgage Loan
(or deemed Principal Balance, in the case of an REO Mortgage Loan), plus (B)
accrued but unpaid interest thereon calculated at the Mortgage Rate to, but not
including, the Due Date in the Collection Period in which such purchase or
liquidation occurs, plus (C) the amount of any expenses related to such Mortgage
Loan and any related Serviced Companion Mortgage Loan, B Note or REO Property
(including any Servicing Advances and Advance Interest thereon (which have not
been paid by the Mortgagor or out of Late Fees or default interest paid by the
related Mortgagor on the related Mortgage Loan and any related Serviced
Companion Mortgage Loan or B Note) related to such Mortgage Loan and any related
Serviced Companion Mortgage Loan or
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B Note, the amount of any Servicing Advances (and Advance Interest thereon) that
were reimbursed from principal collections on the Mortgage Pool pursuant to
Section 5.2(a)(II)(iii) and not subsequently recovered from the related
Mortgagor, and all Special Servicing Fees and Liquidation Fees paid with respect
to the Mortgage Loan and any related Serviced Companion Mortgage Loan or B Note)
that are reimbursable or payable to the Master Servicer, the Special Servicer,
the Paying Agent, the Trustee, any Non-Serviced Mortgage Loan Master Servicer or
any Non-Serviced Mortgage Loan Special Servicer, plus (D) if such Mortgage Loan
or REO Mortgage Loan is being repurchased or substituted for by a Seller
pursuant to the related Mortgage Loan Purchase Agreement, all expenses
reasonably incurred or to be incurred by the applicable Primary Servicer, the
Master Servicer, the Special Servicer, the Depositor, the Paying Agent or the
Trustee in respect of the Material Breach or Material Document Defect giving
rise to the repurchase or substitution obligation (and that are not otherwise
included in (C) above) plus, in connection with a purchase by a Seller, any
Liquidation Fee payable by such Seller in accordance with the proviso contained
in the definition of "Liquidation Fee". With respect to the G&L Portfolio
Mortgage Loan, the Purchase Price for each of PCFII and MSMC will be its
respective percentage interest as of the Closing Date of the total Purchase
Price for each such Mortgage Loan, which percentage interest with respect to
such Mortgage Loan for each of PCFII and MSMC shall be 50%.
"PURCHASE PROCEEDS" means any cash amounts received by the Master
Servicer in connection with: (i) the repurchase of a Mortgage Loan or an REO
Mortgage Loan by a Seller pursuant to Section 2.3 or (ii) the purchase of the
Mortgage Loans and REO Properties by the Depositor, the Master Servicer, the
Special Servicer or the holders of the Class R-I Certificates pursuant to
Section 10.1(b).
"QUALIFIED BIDDER" means as used in section 8.29(c), a Person
qualified to act as successor Master Servicer hereunder pursuant to Section
8.22(b) (including the requirement set forth in Section 8.22(b) that Rating
Agency Confirmation shall have been obtained from each Rating Agency with
respect to such Person).
"QUALIFIED INSTITUTIONAL BUYER" means a qualified institutional buyer
qualifying pursuant to Rule 144A.
"QUALIFIED INSURER" means, (i) with respect to any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note, an insurance company duly qualified
as such under the laws of the state in which the related Mortgaged Property is
located, duly authorized and licensed in such state to transact the applicable
insurance business and to write the insurance, but in no event rated lower than
"A" by Fitch, or if not so rated, then Fitch has issued a Rating Agency
Confirmation and "A-" by S&P if rated by S&P or if not rated by S&P, then S&P
has issued a Rating Agency Confirmation, and (ii) with respect to the Servicer
Errors and Omissions Insurance Policy or Servicer Fidelity Bond an insurance
company that has a claim paying ability no lower than "A" by Fitch if rated by
Fitch, or if not rated by Fitch, then rated A:IX by A.M Best or as to which
Fitch has issued a Rating Agency Confirmation, and "A-" by S&P if rated by S&P
or if not rated by S&P, then S&P has issued a Rating Agency Confirmation, or
(iii) in either case, a company not satisfying clause (i) or (ii) but with
respect to which a Rating Agency Confirmation is obtained. "Qualified Insurer"
shall also mean any entity that satisfies all of the criteria, other than the
ratings criteria, set forth in one of the foregoing clauses and whose
65
obligations under the related insurance policy are guaranteed or backed by an
entity that satisfies the ratings criteria set forth in such clause (construed
as if such entity were an insurance company referred to therein).
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" means, in the case of a Mortgage
Loan substituted for a Deleted Mortgage Loan, a Mortgage Loan which, on the date
of substitution, (i) has an outstanding principal balance, after deduction of
the principal portion of the Scheduled Payment due in the month of substitution,
not in excess of the Principal Balance of the Deleted Mortgage Loan; provided,
however, that, to the extent that the principal balance of such Mortgage Loan is
less than the Principal Balance of the Deleted Mortgage Loan, then such
differential in principal amount, together with interest thereon at the Mortgage
Rate on the related Mortgage Loan from the date as to which interest was last
paid through the last day of the month in which such substitution occurs, shall
be paid by the party effecting such substitution to the Master Servicer for
deposit into the Certificate Account, and shall be treated as a Principal
Prepayment hereunder; (ii) is accruing interest at a rate of interest at least
equal to that of the Deleted Mortgage Loan; (iii) has a remaining term to stated
maturity not greater than, and not more than two years less than, that of the
Deleted Mortgage Loan; (iv) has (A) an original Loan-to-Value Ratio not greater
than the lesser of (x) the current Loan-to-Value Ratio of the Deleted Mortgage
Loan set forth under the heading "Cut-Off Date LTV" in Appendix II to the Final
Prospectus Supplement and (y) 75% and (B) has a current Debt Service Coverage
Ratio for the four calendar quarters immediately preceding the repurchase or
replacement of not less than the greater of (x) the current Debt Service
Coverage Ratio of the Deleted Mortgage Loan set forth under the heading "NCF
DSCR" in Appendix II to the Final Prospectus Supplement and (y) 1.25x; (v) will
comply with all of the representations and warranties relating to Mortgage Loans
set forth herein, as of the date of substitution; (vi) has a Phase I
Environmental Report relating to the related Mortgaged Property in its Mortgage
Files and such Phase I Environmental Report does not, in the good faith
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard, raise material issues that have not been adequately addressed; (vii)
has an engineering report relating to the related Mortgaged Property in its
Mortgage Files and such engineering report does not, in the good faith
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard raise material issues that have not been adequately addressed; and
(viii) as to which the Trustee and the Paying Agent have received an Opinion of
Counsel, at the related Seller's expense, that such Mortgage Loan is a
"qualified replacement mortgage" within the meaning of Section 860G(a)(4) of the
Code; provided that no Mortgage Loan may have a Maturity Date after the date
three years prior to the Rated Final Distribution Date, and provided, further,
that no such Mortgage Loan shall be substituted for a Deleted Mortgage Loan
unless Rating Agency Confirmation is obtained, and provided, further that no
such Mortgage Loan shall be substituted for a Deleted Mortgage Loan unless the
Operating Adviser shall have approved of such substitution (provided, however,
that such approval of the Operating Adviser may not be unreasonably withheld).
In the event that either one mortgage loan is substituted for more than one
Deleted Mortgage Loan or more than one mortgage loan is substituted for one or
more Deleted Mortgage Loans, then (A) the Principal Balance referred to in
clause (i) above shall be determined on the basis of aggregate Principal
Balances and (B) the rates referred to in clause (ii) above and the remaining
term to stated maturity referred to in clause (iii) above shall be determined on
a weighted average basis (provided, that the REMIC I Net Mortgage Rate for any
Qualifying Substitute Mortgage Loan may not be less than the highest
Pass-Through Rate of any outstanding Class of Certificates (other than the Class
A-4FL
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Certificates) or the Class A-4FL Regular Interest that is not based on, or
subject to a cap equal to, the Weighted Average REMIC I Net Mortgage Rate).
Whenever a Qualifying Substitute Mortgage Loan is substituted for a Deleted
Mortgage Loan pursuant to this Agreement, the party effecting such substitution
shall certify that such Mortgage Loan meets all of the requirements of this
definition and shall send such certification to the Paying Agent, which shall
deliver a copy of such certification to the Special Servicer, the Trustee and
the Operating Adviser promptly, and in any event within five Business Days
following the Paying Agent's receipt of such certification.
"RATED FINAL DISTRIBUTION DATE" means with respect to each rated Class
of Certificates (other than the Class DP Certificates and the Class ST
Certificates), the Distribution Date in July 2044 and, with respect to the Class
ST Certificates, the Distribution Date in December 2035.
"RATING AGENCIES" means Fitch and S&P.
"RATING AGENCY CONFIRMATION" means, with respect to any matter,
confirmation in writing by each Rating Agency (or such Rating Agency as is
specified herein) that a proposed action, failure to act, or other event
specified herein will not in and of itself result in the withdrawal, downgrade,
or qualification, as applicable, of the then-current rating assigned by such
Rating Agency to any Class of Certificates then rated by such Rating Agency,
provided that with respect to any matter affecting any Serviced Companion
Mortgage Loan, such confirmation shall also refer to the nationally recognized
statistical rating organizations then rating the securities representing an
interest in such loan and such rating organizations' respective ratings of such
securities.
"RATING AGENCY TRIGGER EVENT" means if the Swap Counterparty
Guarantor's long-term rating is not at least "A-" by Fitch or "A" by S&P.
"REALIZED INTEREST LOSS" means, with respect to each Mortgage Loan, or
the DCT Industrial Portfolio Mortgage Loan or the DCT Industrial Portfolio C
Note, (i) in the case of a Liquidation Realized Loss, the portion of any
Liquidation Realized Loss that exceeds the Realized Principal Loss on the
related Mortgage Loan, or the DCT Industrial Portfolio Mortgage Loan or the DCT
Industrial Portfolio C Note, (ii) in the case of a Bankruptcy Loss, the portion
of such Realized Loss attributable to accrued interest on the related Mortgage
Loan, or the DCT Industrial Portfolio Mortgage Loan or the DCT Industrial
Portfolio C Note, (iii) in the case of an Expense Loss, an Expense Loss
resulting in any period from the payment of the Special Servicing Fee and any
Expense Losses treated as Realized Interest Losses pursuant to clause (iv) of
the definition of "Realized Principal Loss" or (iv) in the case of a
Modification Loss, a Modification Loss described in clause (iii) of the
definition thereof. For purposes of this definition, the term "Mortgage Loan"
excludes the DCT Industrial Portfolio Mortgage Loan and amounts with respect to
the DCT Industrial Portfolio Mortgage Loan and the DCT Industrial Portfolio C
Note shall be calculated separately.
"REALIZED LOSS" means a Liquidation Realized Loss, a Modification
Loss, a Bankruptcy Loss or an Expense Loss with respect to a Mortgage Loan, or
the DCT Industrial Portfolio Mortgage Loan or the DCT Industrial Portfolio C
Note. For purposes of this definition, the term "Mortgage Loan" excludes the DCT
Industrial Portfolio Mortgage Loan and amounts
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with respect to the DCT Industrial Portfolio Mortgage Loan and the DCT
Industrial Portfolio C Note shall be calculated separately.
"REALIZED PRINCIPAL LOSS" means, with respect to each Mortgage Loan,
or the DCT Industrial Portfolio Mortgage Loan or the DCT Industrial Portfolio C
Note, (i) in the case of a Liquidation Realized Loss, the amount of such
Liquidation Realized Loss, to the extent that it does not exceed the Principal
Balance (plus the amount of any Unliquidated Advance with respect to such
Mortgage Loan) of the Mortgage Loan, or the DCT Industrial Portfolio Mortgage
Loan or the DCT Industrial Portfolio C Note (or deemed Principal Balance, in the
case of REO Property), (ii) in the case of a Modification Loss, the amount of
such Modification Loss described in clause (i) of the definition thereof, (iii)
in the case of a Bankruptcy Loss, the portion of such Bankruptcy Loss
attributable to the reduction in the Principal Balance of the related Mortgage
Loan, or the DCT Industrial Portfolio Mortgage Loan or the DCT Industrial
Portfolio C Note, (iv) in the case of an Expense Loss, the amount of such
Expense Loss (other than Expense Losses resulting from the payment of Special
Servicing Fees) to the extent that such Expense Loss does not exceed amounts
collected in respect of the Mortgage Loans that were identified as allocable to
principal in the Collection Period in which such Expense Losses were incurred,
and any such excess shall be treated as a Realized Interest Loss and, (v) the
amounts in respect thereof that are withdrawn from the Certificate Account
pursuant to Section 6.6(b)(i). Notwithstanding clause (iv) of the preceding
sentence, to the extent that Expense Losses (exclusive of Expense Losses
resulting from payment of the Special Servicing Fee) exceed amounts with respect
to a Mortgage Loan, or the DCT Industrial Portfolio Mortgage Loan or the DCT
Industrial Portfolio C Note that were identified as allocable to principal, such
excess shall be treated as a Realized Interest Loss. For purposes of this
definition, the term "Mortgage Loan" excludes the DCT Industrial Portfolio
Mortgage Loan and amounts with respect to the DCT Industrial Portfolio Mortgage
Loan and the DCT Industrial Portfolio C Note shall be calculated separately.
"RECORD DATE" means, for each Distribution Date, (i) with respect to
each Class of Certificates, other than the Class A-4FL Certificates, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs and (ii) with respect to the Class A-4FL Certificates,
subject to Section 6.13, the Business Day immediately preceding the related
Distribution Date.
"RECOVERIES" means, as of any Distribution Date, any amounts recovered
with respect to a Mortgage Loan, a Serviced Companion Mortgage Loan, a B Note or
REO Property following the period in which a Final Recovery Determination occurs
plus other amounts defined as "Recoveries" herein.
"REGISTERED CERTIFICATES" has the meaning set forth in the Preliminary
Statement hereto.
"REGULATION AB" means Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
68
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S CERTIFICATE" means a written certification substantially
in the form set forth in Exhibit F hereto certifying that a beneficial owner of
an interest in a Regulation S Temporary Global Certificate is not a U.S. Person
(as defined in Regulation S).
"REGULATION S GLOBAL CERTIFICATES" means the Regulation S Permanent
Global Certificates together with the Regulation S Temporary Global
Certificates.
"REGULATION S PERMANENT GLOBAL CERTIFICATE" means any single permanent
global Certificate, in definitive, fully registered form without interest
coupons received in exchange for a Regulation S Temporary Global Certificate.
"REGULATION S TEMPORARY GLOBAL CERTIFICATE" means, with respect to any
Class of Certificates offered and sold outside of the United States in reliance
on Regulation S, a single temporary global Certificate, in definitive, fully
registered form without interest coupons.
"REHABILITATED MORTGAGE LOAN" means any Specially Serviced Mortgage
Loan with respect to which (i) three consecutive Scheduled Payments have been
made (in the case of any such Mortgage Loan, Serviced Companion Mortgage Loan or
B Note that was modified, based on the modified terms), or a complete defeasance
shall have occurred, (ii) no other Servicing Transfer Event has occurred and is
continuing (or with respect to determining whether a Required Appraisal Loan is
a Rehabilitated Mortgage Loan for applying Appraisal Reductions, no other
Appraisal Event has occurred and is continuing) and (iii) the Trust has been
reimbursed for all costs incurred as a result of the occurrence of a Servicing
Transfer Event, such amounts constitute a Workout-Delayed Reimbursement Amount,
or such amounts have been forgiven. An A Note shall not constitute a
Rehabilitated Mortgage Loan unless its related B Note would constitute a
Rehabilitated Mortgage Loan. A B Note shall not constitute a Rehabilitated
Mortgage Loan unless its related A Note also would constitute a Rehabilitated
Mortgage Loan. A Serviced Pari Passu Mortgage Loan shall not constitute a
Rehabilitated Mortgage Loan unless its related Serviced Companion Mortgage Loan
would constitute a Rehabilitated Mortgage Loan. A Serviced Companion Mortgage
Loan shall not constitute a Rehabilitated Mortgage Loan unless its related
Serviced Pari Passu Mortgage Loan also would constitute a Rehabilitated Mortgage
Loan.
"RELEASE DATE" means the date 40 days after the later of (i) the
commencement of the offering of the Certificates and (ii) the Closing Date.
"RELEVANT SERVICING CRITERIA" means the Servicing Criteria applicable
to each Reporting Servicer (as set forth, with respect to the Master Servicer,
the Special Servicer, any Primary Servicer, the Paying Agent and the Trustee, on
Schedule XIV attached hereto). For clarification purposes, multiple Reporting
Servicers can have responsibility for the same Relevant Servicing Criteria and
some of the Servicing Criteria will not be applicable to certain Reporting
Servicers. With respect to a Servicing Function Participant engaged by the
Trustee, the Master Servicer, the Special Servicer, any Primary Servicer, the
Paying Agent or any Sub-
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Servicer, the term "Relevant Servicing Criteria" may refer to a portion of the
Relevant Servicing Criteria applicable to the Trustee, the Master Servicer, the
Special Servicer, any Primary Servicer, the Paying Agent or such Sub-Servicer.
"REMIC" means a real estate mortgage investment conduit within the
meaning of Section 860D of the Code.
"REMIC I" means the segregated pool of assets consisting of the
Majority Mortgage Loans (other than any Excess Interest payable thereon), such
amounts with respect thereto as shall from time to time be held in the
Collection Account, the Certificate Account (other than the portions thereof
consisting of the DCT Industrial Portfolio C Note Custodial Account), the
Reserve Account, the Distribution Account (other than the portions thereof
constituting the Floating Rate Account, the Excess Interest Sub-account, the DCT
Industrial Portfolio C Note Distribution Account and the 000 00xx Xxxxxx X Note
Distribution Account, or funds held with respect to REMIC II or REMIC III) and
the Interest Reserve Account, the Insurance Policies (other than the interests
of the holder of any Non-Serviced Companion Mortgage Loan or Serviced Companion
Mortgage Loan or B Note therein) and any REO Properties or beneficial interests
therein (other than the interests of the holder of any Non-Serviced Companion
Mortgage Loan or any Serviced Companion Mortgage Loan or B Note therein), in
each case to the extent allocable to any Majority Mortgage Loan, for which a
REMIC election has been made pursuant to Section 12.1(a) hereof. The Class A-4FL
Regular Interest, the Swap Contract, the Floating Rate Account, Excess Interest
on the Majority Mortgage Loans and the Excess Interest Sub-account shall
constitute assets of the Trust but shall not be a part of any REMIC Pool formed
hereunder. The DCT Industrial Portfolio C Note and any amounts (including any
Excess Interest) payable thereon shall constitute assets of the Trust and assets
of the Class DP REMIC, but shall not be a part of REMIC I. The 000 00xx Xxxxxx X
Note and any amounts payable thereon shall constitute assets of the Trust and
assets of the Class ST REMIC, but shall not be a part of REMIC I. The
Non-Serviced Companion Mortgage Loans and any amounts payable thereon shall not
constitute assets of the Trust or any REMIC Pool formed hereunder. No B Note
(other than the DCT Industrial Portfolio C Note, which shall constitute an asset
of the Class DP REMIC) or any amounts payable thereon shall constitute an asset
of the Trust or any REMIC Pool formed hereunder. No Serviced Companion Mortgage
Loan or any amounts payable thereon shall constitute an asset of the Trust or
any REMIC Pool formed hereunder.
"REMIC I INTERESTS" means, collectively, the REMIC I Regular Interests
and the REMIC I Residual Interest.
"REMIC I MP IO COMPONENT REGULAR INTEREST" means the uncertificated
interest designated as a "regular interest" in REMIC I, which shall consist of
an interest having an initial Certificate Balance equal to the Cut-Off Date
principal balance of the Millenium Portfolio IO Component, and which has a
Pass-Through Rate equal to the REMIC I Net Mortgage Rate of the Millenium
Portfolio Mortgage Loan.
"REMIC I MP NON-IO COMPONENT REGULAR INTEREST" means the
uncertificated interest designated as a "regular interest" in REMIC I which
shall consist of an interest having an initial Certificate Balance equal to the
Cut-Off Date principal balance of the Millenium Portfolio
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Non-IO Component, and which has a Pass-Through Rate equal to the REMIC I Net
Mortgage Rate of the Millenium Portfolio Mortgage Loan.
"REMIC I NET MORTGAGE RATE" means, with respect to any Distribution
Date, as to any REMIC I Regular Interest, a rate per annum equal to (a) with
respect to any Mortgage Loan that accrues interest on the basis of a 360-day
year consisting of twelve (12) 30-day months ("30/360 basis"), (i) the Mortgage
Rate thereof (without taking into account any increase therein after the
Anticipated Repayment Date in respect of an ARD Loan or any default interest
rate) as of the Cut-Off Date and without regard to any modification, waiver or
amendment of the terms thereof following the Cut-Off Date, minus (ii) the
Administrative Cost Rate, and (b) with respect to any Mortgage Loan that accrues
interest on a basis other than a 30/360 basis, the annualized rate that, when
applied to the Principal Balance of the related Mortgage Loan (on the day prior
to the Due Date preceding such Distribution Date) on a 30/360 basis for the
related loan accrual period, yields the amount of net interest that would have
accrued during the related loan accrual period assuming a net interest rate
equal to the rate described in clause (a) above, and assuming an interest
accrual basis that is the same as the actual interest accrual basis of such
Mortgage Loan, provided that for purposes of this clause (b), (i) the REMIC I
Net Mortgage Rate for the loan accrual period relating to the Due Dates in both
January (commencing in 2007) and February (commencing in 2007) in any year that
is not a leap year and in February in any year that is a leap year, shall be
determined net of any amounts transferred to the Interest Reserve Account and
(ii) the REMIC I Net Mortgage Rate for the loan accrual period relating to the
Due Date in March (commencing in 2007) shall be determined taking into account
the addition of any amounts withdrawn from the Interest Reserve Account.
"REMIC I RC IO COMPONENT REGULAR INTEREST" means the uncertificated
interest designated as a "regular interest" in REMIC I, which shall consist of
an interest having an initial Certificate Balance equal to the Cut-Off Date
principal balance of the Xxxx-Xxxxxxx IO Component, and which has a Pass-Through
Rate equal to the REMIC I Net Mortgage Rate of the Ritz-Xxxxxxx Xxxx Passu Loan.
"REMIC I RC NON-IO COMPONENT REGULAR INTEREST" means the
uncertificated interest designated as a "regular interest" in REMIC I which
shall consist of an interest having an initial Certificate Balance equal to the
Cut-Off Date principal balance of the Xxxx-Xxxxxxx Non-IO Component, and which
has a Pass-Through Rate equal to the REMIC I Net Mortgage Rate of the
Ritz-Xxxxxxx Xxxx Passu Loan.
"REMIC I REGULAR INTERESTS" means, collectively, the uncertificated
interests designated as "regular interests" in REMIC I, which shall consist of,
(i) with respect to each Majority Mortgage Loan other than the Millenium
Portfolio Mortgage Loan and the Ritz-Xxxxxxx Xxxx Passu Loan, an interest having
an initial Certificate Balance equal to the Cut-Off Date Scheduled Principal
Balance of such Mortgage Loan, and which has a Pass-Through Rate equal to the
REMIC I Net Mortgage Rate of such Mortgage Loan, (ii) the REMIC I MP IO
Component Regular Interest, (iii) the REMIC I MP Non-IO Component Regular
Interest, (iv) the REMIC I RC IO Component Regular Interest, and (v) the REMIC I
RC Non-IO Component Regular Interest.
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"REMIC I RESIDUAL INTEREST" means the sole class of "residual
interests" in REMIC I and which shall be evidenced by the Class R-I
Certificates.
"REMIC II" means the segregated pool of assets consisting of the REMIC
I Regular Interests and related amounts in the Distribution Account for which a
REMIC election has been made pursuant to Section 12.1(a) hereof.
"REMIC II INTERESTS" means, collectively, the REMIC II Regular
Interests and the Class R-II Certificates.
"REMIC II REGULAR INTEREST A-1" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having an initial Certificate Balance equal to the Aggregate
Certificate Balance of the Class A-1 Certificates, and which has a Pass-Through
Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-1A" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having an initial Certificate Balance equal to the Aggregate
Certificate Balance of the Class A-1A Certificates, and which has a Pass-Through
Rate equal to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-2" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having an initial Certificate Balance equal to Aggregate Certificate
Balance of the Class A-2 Certificates, and which has a Pass-Through Rate equal
to the Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-3" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-3 Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-AB" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-AB Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-4" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-4 Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-4FL" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-4FL Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
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"REMIC II REGULAR INTEREST A-M" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-M Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST A-J" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class A-J Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST B" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class B Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST C" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class C Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST D" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class D Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST E" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class E Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST F" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class F Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST G" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class G Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST H" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class H Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST J" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance
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equal to the Aggregate Certificate Balance of the Class J Certificates, and
which has a Pass-Through Rate equal to the Weighted Average REMIC I Net Mortgage
Rate.
"REMIC II REGULAR INTEREST K" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class K Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST L" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class L Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST M" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class M Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST N" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class N Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST O" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class O Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST P" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class P Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST Q" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class Q Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST S" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Certificate Balance equal to the Aggregate Certificate Balance
of the Class S Certificates, and which has a Pass-Through Rate equal to the
Weighted Average REMIC I Net Mortgage Rate.
"REMIC II REGULAR INTEREST X-MP" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Notional Amount equal to the Class X-MP Notional Amount, and
which has a Pass-Through Rate equal to the Class X-MP Strip Rate.
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"REMIC II REGULAR INTEREST X-RC" means the uncertificated interest
designated as a "regular interest" in REMIC II, which shall consist of an
interest having a Notional Amount equal to the Class X-RC Notional Amount, and
which has a Pass-Through Rate equal to the Class X-RC Strip Rate.
"REMIC II REGULAR INTERESTS" means, collectively, the REMIC II Regular
Interest A-1, REMIC II Regular Interest A-1A, REMIC II Regular Interest A-2,
REMIC II Regular Interest A-3, REMIC II Regular Interest A-AB, REMIC II Regular
Interest A-4, REMIC II Regular Interest A-4FL, REMIC II Regular Interest A-M,
REMIC II Regular Interest A-J, REMIC II Regular Interest B, REMIC II Regular
Interest C, REMIC II Regular Interest D, REMIC II Regular Interest E, REMIC II
Regular Interest F, REMIC II Regular Interest G, REMIC II Regular Interest H,
REMIC II Regular Interest J, REMIC II Regular Interest K, REMIC II Regular
Interest L, REMIC II Regular Interest M, REMIC II Regular Interest N, REMIC II
Regular Interest O, REMIC II Regular Interest P, REMIC II Regular Interest Q,
the REMIC II Regular Interest S, the REMIC II Regular Interest X-MP and the
REMIC II Regular Interest X-RC.
"REMIC III" means the segregated pool of assets consisting of the
REMIC II Regular Interests and related amounts in the Distribution Account for
which a REMIC election has been made pursuant to Section 12.1(a) hereof.
"REMIC III CERTIFICATES" has the meaning set forth in the penultimate
paragraph of the Preliminary Statement hereto.
"REMIC III REGULAR CERTIFICATES" means, collectively, the Class A-1,
Class A-1A, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-M, Class A-J,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class X, Class
X-MP and Class X-RC Certificates.
"REMIC III REGULAR INTERESTS" means, collectively, the REMIC III
Regular Certificates and the Class A-4FL Regular Interest.
"REMIC POOL" means each of the five segregated pools of assets
designated as a REMIC pursuant to Section 12.1(a) hereof.
"REMIC PROVISIONS" means the provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and final, temporary and proposed regulations and rulings
promulgated thereunder, as the foregoing may be in effect from time to time and
taking account, as appropriate, of any proposed legislation or regulations
which, as proposed, would have an effective date prior to enactment or
promulgation thereof.
"REMIC REGULAR CERTIFICATES" means, collectively, the REMIC III
Regular Certificates, the Class DP Certificates and the Class ST Certificates.
"RENT LOSS POLICY" or "RENT LOSS INSURANCE" means a policy of
insurance generally insuring against loss of income or rent resulting from
hazards or acts of God.
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"RENTS FROM REAL PROPERTY" means, with respect to any REO Property,
income of the character described in Section 856(d) of the Code.
"REO ACCOUNT" shall have the meaning set forth in Section 9.14(a)
hereof.
"REO DISPOSITION" means the receipt by the Master Servicer or the
Special Servicer of Liquidation Proceeds and other payments and recoveries
(including proceeds of a final sale) from the sale or other disposition of REO
Property.
"REO INCOME" means, with respect to any REO Property that had not been
security for an A/B Mortgage Loan or Loan Pair for any Collection Period, all
income received in connection with such REO Property during such period less any
operating expenses, utilities, real estate taxes, management fees, insurance
premiums, expenses for maintenance and repairs and any other capital expenses
directly related to such REO Property paid during such period or, with respect
to an REO Property that had been security for an A/B Mortgage Loan or Loan Pair,
the portion of the amounts described above received with respect to such REO
Property and allocable to the related A Note or Serviced Pari Passu Mortgage
Loan, as applicable, pursuant to the related Intercreditor Agreement or Loan
Pair Intercreditor Agreement, as applicable. With respect to any Non-Serviced
Mortgage Loan or the 000 00xx Xxxxxx X Note (if the applicable Non-Serviced
Mortgage Loan Special Servicer or the MLMT 2006-C1 Special Servicer, as
applicable, has foreclosed upon the Mortgaged Property secured by such
Non-Serviced Mortgage Loan Mortgage or the 000 00xx Xxxxxx X Note), the REO
Income shall comprise only such portion of the foregoing that is allocable to
the holder of such Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note, as
applicable, and with respect to the Mortgaged Property securing any Loan Pair or
A/B Mortgage Loan, only the portion of such amounts allocable to the holder of
the related Serviced Pari Passu Mortgage or the related A Note, as applicable,
shall be included in REO Income.
"REO MORTGAGE LOAN" means a Mortgage Loan, a Serviced Companion
Mortgage Loan or a B Note as to which the related Mortgaged Property is an REO
Property.
"REO PROPERTY" means a Mortgaged Property (or an interest therein, if
the Mortgaged Property securing any Loan Pair or the Mortgaged Property securing
an A/B Mortgage Loan has been acquired by the Trust) acquired by the Trust
through foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation
from bankruptcy in connection with a Defaulted Mortgage Loan or otherwise
treated as foreclosure property under the REMIC Provisions; provided that a
Mortgaged Property that secures a Non-Serviced Mortgage Loan or the 000 00xx
Xxxxxx X Note shall constitute an REO Property if and when it is acquired under
the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement or the
MLMT 2006-C1 Pooling and Servicing Agreement, as applicable, for the benefit of
the Trustee as the holder of such Non-Serviced Mortgage Loan or the 000 00xx
Xxxxxx X Note and of the holder of the related Non-Serviced Companion Loan(s)
and the 000 00xx Xxxxxx A Note and 000 00xx Xxxxxx C Note through foreclosure,
acceptance of a deed-in-lieu of foreclosure, abandonment or reclamation from
bankruptcy in connection with a default or otherwise treated as foreclosure
property under the REMIC Provisions. The Special Servicer shall not have any
obligations with respect to an REO Property that relates to a Mortgaged Property
that secures a Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note and all
references to the Special Servicer's obligations in this
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Agreement with respect to "REO Property" shall exclude any such Mortgaged
Property that secures a Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X
Note.
"REPORT DATE" means the third Business Day before the related
Distribution Date.
"REPORTABLE EVENT" has the meaning set forth in Section 13.7.
"REPORTING SERVICER" means the Master Servicer, the Special Servicer
and any Servicing Function Participant (including any Primary Servicer, the
Paying Agent, the Trustee (if and for such time as it is a Servicing Function
Participant) and each Sub-Servicer), as the case may be.
"REPURCHASED LOAN" has the meaning set forth in Section 2.3(a).
"REQUEST FOR RELEASE" means a request for release of certain documents
relating to the Mortgage Loans, a form of which is attached hereto as Exhibit C.
"REQUIRED APPRAISAL LOAN" means any Mortgage Loan, Loan Pair or B Note
as to which an Appraisal Event has occurred. In the case of an A/B Mortgage
Loan, upon the occurrence of an Appraisal Event in respect of either the related
A Note or B Note, the A/B Mortgage Loan shall be deemed to be a single Required
Appraisal Loan. A Mortgage Loan, Loan Pair or B Note will cease to be a Required
Appraisal Loan at such time as it is a Rehabilitated Mortgage Loan.
"RESERVE ACCOUNT" shall mean the Reserve Account maintained by the
Paying Agent in accordance with the provisions of Section 5.3, which shall be an
Eligible Account or a subaccount of an Eligible Account.
"RESIDUAL CERTIFICATES" means, with respect to REMIC I, the Class DP
REMIC and the Class ST REMIC, the Class R-I Certificates; with respect to REMIC
II, the Class R-II Certificates; and with respect to REMIC III, the Class R-III
Certificates.
"RESPONSIBLE OFFICER" means, when used with respect to the initial
Trustee, any officer assigned to the Corporate Trust and Loan Agency, or with
respect to the Paying Agent, any officer assigned to the Global Securities and
Trust Services Group, each with specific responsibilities for the matters
contemplated by this Agreement and when used with respect to any successor
Trustee, Paying Agent, any Vice President, Assistant Vice President, corporate
trust officer or any assistant corporate trust officer or persons performing
similar roles on behalf of the Trustee or Paying Agent.
"RESTRICTED SERVICER REPORTS" means the following reports in CMSA
format (as in effect on the date hereof or as such formats may be changed from
time to time by the CMSA) in, and containing substantially the information
contemplated by, the forms attached hereto as part of Exhibit W prepared by the
Master Servicer (combining reports in such forms prepared by the Master Servicer
and the Special Servicer (with respect to Specially Serviced Mortgage Loans and
REO Properties)): (i) a CMSA Comparative Financial Status Report; (ii) without
duplication with Section 8.14, a CMSA NOI Adjustment Worksheet; (iii) without
duplication with Section 8.14, a CMSA Operating Statement Analysis Report, (iv)
subject to Section 8.11(h),
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a CMSA Watch List, (v) a Property File, (vi) without duplication with Section
8.14, a Financial File, (vii) a CMSA Special Servicer Loan File and (viii) to
the extent applicable a realized loss report substantially in the form included
in Exhibit W.
"REVERSE SEQUENTIAL ORDER" means sequentially to the Class S, Class Q,
Class P, Class O, Class N, Class M, Class L, Class K, Class J, Class H, Class G,
Class F, Class E, Class D, Class C, Class B, Class A-J, Class A-M and finally to
the Class X and Class A Senior Certificates (including the Class A-4FL
Certificates or the Class A-4FL Regular Interest, as applicable), on a pro rata
basis, as described herein.
"XXXX-XXXXXXX B NOTE" means, with respect to the Ritz-Xxxxxxx Xxxx
Passu Loan, the related subordinated B Note not included in the Trust, which is
subordinated in right of payment to the Ritz-Xxxxxxx Xxxx Passu Loan and the
Xxxx-Xxxxxxx Companion Loan to the extent set forth in the related Intercreditor
Agreement. The Xxxx-Xxxxxxx B Note is not a Mortgage Loan.
"XXXX-XXXXXXX COMPANION LOAN" means the loan that is secured by the
Ritz-Xxxxxxx Xxxx Passu Mortgage on a pari passu basis with the Ritz-Xxxxxxx
Xxxx Passu Loan. The Xxxx-Xxxxxxx Companion Loan is not a Mortgage Loan.
"XXXX-XXXXXXX IO COMPONENT" means a component of the beneficial
interest in the Ritz-Xxxxxxx Xxxx Passu Loan with an initial principal balance
of $7,600,000 as of the Cut-Off Date, which principal balance will be reduced by
all principal payments made on the Ritz-Xxxxxxx Xxxx Passu Loan until such
component is reduced to zero; provided that Realized Losses on the Ritz-Xxxxxxx
Xxxx Passu Loan will reduce the principal balance of the Xxxx-Xxxxxxx IO
Component and the Xxxx-Xxxxxxx Non-IO Component pro rata. Distributions in
respect of a reimbursement of any Realized Losses in respect of the Ritz-Xxxxxxx
Xxxx Passu Loan previously allocated to any Class of Certificates or Interests
shall not constitute distributions of principal and shall not result in the
reduction of the principal balance of the Xxxx-Xxxxxxx IO Component.
"XXXX-XXXXXXX LOAN GROUP" means, collectively, the Ritz-Xxxxxxx Xxxx
Passu Loan, the Xxxx-Xxxxxxx Companion Loan and the Xxxx-Xxxxxxx B Note.
"XXXX-XXXXXXX NON-IO COMPONENT" means a component of the beneficial
interest in the Ritz-Xxxxxxx Xxxx Passu Loan with an initial principal balance
of $31,448,614 as of the Cut-Off Date, which principal balance will be reduced
by all principal payments made on the Ritz-Xxxxxxx Xxxx Passu Loan after the
principal balance of the Xxxx-Xxxxxxx IO Component has first been reduced to
zero; provided that the Realized Losses on the Ritz-Xxxxxxx Xxxx Passu Loan will
reduce the principal balance of the Xxxx-Xxxxxxx IO Component and the
Xxxx-Xxxxxxx Non-IO Component pro rata. Distributions in respect of a
reimbursement of any Realized Losses in respect of the Ritz-Xxxxxxx Xxxx Passu
Loan previously allocated to any Class of Certificates or Interests shall not
constitute distributions of principal and shall not result in the reduction of
the principal balance of the Xxxx-Xxxxxxx Non-IO Component.
"RITZ-XXXXXXX XXXX PASSU LOAN" means Mortgage Loan Nos. 68-72, which
is secured on a pari passu basis with the Xxxx-Xxxxxxx Companion Loan pursuant
to the Ritz-Xxxxxxx Xxxx Passu Mortgage.
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"RITZ-XXXXXXX XXXX PASSU MORTGAGE" means the mortgage securing the
Ritz-Xxxxxxx Xxxx Passu Loan, the Xxxx-Xxxxxxx Companion Loan and the
Xxxx-Xxxxxxx B Note.
"RLJ PORTFOLIO COMPANION LOAN" means the loan that is secured by the
RLJ Portfolio Pari Passu Mortgage on a pari passu basis with the RLJ Portfolio
Pari Passu Loan. The RLJ Portfolio Companion Loan is not a "Mortgage Loan."
"RLJ PORTFOLIO PARI PASSU LOAN" means Mortgage Loan No. 26-66, which
is secured on a pari passu basis with the RLJ Portfolio Companion Loan pursuant
to the RLJ Portfolio Pari Passu Mortgage.
"RLJ PORTFOLIO PARI PASSU MORTGAGE" means the mortgage securing the
RLJ Portfolio Pari Passu Loan and the RLJ Portfolio Companion Loan.
"RULE 144A" means Rule 144A under the Securities Act.
"RULE 144A-IAI GLOBAL CERTIFICATE" means, with respect to any Class of
Certificates offered and sold in reliance on Rule 144A or to certain
Institutional Accredited Investors, a single, permanent global Certificate, in
definitive, fully registered form without interest coupons.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
"XXXXXXXX-XXXXX ACT" means the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
"XXXXXXXX-XXXXX CERTIFICATION" has the meaning set forth in Section
13.6.
"SCHEDULED PAYMENT" means each scheduled payment of principal of,
and/or interest on, a Mortgage Loan, the DCT Industrial Portfolio Mortgage Loan,
the DCT Industrial Portfolio C Note, a Serviced Companion Mortgage Loan or a B
Note required to be paid on its Due Date by the Mortgagor in accordance with the
terms of the related Mortgage Note, the DCT Industrial Portfolio Mortgage Loan,
the DCT Industrial Portfolio C Note, Serviced Companion Mortgage Loan or B Note
(excluding all amounts of principal and interest which were due on or before the
Cut-Off Date, whenever received, and taking account of any modifications thereof
and the effects of any Debt Service Reduction Amounts and Deficient Valuation
Amounts). Notwithstanding the foregoing, the amount of the Scheduled Payment for
any Serviced Pari Passu Mortgage Loan or Serviced Companion Mortgage Loan or any
A Note or B Note shall be calculated without regard to the related Loan Pair
Intercreditor Agreement or the related Intercreditor Agreement, as applicable.
For purposes of this definition, the term "Mortgage Loan" excludes the DCT
Industrial Portfolio Mortgage Loan and DCT Industrial Portfolio C Note.
"SCHEDULED PRINCIPAL BALANCE" means, with respect to any Mortgage
Loan, Serviced Companion Mortgage Loan, Loan Pair, B Note, REO Mortgage Loan,
DCT Industrial Portfolio Mortgage Loan or DCT Industrial Portfolio C Note, for
purposes of performing
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calculations with respect to any Distribution Date, the Principal Balance
thereof minus the aggregate amount of any P&I Advances of principal previously
made with respect to such Mortgage Loan, Serviced Companion Mortgage Loan, Loan
Pair, B Note, REO Mortgage Loan, DCT Industrial Portfolio Mortgage Loan or DCT
Industrial Portfolio C Note. For purposes of this definition, the term "Mortgage
Loan" excludes the DCT Industrial Portfolio Mortgage Loan and DCT Industrial
Portfolio C Note.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"SELLER" means LaSalle, MSMC or PCFII, as the case may be.
"SELLER SUB-SERVICER" means a Sub-Servicer or Additional Servicer
required to be retained by a Master Servicer or Special Servicer, as applicable,
by a Seller, as listed on Schedule XIX hereto.
"SENIOR CERTIFICATES" means the Class A Senior and Class X
Certificates.
"SERVICED COMPANION MORTGAGE LOAN" means a mortgage loan that is
serviced under this Agreement, is not a "Mortgage Loan" included in the Trust,
but is paid on a pari passu basis with a Mortgage Loan included in the Trust.
The Serviced Companion Mortgage Loan related to the Trust is the Cherry Creek
Companion Loan.
"SERVICED COMPANION MORTGAGE LOAN CUSTODIAL ACCOUNT" means each of the
custodial sub-account(s) of the Certificate Account (but which are not included
in the Trust) created and maintained by the Master Servicer pursuant to Section
5.1(c) on behalf of the holder of the related Serviced Companion Mortgage Loan.
Any such sub-account(s) shall be maintained as a sub-account of an Eligible
Account.
"SERVICED PARI PASSU MORTGAGE" means the Mortgage securing a Serviced
Pari Passu Mortgage Loan and its related Serviced Companion Mortgage Loan
secured by the related Mortgaged Property.
"SERVICED PARI PASSU MORTGAGE LOAN" means a mortgage loan that is a
"Mortgage Loan" included in the Trust and is paid on a pari passu basis with a
Serviced Companion Mortgage Loan. The only Serviced Pari Passu Mortgage Loan
related to the Trust is the Cherry Creek Pari Passu Loan.
"SERVICE(S)(ING)" means, in accordance with Regulation AB, the act of
servicing and administering the Mortgage Loans or any other assets of the Trust
by an entity that meets the definition of "servicer" set forth in Item 1101 of
Regulation AB and is subject to the disclosure requirements set forth in Item
1108 of Regulation AB. For clarification purposes, any uncapitalized occurrence
of this term shall have the meaning commonly understood by participants in the
commercial mortgage-backed securities market.
"SERVICER ERRORS AND OMISSIONS INSURANCE POLICY" or "ERRORS AND
OMISSIONS INSURANCE POLICY" means an errors and omissions insurance policy
maintained by the Master
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Servicer, the Special Servicer, the Trustee or the Paying Agent, as the case may
be, in accordance with Section 8.2, Section 9.2 and Section 7.17, respectively.
"SERVICER FIDELITY BOND" or "FIDELITY BOND" means a bond or insurance
policy under which the insurer agrees to indemnify the Master Servicer, the
Special Servicer, the Trustee, the Custodian or the Paying Agent, as the case
may be, (subject to standard exclusions) for all losses (less any deductible)
sustained as a result of any theft, embezzlement, fraud or other dishonest act
on the part of the Master Servicer's, the Special Servicer's, the Trustee's, the
Custodian's or the Paying Agent's, as the case may be, directors, officers or
employees and is maintained in accordance with Section 8.2, Section 9.2 and
Section 7.17, respectively.
"SERVICER MORTGAGE FILE" means copies of the mortgage documents listed
in the definition of "Mortgage File" relating to a Mortgage Loan and shall also
include, to the extent required to be (and actually) delivered to the applicable
Seller pursuant to the applicable Mortgage Loan documents, copies of the
following items: the Mortgage Note, any Mortgage, the Assignment of Leases and
the Assignment of Mortgage, any guaranty/indemnity agreement, any loan
agreement, any insurance policies or certificates (as applicable), any property
inspection reports, any financial statements on the property, any escrow
analysis, any tax bills, any Appraisal, any environmental report, any
engineering report, any asset summary, financial information on the
Mortgagor/sponsor and any guarantors, any letters of credit, any intercreditor
agreement and any Environmental Insurance Policies.
"SERVICING ADVANCE" means any cost or expense of the Master Servicer,
the Special Servicer or the Trustee, as the case may be, designated as a
Servicing Advance pursuant to this Agreement and any other costs and expenses
incurred by the Master Servicer, the Special Servicer or the Trustee, as the
case may be, to protect and preserve the security for such Mortgage Loan and/or
(if applicable) the related Serviced Companion Mortgage Loan or B Note.
"SERVICING CRITERIA" means the criteria set forth in paragraph (d) of
Item 1122 of Regulation AB, as such may be amended from time to time.
"SERVICING FUNCTION PARTICIPANT" means any Person, other than the
Master Servicer and the Special Servicer, that, within the meaning of Item 1122
of Regulation AB, is performing activities addressed by the Servicing Criteria,
unless such Person's activities relate only to 5% or less of the Mortgage Loans
(based on their Principal Balance). For clarification purposes, any Primary
Servicer and the Paying Agent are each Servicing Function Participants and the
Trustee is a Servicing Function Participant only if, and for such time as, it
has made an Advance during the calendar year covered by the next Annual Report
on Assessment of Compliance with Servicing Criteria.
"SERVICING OFFICER" means, any officer or employee of the Master
Servicer, or an Additional Servicer, as the case may be, involved in, or
responsible for, the administration and servicing of the Mortgage Loans, any
Serviced Companion Mortgage Loan and any B Note whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee by the Master Servicer, or an Additional Servicer, as the case may be,
and signed by an officer of the Master Servicer, or an Additional Servicer, as
the case may be, as such list may from time to time be amended.
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"SERVICING STANDARD" means, with respect to the Master Servicer or the
Special Servicer, as the case may be, to service and administer the Mortgage
Loans (and any Serviced Companion Mortgage Loan and B Note but not any
Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note) that it is obligated
to service and administer pursuant to this Agreement on behalf of the Trustee
and in the best interests of and for the benefit of the Certificateholders (and
in the case of any Serviced Companion Mortgage Loan or B Note, the related
holder of the Serviced Companion Mortgage Loan or B Note, as applicable) as a
collective whole, taking into account the subordinated nature of such B Note (as
determined by the Master Servicer or the Special Servicer, as the case may be,
in its good faith and reasonable judgment), in accordance with applicable law,
the terms of this Agreement and the terms of the respective Mortgage Loans, any
Serviced Companion Mortgage Loan and any B Note (and, in the case of any Loan
Pair or any A Note and B Note, the related Loan Pair Intercreditor Agreement or
the related Intercreditor Agreement, as applicable) and, to the extent
consistent with the foregoing, further as follows:
(a) with the same care, skill and diligence as is normal and usual in
its general mortgage servicing and REO property management activities on behalf
of third parties or on behalf of itself, whichever is higher, with respect to
mortgage loans and REO properties that are comparable to those for which it is
responsible hereunder;
(b) with a view to the timely collection of all Scheduled Payments of
principal and interest under the Mortgage Loans, any Serviced Companion Mortgage
Loan and any B Note or, if a Mortgage Loan, any Serviced Companion Mortgage Loan
or any B Note comes into and continues in default and if, in the good faith and
reasonable judgment of the Special Servicer, no satisfactory arrangements can be
made for the collection of the delinquent payments, the maximization of the
recovery of principal and interest on such Mortgage Loan to the
Certificateholders (as a collective whole) (or in the case of any A/B Mortgage
Loan and its related B Note or any Loan Pair, the maximization of the recovery
of principal and interest on such A/B Mortgage Loan or Loan Pair, as applicable,
to the Certificateholders and the holder of the related B Note or Serviced
Companion Mortgage Loan, as applicable, all taken as a collective whole, taking
into account the subordinated nature of such B Note) on a net present value
basis (the relevant discounting of anticipated collections that will be
distributable to Certificateholders to be performed at the rate determined by
the Special Servicer but in any event not less than (i) the related REMIC I Net
Mortgage Rate, in the case of the Mortgage Loans (other than any A Note or
Serviced Pari Passu Mortgage Loan) or (ii) the weighted average of the mortgage
rates on the related A Note and B Note, in the case of any A/B Mortgage Loan,
and on the related Serviced Pari Passu Mortgage Loan and Serviced Companion
Mortgage Loan in the case of any Loan Pair); and without regard to: (I) any
other relationship that the Master Servicer or the Special Servicer, as the case
may be, or any Affiliate thereof may have with the related Mortgagor; (II) the
ownership of any Certificate or any interest in any Non-Serviced Companion
Mortgage Loan, Serviced Companion Mortgage Loan, B Note or any mezzanine loan
related to a Mortgage Loan by the Master Servicer or the Special Servicer, as
the case may be, or any Affiliate thereof; (III) the Master Servicer's
obligation to make Advances; (IV) the right of the Master Servicer (or any
Affiliate thereof) or the Special Servicer (or any Affiliate thereof), as the
case may be, to receive reimbursement of costs, or the sufficiency of any
compensation payable to it, hereunder or with respect to any particular
transaction and (V) any obligation of the Master Servicer (or any Affiliate
thereof) to repurchase any Mortgage Loan from the Trust.
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"SERVICING TRANSFER EVENT" means the occurrence of any of the
following events: (i) a payment default shall have occurred on a Mortgage Loan
(x) at its Maturity Date (except, if (a) the Mortgagor is making the related
Assumed Scheduled Payment, (b) the Mortgagor notifies the Master Servicer of its
intent to refinance such Mortgage Loan and is diligently pursuing such
refinancing, (c) the Mortgagor delivers a firm commitment to refinance
acceptable to the Operating Adviser on or prior to the Maturity Date, and (d)
such refinancing occurs within 60 days of such default which 60 day period may
be extended to 120 days at the Operating Adviser's discretion) or (y) if any
other payment is more than 60 days past due or has not been made on or before
the second Due Date following the Due Date such payment was due; (ii) any
Mortgage Loan (other than a Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx X
Note), Serviced Companion Mortgage Loan or B Note as to which, to the Master
Servicer's knowledge, the Mortgagor has consented to the appointment of a
receiver or conservator in any insolvency or similar proceeding of, or relating
to, such Mortgagor or to all or substantially all of its property, or the
Mortgagor has become the subject of a decree or order issued under a bankruptcy,
insolvency or similar law and such decree or order shall have remained
undischarged or unstayed for a period of 30 days; (iii) any Mortgage Loan (other
than a Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx X Note), Serviced
Companion Mortgage Loan or B Note as to which the Master Servicer shall have
received notice of the foreclosure or proposed foreclosure of any other lien on
the Mortgaged Property; (iv) any Mortgage Loan (other than a Non-Serviced
Mortgage Loan and the 000 00xx Xxxxxx X Note), Serviced Companion Mortgage Loan
or B Note as to which the Master Servicer has knowledge of a default (other than
a failure by the related Mortgagor to pay principal or interest) which in the
good faith reasonable judgment of the Master Servicer materially and adversely
affects the interests of the Certificateholders or the holder of any related
Serviced Companion Mortgage Loan or B Note and which has occurred and remains
unremedied for the applicable grace period specified in such Mortgage Loan (or,
if no grace period is specified, 60 days); (v) any Mortgage Loan (other than a
Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx X Note), Serviced Companion
Mortgage Loan or B Note as to which the Mortgagor admits in writing its
inability to pay its debts generally as they become due, files a petition to
take advantage of any applicable insolvency or reorganization statute, makes an
assignment for the benefit of its creditors or voluntarily suspends payment of
its obligations; and (vi) any Mortgage Loan (other than a Non-Serviced Mortgage
Loan and the 000 00xx Xxxxxx X Note), Serviced Companion Mortgage Loan or B Note
as to which, in the good faith reasonable judgment of the Master Servicer, (a)
(other than with respect to any A/B Mortgage Loan) a payment default is imminent
or is likely to occur within 60 days, or (b) any other default is imminent or is
likely to occur within 60 days and such default, in the judgment of the Master
Servicer, is reasonably likely to materially and adversely affect the interests
of the Certificateholders or the holder of any related Serviced Companion
Mortgage Loan or B Note (as the case may be); provided, however, that (1) if the
holder of the B Note exercised its right to cure a monetary default and a
monetary default occurs in the following month due to the holder of the B Note's
failure to cure, then servicing of such Mortgage Loan shall be transferred to
the Special Servicer on the Business Day following the expiration of the cure
period (as defined in the related Intercreditor Agreement) of the holder of the
B Note if the holder of the B Note does not cure the current monetary default or
(2) if the holder of the B Note has exercised its right to cure the number of
consecutive monetary defaults it is permitted to cure under the related
Intercreditor Agreement and a monetary default occurs in the following month,
then servicing of such Mortgage Loan shall be transferred to the Special
Servicer at the
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expiration of the Mortgagor's grace period for the current monetary default. If
a Servicing Transfer Event occurs with respect to an A Note, it shall be deemed
to have occurred also with respect to its related B Note; provided, however,
that if a Servicing Transfer Event would otherwise have occurred with respect to
an A Note, but has not so occurred solely because the holder of the related B
Note has exercised its cure rights under the related Intercreditor Agreement,
then a Servicing Transfer Event will not occur with respect to such A/B Mortgage
Loan. If a Servicing Transfer Event occurs with respect to a B Note, it shall be
deemed to have occurred also with respect to its related A Note. If a Servicing
Transfer Event occurs with respect to any Serviced Pari Passu Mortgage Loan, it
shall be deemed to have occurred also with respect to the related Serviced
Companion Mortgage Loan. If a Servicing Transfer Event occurs with respect to
any Serviced Companion Mortgage Loan, it shall be deemed to have occurred also
with respect to the related Serviced Pari Passu Mortgage Loan. Under the
applicable Non-Serviced Mortgage Loan Pooling and Servicing Agreement or the
MLMT 2006-C1 Pooling and Servicing Agreement, if a Servicing Transfer Event
occurs with respect to any Non-Serviced Companion Mortgage Loan or the 000 00xx
Xxxxxx X Note, as applicable, it shall be deemed to have occurred also with
respect to the related Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note.
"SIMILAR LAWS" has the meaning set forth in Section 3.3(d).
"SINGLE-PURPOSE ENTITY" means a Person, other than an individual,
whose organizational documents provide substantially to the effect that it is
formed or organized solely for the purpose of owning and collecting payments
from Defeasance Collateral for the benefit of the Trust and which (i) does not
engage in any business unrelated thereto and the financing thereof; (ii) does
not have any assets other than those related to its interest in Defeasance
Collateral; (iii) maintains its own books, records and accounts, in each case
which are separate and apart from the books, records and accounts of any other
Person; (iv) conducts business in its own name and uses separate stationery,
invoices and checks; (v) does not guarantee or assume the debts or obligations
of any other Person; (vi) does not commingle its assets or funds with those of
any other Person; (vii) transacts business with affiliates on an arm's length
basis pursuant to written agreements; and (viii) holds itself out as being a
legal entity, separate and apart from any other Person, and otherwise complies
with the single-purpose requirements established by the Rating Agencies. The
entity's organizational documents also provide that any dissolution and winding
up or insolvency filing for such entity requires the unanimous consent of all
partners or members, as applicable, and that such documents may not be amended
with respect to the Single-Purpose Entity requirements.
"SOLE CERTIFICATEHOLDER" means any Certificateholder (or
Certificateholders provided they act in unanimity) holding 100% of the then
outstanding Class X, Class DP, Class ST-A, Class ST-B, Class ST-C, Class ST-D,
Class ST-E, Class ST-F, Class L, Class M, Class N, Class O, Class P, Class Q,
Class S and Class T Certificates; provided, however, that the Certificate
Balances of the Class A-1, Class A-1A, Class A-2, Class A-3, Class A-AB, Class
A-4, Class A-4FL, Class A-M, Class A-J, Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J and Class K Certificates have been reduced to
zero.
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"SPECIAL SERVICER" means X.X. Xxxxxx Company, Inc., or any successor
Special Servicer as herein provided, including without limitation, any successor
Special Servicer appointed pursuant to Section 9.39 hereof.
"SPECIAL SERVICER COMPENSATION" means, with respect to any applicable
period, the sum of the Special Servicing Fees, the Liquidation Fees and Work-Out
Fees and any other amounts to be paid to the Special Servicer pursuant to the
terms of this Agreement.
"SPECIAL SERVICER REMITTANCE DATE" means the Business Day preceding
each Determination Date.
"SPECIAL SERVICING FEE" means, for each calendar month, as to each
Mortgage Loan (other than any Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx
X Note), Serviced Companion Mortgage Loan or B Note that is a Specially Serviced
Mortgage Loan (including REO Mortgage Loans), the fraction or portion of the
Special Servicing Fee Rate applicable to such month (determined using the same
interest accrual methodology that is applied with respect to the Mortgage Rate
for such Mortgage Loan, Serviced Companion Mortgage Loan or B Note for such
month) multiplied by the Scheduled Principal Balance of such Specially Serviced
Mortgage Loan immediately before the Due Date occurring in such month.
"SPECIAL SERVICING FEE RATE" means 0.25% per annum.
"SPECIAL SERVICING OFFICER" means any officer or employee of the
Special Servicer involved in, or responsible for, the administration and
servicing of the Specially Serviced Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished to the
Trustee, the Paying Agent and the Master Servicer by the Special Servicer signed
by an officer of the Special Servicer, as such list may from time to time be
amended.
"SPECIALLY SERVICED MORTGAGE LOAN" means, as of any date of
determination, any Mortgage Loan (other than any Non-Serviced Mortgage Loan and
the 000 00xx Xxxxxx X Note), Serviced Companion Mortgage Loan or B Note with
respect to which the Master Servicer has notified the Special Servicer, the
Operating Adviser and the Trustee that a Servicing Transfer Event has occurred
(which notice shall be effective upon receipt) and the Special Servicer has
received all information, documents and records relating to such Mortgage Loan,
Serviced Companion Mortgage Loan or B Note as reasonably requested by the
Special Servicer to enable it to assume its duties with respect to such Mortgage
Loan, Serviced Companion Mortgage Loan or B Note. A Specially Serviced Mortgage
Loan shall cease to be a Specially Serviced Mortgage Loan from and after the
date on which the Special Servicer notifies the Master Servicer, the Operating
Adviser, the Paying Agent and the Trustee, in accordance with Section 8.1(b),
that such Mortgage Loan (and the related B Note in the case of an A/B Mortgage
Loan, and the related Serviced Companion Mortgage Loan in the case of a Loan
Pair) has become a Rehabilitated Mortgage Loan (and, in the case of an A Note
(or B Note) that is or was a Specially Serviced Mortgage Loan, its related B
Note (or A Note) has also become a Rehabilitated Mortgage Loan and, in the case
of a Serviced Pari Passu Mortgage Loan (or Serviced Companion Mortgage Loan)
that is or was a Specially Serviced Mortgage Loan, its related Serviced
Companion Mortgage Loan (or Serviced Pari Passu Mortgage Loan) has also
85
become a Rehabilitated Mortgage Loan), with respect to such Servicing Transfer
Event, unless and until the Master Servicer notifies the Special Servicer, the
Paying Agent and the Trustee, in accordance with Section 8.1(b) that another
Servicing Transfer Event with respect to such Mortgage Loan, Serviced Companion
Mortgage Loan or B Note exists or occurs.
"STANDARD HAZARD INSURANCE POLICY" means a fire and casualty extended
coverage insurance policy in such amount and with such coverage as required by
this Agreement.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC II and
REMIC III, the day designated as such in Section 12.1(b).
"SUBCONTRACTOR" means any vendor, subcontractor or other Person that
is not responsible for the overall servicing of Mortgage Loans but performs one
or more discrete functions identified in Item 1122(d) of Regulation AB with
respect to Mortgage Loans under the direction or authority of the Master
Servicer, the Special Servicer, an Additional Servicer or a Sub-Servicer.
"SUBORDINATE CERTIFICATES" means, collectively, the Class A-M, Class
A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O, Class P, Class Q and Class S
Certificates.
"SUB-SERVICER" means any Person that (i) is a Servicing Function
Participant, (ii) Services the assets of the Trust on behalf of (a) the Trust,
(b) the Paying Agent, (c) the Master Servicer, (d) the Special Servicer, (e) any
Additional Servicer (f) or any other Person that otherwise constitutes a
"Sub-Servicer", and (iii) is responsible for the performance (whether directly
or through sub-servicers or Subcontractors) of Servicing functions that are
required to be performed by the Trust, the Paying Agent, the Master Servicer,
the Special Servicer or any Additional Servicer under this Agreement or any
sub-servicing agreement and are identified in Item 1122(d) of Regulation AB.
"SUCCESSFUL BIDDER" has the meaning set forth in Section 8.29(d).
"SWAP CONTRACT" means the interest rate Swap Contract, dated as of
August 1, 2006, between the Swap Counterparty and the Trust, and the Credit
Support Annex (as defined in the Swap Contract) and the Schedule to the related
ISDA Master Agreement relating thereto.
"SWAP COUNTERPARTY" means Xxxxxx Xxxxxxx Capital Services Inc., acting
in such capacity or its successor in interest.
"SWAP COUNTERPARTY COLLATERAL ACCOUNT" has the meaning set forth in
Section 8.32(f).
"SWAP COUNTERPARTY GUARANTOR" means Xxxxxx Xxxxxxx, a Delaware
corporation.
"SWAP DEFAULT" means any failure on the part of the Swap Counterparty
to (i) make a required payment under the Swap Contract or (ii) either post
acceptable collateral, cause
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an acceptable entity to guarantee or provide an indemnity in respect of the Swap
Counterparty's obligations, find an acceptable replacement Swap Counterparty
after a Rating Agency Trigger Event or enter into any other arrangement
acceptable to the Rating Agencies, in each case, as required by the Schedule to
the related ISDA Master Agreement.
"TAX MATTERS PERSON" means the person designated as the "tax matters
person" of each REMIC Pool pursuant to Treasury Regulations Section 1.860F-4(d)
and temporary Treasury Regulations Section 301.6231(a)(7)-1T.
"10-K FILING DEADLINE" has the meaning set forth in Section 13.5.
"TERMINATION PRICE" has the meaning set forth in Section 10.1(b).
"TITLE INSURANCE POLICY" means a title insurance policy maintained
with respect to a Mortgage Loan issued on the date of origination of the related
Mortgage Loan.
"TRANSFER" means any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFEREE" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TRANSFEROR" means any Person who is disposing by Transfer any
Ownership Interest in a Certificate.
"TRUST" means the trust created pursuant to this Agreement, the assets
which consist of all the assets of the Class DP REMIC, the Class ST REMIC, REMIC
I (including in each case the related Mortgage Loans (other than Excess Interest
with respect to the Majority Mortgage Loans), such amounts related thereto as
shall from time to time be held in the Certificate Account, the Distribution
Account, the Reserve Account, the Interest Reserve Account, the Insurance
Policies, any REO Properties or beneficial interests therein and other items
referred to in Section 2.1(a) hereof); REMIC II; REMIC III; the Swap Contract,
the Class A-4FL Regular Interest and funds or assets from time to time on
deposit in the Floating Rate Account and the Excess Interest Sub-account and any
Excess Interst on the Majority Mortgage Loans. The Trust shall not include any
Non-Serviced Companion Mortgage Loan, any B Note, any interest of the holders of
a B Note, any A/B Loan Custodial Account, any Serviced Companion Mortgage Loan,
any interest of the holders of a Serviced Companion Mortgage Loan or any
Serviced Companion Mortgage Loan Custodial Account.
"TRUSTEE" means HSBC Bank USA, National Association, as trustee, or
its successor-in-interest, or if any successor trustee or any co-trustee shall
be appointed as herein provided, then "Trustee" shall also mean such successor
trustee (subject to Section 7.7 hereof) and such co-trustee (subject to Section
7.9 hereof), as the case may be.
"TRUSTEE FEE" means for each calendar month, as to each Mortgage Loan
(including REO Mortgage Loans and Defeasance Loans), the portion of the Trustee
Fee Rate applicable to such month (determined using the same interest accrual
methodology (other than the rate of accrual) that is applied with respect to the
Mortgage Rate for such Mortgage Loan for
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such month) multiplied by the Scheduled Principal Balance of each such Mortgage
Loan immediately before the Due Date occurring in such month; provided that a
portion of the Trustee Fee agreed upon between the Trustee and the Paying Agent
shall be applied to pay the Paying Agent Fee.
"TRUSTEE FEE RATE" means 0.00088% per annum, which, includes the
Paying Agent Fee.
"UNDERWRITER" means each of Xxxxxx Xxxxxxx & Co. Incorporated, LaSalle
Financial Services, Inc., Greenwich Capital Markets, Inc. and Xxxxxxx Lynch,
Pierce, Xxxxxx and Xxxxx Incorporated and or its successors in interest.
"UNITED STATES TAX PERSON" means any of (i) a citizen or resident of
the United States, (ii) corporation or partnership organized in or under the
laws of the United States, any State thereof or the District of Columbia, (iii)
an estate the income of which is includible in gross income for United States
tax purposes, regardless of its source or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust, and one or more United States Tax Persons has the authority to
control all substantial decisions of such trust.
"UNLIQUIDATED ADVANCE" means any Advance previously made by a party
hereto that has been previously reimbursed to that party by the Trust Fund as
part of a Workout-Delayed Reimbursement Amount pursuant to subsection (iii) of
Section 5.2(a)(II), but that has not been recovered from the Mortgagor or
otherwise from collections on or the proceeds of the Mortgage Loan or REO
Property in respect of which the Advance was made.
"UNPAID INTEREST" means, on any Distribution Date with respect to any
Class of Interests (including the Class A-4FL Regular Interest) or Certificates
(other than the Class A-4FL Certificates and the Residual Certificates), the
portion of Distributable Certificate Interest for such Class remaining unpaid as
of the close of business on the preceding Distribution Date.
"UNRESTRICTED SERVICER REPORTS" means the following reports in CMSA
format (as in effect on the date hereof or as such formats may be changed from
time to time by the CMSA) in, and containing substantially the information
contemplated by, the forms attached hereto as part of Exhibit X prepared by the
Master Servicer (combining reports in such forms prepared by the Master Servicer
and the Special Servicer (with respect to Specially Serviced Mortgage Loans and
REO Properties)): (a) the following electronic files: (i) a Loan Setup File
(with respect to the initial Distribution Date only); and (ii) a Loan Periodic
Update File; and (b) the following supplemental reports: (i) a Delinquent Loan
Status Report, (ii) an Historical Loan Modification Report, (iii) an Historical
Liquidation Report, (iv) an REO Status Report, and (v) a CMSA Loan Level
Reserve/LOC Report.
"WEIGHTED AVERAGE REMIC I NET MORTGAGE RATE" means, with respect to
any Distribution Date, the weighted average of the REMIC I Net Mortgage Rates
for the REMIC I Regular Interests, weighted on the basis of their respective
Certificate Balances as of the close of business on the preceding Distribution
Date; provided that, solely for purposes of calculating the Weighted Average
REMIC I Net Mortgage Rate, (i) the REMIC I Net Mortgage Rate of the
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REMIC I MP IO Component Regular Interest shall first be reduced by the Class
X-MP Strip Rate and (ii) the REMIC I Net Mortgage Rate of the REMIC I RC IO
Component Regular Interest shall first be reduced by the Class X-RC Strip Rate.
"WORKOUT-DELAYED REIMBURSEMENT AMOUNT" has the meaning set forth in
subsection (II)(i) of Section 5.2(a).
"WORK-OUT FEE" means a fee payable with respect to any Rehabilitated
Mortgage Loan (other than any Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx
X Note), Serviced Companion Mortgage Loan or B Note, equal to the product of (x)
1.0% and (y) the amount of each collection of interest (other than default
interest and any Excess Interest) and principal received (including any
Condemnation Proceeds received and applied as a collection of such interest and
principal) on such Mortgage Loan, Serviced Companion Mortgage Loan or B Note for
so long as it remains a Rehabilitated Mortgage Loan.
SECTION 1.2 CALCULATIONS RESPECTING MORTGAGE LOANS.
(a) Calculations required to be made by the Paying Agent pursuant to
this Agreement with respect to any Mortgage Loan, Serviced Companion Mortgage
Loan or B Note shall be made based upon current information as to the terms of
such Mortgage Loan, Serviced Companion Mortgage Loan and B Note and reports of
payments received from the Master Servicer on such Mortgage Loan, Serviced
Companion Mortgage Loan and B Note and payments to be made to the Paying Agent
as supplied to the Paying Agent by the Master Servicer. The Paying Agent shall
not be required to recompute, verify or recalculate the information supplied to
it by the Master Servicer and may conclusively rely upon such information in
making such calculations. If, however, a Responsible Officer of the Paying Agent
has actual knowledge of an error in the calculations, the Paying Agent shall
inform the Master Servicer of such error.
(b) Unless otherwise required by law or the applicable Mortgage Loan,
Serviced Companion Mortgage Loan or B Note documents (or the related
Intercreditor Agreement or related Loan Pair Intercreditor Agreement, as
applicable), or as otherwise provided for in the definition of Liquidation
Realized Loss, any amounts (other than escrow and reserve deposits and
reimbursements of lender advances and expenses) received in respect of a
Mortgage Loan, a Serviced Companion Mortgage Loan or a B Note as to which a
default has occurred and is continuing shall be applied first to overdue
interest due with respect to such Mortgage Loan, Serviced Companion Mortgage
Loan or B Note at the Mortgage Rate thereof, next to current interest due with
respect to such Mortgage Loan, Serviced Companion Mortgage Loan or B Note at the
Mortgage Rate thereof, next to the reduction of the Principal Balance of such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note to zero if such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note has been accelerated
and in respect of any scheduled payments of principal then due to the extent
that such Mortgage Loan, Serviced Companion Mortgage Loan or B Note has not yet
been accelerated, next to any default interest and other amounts due on such
Mortgage Loan, Serviced Companion Mortgage Loan or B Note and finally to Late
Fees due with respect to such Mortgage Loan, Serviced Companion Mortgage Loan or
B Note. The foregoing allocations are intended to govern loan level allocations
but shall not
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govern allocations of such amounts at the trust level for the purpose of
determining Principal Distribution Amounts or Distributable Certificate
Interest.
SECTION 1.3 CALCULATIONS RESPECTING ACCRUED INTEREST. Accrued interest
on any Certificate (other than the Class A-4FL Certificates) and on the Class
A-4FL Regular Interest shall be calculated based upon a 360-day year consisting
of twelve 30-day months and, subject to Section 6.13, accrued interest on the
Class A-4FL Certificates shall be calculated on the basis of the actual number
of days elapsed in the related Interest Accrual Period and a 360-day year.
Pass-Through Rates shall be carried out to eight decimal places, rounded if
necessary. All dollar amounts calculated hereunder shall be rounded to the
nearest xxxxx.
SECTION 1.4 INTERPRETATION.
(a) Whenever the Agreement refers to a Distribution Date and a
"related" Collection Period, Interest Accrual Period, Record Date, Due Date,
Report Date, Monthly Certificateholders Report, Special Servicer Remittance
Date, Master Servicer Remittance Date or Determination Date, such reference
shall be to the Collection Period, Interest Accrual Period, Record Date, Due
Date, Report Date, Special Servicer Remittance Date, Master Servicer Remittance
Date or Determination Date, as applicable, immediately preceding such
Distribution Date.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under generally accepted
accounting principles or regulatory accounting principles, as applicable.
(c) The words "hereof," "herein" and "hereunder," and words of similar
import, when used in this Agreement, shall refer to this agreement as a whole
and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(d) Whenever a term is defined herein, the definition ascribed to such
term shall be equally applicable to both the singular and plural forms of such
term and to masculine, feminine and neuter genders of such term.
(e) This Agreement is the result of arm's-length negotiations between
the parties and has been reviewed by each party hereto and its counsel. Each
party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
SECTION 1.5 ARD LOANS.
Notwithstanding any provision of this Agreement:
(a) For the ARD Loans, the Excess Interest accruing as a result of the
step-up in the Mortgage Rate upon failure of the related Mortgagor to pay the
principal due on the Anticipated Repayment Date as specifically provided for in
the related Mortgage Note shall not
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be taken into account for purposes of the definitions of "Appraisal Reduction,"
"Assumed Scheduled Payment," "Mortgage Rate," "Purchase Price" and "Realized
Loss."
(b) Excess Interest on ARD Loans (other than the DCT Industrial
Portfolio C Note) shall constitute an asset of the Trust but not an asset of any
REMIC Pool. Excess Interest on the DCT Industrial Portfolio C Note shall be an
asset of the Class DP REMIC, and shall be paid to the Special Servicer as
additional compensation.
(c) Neither the Master Servicer nor the Special Servicer shall take
any enforcement action with respect to the payment of Excess Interest on any
Mortgage Loan unless the taking of such action is consistent with the Servicing
Standard and all other amounts due under such Mortgage Loan have been paid, and,
in the good faith and reasonable judgment of the Master Servicer and the Special
Servicer, as the case may be, the Liquidation Proceeds expected to be recovered
in connection with such enforcement action will cover the anticipated costs of
such enforcement action and, if applicable, any associated interest thereon.
(d) Liquidation Fees shall not be deemed to be earned on Excess
Interest.
(e) With respect to an ARD Loan, after its Anticipated Repayment Date,
the Master Servicer or the Special Servicer, as the case may be, shall be
permitted, in its discretion, to waive in accordance with Section 8.18 and
Section 9.5 hereof, all or any accrued Excess Interest if, prior to the related
Maturity Date, the related Mortgagor has requested the right to prepay the
Mortgage Loan in full together with all payments required by the Mortgage Loan
in connection with such prepayment except for all or a portion of accrued Excess
Interest, provided that the Master Servicer's or the Special Servicer's
determination to waive the right to such accrued Excess Interest is in
accordance with the Servicing Standard and with Section 8.18 and Section 9.5
hereof. The Master Servicer or the Special Servicer, as the case may be, will
have no liability to the Trust, the Certificateholders or any other person so
long as such determination is based on such criteria.
SECTION 1.6 CERTAIN MATTERS WITH RESPECT TO LOAN PAIRS AND A/B
MORTGAGE LOANS.
(a) The parties hereto acknowledge that, pursuant to the related Loan
Pair Intercreditor Agreement or the related Intercreditor Agreement, if a
Serviced Pari Passu Mortgage Loan or B Note, as applicable, is no longer part of
the Trust Fund or is no longer serviced pursuant to the terms of this Agreement,
the holder of such Serviced Pari Passu Mortgage Loan or B Note, as applicable,
shall negotiate one or more new servicing agreements with the Master Servicer
and the Special Servicer, provided, that prior to entering into any such new
servicing agreement, the new holder of such Serviced Pari Passu Mortgage Loan or
B Note, as applicable, shall obtain and provide to the holder of the related
Serviced Companion Mortgage Loan and/or B Note written confirmation from each
rating agency then rating any securitization relating to such Serviced Companion
Mortgage Loan and/or B Note providing that such new servicing agreement will not
result in the downgrade, qualification or withdrawal of its then-current ratings
of any securities issued in such securitization; provided, that prior to such
time the Master Servicer and the Special Servicer shall continue to service the
related Loan Pair and/or
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A/B Mortgage Loan to the extent provided in the related Loan Pair Intercreditor
Agreement or the related Intercreditor Agreement, as applicable.
(b) For the avoidance of doubt and subject to subsection (a) above,
the parties acknowledge that the rights and duties of each of the Master
Servicer and the Special Servicer under Article VIII and Article IX and the
obligation of the Master Servicer to make Advances, insofar as such rights,
duties and obligations relate to any A/B Mortgage Loan (including both the
related A Note and the related B Note) or Loan Pair, shall terminate upon the
earliest to occur of the following with respect to such A/B Mortgage Loan or
Loan Pair, as the case may be: (i) any repurchase of or substitution for the
related A Note or Serviced Pari Passu Mortgage Loan by the applicable Seller
pursuant to Section 2.3, (ii) any purchase of the related A Note by the owner of
the related B Note pursuant to the terms of the related Intercreditor Agreement,
(iii) any payment in full of any and all amounts due (or deemed due) under the
related A Note or Serviced Pari Passu Mortgage Loan (or its successor REO
Mortgage Loan) (including amounts to which the holder of such A Note or Serviced
Pari Passu Mortgage Loan is entitled under the related Intercreditor Agreement
or related Loan Pair Intercreditor Agreement), as applicable, (iv) any final
liquidation of such A/B Mortgage Loan or Loan Pair and (v) the occurrence of a
Final Recovery Determination with respect to the related A Note or Serviced Pari
Passu Mortgage Loan; provided, however, that this statement shall not limit (A)
the duty of the Master Servicer or the Special Servicer to deliver or make
available the reports otherwise required of it hereunder with respect to the
Collection Period in which such event occurs or (B) the rights of the Master
Servicer or the Special Servicer that may otherwise accrue or arise in
connection with the performance of its duties hereunder with respect to such A/B
Mortgage Loan or Loan Pair prior to the date on which such event occurs.
(c) In connection with any purchase described in clause (ii) of
subsection (b) or an event described in clause (iii) of subsection (b), the
Trustee, the Custodian, the Master Servicer and the Special Servicer shall each
tender to (in the case of a purchase under such clause (ii)) the related
purchaser (provided that the related purchaser shall have paid the full amount
of the applicable purchase price) or (in the case of such clause (iii)) to the
holder of the related Serviced Companion Mortgage Loan or B Note (if then still
outstanding), upon delivery to them of a receipt executed by such purchaser or
holder, all portions of the Mortgage File and other documents pertaining to such
Loan Pair or A/B Mortgage Loan, as applicable, possessed by it, and each
document that constitutes a part of the Mortgage File shall be endorsed or
assigned to the extent necessary or appropriate to such purchaser or holder (or
the designee of such purchaser or holder) in the same manner, and pursuant to
appropriate forms of assignment, substantially similar to the manner and forms
pursuant to which documents were previously assigned to the Trustee by the
related Seller, but in any event, without recourse, representation or warranty;
provided that such tender by the Custodian shall be conditioned upon its receipt
from the Master Servicer of a Request for Release. The Master Servicer shall,
and is also hereby authorized and empowered by the Trustee to, convey to such
purchaser or such holder any deposits then held in an Escrow Account relating to
the applicable A/B Mortgage Loan or Loan Pair. If a Serviced Pari Passu Mortgage
Loan and the related Serviced Companion Mortgage Loan or an A Note and the
related B Note under the applicable Mortgage Loan are then REO Mortgage Loans,
then the Special Servicer shall, and is also hereby authorized and empowered by
the Trustee to, convey to such purchaser or such holder, in each case, to the
extent not needed to pay or reimburse the Master Servicer, the Special Servicer
or the Trustee in accordance with
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this Agreement, deposits then held in the REO Account insofar as they relate to
the related REO Property.
(d) If an expense under this Agreement relates, in the reasonable
judgment of the Master Servicer, the Special Servicer, the Trustee or the Paying
Agent, as applicable, primarily to the administration of the Trust Fund or any
REMIC formed hereunder or to any determination respecting the amount, payment or
avoidance of any tax under the REMIC Provisions or provisions relating to the
grantor trust or the actual payment of any REMIC tax or expense or the grantor
trust tax or expense with respect to any REMIC formed hereunder, then such
expense shall not be allocated to, deducted or reimbursed from, or otherwise
charged against the holder of any Serviced Companion Mortgage Loan or B Note and
such holder shall not suffer any adverse consequences as a result of the payment
of such expense.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
SECTION 2.1 CONVEYANCE OF MORTGAGE LOANS.
(a) Effective as of the Closing Date, the Depositor does hereby assign
in trust to the Trustee, without recourse, for the benefit of the
Certificateholders all the right, title and interest of the Depositor, in, to
and under (i) the Mortgage Loans identified on the Mortgage Loan Schedule
including the related Mortgage Notes, Mortgages, security agreements and title,
hazard and other insurance policies, including all Qualifying Substitute
Mortgage Loans, all distributions with respect thereto payable after the Cut-Off
Date, the Mortgage File and all rights, if any, of the Depositor in the
Distribution Account, all REO Accounts, the Certificate Account, the Reserve
Account and the Interest Reserve Account, (ii) the Depositor's rights under each
Mortgage Loan Purchase Agreement that are permitted to be assigned to the
Trustee pursuant to Section 14 thereof, (iii) the Initial Deposit, (iv) the
Depositor's rights under any Intercreditor Agreement, Loan Pair Intercreditor
Agreement, Non-Serviced Mortgage Loan Intercreditor Agreement and the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement with respect to any
Non-Serviced Mortgage Loan (v) with respect to the Class A-4FL Certificates, the
Swap Contract, the Class A-4FL Regular Interest and funds or assets from time to
time on deposit in the Floating Rate Account, and (vi) all other assets included
or to be included in REMIC I, the Class DP REMIC, the Class ST REMIC or the
Excess Interest Grantor Trust. Such assignment includes all interest and
principal received or receivable on or with respect to the Mortgage Loans and
due after the Cut-Off Date. The transfer of the Mortgage Loans and the related
rights and property accomplished hereby is absolute and is intended by the
parties to constitute a sale. In connection with the initial sale of the
Certificates by the Depositor, the purchase price to be paid includes a portion
attributable to interest accruing on the Certificates from and after the Cut-Off
Date. The transfer and assignment of any Non-Serviced Mortgage Loans to the
Trustee and the right to service such Mortgage Loans are subject to the terms
and conditions of the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement and the related Non-Serviced Mortgage Loan Intercreditor Agreement,
and the Trustee, by the execution and delivery of this Agreement, hereby agrees
that such Mortgage Loans remain subject to the terms of the related Non-Serviced
Mortgage Loan Intercreditor Agreement and, with respect to
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each Serviced Pari Passu Mortgage Loan and Serviced Companion Mortgage Loan, the
related Loan Pair Intercreditor Agreement. The transfer and assignment of the
000 00xx Xxxxxx X Note to the Trustee and the right to service such 000 00xx
Xxxxxx X Note is subject to the terms and conditions of the MLMT 2006-C1 Pooling
and Servicing Agreement and the related Intercreditor Agreement, and the
Trustee, by the execution and delivery of this Agreement, hereby agrees that
such 000 00xx Xxxxxx X Note remains subject to the terms of the related
Intercreditor Agreement.
(b) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall direct, and hereby represents and warrants
that it has directed, each Seller pursuant to the applicable Mortgage Loan
Purchase Agreement to deliver to and deposit with, or cause to be delivered to
and deposited with, the Trustee or a Custodian appointed hereunder, on or before
the Closing Date, the Mortgage Note for each Mortgage Loan so assigned, endorsed
to the Trustee as specified in clause (i) of the definition of "Mortgage File."
Each Seller is required, pursuant to the applicable Mortgage Loan Purchase
Agreement, to deliver to the Custodian the remaining documents constituting the
Mortgage File for each Mortgage Loan within the time period set forth therein.
None of the Trustee, the Paying Agent, any Custodian, the Master Servicer or the
Special Servicer shall be liable for any failure by any Seller or the Depositor
to comply with the document delivery requirements of the Mortgage Loan Purchase
Agreements and this Section 2.1(b). Notwithstanding anything to the contrary
contained herein, with respect to the G&L Portfolio Mortgage Loan, the
obligations of each of PCFII and MSMC to deliver a Mortgage Note to the Trustee,
or a Custodian appointed thereby, shall be limited to delivery of only the
Mortgage Note held by such party to the Trustee or Custodian appointed thereby.
With respect to the G&L Portfolio Mortgage Loan, either PCFII or MSMC may
deliver the Mortgage File or one of any other document required to be delivered
with respect to the G&L Portfolio Mortgage Loan hereunder and such delivery
shall satisfy such delivery requirements for both PCFII and MSMC.
(c) The applicable Seller shall, at the expense of such Seller as to
each of its respective Mortgage Loans, promptly (and in any event within 45 days
following the receipt thereof) cause to be submitted for recording or filing
(except with respect to any Mortgage that has been recorded in the name of MERS
or its designees), as the case may be, in the appropriate public office for real
property records or UCC financing statements, as appropriate, each assignment to
the Trustee referred to in clauses (iv), (vi)(B) and (ix)(B) of the definition
of "Mortgage File;" provided, if the related Mortgage and UCC financing
statements have been recorded in the name of MERS or its designee, no such
assignments will be required to be submitted for recording or filing and
instead, the applicable Seller has agreed in the applicable Mortgage Loan
Purchase Agreement to take all actions as are necessary to cause the Trustee to
be shown as, and the Trustee shall take all actions necessary to confirm that it
is shown as, the owner of the related Mortgage on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS. Each such assignment shall reflect that it should
be returned by the public recording office to the Custodian following recording
or filing; provided that in those instances where the public recording office
retains the original Assignment of Mortgage, assignment of Assignment of Leases
or assignment of UCC financing statements, the applicable Seller shall obtain
therefrom a certified copy of the recorded original. The applicable Seller shall
forward copies thereof to the Trustee, the Custodian and the Special Servicer
and, if recorded in the name of MERS, shall deliver to the Master Servicer and
the Special Servicer, within 45 days of the Closing Date, evidence confirming
that the Trustee is
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shown as the owner on the record of MERS. If any such document or instrument is
lost or returned unrecorded or unfiled, as the case may be, because of a defect
therein, the applicable Seller shall, pursuant to the applicable Mortgage Loan
Purchase Agreement, promptly prepare or cause to be prepared a substitute
therefor or cure such defect, as the case may be, and thereafter the applicable
Seller shall upon receipt thereof cause the same to be duly recorded or filed,
as appropriate. After the applicable Seller has caused the Trustee to be
identified on the records of MERS as the owner of a Mortgage, it shall be the
sole responsibility of the Master Servicer to ensure that subsequent relevant
events relating to the Mortgage (as, for example, assumptions and partial
releases) are promptly and properly registered with MERS throughout the term of
the related Mortgage Loan for so long as the Mortgage Loan is an asset of the
Trust.
The parties acknowledge the obligation of each Seller pursuant to
Section 2 of the related Mortgage Loan Purchase Agreement to deliver to the
Trustee, on or before the fifth Business Day after the Closing Date, five
limited powers of attorney substantially in the form attached as Exhibit C to
the applicable Primary Servicing Agreement in favor of the Trustee and the
Special Servicer to empower the Trustee and, in the event of the failure or
incapacity of the Trustee, the Special Servicer, to submit for recording, at the
expense of the applicable Seller, any mortgage loan documents required to be
recorded as described in the preceding paragraph and any intervening assignments
with evidence of recording thereon that are required to be included in the
Mortgage Files (so long as original counterparts have previously been delivered
to the Custodian). The Sellers agree to reasonably cooperate with the Trustee,
the Custodian and the Special Servicer in connection with any additional powers
of attorney or revisions thereto that are requested by such parties for purposes
of such recordation. The Trustee and each other party hereto agrees that no such
power of attorney shall be used with respect to any Mortgage Loan by or under
authorization by any party hereto except to the extent that the absence of a
document described in the second preceding sentence with respect to such
Mortgage Loan remains unremedied as of the earlier of (i) the date that is 180
days following the delivery of notice of such absence to the related Seller, but
in no event earlier than 18 months from the Closing Date, and (ii) the date (if
any) on which such Mortgage Loan becomes a Specially Serviced Mortgage Loan. The
Custodian shall submit such documents for recording, at the related Seller's
expense, after the periods set forth above; provided, however, the Custodian
shall not submit such assignments for recording if the applicable Seller
produces evidence that it has sent any such assignment for recording and
certifies that it is awaiting its return from the applicable recording office.
(d) All relevant servicing or loan documents and records in the
possession of the Depositor or the Sellers that relate to the Mortgage Loans,
Serviced Companion Mortgage Loans or B Notes and that are not required to be a
part of a Mortgage File in accordance with the definition thereof shall be
delivered to the Master Servicer or the applicable Primary Servicer on its
behalf, on or before the date that is 45 days following the Closing Date and
shall be held by the Master Servicer or the applicable Primary Servicer on
behalf of the Trustee in trust for the benefit of the Certificateholders. To the
extent delivered to the Master Servicer or the applicable Primary Servicer by
the related Seller, the Servicer Mortgage File, will include, to the extent
required to be (and actually) delivered to the applicable Seller pursuant to the
applicable Mortgage Loan documents, copies of the following items: the Mortgage
Note, any Mortgage, the Assignment of Leases and the Assignment of Mortgage, any
guaranty/indemnity agreement, any loan agreement, the insurance policies or
certificates (as applicable), the property inspection
95
reports, any financial statements on the property, any escrow analysis, the tax
bills, the Appraisal, the environmental report, the engineering report, the
asset summary, financial information on the Mortgagor/sponsor and any
guarantors, any letters of credit, any intercreditor agreement and any
Environmental Insurance Policies. Notwithstanding the foregoing, no Seller shall
be required to deliver any draft documents, or any attorney-client
communications that are privileged communications or constitute legal or other
due diligence analyses, or internal communications of the Seller or its
affiliates, or credit underwriting or other analyses or data. Delivery of any of
the foregoing documents to the applicable Primary Servicer (or sub-servicer)
shall be deemed delivery to the Master Servicer and satisfy the Depositor's
obligations under this Section 2.1(d). None of the Master Servicer, the Special
Servicer or the applicable Primary Servicer shall have any liability for the
absence of any of the foregoing items from the Servicing Mortgage File if such
item was not delivered by the related Seller.
(e) In connection with the Depositor's assignment pursuant to Section
2.1(a) above, the Depositor shall deliver to the Trustee on or before the
Closing Date a copy of a fully executed counterpart of each Mortgage Loan
Purchase Agreement, as in full force and effect on the Closing Date, which
Mortgage Loan Purchase Agreements shall contain the representations and
warranties made by the Sellers with respect to each related Mortgage Loan as of
the Closing Date.
(f) In connection herewith, the Depositor has acquired the LaSalle
Loans from LaSalle, the MSMC Loans from MSMC and the PCFII Loans from PCFII. The
Depositor will deliver or cause to be delivered the original Mortgage Notes (or
lost note affidavits with copies of the related Mortgage Notes, as described in
the definition of "Mortgage File") relating to the LaSalle Loans to the
Custodian, endorsed as otherwise provided herein, to effect the transfer to the
Trustee of such Mortgage Notes and all related deeds of trust, mortgages and
other loan documents. The Depositor will deliver or cause to be delivered the
original Mortgage Notes (or lost note affidavits with copies of the related
Mortgage Notes, as described in the definition of "Mortgage File") relating to
the MSMC Loans to the Custodian, endorsed as otherwise provided herein, to
effect the transfer to the Trustee of such Mortgage Notes and all related deeds
of trust, mortgages and other loan documents. The Depositor will deliver or
cause to be delivered the original Mortgage Notes (or lost note affidavits with
copies of the related Mortgage Notes, as described in the definition of
"Mortgage File") relating to the PCFII Loans to the Custodian, endorsed as
otherwise provided herein, to effect the transfer to the Trustee of such
Mortgage Notes and all related deeds of trust, mortgages and other loan
documents. To avoid the unnecessary expense and administrative inconvenience
associated with the execution and recording of multiple assignment documents,
LaSalle, MSMC and PCFII, as applicable, are required under the Mortgage Loan
Purchase Agreements to deliver Assignments of Mortgages and assignments of
Assignments of Leases and assignments of UCC financing statements naming the
Trustee, on behalf of the Certificateholders, as assignee. Notwithstanding the
fact that the assignments shall name the Trustee, on behalf of the
Certificateholders, as the assignee, the parties hereto acknowledge and agree
that for all purposes the LaSalle Loans shall be deemed to have been transferred
from LaSalle to the Depositor, the MSMC Loans shall be deemed to have been
transferred from MSMC to the Depositor, the PCFII Loans shall be deemed to have
been transferred from PCFII to the Depositor and all Mortgage Loans shall be
deemed to have been transferred from the Depositor to the Trustee on behalf of
the Certificateholders.
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With respect to the 000 00xx Xxxxxx X Note, the related Mortgage File
(exclusive, however, of the original Mortgage Note), together with certain other
documents and records, and all unapplied Escrow Payments and Reserve Funds, in
the possession of the Depositor or the related Mortgage Loan Seller that relate
to such Mortgage Loan has been delivered to the MLMT 2006-C1 Trustee in
accordance with the applicable Intercreditor Agreement and the MLMT 2006-C1
Pooling and Servicing Agreement. Such documents and funds shall be held thereby
on behalf of the Trustee (and, for the benefit of the Class ST
Certificateholders) and the holders of the related 000 00xx Xxxxxx A Note;
provided that, if the 000 00xx Xxxxxx A Note is paid in full while such 000 00xx
Xxxxxx X Note is outstanding and the Mortgage File is delivered, and to the
extent applicable the documents therein are assigned, to the Trustee in
accordance with the applicable Intercreditor Agreement, the Custodian shall
accept and hold such documents in trust in accordance with Section 2.2 below and
shall, at the expense of the Depositor, arrange for the recordation and/or
filing in all applicable governmental offices of any assignments thereto, the
recordation or filing of which are necessary or appropriate to protect the
interests of the Class ST Certificateholders in and to such Mortgage Loan.
SECTION 2.2 ACCEPTANCE BY TRUSTEE AND CUSTODIAN. The Trustee will hold
(i) the REMIC I Regular Interests and (ii) the REMIC II Regular Interests, in
each case, in trust for the exclusive use and benefit of all present and future
Certificateholders (other than Holders of the Class R-I, Class DP, Class ST and
Class T Certificates) and the Custodian will hold the documents constituting a
part of the Mortgage Files delivered to it in trust for the exclusive use and
benefit of all present and future Certificateholders. To the extent that the
contents of the Mortgage File for any A Note relate to the corresponding B Note,
the Trustee, or the Custodian on the Trustee's behalf, will also hold such
Mortgage File in trust for the benefit of the holder of the related B Note;
provided, that if a B Note remains outstanding following payment in full of the
amounts due under the related A Notes, the Mortgage Loan documents relating to
such A/B Mortgage Loan (exclusive of any such documents related solely to the A
Notes) shall be assigned to the holder of the B Note or its designee. To the
extent that the contents of the Mortgage File for any Serviced Pari Passu
Mortgage Loan relate to the corresponding Serviced Companion Mortgage Loan, the
Trustee, or the Custodian, on the Trustee's behalf, will also hold such Mortgage
File in trust for the benefit of the holder of the related Serviced Companion
Mortgage Loan.
On the Closing Date in respect of the Initial Certification, and
within 90 days after the Closing Date in respect of the Final Certification, the
Custodian shall examine the Mortgage Files in its possession, and shall deliver
to the Depositor, the Trustee, the Sellers, the Master Servicer, the Special
Servicer, the Operating Adviser and the holder of any Serviced Companion
Mortgage Loan a certification (the "Initial Certification" and the "Final
Certification", respectively, in the respective forms set forth as Exhibit B-1
and Exhibit B-2 hereto), which shall be in electronic format (i) in the case of
the Initial Certification, as to each Mortgage Loan listed in the Mortgage Loan
Schedule, except as may be specified in the schedule of exceptions attached
thereto, to the effect that: (A) all documents pursuant to clause (i) of the
definition of "Mortgage File" are in its possession, (B) such documents have
been reviewed by it and have not been materially mutilated, damaged, defaced,
torn or otherwise physically altered, and such documents relate to such Mortgage
Loan, and (C) each Mortgage Note has been endorsed as provided in clause (i) of
the definition of "Mortgage File", and (ii) in the case of the Final
Certification, as to each Mortgage Loan listed in the Mortgage Loan Schedule,
except as may be
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specified in the schedule of exceptions attached thereto, to the effect that:
(A) (I) all documents pursuant to clauses (i), (ii), (iv), (v), (vi), (viii),
(x) and (xii) of the definition of "Mortgage File" required to be included in
the Mortgage File (to the extent required to be delivered pursuant to this
Agreement and the applicable Primary Servicing Agreement), and with respect to
all documents specified in the other clauses of the definition of "Mortgage
File" to the extent known by a Responsible Officer of the Custodian to be
required pursuant to this Agreement, are in its possession, and (II) for each
Mortgage recorded in the name of MERS or its designee, the Trustee is shown as
the transferee of the related Mortgage on the records of MERS for purposes of
the system maintained by MERS of recording transfers of beneficial ownership for
mortgages, (B) such documents have been reviewed by it and have not been
materially mutilated, damaged, defaced, torn or otherwise physically altered,
and such documents relate to such Mortgage Loan, (C) based on its examination
and only as to the Mortgage Note and Mortgage, the street address of the
Mortgaged Property set forth in the Mortgage Loan Schedule respecting such
Mortgage Loan accurately reflects the information contained in the documents in
the Mortgage File, and (D) each Mortgage Note has been endorsed. Notwithstanding
the foregoing, the delivery of a commitment to issue a Title Insurance Policy in
lieu of the delivery of the actual Title Insurance Policy shall not be
considered a Material Document Defect with respect to any Mortgage File if such
actual Title Insurance Policy is delivered to the Trustee or a Custodian on its
behalf not later than the 180th day following the Closing Date.
Within 360 days after the Cut-Off Date, the Custodian shall provide a
confirmation of receipt of recorded assignments of Mortgage (as described in the
definition of "Mortgage File," with evidence of recording thereon) or otherwise
provide evidence of such recordation to the Trustee, the Master Servicer, the
Special Servicer, the Operating Adviser and each Seller, and if any recorded
assignment of Mortgage has not been received by the Custodian by such time, the
Custodian shall provide information in such confirmation on the status of
missing assignments. The Custodian agrees to use reasonable efforts to submit
for recording any unrecorded assignments of Mortgage that have been delivered to
it (including effecting such recordation process through or cooperating with the
applicable Seller), such recordation to be at the expense of the applicable
Seller; provided, however, that the Custodian shall not submit for recording any
such assignments if the applicable Seller produces evidence that it has sent any
such assignment for recording and is awaiting its return from the applicable
recording office. In giving the certifications required above, the Custodian
shall be under no obligation or duty to inspect, review or examine any such
documents, instruments, securities or other papers to determine whether they or
the signatures thereon are valid, legal, genuine, enforceable, in recordable
form or appropriate for their represented purposes, or that they are other than
what they purport to be on their face, or to determine whether any Mortgage File
should include any assumption agreement, modification agreement, consolidation
agreement, extension agreement, Assignment of Lease, ground lease, UCC financing
statement, guaranty, written assurance, substitution agreement, lock box
agreement, intercreditor agreement, management agreement or letter of credit.
If any exceptions are noted on a schedule of exceptions attached to
the Final Certification, including exceptions resulting from the fact that the
recordation and/or filing has not been completed (based solely on the absence of
receipt by the Custodian of the particular documents showing evidence of the
recordation and/or filing), then the Custodian shall continuously update such
schedule of exceptions to reflect receipt of any corrected documents,
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additional documents or instruments or evidences of recordation and/or filing,
as to each Mortgage Loan, until the earliest of the following dates: (i) the
date on which all such exceptions are eliminated (any such elimination resulting
from the fact that recordation and/or filing has been completed shall be based
solely on receipt by the Custodian or the Trustee of the particular documents
showing evidence of the recordation and/or filing), (ii) the date on which all
the affected Mortgage Loans are removed from the Trust and (iii) the second
anniversary of the Closing Date, and shall provide such updated schedule of
exceptions (which may be in electronic format) to each of the Depositor, each
Seller (as to its respective Mortgage Loans only), the Master Servicer, the
Special Servicer, the Operating Adviser, the Paying Agent and the holder of any
Serviced Companion Mortgage Loan on or about the date that is 180 days after the
Closing Date and then again every 90 days thereafter (until the earliest date
specified above). Upon request, the Paying Agent shall promptly forward a copy
thereof to each Certificateholder in the Controlling Class and shall deliver or
make available a copy thereof to other Certificateholders. Promptly, and in any
event within two Business Days, following any request therefor by the Depositor,
the Master Servicer, the Special Servicer, the Operating Adviser or the holder
of any Serviced Companion Mortgage Loan that is made later than two years
following the Closing Date, the Custodian (or the Trustee) shall deliver an
updated schedule of exceptions, which may be in electronic format (to the extent
the prior schedule showed exceptions), to the requesting Person and the Paying
Agent, which shall make available a copy thereof. Upon request, the Master
Servicer shall provide to the Trustee the names and addresses of each holder of
a Serviced Companion Mortgage Loan of which the Master Servicer has received
notice in accordance with this Agreement and/or the related Loan Pair
Intercreditor Agreement.
The Custodian or its authorized agents shall retain possession and
custody of each Custodian Mortgage File in accordance with and subject to the
terms and conditions set forth herein.
SECTION 2.3 SELLERS' REPURCHASE OF MORTGAGE LOANS FOR MATERIAL
DOCUMENT DEFECTS AND MATERIAL BREACHES OF REPRESENTATIONS AND WARRANTIES.
(a) If any party hereto discovers that any document or documents
constituting a part of a Mortgage File has not been delivered as and when
required, has not been properly executed, or is defective on its face or
discovers or receives notice of a breach of any of the representations and
warranties relating to the Mortgage Loans required to be made by a Seller
regarding the characteristics of the Mortgage Loans and/or related Mortgaged
Properties as set forth in the related Mortgage Loan Purchase Agreements, and,
in either case, the party discovering such defect or breach determines that
either (i) the defect or breach materially and adversely affects the interests
of the holders of the Certificates in the related Mortgage Loan or (ii) both (A)
the defect or breach materially and adversely affects the value of the Mortgage
Loan and (B) the Mortgage Loan is a Specially Serviced Mortgage Loan or
Rehabilitated Mortgage Loan (any such defect described in the preceding clause
(i) or (ii), a "Material Document Defect", and such a breach described in the
preceding clause (i) or (ii), a "Material Breach") the party determining that
such Material Document Defect or Material Breach exists shall give prompt
written notice to the other parties hereto and to each Rating Agency subject to
the terms of the applicable Mortgage Loan Purchase Agreement; provided that any
breach of the representation and warranty contained in paragraph 42 of such
Exhibit 2 of the related Mortgage Loan Purchase Agreement shall constitute a
Material Breach only if such prepayment premium
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or yield maintenance charge is not deemed "customary" for commercial mortgage
loans as evidenced by (i) an opinion of tax counsel to such effect or (ii) a
determination by the Internal Revenue Service that such provision is not
customary. Promptly (but in any event within three Business Days) upon
determining (or becoming aware of another party's determination) that any such
Material Document Defect or Material Breach exists, the Master Servicer shall,
and the Special Servicer may, request that the related Seller, not later than 90
days from such Seller's receipt of the notice of such Material Document Defect
or Material Breach, cure such Material Document Defect or Material Breach, as
the case may be, in all material respects; provided, however, that if such
Material Document Defect or Material Breach, as the case may be, cannot be
corrected or cured in all material respects within such 90-day period, and such
Material Document Defect or Material Breach would not cause the Mortgage Loan to
be other than a "qualified mortgage" (as defined in the Code) but the related
Seller is diligently attempting to effect such correction or cure, as certified
by such Seller in an Officer's Certificate delivered to the Trustee, then the
cure period will be extended for an additional 90 days unless, solely in the
case of a Material Document Defect, (x) the Mortgage Loan is then a Specially
Serviced Mortgage Loan and a Servicing Transfer Event has occurred as a result
of a monetary default or as described in clause (ii) or clause (v) of the
definition of "Servicing Transfer Event" and (y) the Material Document Defect
was identified in a certification delivered to the Seller by the Trustee
pursuant to Section 2.2 not less than 90 days prior to the delivery of the
notice of such Material Document Defect. The parties acknowledge that neither
delivery of a certification or schedule of exceptions to a Seller pursuant to
Section 2.2 or otherwise nor possession of such certification or schedule by the
Seller shall, in and of itself, constitute delivery of notice of any Material
Document Defect or knowledge or awareness by the Seller or any party hereto of
any Material Document Defect listed therein.
If any Material Document Defect or Material Breach that exists cannot
be corrected or cured in all material respects within the above cure periods,
the related Seller will be obligated, not later than the last day of such
permitted cure period, to (i) repurchase the affected Mortgage Loan (or the
related Seller's portion thereof with respect to the G&L Portfolio Mortgage
Loan) or REO Mortgage Loan (or the related Seller's portion thereof with respect
to the G&L Portfolio Mortgage Loan) from the Trust at the applicable Purchase
Price in accordance with the related Mortgage Loan Purchase Agreement, or (ii)
if within the three-month period commencing on the Closing Date (or within the
two-year period commencing on the Closing Date if the related Mortgage Loan is a
"defective obligation" within the meaning of Section 860G(a)(4)(B)(ii) of the
Code and Treasury Regulations Section 1.860G-2(f)), at the related Seller's
option, without recourse (other than the representations and warranties made
with respect thereto), replace such Mortgage Loan or REO Mortgage Loan with a
Qualifying Substitute Mortgage Loan. If such Material Document Defect or
Material Breach would cause the Mortgage Loan to be other than a "qualified
mortgage" (as defined in the Code), then notwithstanding the previous sentence
or the previous paragraph, the repurchase must occur within 85 days from the
date the related Seller was notified of the defect and substitution must occur
within the sooner of (i) 85 days from the date the related Seller was notified
of the defect or (ii) two years from the Closing Date. With respect to the G&L
Portfolio Mortgage Loan, the obligations of each of PCFII and MSMC to cure or
repurchase with respect to a Material Document Defect or Material Breach with
respect to the G&L Portfolio Mortgage Loan shall be limited to a cure or
repurchase with respect to the Mortgage Note it sold to the Depositor in
accordance with the related Mortgage Loan Purchase Agreement. With respect to
the G&L
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Portfolio Mortgage Loan, any cure by either of PCFII or MSMC with respect to the
Mortgage Note it sold to the Depositor in accordance with the related Mortgage
Loan Purchase Agreement that also cures the Material Document Defect or Material
Breach with respect to the G&L Portfolio Mortgage Loan shall satisfy the cure
obligations of both PCFII and MSMC with respect to the G&L Portfolio Mortgage
Loan.
As to any Qualifying Substitute Mortgage Loan or Loans, the Master
Servicer shall not execute any instrument effecting the substitution unless the
related Seller has delivered to the Custodian for such Qualifying Substitute
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the related Assignment
of Mortgage, and such other documents and agreements as are required by Section
2.1, with the Mortgage Note endorsed as required by Section 2.1, and the Master
Servicer shall be entitled to rely on statements and certifications from the
Custodian for this purpose. No substitution may be made in any calendar month
after the Determination Date for such month. Monthly payments due with respect
to Qualifying Substitute Mortgage Loans in the month of substitution shall not
be part of the Trust and will be retained by Master Servicer and remitted by the
Master Servicer to the related Seller on the next succeeding Distribution Date.
For the month of substitution, distributions to Certificateholders will include
the Scheduled Payment due on the related Deleted Mortgage Loan for such month
and thereafter the related Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
The Master Servicer shall amend or cause to be amended the Mortgage
Loan Schedule to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualifying Substitute Mortgage Loan or Loans and upon such
amendment the Master Servicer shall deliver or cause to be delivered such
amended Mortgage Loan Schedule to the Trustee (and the Custodian), the Paying
Agent and the Special Servicer. Upon such substitution, the Qualifying
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects. Upon receipt of the Custodian Mortgage File
pertaining to any Qualifying Substitute Mortgage Loans, the Custodian shall
release the Custodian Mortgage File relating to such Deleted Mortgage Loan to
the related Seller, and the Custodian (and the Depositor, if necessary) shall
execute and deliver such instruments of transfer or assignment in the form
presented to it, in each case without recourse, representation or warranty, as
shall be necessary to vest title (provided, however, if applicable, the Master
Servicer will take all necessary action to register the transfer of ownership of
the Mortgage related to such Deleted Mortgage Loan on the records of MERS) (to
the extent that such title was transferred to the Trustee or the Depositor) in
the related Seller or its designee to any Deleted Mortgage Loan (including any
property acquired in respect thereof or any insurance policy proceeds relating
thereto) substituted for pursuant to this Section 2.3.
If (x) a Mortgage Loan is to be repurchased or replaced as
contemplated above (a "Defective Mortgage Loan"), (y) such Defective Mortgage
Loan is cross-collateralized and cross-defaulted with one or more other Mortgage
Loans ("Crossed Mortgage Loans") and (z) the applicable document defect or
breach does not constitute a Material Document Defect or Material Breach, as the
case may be, as to such Crossed Mortgage Loans (without regard to this
paragraph), then the applicable document defect or breach (as the case may be)
shall be deemed to constitute a Material Document Defect or Material Breach (as
the case may be) as to each such Crossed Mortgage Loan for purposes of the above
provisions, and the related Seller shall be
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obligated to repurchase or replace each such Crossed Mortgage Loan in accordance
with the provisions above unless, in the case of such breach or document defect,
the Seller (A) provides a Nondisqualification Opinion to the Trustee at the
expense of the Seller and (B) both of the following conditions would be
satisfied if the related Seller were to repurchase or replace only those
Mortgage Loans as to which a Material Breach or Material Document Defect had
occurred without regard to this paragraph (the "Affected Loan(s)"): (i) the Debt
Service Coverage Ratio for all such other Mortgage Loans (excluding the Affected
Loan(s)) for the four calendar quarters immediately preceding the repurchase or
replacement is not less than the greater of (A) the Debt Service Coverage Ratio
for all such Crossed Mortgage Loans (including the Affected Loan(s)) set forth
under the heading "NCF DSCR" in Appendix II to the Final Prospectus Supplement
and (B) 1.25x, and (ii) the Loan-to-Value Ratio for all such Crossed Mortgage
Loans (excluding the Affected Loan(s)) is not greater than the lesser of (A) the
current Loan-to-Value ratio for all such Crossed Mortgage Loans (including the
Affected Loan(s)) set forth under the heading "Cut-Off Date LTV" in Appendix II
to the Final Prospectus Supplement and (y) 75%. The determination of the Master
Servicer as to whether the conditions set forth above have been satisfied shall
be conclusive and binding in the absence of manifest error. The Master Servicer
will be entitled to cause to be delivered, or direct the related Seller to (in
which case the related Seller shall) cause to be delivered to the Master
Servicer: (A) an Appraisal of any or all of the related Mortgaged Properties for
purposes of determining whether the condition set forth in clause (ii) above has
been satisfied, in each case at the expense of the related Seller if the scope
and cost of the Appraisal is approved by the related Seller (such approval not
to be unreasonably withheld) and (B) an Opinion of Counsel that not requiring
the repurchase of each such other Mortgage Loan will not result in an Adverse
REMIC Event.
With respect to any Defective Mortgage Loan, to the extent that the
applicable Seller is required to repurchase or substitute for such Defective
Mortgage Loan (each, a "Repurchased Loan") in the manner prescribed above while
the Trustee continues to hold any Crossed Mortgage Loan that is
cross-collateralized and/or cross-defaulted (each, a "Cross-Collateralized
Loan") with such Repurchased Loan, the related Seller and the Depositor have
agreed in the related Mortgage Loan Purchase Agreement to modify, prior to such
repurchase or substitution, the related Mortgage Loan documents in a manner such
that such affected Repurchased Loan, on the one hand, and any related
Crossed-Collateralized Loans held by Trustee, on the other, would no longer be
cross-defaulted or cross-collateralized with one another; provided that the
related Seller shall have furnished Trustee, at the expense of such Seller, an
opinion of Counsel that such modification shall not cause an Adverse REMIC
Event; provided, further, that if such opinion of Counsel cannot be furnished,
the applicable Seller and the Depositor have agreed in the applicable Mortgage
Loan Purchase Agreement that such repurchase or substitution of only the
Repurchased Loan, notwithstanding anything to the contrary herein, shall not be
permitted and the applicable Seller shall repurchase or substitute for the
Repurchased Loan and all related Crossed-Collateralized Loans. Any reserve or
other cash collateral or letters of credit securing the Cross Collateralized
Mortgage Loans shall be allocated between such Mortgage Loans in accordance with
the Mortgage Loan documents, or otherwise on a pro rata basis based upon their
outstanding Principal Balances. All other terms of the Mortgage Loans shall
remain in full force and effect, without any modification thereof. The
Mortgagors set forth on Schedule VIII hereto are intended third-party
beneficiaries of the provisions set forth in this paragraph and the preceding
paragraph. The provisions of this
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paragraph and the preceding paragraph may not be modified with respect to any
Mortgage Loan without the related Mortgagor's consent.
Any of the following document defects shall be conclusively presumed
materially and adversely to affect the interests of Certificateholders in a
Mortgage Loan and be a Material Document Defect: (a) the absence from the
Mortgage File of the original signed Mortgage Note, unless the Mortgage File
contains a signed lost note affidavit and indemnity that appears to be regular
on its face; (b) the absence from the Mortgage File of the original signed
Mortgage (or with respect to any Non-Serviced Mortgage Loan or the 000 00xx
Xxxxxx X Note, a copy thereof) that appears to be regular on its face, unless
there is included in the Mortgage File a certified copy of the Mortgage by the
local authority with which the Mortgage was recorded; (c) the absence from the
Mortgage File of the item called for by paragraph (viii) of the definition of
"Mortgage File" (or with respect to any Non-Serviced Mortgage Loan or the 000
00xx Xxxxxx X Note, a copy thereof) or (d) the absence from the Mortgage File of
the item called for by paragraph (xii) of the definition of "Mortgage File" (or
with respect to any Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note, a
copy thereof). If any of the foregoing Material Document Defects is discovered
by the Custodian (or the Trustee if there is no Custodian), the Trustee (or as
set forth in Section 2.3(a), the Master Servicer) will take the steps described
elsewhere in this section, including the giving of notices to the Rating
Agencies, the parties hereto and, to the extent any Material Document Defect
relates to a Serviced Pari Passu Mortgage Loan, the holder of the related
Serviced Companion Mortgage Loan, and making demand upon the related Seller for
the cure of the document defect or repurchase or replacement of the related
Mortgage Loan.
If the related Seller disputes that a Material Document Defect or
Material Breach exists with respect to a Mortgage Loan or otherwise refuses (i)
to effect a correction or cure of such Material Document Defect or Material
Breach, (ii) to repurchase the affected Mortgage Loan from the Trust or (iii) to
replace such Mortgage Loan with a Qualifying Substitute Mortgage Loan, each in
accordance with the related Mortgage Loan Purchase Agreement, then provided that
(x) the period of time provided for the related Seller to correct, repurchase or
cure has expired and (y) the Mortgage Loan is then in default and is then a
Specially Serviced Mortgage Loan, the Special Servicer may, subject to the
Servicing Standard, modify, workout or foreclose, sell or otherwise liquidate
(or permit the liquidation of) the Mortgage Loan pursuant to Section 9.5,
Section 9.12, Section 9.15 and Section 9.36, as applicable, hereof, while
pursuing the repurchase claim. The related Seller has acknowledged and agreed
under the related Mortgage Loan Purchase Agreement that any modification of the
Mortgage Loan pursuant to a workout shall not constitute a defense to any
repurchase claim nor shall such modification and workout change the Purchase
Price due from the related Seller for any repurchase claim. Any sale of the
related Mortgage Loan, or foreclosure upon such Mortgage Loan and sale of the
related REO Property, to a Person other than the related Seller shall be without
(i) recourse of any kind (either expressed or implied) by such Person against
the related Seller and (ii) representation or warranty of any kind (either
expressed or implied) by the related Seller to or for the benefit of such
Person.
The fact that a Material Document Defect or Material Breach is not
discovered until after foreclosure (but in all instances prior to the sale of
the related REO Property or Mortgage Loan) shall not prejudice any claim against
the Seller for repurchase of the REO
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Mortgage Loan or REO Property. In such an event, the Master Servicer shall
notify the related Seller of the discovery of the Material Document Defect or
Material Breach and the related Seller shall have 90 days to correct or cure
such Material Document Defect or Material Breach or purchase the REO Property at
the Purchase Price. After a final liquidation of the Mortgage Loan or REO
Mortgage Loan, if a court of competent jurisdiction issues a final order after
the expiration of any applicable appeal period that the related Seller is or was
obligated to repurchase the related Mortgage Loan or REO Mortgage Loan (a "Final
Judicial Determination") or the related Seller otherwise accepts liability,
then, but in no event later than the termination of the Trust pursuant to
Section 9.30 hereof, the related Seller will be obligated to pay to the Trust
the difference between any Liquidation Proceeds received upon such liquidation
(including those arising from any sale to the related Seller) and the Purchase
Price. If any payment is due with respect to the preceding sentence for the G&L
Portfolio Mortgage Loan, then each of PCFII and MSMC shall be required to pay
such party's pro rata share (i.e. 50%) of the G&L Portfolio Mortgage Loan.
In any month in which the related Seller substitutes one or more
Qualifying Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer will determine the amount (if any) by which the aggregate
Principal Balance of all such Qualifying Substitute Mortgage Loans as of the
date of substitution is less than the aggregate Principal Balance of all such
Deleted Mortgage Loans (in each case after application of scheduled principal
portion of the monthly payments received in the month of substitution). The
Depositor shall cause the related Seller to deposit the amount of such shortage
into the Certificate Account in the month of substitution, without any
reimbursement thereof. In addition, the Depositor shall cause the related Seller
to deposit into the Certificate Account, together with such shortage, if any, an
amount equal to interest on the Deleted Mortgage Loans at a rate equal to the
sum of the applicable Mortgage Rate from the Due Date as to which interest was
last paid up to the Due Date next succeeding such substitution together with the
amount of unreimbursed Servicing Advances, amounts required to be paid to the
Special Servicer but remaining unpaid or unreimbursed, and interest on
unreimbursed Advances with respect to such Deleted Mortgage Loans at the Advance
Rate. The Depositor shall cause the related Seller, in the case of the Mortgage
Loans, to give notice in writing (accompanied by an Officer's Certificate as to
the calculation of such shortage) to the Trustee, the Paying Agent and the
Master Servicer of such event which notice shall be accompanied by an Officer's
Certificate as to the calculation of such shortfall.
If the affected Mortgage Loan is to be repurchased, the Master
Servicer shall designate the Certificate Account as the account to which funds
in the amount of the Purchase Price are to be wired. Any such purchase of a
Mortgage Loan shall be on a whole loan, servicing released basis.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.3, the Custodian, the Trustee, the
Master Servicer and the Special Servicer shall each tender to the related
Seller, upon delivery to each of them of a receipt executed by such Seller, all
portions of the Mortgage File and other documents pertaining to such Mortgage
Loan possessed by it, and each document that constitutes a part of the Mortgage
File shall be endorsed or assigned to the extent necessary or appropriate to the
related Seller or its designee in the same manner, and pursuant to appropriate
forms of assignment, substantially
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similar to the manner and forms pursuant to which documents were previously
assigned to the Trustee, but in any event, without recourse, representation or
warranty; provided that such tender by the Trustee shall be conditioned upon its
receipt from the Master Servicer of a Request for Release. The Master Servicer
shall, and is hereby authorized and empowered by the Trustee to, prepare,
execute and deliver in its own name, on behalf of the Certificateholders and the
Trustee or any of them, the endorsements and assignments contemplated by this
Section 2.3, and the Trustee shall execute and deliver any powers of attorney
necessary to permit the Master Servicer to do so. The Master Servicer shall, and
is also hereby authorized and empowered by the Trustee to, reconvey to the
related Seller any deposits then held in an Escrow Account relating to the
Mortgage Loan being repurchased or substituted for. The Master Servicer shall
indemnify the Trustee for all costs, liabilities and expenses (including
attorneys' fees) incurred by the Trustee in connection with any negligent or
intentional misuse of any such powers of attorney by the Master Servicer.
(c) The Mortgage Loan Purchase Agreements provide the sole remedies
available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Material Document Defect or Material Breach.
The parties hereunder understand that (i) LaSalle, as Seller under Mortgage Loan
Purchase Agreement I, will be providing the remedies with respect to the LaSalle
Loans, (ii) MSMC, as Seller under Mortgage Loan Purchase Agreement II, will be
providing the remedies with respect to the MSMC Loans and (iii) PCFII, as Seller
under Mortgage Loan Purchase Agreement III, will be providing the remedies with
respect to the PCFII Loans.
(d) The Trustee or its designee (which, with the Master Servicer's
consent, may be the Master Servicer or which, with the Special Servicer's
consent, may be the Special Servicer) shall enforce the provisions of this
Section 2.3.
SECTION 2.4 REPRESENTATIONS AND WARRANTIES. The Depositor hereby
represents and warrants to the Master Servicer, the Special Servicer, the
Trustee (in its capacity as Trustee of the Trust) and the Paying Agent as of the
Closing Date that:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence and has
full corporate power and authority to own its property, to carry on its business
as presently conducted, to enter into and perform its obligations under this
Agreement, and to create the trust pursuant hereto;
(b) The execution and delivery by the Depositor of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Depositor; neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, (i) any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its
properties; (ii) the certificate of incorporation or bylaws of the Depositor; or
(iii) the terms of any indenture or other agreement or instrument to which the
Depositor is a party or by which it is bound; neither the Depositor nor any of
its Affiliates is a party to, bound by, or in breach of or violation of any
indenture or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having
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jurisdiction over it, which materially and adversely affects or to the best
knowledge of the Depositor may in the future materially and adversely affect (i)
the ability of the Depositor to perform its obligations under this Agreement or
(ii) the business, operations, financial condition, properties or assets of the
Depositor;
(c) The execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except such as has been obtained, given,
effected or taken prior to the date hereof;
(d) This Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation of the Depositor enforceable
against it in accordance with its terms;
(e) There are no actions, suits or proceedings pending or, to the best
of the Depositor's knowledge, threatened or likely to be asserted against or
affecting the Depositor, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the transactions
contemplated by this Agreement or (B) with respect to any other matter which in
the judgment of the Depositor will be determined adversely to the Depositor and
will, if determined adversely to the Depositor, materially and adversely affect
it or its business, assets, operations or condition, financial or otherwise, or
adversely affect its ability to perform its obligations under this Agreement;
and
(f) Immediately prior to the consummation of the transactions
contemplated in this Agreement, the Depositor had good title to and was the sole
owner of each Mortgage Loan free and clear of any and all adverse claims,
charges or security interests (including liens arising under the federal tax
laws or the Employee Retirement Income Security Act of 1974, as amended).
SECTION 2.5 CONVEYANCE OF INTERESTS. Effective as of the Closing Date,
the Depositor does hereby transfer, assign, set over, deposit with and otherwise
convey to the Trustee, without recourse, in trust, all the right, title and
interest of the Depositor in and to (i) the assets of REMIC I in exchange for
the REMIC I Interests, (ii) the REMIC I Regular Interests in exchange for the
REMIC II Interests, (iii) the REMIC II Regular Interests in exchange for the
REMIC III Certificates and the Class A-4FL Regular Interest, (iv) the assets of
the Class DP REMIC in exchange for the Class DP Certificates and the Class R-DP
Residual Interest, (v) the assets of the Class ST REMIC in exchange for the
Class ST Certificates and the Class R-ST Residual Interest, (vi) the Class A-4FL
Regular Interest and the Swap Contract, in exchange for the Class A-4FL
Certificates, and (vi) the right to receive Excess Interest on the ARD Loans
(other than the DCT Industrial Portfolio C Note) in exchange for the Class T
Certificates.
SECTION 2.6 CERTAIN MATTERS RELATING TO NON-SERVICED MORTGAGE LOANS
AND THE 000 00XX XXXXXX X NOTE.
(a) Notwithstanding anything to the contrary in this Agreement, with
respect to each Mortgage Loan that is a Non-Serviced Mortgage Loan and the 000
00xx Xxxxxx X Note, each
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of the document delivery requirements set forth herein will be satisfied by the
delivery by the applicable Seller of copies of each such document specified
herein (other than the Mortgage Note (and all intervening endorsements)
evidencing the Mortgage Loan, with respect to which the originals shall be
required); provided, the document delivery requirements for the Assignment of
Mortgage, any assignment of Assignment of Leases and any UCC-2 or UCC-3
financing statement set forth herein will be satisfied by the delivery by the
applicable Seller of copies of such documents made in favor of the trustee of
the Non-Serviced Mortgage Loan Pooling and Servicing Agreement and the MLMT
2006-C1 Pooling and Servicing Agreement.
(b) Promptly following the Closing Date, the Master Servicer shall
send written notice (substantially in the form of Exhibit DD attached hereto)
with respect to each Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx X Note,
to each of the respective master servicer, special servicer and trustee for the
related Non-Serviced Mortgage Loan Pooling and Servicing Agreement and the MLMT
2006-C1 Pooling and Servicing Agreement and the other holders of the related
Non-Serviced Companion Loans (and the 000 00xx Xxxxxx A Note and 000 00xx Xxxxxx
C Note), each stating that, among other things, the Trustee is the holder of the
related Non-Serviced Mortgage Loan and 000 00xx Xxxxxx X Note as of the Closing
Date.
ARTICLE III
THE CERTIFICATES
SECTION 3.1 THE CERTIFICATES.
(a) The Certificates shall be in substantially the forms set forth in
the Exhibits attached hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement or as may in the reasonable judgment of the Paying Agent or the
Depositor be necessary, appropriate or convenient to comply, or facilitate
compliance, with applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be determined
by the officers executing such Certificates, as evidenced by their execution
thereof.
The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(b) The Class A Senior Certificates, the Class A-M Certificates and
the Class A-J Certificates will be issuable in denominations of $25,000 initial
Certificate Balance and in any whole dollar denomination in excess thereof. The
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N, Class O, Class P, Class Q and Class S Certificates
will be issuable in denominations of $100,000 initial
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Certificate Balance or initial Notional Amount (as applicable) or in any whole
dollar denomination in excess thereof. The Class DP and Class ST Certificates
will be issuable in denominations of $1,000,000 initial Certificate Balance or
in any whole dollar denomination in excess thereof. The Class X, Class X-MP and
Class X-RC Certificates will be issuable in denominations of $100,000 initial
Notional Amount or in any whole dollar denomination in excess thereof. The Class
T, Class R-I, Class R-II and Class R-III Certificates will be issued in minimum
Percentage Interests of 10% and integral multiples of 10% in excess thereof.
(c) Each Certificate shall, on original issue, be executed by the
Certificate Registrar and authenticated by the Authenticating Agent upon the
order of the Depositor. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by an authorized officer of the Authenticating Agent by
manual signature, and such certification upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates to the
Authenticating Agent for authentication and the Authenticating Agent shall
authenticate and deliver such Certificates as in this Agreement provided and not
otherwise. In the event that additional Certificates need to be prepared at any
time subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the Class A Senior, Class A-M,
Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class
DP, Class ST, Class X, Class X-MP and Class X-RC Certificates that are issued in
book-entry form, on the Closing Date, the Authenticating Agent upon the order of
the Depositor shall authenticate Book-Entry Certificates that are issued to a
Clearing Agency or its nominee as provided in Section 3.7 against payment of the
purchase price thereof. With respect to the Class L, Class M, Class N, Class O,
Class P, Class Q and Class S Certificates that are issued in definitive form, on
the Closing Date, the Authenticating Agent upon the order of the Depositor shall
authenticate Definitive Certificates that are issued to the registered holder
thereof against payment of the purchase price thereof.
SECTION 3.2 REGISTRATION. The Paying Agent shall be the initial
Certificate Registrar in respect of the Certificates and the Certificate
Registrar shall maintain books for the registration and for the transfer of
Certificates (the "Certificate Register"). The Certificate Registrar may resign
or be discharged or removed by the Paying Agent or the Certificateholders, and a
new successor may be appointed, in accordance with the procedures and
requirements set forth in Sections 7.6 and 7.7 hereof with respect to the
resignation, discharge or removal of the Paying Agent and the appointment of a
successor Paying Agent. The Certificate Registrar may appoint, by a written
instrument delivered to the Holders and the Trustee, any trust company to act as
co-registrar under such conditions as the Certificate Registrar may prescribe;
provided that the Certificate Registrar shall not be relieved of any of its
duties or responsibilities hereunder by reason of such appointment.
SECTION 3.3 TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate may be transferred by the Holder thereof only upon
presentation and surrender of such Certificate at the Corporate Trust Office,
duly endorsed or
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accompanied by a written instrument of transfer duly executed by such Holder or
such Holder's duly authorized attorney in such form as shall be satisfactory to
the Certificate Registrar. Upon the transfer of any Certificate in accordance
with the preceding sentence, and subject to the restrictions set forth in the
other subsections of this Section 3.3, the Certificate Registrar shall execute,
and the Authenticating Agent shall authenticate and deliver to the transferee,
one or more new Certificates of the same Class and evidencing, in the aggregate,
the same aggregate initial Certificate Balance, initial Notional Amount or
Percentage Interest, as the case may be, as the Certificate being transferred.
No service charge shall be made to a Certificateholder for any registration of
transfer of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration or transfer of Certificates. The Certificate
Registrar may decline to accept any request for a registration of transfer of
any Certificate during the period beginning five calendar days prior to any
Distribution Date.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same initial Certificate Balance, initial
Notional Amount or Percentage Interest, as the case may be, as the Certificate
surrendered, upon surrender of the Certificate to be exchanged at the offices of
the Certificate Registrar duly endorsed or accompanied by a written instrument
of exchange duly executed by such Holder or such Holder's duly authorized
attorney in such form as is satisfactory to the Certificate Registrar.
Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange of Certificates. Whenever any
Certificates are so surrendered for exchange, the Certificate Registrar shall
execute and the Authenticating Agent shall authenticate, date and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(c) No transfer, sale, pledge or other disposition of any
Non-Registered Certificate or interest therein shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and
such state securities laws. If a transfer of any Non-Registered Certificate held
as a Definitive Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Non-Registered Certificate by the Depositor
or one of its Affiliates), then the Certificate Registrar shall refuse to
register such transfer unless it receives (and upon receipt, may conclusively
rely upon) either: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit D-1 hereto
and a certificate from such Certificateholder's prospective Transferee
substantially in the form attached either as Exhibit D-2A hereto or as Exhibit
D-2B hereto; or (ii) an Opinion of Counsel satisfactory to the Certificate
Registrar to the effect that such transfer shall be made without registration
under the Securities Act, together with the written certification(s) as to the
facts surrounding such transfer from the Certificateholder desiring to effect
such transfer and/or such Certificateholder's prospective Transferee on which
such Opinion of Counsel is based (such Opinion of Counsel shall not be an
expense of the Trust or of the Depositor, the Master Servicer, the Special
Servicer, the Paying Agent, the Trustee or the
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Certificate Registrar in their respective capacities as such). If a transfer of
any interest in a Non-Registered Certificate that constitutes a Book-Entry
Certificate is to be made without registration under the Securities Act (other
than in connection with the initial issuance of the Certificates or a transfer
of any interest in such Non-Registered Certificate by the Depositor or any of
its Affiliates), then the Certificate Owner desiring to effect such transfer
shall be required to obtain either (i) a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached as Exhibit
D-3A hereto or as Exhibit D-3B hereto, or (ii) an Opinion of Counsel to the
effect that such transfer may be made without registration under the Securities
Act. None of the Depositor, the Paying Agent, the Trustee, the Master Servicer,
the Special Servicer or the Certificate Registrar is obligated to register or
qualify any Class of Non-Registered Certificates under the Securities Act or any
other securities law or to take any action not otherwise required under this
Agreement to permit the transfer of any Certificate. Any Certificateholder or
Certificate Owner desiring to effect a transfer of Non-Registered Certificates
or interests therein shall, and does hereby agree to, indemnify the Depositor,
each Underwriter, the Trustee, the Master Servicer, the Special Servicer, the
Paying Agent and the Certificate Registrar against any liability that may result
if the transfer is not exempt from such registration or qualification or is not
made in accordance with such federal and state laws.
(d) No transfer of a Non-Investment Grade Certificate or Residual
Certificate or any interest therein shall be made (A) to any employee benefit
plan or other retirement arrangement, including individual retirement accounts
and annuities, Xxxxx plans and collective investment funds and separate accounts
in which such plans, accounts or arrangements are invested, including, without
limitation, insurance company general accounts, that is subject to Title I of
ERISA or Section 4975 of the Code or any applicable federal, state or local law
("Similar Laws") materially similar to the foregoing provisions of ERISA or the
Code (each, a "Plan"), (B) in book-entry form to an Institutional Accredited
Investor who is not also a Qualified Institutional Buyer or (C) to any Person
who is directly or indirectly purchasing such Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with "plan assets" of a
Plan, unless: (i) in the case of a Non-Investment Grade Certificate that
constitutes a Book-Entry Certificate and is being sold to a Qualified
Institutional Buyer, the purchase and holding of such Certificate or interest
therein qualifies for the exemptive relief available under Sections I and III of
U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60;
or (ii) in the case of a Non-Investment Grade Certificate held as a Definitive
Certificate, the prospective Transferee provides the Certificate Registrar with
a certification of facts and an Opinion of Counsel which establish to the
satisfaction of the Certificate Registrar that such transfer will not constitute
or result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code or subject the Depositor, the Trustee, the Paying
Agent, the Master Servicer, the Special Servicer or the Certificate Registrar to
any obligation in addition to those undertaken in this Agreement. Each Person
who acquires any Non-Investment Grade Certificate or Residual Certificate or
interest therein (unless it shall have acquired such Certificate or interest
therein from the Depositor or an Affiliate thereof or unless, in the case of a
Non-Investment Grade Certificate, it shall have delivered to the Certificate
Registrar the certification of facts and Opinion of Counsel referred to in
clause (ii) of the preceding sentence) shall be required to deliver to the
Certificate Registrar (or, in the case of an interest in a Non-Investment Grade
Certificate that constitutes a Book-Entry Certificate, to the Certificate Owner
that is transferring such interest) a certification to the effect that: (i) it
is neither a Plan nor any Person who is directly or indirectly purchasing such
Certificate or interest
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therein on behalf of, as named fiduciary of, as trustee of, or with "plan
assets" of a Plan; or (ii) that, in the case of a Non-Investment Grade
Certificate, the purchase and holding of such Certificate or interest therein by
such person qualifies for the exemptive relief available under Sections I and
III of PTCE 95-60 or another exemption from the "prohibited transactions" rules
under ERISA by the U.S. Department of Labor or similar exemption under Similar
Laws.
(e) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Paying Agent under clause (F) below to deliver
payments to a Person other than such Person and to have irrevocably authorized
the Certificate Registrar under clause (G) below to negotiate the terms of any
mandatory sale and to execute all instruments of Transfer and to do all other
things necessary in connection with any such sale. The rights of such person
acquiring any Ownership Interest in a Residual Certificate are expressly subject
to the following provisions:
(A) (1) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall be a Permitted Transferee and a United
States Tax Person and shall promptly notify the Certificate Registrar
of any change or impending change in its status as a Permitted
Transferee and (2) each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Qualified Institutional
Buyer and shall promptly notify the Certificate Registrar of any
change or impending change in its status as a Qualified Institutional
Buyer.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Certificate Registrar shall
require delivery to it, and no Transfer of any Residual Certificate
shall be registered until the Certificate Registrar receives, an
affidavit and agreement substantially in the form attached hereto as
Exhibit E-1 (a "Transfer Affidavit and Agreement") from the proposed
Transferee, in form and substance satisfactory to the Certificate
Registrar, representing and warranting, among other things, that such
Transferee is a Permitted Transferee, that it is a Qualified
Institutional Buyer, that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person that is not a
Permitted Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate, it will endeavor to remain a
Permitted Transferee, that it is a United States Tax Person, that if
such Transferee is a partnership, trust or disregarded entity for U.S.
federal income tax purposes, then each Person that may be allocated
income from a Residual Certificate is a United States Tax Person, that
it is not a foreign permanent establishment or fixed base, within the
meaning of any applicable income tax treaty, of any United States Tax
Person, that it has historically paid its debts as they have come due
and will continue to do so in the future, that it understands that its
tax liability with respect to the Residual Certificates may exceed
cash flows thereon and it intends to pay such taxes as they come due,
that it will not cause income with respect to the Residual
Certificates to be attributable to a foreign permanent establishment
or fixed base, within the meaning of any applicable income tax treaty,
of such proposed Transferee or any other United States Tax Person,
that it will provide the
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Certificate Registrar with all information necessary to determine that
the applicable paragraphs of Section 13 of such Transfer Affidavit and
Agreement are true or that Section 13 is not applicable, and that it
has reviewed the provisions of this Section 3.3(e) and agrees to be
bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the
Certificate Registrar has actual knowledge that the proposed
Transferee is not a Permitted Transferee or is not a United States Tax
Person, no Transfer of an Ownership Interest in a Residual Certificate
to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate shall agree (1) to require a Transfer Affidavit
and Agreement from any prospective Transferee to whom such Person
attempts to transfer its Ownership Interest in such Residual
Certificate and (2) not to transfer its Ownership Interest in such
Residual Certificate unless it provides to the Certificate Registrar a
certificate substantially in the form attached hereto as Exhibit
-------- E-2 among other things stating that (x) it has conducted a
reasonable investigation of the financial condition of --- the
proposed Transferee and, as a result of the investigation, the
Transferor determines that the proposed Transferee had historically
paid its debts as they came due and found no significant evidence that
the proposed Transferee will not continue to pay its debts as they
come due in the future and, (y) it has no actual knowledge that such
prospective Transferee is not a Permitted Transferee, is not a United
States Tax Person, is a foreign permanent establishment or fixed base,
within the meaning of any applicable income tax treaty, of any United
States Tax Person or is a Person with respect to which income on the
Residual Certificate is attributable to a foreign permanent
establishment or fixed base, within the meaning of any applicable
income tax treaty.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate that is a "pass-through interest holder" within
the meaning of temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) or is holding an Ownership Interest in a Residual
Certificate on behalf of a "pass-through interest holder", by
purchasing an Ownership Interest in such Certificate, agrees to give
the Certificate Registrar written notice of its status as such
immediately upon holding or acquiring such Ownership Interest in a
Residual Certificate.
(F) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the provisions of this Section
3.3(e) or if any Holder of a Residual Certificate shall lose its
status as a Permitted Transferee or a United States Tax Person, then
the last preceding Holder of such Residual Certificate that was in
compliance with the provisions of this Section 3.3(e) shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Residual Certificate. None of the Trustee,
the Master Servicer, the Special Servicer, the Certificate Registrar
or the Paying Agent shall be under any liability to any
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Person for any registration of Transfer of a Residual Certificate that
is in fact not permitted by this Section 3.3(e) or for making any
payments due on such Certificate to the Holder thereof or for taking
any other action with respect to such Holder under the provisions of
this Agreement.
(G) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
3.3(e), or if any Holder of a Residual Certificate shall lose its
status as a Permitted Transferee or a United States Tax Person, and to
the extent that the retroactive restoration of the rights and
obligations of the prior Holder of such Residual Certificate as
described in clause (F) above shall be invalid, illegal or
unenforceable, then the Paying Agent shall have the right, without
notice to the Holder or any prior Holder of such Residual Certificate,
but not the obligation, to sell or cause to be sold such Residual
Certificate to a purchaser selected by the Paying Agent on such terms
as the Paying Agent may choose. Such noncomplying Holder shall
promptly endorse and deliver such Residual Certificate in accordance
with the instructions of the Certificate Registrar. Such purchaser may
be the Certificate Registrar itself or any Affiliate of the
Certificate Registrar. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Certificate
Registrar or its Affiliates), expenses and taxes due, if any, will be
remitted by the Certificate Registrar to such noncomplying Holder. The
terms and conditions of any sale under this clause (G) shall be
determined in the sole discretion of the Certificate Registrar, and
the Certificate Registrar shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a result of its
exercise of such discretion.
The Master Servicer, on behalf of the Paying Agent, shall make available, upon
written request from the Paying Agent, to the Internal Revenue Service and those
Persons specified by the REMIC Provisions, all information necessary to compute
any tax imposed (A) as a result of the Transfer of an Ownership Interest in a
Residual Certificate to any Person who is not a Permitted Transferee, including
the information described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such Residual
Certificate and (B) as a result of any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate or organization
described in Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any time any Person
which is not a Permitted Transferee. The Person holding such Ownership Interest
shall be responsible for the reasonable compensation of the Master Servicer and
the Paying Agent for providing such information.
The provisions of this Section 3.3(e) may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee, the
Paying Agent, the Certificate Registrar, the Master Servicer, the Operating
Adviser and the Depositor the following:
(A) written notification from each Rating Agency to the effect
that the modification of, addition to or elimination of such
provisions will not cause such Rating Agency to qualify, downgrade or
withdraw its then current rating of any Class of Certificates; and
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(B) an Opinion of Counsel, in form and substance satisfactory to
the Trustee, the Certificate Registrar and the Depositor, to the
effect that such modification of, addition to or elimination of such
provisions will not cause any REMIC Pool to (x) cease to qualify as a
REMIC or (y) be subject to an entity-level tax caused by the Transfer
of any Residual Certificate to a Person which is not a Permitted
Transferee, or cause a Person other than the prospective Transferee to
be subject to a tax caused by the Transfer of a Residual Certificate
to a Person which is not a Permitted Transferee.
(f) None of the Master Servicer, the Special Servicer, the Trustee,
the Paying Agent or the Certificate Registrar shall have any liability to the
Trust arising from a transfer of any Certificate in reliance upon a
certification, ruling or Opinion of Counsel described in this Section 3.3;
provided, however, that the Certificate Registrar shall not register the
transfer of a Residual Certificate if it has actual knowledge that the proposed
transferee does not meet the qualifications of a permitted Holder of a Residual
Certificate as set forth in Section 3.3(e); provided, further, that the
Certificate Registrar shall not register the transfer of a Noneconomic Residual
Interest if it shall have received notice that the Transferor has determined, as
a result of the investigation under Section 3.3(e)(D), that the proposed
Transferee has not paid its debts as they came due or that it will not pay its
debts as they come due in the future. The Certificate Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance with any
restriction on transfer or exchange of Certificates or any interest therein
imposed under this Article III or under applicable law other than to require
delivery of the certifications and/or opinions described in this Article III;
provided, however, that the Certificate Registrar shall not register the
transfer of a Residual Certificate if it has actual knowledge that the proposed
transferee does not meet the qualifications of a permitted Holder of a Residual
Certificate as set forth in Section 3.3(e). The Certificate Registrar shall have
no liability for transfers (including without limitation transfers made through
the book-entry facilities of the Depository or between or among Participants or
Certificate Owners) made in violation of applicable restrictions, provided that
the Certificate Registrar has satisfied its duties expressly set forth in
Sections 3.3(c), 3.3(d) and 3.3(e).
(g) All Certificates surrendered for transfer and exchange shall be
physically cancelled by the Certificate Registrar, and the Certificate Registrar
shall hold such cancelled Certificates in accordance with its standard
procedures.
(h) The Certificate Registrar shall provide the Master Servicer, the
Special Servicer and the Depositor, upon written request, with an updated copy
of the Certificate Register within a reasonable period of time following receipt
of such request.
(i) Unless and until it is exchanged in whole for the individual
Certificates represented thereby, a Global Certificate representing all of the
Certificates of a Class may not be transferred, except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Clearing Agency or a nominee of such successor
Clearing Agency, and no such transfer to any such other Person may be
registered; provided that this subsection (i) shall not prohibit any transfer of
a Certificate of a Class that is issued in exchange for a Global Certificate of
the same Class pursuant to Section 3.9 below. Nothing in this
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subsection (i) shall prohibit or render ineffective any transfer of a beneficial
interest in a Global Certificate effected in accordance with the other
provisions of this Section 3.3.
SECTION 3.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (A)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (B) except in the case of a mutilated
Certificate so surrendered, there is delivered to the Certificate Registrar such
security or indemnity as may be required by it to save it harmless, then, in the
absence of notice to the Certificate Registrar that such Certificate has been
acquired by a bona fide purchaser, the Certificate Registrar shall execute, and
the Authenticating Agent shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and interest in the Trust. In connection with the
issuance of any new Certificate under this Section 3.4, the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Certificate Registrar)
connected therewith. Any replacement Certificate issued pursuant to this Section
3.4 shall constitute complete and indefeasible evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 3.5 PERSONS DEEMED OWNERS. Prior to presentation of a
Certificate for registration of transfer, the Master Servicer, the Special
Servicer, the Trustee, the Operating Adviser, the Paying Agent and any agent of
the Master Servicer, the Special Servicer, the Paying Agent, the Trustee or the
Operating Adviser may treat the Person in whose name any Certificate is
registered as of the related Record Date as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and neither the Master Servicer, the Special
Servicer, the Trustee, the Paying Agent, the Operating Adviser nor any agent of
the Master Servicer, the Special Servicer, the Trustee, the Paying Agent or the
Operating Adviser shall be affected by any notice to the contrary.
SECTION 3.6 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
If three or more Certificateholders, a Certificateholder holding all the
Certificates of any Class of Certificates, the Master Servicer, the Special
Servicer, the Paying Agent, the Trustee, the Operating Adviser or the Depositor
(A) request in writing from the Certificate Registrar a list of the names and
addresses of Certificateholders and (B) in the case of a request by
Certificateholders, state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, then the Certificate Registrar shall, within ten
Business Days after the receipt of such request, afford such Certificateholders,
the Master Servicer, the Special Servicer, the Depositor, the Paying Agent, the
Trustee, the Swap Counterparty or the Operating Adviser, as applicable, access
during normal business hours to a current list of the Certificateholders. The
expense of providing any such information requested by such Person shall be
borne by the party requesting such information and shall not be borne by the
Certificate Registrar or the Trustee. Every Certificateholder, by receiving and
holding a Certificate, agrees that the Certificate Registrar and the Trustee
shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
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SECTION 3.7 BOOK-ENTRY CERTIFICATES.
(a) The Class A-1, Class A-1A, Class A-2, Class A-3, Class A-AB, Class
A-4, Class A-4FL, Class A-M, Class A-J, Class X, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N,
Class O, Class P, Class Q, Class S, Class DP and Class ST Certificates, upon
original issuance, each shall be issued in the form of one or more Certificates
representing the Book-Entry Certificates, to be delivered to the Certificate
Registrar, as custodian for The Depository Trust Company (the "Depository"), the
initial Clearing Agency, by, or on behalf of, the Depositor, provided, that any
Non-Investment Grade Certificates sold to Institutional Accredited Investors
that are not Qualified Institutional Buyers will be issued as Definitive
Certificates. The Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the Depository, as the
initial Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Certificates,
except as provided in Section 3.9. Unless and until Definitive Certificates have
been issued to the Certificate Owners pursuant to Section 3.9:
(i) the provisions of this Section 3.7 shall be in full force and
effect with respect to each such Class;
(ii) the Depositor, the Master Servicer, the Paying Agent, the
Certificate Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Certificates) as the
authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.7
conflict with any other provisions of this Agreement, the provisions of this
Section 3.7 shall control with respect to each such Class; and
(iv) the rights of the Certificate Owners of each such Class
shall be exercised only through the Clearing Agency and the applicable
Participants and shall be limited to those established by law and agreements
between such Certificate Owners and the Clearing Agency and/or the Participants.
Pursuant to the Depository Agreement, unless and until Certificates are issued
pursuant to Section 3.9, the initial Clearing Agency will make book-entry
transfers among the Participants and receive and transmit distributions of
principal and interest on the related Certificates to such Participants.
(b) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Certificates evidencing a specified percentage of the aggregate unpaid principal
amount of Certificates, such direction or consent may be given by the Clearing
Agency at the direction of Certificate Owners owning Certificates evidencing the
requisite percentage of principal amount of Certificates. The Clearing Agency
may take conflicting actions with respect to the Certificates to the extent that
such actions are taken on behalf of the Certificate Owners.
(c) The Certificates of each Class (other than the Residual
Certificates) initially sold in reliance on Rule 144A or with respect to the
Class G, Class H, Class J and Class K Certificates sold to Institutional
Accredited Investors shall be represented by the Rule 144A-
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IAI Global Certificate for such Class, which shall be deposited with the
Certificate Registrar, as custodian for the Depository and registered in the
name of Cede & Co. as nominee of the Depository. The Class L, Class M, Class N,
Class O, Class P, Class Q, Class S, Class DP and Class ST Certificates initially
sold to Institutional Accredited Investors that are not Qualified Institutional
Buyers shall be represented by IAI Definitive Certificates for such Class. The
Certificates evidenced by any Rule 144A-IAI Global Certificate or IAI Definitive
Certificate shall be subject to certain restrictions on transfer as set forth in
Section 3.3 hereof and shall bear legend(s) regarding such restrictions
described herein.
(d) The Certificates of each Class (other than the Residual
Certificates) initially sold in offshore transactions in reliance on Regulation
S shall be represented by the Regulation S Temporary Global Certificate for such
Class, which shall be deposited with the Certificate Registrar, as custodian for
the Depository and registered in the name of Cede & Co. as nominee of the
Depository. Not earlier than the Release Date, beneficial interests in any
Regulation S Temporary Global Certificate shall be exchangeable for beneficial
interests in the Regulation S Permanent Global Certificate for such Class.
Beneficial interests in any Regulation S Temporary Global Certificate may be
held only through Euroclear Bank or Clearstream Bank; provided, however, that
such interests may be exchanged for interests in the Rule 144A-IAI Global
Certificate for such Class in accordance with the certification requirements
described in Section 3.7(f). The Regulation S Permanent Global Certificates
shall be deposited with the Certificate Registrar, as custodian for the
Depository and registered in the name of Cede & Co. as nominee of the
Depository.
On or prior to the Release Date and on or prior to any Distribution
Date occurring prior to the Release Date, each Certificate Owner of a Regulation
S Temporary Global Certificate that holds a beneficial interest therein on the
Release Date or on any such Distribution Date, as the case may be, must deliver
to Euroclear Bank or Clearstream Bank (as applicable) a Regulation S
Certificate; provided, however, that any Certificate Owner that holds a
beneficial interest in a Regulation S Temporary Global Certificate on the
Release Date or on any such Distribution Date that has previously delivered a
Regulation S Certificate to Euroclear Bank or Clearstream Bank with respect to
its interest therein does not need to deliver any subsequent Regulation S
Certificate (unless the certificate previously delivered is no longer true as of
such subsequent date, and such Certificate Owner must promptly notify Euroclear
Bank or Clearstream Bank, as applicable, thereof). Euroclear Bank or Clearstream
Bank, as applicable, shall be required to promptly deliver to the Certificate
Registrar a certificate substantially in the form of Exhibit I hereto to the
effect that it has received the requisite Regulation S Certificates for each
such Class, and no Certificate Owner (or transferee from any such Certificate
Owner) shall be entitled to receive an interest in the Regulation S Permanent
Global Certificate for such Class or any payment or principal or interest with
respect to its interest in such Regulation S Temporary Global Certificate prior
to the Certificate Registrar receiving such certification from Euroclear Bank or
Clearstream Bank with respect to the portion of the Regulation S Temporary
Global Certificate owned by such Certificate Owner (and, with respect to an
interest in the applicable Regulation S Permanent Global Certificate, prior to
the Release Date). After the Release Date, distributions due with respect to any
beneficial interest in a Regulation S Temporary Global Certificate shall not be
made to the holders of such beneficial interests unless exchange for a
beneficial interest in the related Regulation S Permanent Global Certificate is
improperly withheld or refused. No interest in a Regulation S Global Certificate
may be held by
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or transferred to a U.S. Person (as defined in Regulation S) except for
exchanges for a beneficial interest in the Rule 144A-IAI Global Certificate for
such Class as described in Section 3.7(f).
(e) Except in the limited circumstances described below in Section
3.9, owners of beneficial interests in Global Certificates shall not be entitled
to receive physical delivery of Definitive Certificates. The Certificates are
not issuable in bearer form. Upon the issuance of each Global Certificate, the
Depository or its custodian shall credit, on its internal system, the respective
principal amount of the individual beneficial interests represented by such
Global Certificate to the accounts of Persons who have accounts with such
Depository. Such accounts initially shall be designated by or on behalf of the
Underwriters and Placement Agents. Ownership of beneficial interests in a Global
Certificate shall be limited to Customers or Persons who hold interests directly
or indirectly through Customers. Ownership of beneficial interests in the Global
Certificates shall be shown on, and the transfer of that ownership shall be
effected only through, records maintained by the Depository or its nominee (with
respect to interests of Customers) and the records of Customers (with respect to
interests of Persons other than Customers).
So long as the Depository, or its nominee, is the registered holder of
a Global Certificate, the Depository or such nominee, as the case may be, shall
be considered the sole owner and holder of the Certificates represented by such
Global Certificate for all purposes under this Agreement and the Certificates,
including, without limitation, obtaining consents and waivers thereunder, and
the Trustee, the Paying Agent and the Certificate Registrar shall not be
affected by any notice to the contrary. Except under the circumstance described
in Section 3.9, owners of beneficial interests in a Global Certificate will not
be entitled to have any portions of such Global Certificate registered in their
names, will not receive or be entitled to receive physical delivery of
Definitive Certificates in certificated form and shall not be considered the
owners or holders of the Global Certificate (or any Certificates represented
thereby) under this Agreement or the Certificates. In addition, no Certificate
Owner of an interest in a Global Certificate shall be able to transfer that
interest except in accordance with the Depository's applicable procedures (in
addition to those under this Agreement and, if applicable, those of Euroclear
Bank and Clearstream Bank).
(f) Any holder of an interest in a Regulation S Global Certificate
shall have the right, upon prior written notice to the Certificate Registrar,
Euroclear Bank or Clearstream Bank, as applicable, and the Depository, in the
form of an Exchange Certification (substantially in the form of Exhibit H
attached hereto), to exchange all or a portion of such interest (in authorized
denominations as set forth in Section 3.1(b)) for an equivalent interest in the
Rule 144A-IAI Global Certificate for such Class in connection with a transfer of
its interest therein to a transferee that is eligible to hold an interest in
such Rule 144A-IAI Global Certificate as described herein; provided, however,
that no Exchange Certification shall be required if any such exchange occurs
after the Release Date. Any holder of an interest in the Rule 144A-IAI Global
Certificate shall have the right, upon prior written notice to the Certificate
Registrar, the Depository and Euroclear Bank or Clearstream Bank, as applicable,
in the form of an Exchange Certification, to exchange all or a portion of such
interest (in authorized denominations as set forth in Section 3.1(b)) for an
equivalent interest in the Regulation S Global Certificate for such Class in
connection with a transfer of its interest therein to a transferee that is
eligible to hold an interest in such Regulation S Global Certificate as
described herein; provided, however, that if
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such exchange occurs prior to the Release Date, the transferee shall acquire an
interest in a Regulation S Temporary Global Certificate only and shall be
subject to all of the restrictions associated therewith described in Section
3.7(d). Following receipt of any Exchange Certification or request for transfer,
as applicable, by the Certificate Registrar: (i) the Certificate Registrar shall
endorse the schedule to any Global Certificate representing the Certificate or
Certificates being exchanged to reduce the stated principal amount of such
Global Certificate by the denominations of the Certificate or Certificates for
which such exchange is to be made, and (ii) the Certificate Registrar shall
endorse the schedule to any Global Certificate representing the Certificate or
Certificates for which such exchange is to be made to increase the stated
principal amount of such Global Certificate by the denominations of the
Certificate or Certificates being exchanged therefor. The form of the Exchange
Certification shall be available from the Certificate Registrar.
SECTION 3.8 NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.9, the Paying Agent shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related Participants in accordance with its applicable
rules, regulations and procedures.
SECTION 3.9 DEFINITIVE CERTIFICATES.
(a) Definitive Certificates will be issued to the owners of beneficial
interests in a Global Certificate or their nominees if (i) the Clearing Agency
notifies the Depositor and the Certificate Registrar in writing that the
Clearing Agency is unwilling or unable to continue as depositary for such Global
Certificate and a qualifying successor depositary is not appointed by the
Depositor within 90 days thereof, (ii) the Trustee has instituted or caused to
be instituted or has been directed to institute any judicial proceeding in a
court to enforce the rights of the Certificateholders under this Agreement and
under such Global Certificate and the Trustee has been advised by counsel that
in connection with such proceeding it is necessary or advisable for the Trustee
or its custodian to obtain possession of such Global Certificate, or (iii) after
the occurrence of an Event of Default, Certificate Owners representing a
majority in aggregate outstanding Certificate Balance of such Global Certificate
advise the Clearing Agency through the Participants in writing (and the Clearing
Agency so advises the Depositor, the Certificate Registrar and the Master
Servicer in writing) that the continuation in global form of the Certificates
being evidenced by such Global Certificate is no longer in their best interests;
provided, that under no circumstances will Definitive Certificates be issued to
Certificate Owners of the Regulation S Temporary Global Certificate. Upon notice
of the occurrence of any of the events described in the preceding sentence, the
Certificate Registrar shall notify the Clearing Agency and request the Clearing
Agency to notify all Certificate Owners, through the applicable Participants, of
the occurrence of the event and of the availability of Definitive Certificates
to such Certificate Owners requesting the same. Upon surrender to the
Certificate Registrar of the Global Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Certificate Registrar shall execute, and the Authenticating
Agent shall authenticate and deliver, the Definitive Certificates. None of the
Depositor, the Trustee, the Paying Agent or the Certificate Registrar shall be
liable for any
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delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Certificate Registrar, to the extent applicable with respect to
such Definitive Certificates, and the Certificate Registrar and the Trustee and
the Paying Agent shall recognize the Holders of Definitive Certificates as
Certificateholders hereunder.
(b) Distributions of principal and interest on the Definitive
Certificates shall be made by the Paying Agent directly to holders of Definitive
Certificates in accordance with the procedures set forth in this Agreement.
ARTICLE IV
ADVANCES
P&I Advances and Servicing Advances shall be made as provided herein
by the Master Servicer and, if the Master Servicer does not make such Advances,
by the Trustee except to the extent that the Master Servicer or the Trustee, as
applicable, determines in accordance with Section 4.4 below, that any such
Advance would be a Nonrecoverable Advance.
SECTION 4.1 P&I ADVANCES BY MASTER SERVICER.
(a) On or prior to the Advance Report Date, the Master Servicer shall
notify the Trustee and the Paying Agent if the P&I Advance Amount for such
Distribution Date is greater than zero, and the Master Servicer shall make a P&I
Advance in respect of each Mortgage Loan of such amount no later than the Master
Servicer Remittance Date. It is understood that the obligation of the Master
Servicer to make such P&I Advances is mandatory and shall apply through any
court appointed stay period or similar payment delay resulting from any
insolvency of the Mortgagor or related bankruptcy, notwithstanding any other
provision of this Agreement. Notwithstanding the foregoing, the Master Servicer
shall not be required to make such P&I Advance, if the Master Servicer
determines, in accordance with Section 4.4 below, that any such P&I Advance
would be a Nonrecoverable Advance and shall not make such P&I Advance if such
P&I Advance if made would be a Nonrecoverable Advance as determined by the
Special Servicer in accordance with the Servicing Standard, in which event the
Special Servicer shall promptly direct the Master Servicer not to make such P&I
Advance. Such determination shall be conclusive and binding on the Trustee and
the Certificateholders. The Master Servicer shall not advance any amount due to
be paid by the Swap Counterparty for distribution to the Class A-4FL
Certificates in the event that the Swap Counterparty fails to make a required
payment. The Special Servicer shall not make P&I Advances under this Agreement
and shall not advance any amount due to be paid by the Swap Counterparty for
distribution to the Class A-4FL Certificates in the event that the Swap
Counterparty fails to make a required payment. If the Master Servicer fails to
make a P&I Advance that it is required to make under this Section 4.1, it shall
promptly notify the Trustee and the Paying Agent of such failure.
(b) If the Master Servicer determines that there is a P&I Advance
Amount for a Distribution Date, the Master Servicer shall on the related Master
Servicer Remittance Date either (A) deposit in the Certificate Account an amount
equal to the P&I Advance Amount or (B)
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utilize funds in the Certificate Account being held for future distributions or
withdrawals to make such Advance. Any funds being held in the Certificate
Account for future distribution or withdrawal and so used shall be replaced by
the Master Servicer from its own funds by deposit in the Certificate Account on
or before any future Master Servicer Remittance Date to the extent that funds in
the Certificate Account on such Master Servicer Remittance Date shall be less
than payments to the Paying Agent or other Persons required to be made on such
date.
(c) Subsections (a) and (b) of this Section 4.1 shall not apply to the
DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note.
SECTION 4.1A P&I ADVANCES WITH RESPECT TO NON-SERVICED MORTGAGE LOANS
AND SERVICED PARI PASSU MORTGAGE LOANS.
With respect to the Non-Serviced Mortgage Loans and Serviced Pari
Passu Mortgage Loans (the "P&I Pari Passu Loans"), the Master Servicer shall
make its determination that a P&I Advance previously made on any P&I Pari Passu
Loan is a Nonrecoverable Advance or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable Advance with respect to such P&I Pari Passu
Loan in accordance with Section 4.1 independently of any determination made by
any Other Master Servicer under the related Other Companion Loan Pooling and
Servicing Agreement in respect of any P&I Pari Passu Loan following deposit of
the Non-Serviced Companion Mortgage Loans or Serviced Companion Mortgage Loans
into a commercial mortgage securitization trust, and the Other Master Servicer
shall make its own determination that it has made a P&I Advance that is a
Nonrecoverable Advance (both as defined in the related Other Companion Loan
Pooling and Servicing Agreement) or that any proposed P&I Advance, if made,
would constitute a Nonrecoverable Advance (both as defined in the related Other
Companion Loan Pooling and Servicing Agreement) with respect to the Non-Serviced
Companion Mortgage Loans or Serviced Companion Mortgage Loans, as applicable, in
accordance with the related Other Companion Loan Pooling and Servicing
Agreement. The determination by either the Master Servicer or the Other Master
Servicer made on the earlier of (i) the Advance Report Date and (ii) the Other
Advance Report Date that any such P&I Advance is nonrecoverable shall be binding
on the Other Master Servicer and the Master Servicer, as applicable, the
Certificateholders and the holders of any securities relating to the
Non-Serviced Companion Mortgage Loans or Serviced Companion Mortgage Loans, as
applicable.
The Master Servicer shall not make a P&I Advance with respect to any
P&I Pari Passu Loan after its receipt of notice from the related Other Master
Servicer that it has determined that it has made a P&I Advance that is a
Nonrecoverable Advance on the Non-Serviced Companion Mortgage Loans or Serviced
Companion Mortgage Loans, as applicable, or that any proposed P&I Advance, if
made, would constitute a Nonrecoverable Advance pursuant to the relevant Other
Companion Loan Pooling and Servicing Agreement. If the Master Servicer
determines that a P&I Advance would be (if made), or any outstanding P&I Advance
previously made is, a Nonrecoverable Advance, the Master Servicer shall provide
the Other Master Servicer written notice of such determination within two
Business Days after such determination was made. If the Master Servicer receives
written notice by the Other Master Servicer that it has determined, with respect
to any Mortgage Loan, that any proposed future P&I Advance would be, or any
outstanding P&I Advance is, a Nonrecoverable Advance, the Master Servicer shall
not make any additional P&I Advances with respect to such Mortgage Loan unless
the Master
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Servicer has consulted with the Other Master Servicer and they both
agree that circumstances with respect to such Mortgage Loan have changed such
that a proposed future P&I Advance would not be a Nonrecoverable Advance.
Notwithstanding the foregoing, the Master Servicer shall continue to have the
discretion provided in this Agreement to determine that any future P&I Advance
or outstanding P&I Advance would be, or is, as applicable, a Nonrecoverable
Advance. Once such a determination is made by the Master Servicer or the Master
Servicer receives written notice of such determination by the Other Master
Servicer, the Master Servicer shall follow the process set forth in this
paragraph before making any additional P&I Advances with respect to such
Mortgage Loan.
Following a securitization of a Serviced Companion Mortgage Loan, the
Master Servicer shall be required to deliver to the related Other Master
Servicer the following information: (i) any loan related information (in the
form received), including without limitation CMSA Reports relating to the
related Serviced Pari Passu Mortgage Loan, applicable to a determination that an
Advance is or would be a Nonrecoverable Advance, within one Business Day of the
Master Servicer's receipt thereof, (ii) notice of any Servicing Advance it, or
the Trustee makes with respect to the related Serviced Pari Passu Mortgage Loan
within one Business Day of the making of such Advance and (iii) notice of any
determination that any Servicing Advance is a Nonrecoverable Advance within one
Business Day thereof.
SECTION 4.2 SERVICING ADVANCES. The Master Servicer and, if the Master
Servicer does not, the Trustee to the extent the Trustee receives written notice
from the Paying Agent that such Advance has not been made by the Master
Servicer, shall make Servicing Advances to the extent provided in this
Agreement, except to the extent that the Master Servicer or the Trustee, as
applicable, determines in accordance with Section 4.4 below, that any such
Advance would be a Nonrecoverable Advance and, subject to the last sentence of
this Section 4.2, except to the extent the Special Servicer determines in
accordance with the Servicing Standard and Section 4.4 that such Advance, if
made, would be a Nonrecoverable Advance, in which event the Special Servicer
shall promptly direct the Master Servicer not to make such Advance. Such
determination by the Master Servicer or the Special Servicer shall be conclusive
and binding on the Trustee and the Certificateholders and, in the case of any B
Note, the holder of the related B Note and, in the case of any Serviced Pari
Passu Mortgage Loan, the holder of the related Serviced Companion Mortgage Loan,
and, in the case of the DCT Industrial Portfolio C Note, the holder of the DCT
Industrial Portfolio C Note. The Special Servicer shall not be required to make
Servicing Advances under this Agreement but may make such Servicing Advances at
its option in which event the Master Servicer shall reimburse the Special
Servicer for such Servicing Advance within 30 days of receipt of a statement
therefor. Promptly after discovering that the Master Servicer has failed to make
a Servicing Advance that the Master Servicer is required to make hereunder, the
Paying Agent shall promptly notify the Trustee in writing of the failure by the
Master Servicer to make such Servicing Advance. The Master Servicer may make
Servicing Advances in its own discretion if it determines that making such
Servicing Advance is in the best interest of the Certificateholders, even if the
Master Servicer or the Special Servicer has determined, in accordance with
Section 4.4 below, that any such Advance would be a Nonrecoverable Advance.
The applicable Non-Serviced Mortgage Loan Master Servicer is obligated
to make Servicing Advances pursuant to the related Non-Serviced Mortgage Loan
Pooling and
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Servicing Agreement with respect to any Non-Serviced Mortgage Loan, and the
Master Servicer shall have no obligation or authority to make Servicing Advances
with respect to such Mortgage Loan.
SECTION 4.3 ADVANCES BY THE TRUSTEE.
(a) To the extent that the Master Servicer fails to make a P&I Advance
with respect to a Mortgage Loan by the Master Servicer Remittance Date (other
than a P&I Advance that the Master Servicer or the Special Servicer determines
is a Nonrecoverable Advance), the Trustee shall make such P&I Advance with
respect to such Mortgage Loan to the extent the Trustee receives written notice
from the Paying Agent not later than 10:00 a.m. (New York City time) on the
Distribution Date that such Advance has not been made by the Master Servicer on
the Master Servicer Remittance Date unless the Trustee determines that such P&I
Advance, if made, would be a Nonrecoverable Advance. The Paying Agent shall
notify the Trustee in writing as soon as practicable, but not later than 10:00
a.m. (New York City time) on the Distribution Date if the Master Servicer has
failed to make a P&I Advance.
(b) To the extent that the Master Servicer fails to make a Servicing
Advance by the date such Servicing Advance is required to be made (other than a
Servicing Advance that the Master Servicer determines is a Nonrecoverable
Advance), and a Responsible Officer of the Trustee receives actual notice
thereof, the Trustee shall make such Servicing Advance promptly, but in any
event, not later than five Business Days after notice thereof in accordance with
Section 4.2, unless the Trustee determines that such Servicing Advance, if made,
would be a Nonrecoverable Advance.
SECTION 4.4 EVIDENCE OF NONRECOVERABILITY.
(a) If the Master Servicer or the Special Servicer determines at any
time, in its sole discretion, exercised in good faith, that any Advance
previously made (or Unliquidated Advance in respect thereof) or any proposed
Advance, if made, would constitute a Nonrecoverable Advance, such determination
shall be evidenced by an Officer's Certificate delivered to the Trustee, the
Master Servicer, the Paying Agent, the Special Servicer, the Operating Adviser
and the Rating Agencies (and the holder of the Serviced Companion Mortgage Loan
if the Advance relates to a Loan Pair) by the Business Day prior to the
Distribution Date. Such Officer's Certificate shall set forth the reasons for
such determination of nonrecoverability, together with, to the extent such
information, report or document is in the Master Servicer's or Special
Servicer's possession, any related financial information such as related income
and expense statements, rent rolls, occupancy status, property inspections and
any Appraisals performed within the last 12 months on the Mortgaged Property,
and, if such reports are used by the Master Servicer or the Special Servicer, as
applicable, to determine that any P&I Advance or Servicing Advance, as
applicable, would be a Nonrecoverable Advance, any engineers' reports,
environmental surveys, internal final valuations or other information relevant
thereto which support such determination. If the Trustee determines at any time
that any portion of an Advance previously made or a portion of a proposed
Advance that the Trustee is required to make pursuant to this Agreement, if
made, would constitute a Nonrecoverable Advance, such determination shall be
evidenced by an Officer's Certificate of a Responsible Officer of the Trustee
delivered to the Depositor, the Master Servicer, the Special Servicer, the
Paying Agent
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and the Operating Adviser similar to the Officer's Certificate of the Master
Servicer or the Special Servicer described in the prior sentence. If the Special
Servicer determines at any time that any portion of an Advance previously made
would constitute a Nonrecoverable Advance, such determination shall be evidenced
by an Officer's Certificate of a Responsible Officer of the Special Servicer,
delivered to the Depositor, the Master Servicer, the Trustee, the Paying Agent
and the Operating Adviser similar to the Officer's Certificate of the Master
Servicer described above. The Trustee shall not be required to make an Advance
that the Master Servicer or the Special Servicer (or with respect to a Mortgage
Loan included in a Loan Pair or any Non-Serviced Mortgage Loan, the related
Other Master Servicer) has previously determined to be a Nonrecoverable Advance.
Notwithstanding any other provision of this Agreement, none of the Master
Servicer, the Special Servicer, the Trustee shall be obligated to, nor shall it,
make any Advance or make any payment that is designated in this Agreement to be
an Advance, if the Trustee determines in its good faith business judgment and,
with respect to the Master Servicer or the Special Servicer, in accordance with
the Servicing Standard that such Advance or such payment (including interest
accrued thereon at the Advance Rate) would be a Nonrecoverable Advance. The
Master Servicer's and the Special Servicer's determinations in accordance with
the above provisions shall be conclusive and binding on the Trustee, the Paying
Agent and the Certificateholders. The Master Servicer shall consider
Unliquidated Advances in respect of prior P&I Advances and Servicing Advances as
outstanding Advances for purposes of nonrecoverablility determinations as if
such Unliquidated Advance were a P&I Advance or Servicing Advance, as
applicable.
(b) Any Non-Serviced Mortgage Loan Master Servicer, Non-Serviced
Mortgage Loan Trustee or Non-Serviced Mortgage Loan Fiscal Agent, as applicable,
shall be entitled to reimbursement for Pari Passu Loan Nonrecoverable Advances
pursuant to and to the extent set forth in the related Non-Serviced Mortgage
Loan Intercreditor Agreement (with, in each case, any accrued and unpaid
interest thereon provided for under the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement) in the manner set forth in Section 5.2.
SECTION 4.5 INTEREST ON ADVANCES; CALCULATION OF OUTSTANDING ADVANCES
WITH RESPECT TO A MORTGAGE LOAN. Any unreimbursed Advance funded from the Master
Servicer's, the Special Servicer's or the Trustee's own funds shall accrue
interest on a daily basis, at a per annum rate equal to the Advance Rate, from
and including the date such Advance was made to but not including the date on
which such Advance has been reimbursed; provided, however, that neither the
Master Servicer nor any other party shall be entitled to interest accrued on the
amount of any P&I Advance with respect to any Mortgage Loan or any B Note for
the period commencing on the date of such P&I Advance and ending on the day on
which the grace period applicable to the related Mortgagor's obligation to make
the related Scheduled Payment expires pursuant to the related Mortgage Loan or B
Note documents. All Late Collections on any Non-Serviced Mortgage Loan in
respect of interest shall, promptly following receipt thereof, be applied by the
Master Servicer to reimburse the interest component of any P&I Advance
outstanding with respect to such Non-Serviced Mortgage Loan. Any party that
makes a P&I Advance with respect to any Non-Serviced Mortgage Loan shall provide
to the applicable Non-Serviced Mortgage Loan Master Servicer monthly, at least
two Business Days prior to the next succeeding Due Date for such Non-Serviced
Mortgage Loan, written notice of whether (and, if any, how much) Advance
Interest will be payable on the interest component of that P&I Advance through
the next succeeding related Master Servicer Remittance Date. For purposes of
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determining whether a P&I Advance is outstanding, amounts collected with respect
to a particular Mortgage Loan, B Note or REO Property and treated as collections
of principal or interest shall be applied first to reimburse the earliest P&I
Advance and then each succeeding P&I Advance to the extent not inconsistent with
Section 4.6. The Master Servicer shall use efforts consistent with the Servicing
Standard to collect (but shall have no further obligation to collect), with
respect to the Mortgage Loans (and the Serviced Companion Mortgage Loans) that
are not Specially Serviced Mortgage Loans, Late Fees and default interest from
the Mortgagors in an amount sufficient to pay Advance Interest and Additional
Trust Expenses incurred in respect of each related Mortgage Loan. The Master
Servicer shall be entitled to retain Late Fees and default interest paid by any
Mortgagor during a Collection Period with respect to any Mortgage Loan (other
than the portion of such Late Fee and default interest that relates to the
period commencing after the Servicing Transfer Event in respect of a Specially
Serviced Mortgage Loan, as to which the Special Servicer shall retain Late Fees
and default interest with respect to such Specially Serviced Mortgage Loan,
subject to the offsets set forth below) as additional servicing compensation
only to the extent such Late Fees and default interest with respect to such
Mortgage Loan (x) exceed unreimbursed Additional Trust Expenses and Advance
Interest (incurred in respect of the related Mortgage Loan) with respect to the
Mortgage Loans arising on or after the Cut-Off Date and (y) are not used to pay
Special Servicing Fees, Liquidation Fees and Workout Fees accrued with respect
to such Collection Period on such Mortgage Loan. The applicable Special
Servicer, with respect to any Specially Serviced Mortgage Loan, shall (i) pay
from any Late Fees and default interest collected from such Specially Serviced
Mortgage Loan (a) any outstanding and unpaid Advance Interest in respect of such
Specially Serviced Mortgage Loan to the Master Servicer or the Trustee, as
applicable and (b) to the Trust, any losses previously incurred by the Trust
with respect to such Specially Serviced Mortgage Loan and (ii) retain any
remaining portion of such Late Fees and default interest as additional Special
Servicer Compensation. It is hereby acknowledged that the applicable Master
Servicer may only waive Late Fees and default interest to the extent set forth
in Section 8.3(a).
SECTION 4.6 REIMBURSEMENT OF ADVANCES AND ADVANCE INTEREST.
(a) Advances made with respect to each Mortgage Loan, Serviced
Companion Mortgage Loan, B Note, Specially Serviced Mortgage Loan or REO
Property (including Advances later determined to be Nonrecoverable Advances) and
Advance Interest thereon shall be reimbursed to the extent of the amounts
identified to be applied therefor in Section 5.2. The aggregate of the amounts
available to repay Advances and Advance Interest thereon pursuant to Section 5.2
collected in any Collection Period with respect to Mortgage Loans, any Serviced
Companion Mortgage Loan or any B Note or Specially Serviced Mortgage Loans or
REO Property shall be an "Available Advance Reimbursement Amount."
(b) To the extent that Advances have been made on the Mortgage Loans,
any Serviced Companion Mortgage Loan, any B Note, any Specially Serviced
Mortgage Loans or any REO Mortgage Loans, the Available Advance Reimbursement
Amount with respect to any Determination Date shall be applied to reimburse (i)
the Trustee for any Advances outstanding to the Trustee with respect to any of
such Mortgage Loans, Serviced Companion Mortgage Loan, B Note, Specially
Serviced Mortgage Loans or REO Mortgage Loans, plus any Advance Interest owed to
the Trustee with respect to such Advances and then (ii) the Master Servicer for
any
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Advances outstanding to the Master Servicer with respect to any of such Mortgage
Loans, Serviced Companion Mortgage Loan, B Note, Specially Serviced Mortgage
Loans or REO Mortgage Loans, plus any Advance Interest owed to the Master
Servicer with respect to such Advances and then (iii) the Special Servicer for
any Advances outstanding to the Special Servicer with respect to any of such
Mortgage Loans, Serviced Companion Mortgage Loan, B Note, Specially Serviced
Mortgage Loans or REO Mortgage Loans, plus any Advance Interest owed to the
Special Servicer with respect to such Advances. To the extent that any Advance
Interest payable to the Master Servicer, the Special Servicer or the Trustee
with respect to a Specially Serviced Mortgage Loan or REO Mortgage Loan cannot
be recovered from the related Mortgagor, the amount of such Advance Interest
shall be payable to the Trustee, the Special Servicer or the Master Servicer, as
the case may be, from amounts on deposit in the Certificate Account (or
sub-account thereof) or the Distribution Account, to the extent of amounts
identified to be applied therefor, pursuant to Section 5.2(a) or Section
5.3(b)(ii). The Master Servicer's, the Special Servicer's and the Trustee's
right of reimbursement under this Agreement for Advances shall be prior to the
rights of the Certificateholders (and, in the case of a Serviced Companion
Mortgage Loan, the holder thereof and, in the case of a B Note, the holder
thereof) to receive any amounts recovered with respect to such Mortgage Loans,
Serviced Companion Mortgage Loans, B Notes or REO Mortgage Loans.
(c) Advance Interest will be paid to the Trustee, the Master Servicer
and/or the Special Servicer (in accordance with the priorities specified in the
preceding paragraph) first, from Late Fees and default interest collected from
the related Mortgage Loan during the Collection Period during which the related
Advance is reimbursed, and then from Excess Liquidation Proceeds then available
prior to payment from any other amounts. Late Fees and default interest will be
applied on a "loan-by-loan basis" for non-Specially Serviced Mortgage Loans and
on a "loan-by-loan basis" (under which Late Fees and default interest will be
offset against the Advance Interest arising only from that particular Specially
Serviced Mortgage Loan) for Specially Serviced Mortgage Loans, as the case may
be, to the payment of Advance Interest on all Advances on such non-Specially
Serviced Mortgage Loans or such Specially Serviced Mortgage Loans, as the case
may be, then being reimbursed. Advance Interest payable to the Master Servicer,
the Special Servicer or the Trustee in respect of Servicing Advances on any Loan
Pair shall be allocated to the Serviced Pari Passu Mortgage Loan and the
Serviced Companion Mortgage Loan on a pro rata basis based upon the Principal
Balance thereof.
(d) Amounts applied to reimburse Advances shall first be applied to
reduce Advance Interest thereon that was not paid from amounts specified in the
preceding paragraph (c) and then to reduce the outstanding amount of such
Advances.
(e) To the extent that the Special Servicer incurs out-of-pocket
expenses, in accordance with the Servicing Standard, in connection with
servicing Specially Serviced Mortgage Loans, the Master Servicer shall reimburse
the Special Servicer for such expenditures within 30 days after receiving an
invoice and a report from the Special Servicer, subject to Section 4.4. With
respect to each Collection Period, the Special Servicer shall deliver such
invoice and report to the Master Servicer by the following Determination Date.
All such amounts reimbursed by the Master Servicer shall be a Servicing Advance,
subject to Section 4.4. In the event that the Master Servicer fails to reimburse
the Special Servicer hereunder or the Master Servicer determines that such
Servicing Advance was or, if made, would be a
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Nonrecoverable Advance and the Master Servicer does not make such payment, the
Special Servicer shall notify the Master Servicer and the Paying Agent in
writing of such nonpayment and the amount payable to the Special Servicer and
shall be entitled to receive reimbursement from the Trust as an Additional Trust
Expense. The Master Servicer, the Paying Agent and the Trustee shall have no
obligation to verify the amount payable to the Special Servicer pursuant to this
Section 4.6(e) and circumstances surrounding the notice delivered by the Special
Servicer pursuant to this Section 4.6(e).
ARTICLE V
ADMINISTRATION OF THE TRUST
SECTION 5.1 COLLECTIONS.
(a) On or prior to the Closing Date, the Master Servicer shall open,
or cause to be opened, and shall thereafter maintain, or cause to be maintained,
a separate account or accounts, which accounts must be Eligible Accounts, in the
name of "Xxxxx Fargo Bank, National Association, as Master Servicer for HSBC
Bank USA, National Association, as Trustee for the Holders of Xxxxxx Xxxxxxx
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-HQ9"
(the "Certificate Account"). On or prior to the Closing Date, the Master
Servicer shall open, or cause to be opened, and shall maintain, or cause to be
maintained an additional separate account or accounts in the name of "Xxxxx
Fargo Bank, National Association, as Master Servicer for HSBC Bank USA, National
Association, as Trustee for the Holders of Xxxxxx Xxxxxxx Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 2006-HQ9" (the "Interest
Reserve Account").
(b) On or prior to the date the Master Servicer shall first deposit
funds in a Certificate Account or the Interest Reserve Account, as the case may
be, the Master Servicer shall give to the Paying Agent and the Trustee prior
written notice of the name and address of the depository institution(s) at which
such accounts are maintained and the account number of such accounts. The Master
Servicer shall take such actions as are necessary to cause the depository
institution holding the Certificate Account and the Interest Reserve Account to
hold such account in the name of the Master Servicer as provided in Section
5.1(a), subject to the Master Servicer's (or its applicable Primary Servicer's
or its Sub-Servicer's) right to direct payments and investments and its rights
of withdrawal under this Agreement.
(c) On the Closing Date, the Master Servicer shall deposit the Initial
Deposit delivered to it by the Depositor on that date into the Certificate
Account. The Master Servicer shall deposit, or cause to be deposited, into the
Certificate Account on the Business Day following receipt (or, in the case of an
inadvertent failure to make such deposit on the Business Day following receipt,
within 3 Business Days of discovery of such failure and in the case of
unscheduled remittances of principal or interest, on the Business Day following
identification of the proper application of such amounts), the following amounts
received by it (including amounts remitted to the Master Servicer by the Special
Servicer from an REO Account pursuant to Section 9.14), other than (i) amounts
received by it with respect to the DCT Industrial Portfolio C Note (including
Excess Interest thereon), which amounts will be deposited directly into the DCT
Industrial Portfolio C Note Custodial Account, (ii) amounts received by it with
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respect to the 000 00xx Xxxxxx X Note, which amounts will be deposited directly
into the 000 00xx Xxxxxx X Note Distribution Account, and (iii) amounts in
respect of interest and principal on the Mortgage Loans, any Serviced Companion
Mortgage Loan or any B Note due on or before the Cut-Off Date which shall be
remitted to the Depositor (provided that the Master Servicer (I) may retain
amounts otherwise payable to the Master Servicer as provided in Section 5.2(a)
rather than deposit them into the Certificate Account, (II) shall, rather than
deposit them in the Certificate Account, directly remit to the applicable
Primary Servicer the applicable Primary Servicing Fees payable as provided in
Section 5.2(a)(iv)(unless already retained by the applicable Primary Servicer),
and (III) shall, rather than deposit them in the Certificate Account, directly
remit the Excess Servicing Fees to the holders thereof as provided in Section
5.2(a)(iv))(unless already retained by the applicable holder of the excess
servicing rights)):
(A) Principal: all payments on account of principal, including
Principal Prepayments, the principal component of Scheduled Payments,
and any Late Collections in respect thereof, on the Mortgage Loans,
any Serviced Companion Mortgage Loan and any B Note;
(B) Interest: subject to subsection (d) hereof, all payments on
account of interest on the Mortgage Loans, any Serviced Companion
Mortgage Loan and any B Note (minus any portion of any such payment
that is allocable to the period prior to the Cut-Off Date which shall
be remitted to the Depositor and excluding Interest Reserve Amounts to
be deposited in the Interest Reserve Account pursuant to Section
5.1(d) below);
(C) Liquidation Proceeds: all Liquidation Proceeds with respect
to the Mortgage Loans, any Serviced Companion Mortgage Loan and any B
Note;
(D) Insurance Proceeds: all Insurance Proceeds other than
proceeds to be applied to the restoration or repair of the property
subject to the related Mortgage or released to the related Mortgagor
in accordance with the Servicing Standard, which proceeds shall be
deposited by the Master Servicer into an Escrow Account and not
deposited in the Certificate Account;
(E) Condemnation Proceeds: all Condemnation Proceeds other than
proceeds to be applied to the restoration or repair of the property
subject to the related Mortgage or released to the related Mortgagor
in accordance with the Servicing Standard, which proceeds shall be
deposited by the Master Servicer into an Escrow Account and not
deposited in the Certificate Account;
(F) REO Income: all REO Income received from the Special
Servicer;
(G) Investment Losses: any amounts required to be deposited by
the Master Servicer pursuant to Section 5.1(e) in connection with
losses realized on Eligible Investments with respect to funds held in
the Certificate Account and amounts required to be deposited by the
Special Servicer pursuant to Section 9.14(b) in connection with losses
realized on Eligible Investments with respect to funds held in the REO
Account;
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(H) Advances: all P&I Advances unless made directly to the
Distribution Account;
(I) Compensating Interest: all Compensating Interest received
with respect to the Mortgage Loans;
(J) Other: all other amounts, including Prepayment Premiums,
required to be deposited in the Certificate Account pursuant to this
Agreement, including Purchase Proceeds of any Mortgage Loans
repurchased by a Seller or substitution shortfall amounts (as
described in the fifth paragraph of Section 2.3(a)) paid by a Seller
in connection with the substitution of any Qualifying Substitute
Mortgage Loans, payments or recoveries in respect of Unliquidated
Advances or in respect of Nonrecoverable Advances paid from principal
collections on the Mortgage Loan pursuant Section 5.2(a)(II), any
other amounts received with respect to any Serviced Companion Mortgage
Loan and with respect to any B Note, all other amounts received
pursuant to the cure and purchase rights set forth in the applicable
Intercreditor Agreement; and
(K) to the extent not otherwise set forth above, all amounts
received from each Non-Serviced Mortgage Loan Master Servicer,
Non-Serviced Mortgage Loan Special Servicer or Non-Serviced Mortgage
Loan Trustee pursuant to the related Non-Serviced Mortgage Loan
Pooling and Servicing Agreement and Non-Serviced Mortgage Loan
Intercreditor Agreement.
With respect to any A/B Mortgage Loan, the Master Servicer shall
establish and maintain one or more sub-accounts of the Certificate Account (each
an "A/B Loan Custodial Account") into which the Master Servicer shall deposit
any amounts described above that are required to be paid to the holder of the
related B Note (provided that any amounts required to be paid to the holder of
the DCT Industrial Portfolio C Note will be deposited directly into a separate
A/B Loan Custodial Account designated for amounts described above in respect of
the DCT Industrial Portfolio C Note (the "DCT Industrial Portfolio C Note
Custodial Account") pursuant to the terms of the related Intercreditor
Agreement, in each case on the same day as the deposit thereof into the
Certificate Account. Any A/B Loan Custodial Account (other than the portion of
the A/B Loan Custodial Account relating to the DCT Industrial Portfolio C Note)
shall be held in trust for the benefit of the holder of the related B Note and
shall not be part of any REMIC Pool.
With respect to any Loan Pair, the Master Servicer shall establish and
maintain one or more sub-accounts of the Certificate Account (each, a "Serviced
Companion Mortgage Loan Custodial Account") into which the Master Servicer shall
deposit any amounts described above that are required to be paid to the holder
of the related Serviced Companion Mortgage Loan pursuant to the terms of the
related Loan Pair Intercreditor Agreement, in each case on the same day as the
deposit thereof into the Certificate Account. Each Serviced Companion Mortgage
Loan Custodial Account shall be held in trust for the benefit of the holder of
the related Serviced Companion Mortgage Loan and shall not be part of any REMIC
Pool.
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Remittances from any REO Account to the Master Servicer for deposit in
the Certificate Account shall be made by the Special Servicer no later than the
Special Servicer Remittance Date.
(d) The Master Servicer, with respect to each Distribution Date
occurring in January (other than in any leap year) and February of each year,
shall deposit in the Interest Reserve Account in respect of each Interest
Reserve Loan, an amount equal to one day's interest at the related REMIC I Net
Mortgage Rate (without any conversion to a 30/360 basis as provided in the
definition thereof) on the Scheduled Principal Balance of such Mortgage Loan as
of the Due Date in the month in which such Distribution Date occurs, to the
extent a Scheduled Payment or P&I Advance is timely made in respect thereof for
such Due Date (all amounts so deposited in any consecutive January and February
in respect of each Interest Reserve Loan, the "Interest Reserve Amount"). For
purposes of determining amounts to be deposited into the Interest Reserve
Account, the REMIC I Net Mortgage Rate used in this calculation for those months
will be calculated without regard to any adjustment for Interest Reserve Amounts
or the interest accrual basis as described in the proviso to the definition of
"REMIC I Net Mortgage Rate." Notwithstanding the foregoing, with respect to the
Millenium Portfolio Mortgage Loan, the Interest Reserve Amount to be deposited
into the Interest Reserve Account in accordance with this Section 5.1(d) shall
not include the Class X-MP Strip Amount and with respect to the Ritz-Xxxxxxx
Xxxx Passu Loan, the Interest Reserve Amount to be deposited into the Interest
Reserve Account in accordance with this Section 5.1(d) shall not include the
Class X-RC Strip Amount.
(e) Funds in the Certificate Account (including any A/B Loan Custodial
Accounts and Serviced Companion Mortgage Loan Custodial Accounts) and Interest
Reserve Account may be invested and, if invested, shall be invested by, and at
the risk of, the Master Servicer in Eligible Investments selected by the Master
Servicer which shall mature, unless payable on demand, not later than the
Business Day immediately preceding the next Master Servicer Remittance Date, and
any such Eligible Investment shall not be sold or disposed of prior to its
maturity unless payable on demand. All such Eligible Investments shall be made
in the name of "HSBC Bank USA, National Association, as Trustee for the Holders
of the Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2006-HQ9 and the holder of any related Serviced Companion
Mortgage Loan or B Note as their interests may appear." None of the Depositor,
the Mortgagors, the Paying Agent or the Trustee shall be liable for any loss
incurred on such Eligible Investments.
An amount equal to all income and gain realized from any such
investment shall be paid to the Master Servicer as additional servicing
compensation and shall be subject to its withdrawal at any time from time to
time. The amount of any losses incurred in respect of any such investments shall
be for the account of the Master Servicer which shall deposit the amount of such
loss (to the extent not offset by income from other investments) in the
Certificate Account (and, solely to the extent that the loss is of an amount
credited to an A/B Loan Custodial Account or Serviced Companion Mortgage Loan
Custodial Account, deposit to the related A/B Loan Custodial Account or Serviced
Companion Mortgage Loan Custodial Account, as the case may be) or Interest
Reserve Account, as the case may be, out of its own funds immediately as
realized. If the Master Servicer deposits in or transfers to the Certificate
Account, any A/B Loan Custodial Account, any Serviced Companion Mortgage Loan
Custodial Account or the Interest
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Reserve Account, as the case may be, any amount not required to be deposited
therein or transferred thereto, it may at any time withdraw such amount or
retransfer such amount from the Certificate Account, such A/B Loan Custodial
Account, such Serviced Companion Mortgage Loan Custodial Account or the Interest
Reserve Account, as the case may be, any provision herein to the contrary
notwithstanding.
(f) Except as expressly provided otherwise in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Paying Agent on behalf of and at the direction of the Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings; provided, however, that if the Master Servicer shall have deposited
in the Certificate Account, the related Serviced Companion Mortgage Loan
Custodial Account, the related A/B Loan Custodial Account or the Interest
Reserve Account, as applicable, an amount equal to all amounts due under any
such Eligible Investment (net of anticipated income or earnings thereon that
would have been payable to the Master Servicer as additional servicing
compensation) the Master Servicer shall have the sole right to enforce such
payment or performance.
(g) Certain of the Mortgage Loans may provide for payment by the
Mortgagor to the Master Servicer of amounts to be used for payment of Escrow
Amounts for the account of the Mortgagor. The Master Servicer shall deal with
these amounts in accordance with the Servicing Standard, the terms of the
related Mortgage Loans and Section 8.3(e) hereof, and the applicable Primary
Servicer will be entitled to hold any Escrow Accounts relating to the Mortgage
Loans that it services in accordance with the requirements set forth in Section
8.3(e). The Master Servicer shall not release any Escrow Amounts held for "earn
outs" or performance criteria listed on Schedule IX hereof, without the prior
consent of the Operating Adviser, which consent shall not be unreasonably
withheld or delayed. Within 20 days following the first anniversary of the
Closing Date, the Master Servicer shall deliver to the Trustee, the Paying Agent
and the Operating Adviser, for each Mortgage Loan set forth on Schedule VII
hereto, a brief statement as to the status of the work or project based on the
most recent information provided by the Mortgagor. Schedule VII sets forth those
Mortgage Loans as to which an upfront reserve was collected at closing in an
amount in excess of $75,000 with respect to specific immediate engineering work,
completion of additional construction, environmental remediation or similar
one-time projects (but not with respect to escrow accounts maintained for
ongoing obligations, such as real estate taxes, insurance premiums, ongoing
property maintenance, replacements and capital improvements or debt service). If
the work or project is not completed in accordance with the requirements of the
escrow, the Master Servicer and the Special Servicer (which shall itself consult
with the Operating Adviser) will consult with each other as to whether there
exists a material default under the underlying Mortgage Loan documents.
(h) In the case of the Mortgage Loans set forth on Schedule XI, as to
which the Scheduled Payment is due in a calendar month on a Due Date (including
any grace period) that may occur after the end of the Collection Period ending
in such calendar month, the Master Servicer shall, unless the Scheduled Payment
is received before the end of such Collection Period, make a P&I Advance by
deposit to the Certificate Account on the Master Servicer Remittance Date in an
amount equal to the Scheduled Payment or the Assumed Scheduled
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Payment, as applicable, and for purposes of the definition of "Available
Distribution Amount" and "Principal Distribution Amount," such Scheduled Payment
or Assumed Scheduled Payment, as applicable, shall be deemed to have been
received in such Collection Period.
SECTION 5.2 APPLICATION OF FUNDS IN THE CERTIFICATE ACCOUNT AND
INTEREST RESERVE ACCOUNT.
(a) Subsection (I). The Master Servicer shall, from time to time, make
withdrawals from the Certificate Account and remit them by wire transfer prior
to 12:00 p.m., New York City time, on the related Master Servicer Remittance
Date in immediately available funds to the account specified in this Section or
otherwise (w) to such account as it shall determine from time to time of amounts
payable to the Master Servicer from the Certificate Account (or, insofar as they
relate to a B Note, from the related A/B Loan Custodial Account or, insofar as
they relate to a Serviced Companion Mortgage Loan, from the related Serviced
Companion Mortgage Loan Custodial Account) pursuant to clauses (i), (ii), (iii),
(iv), (vi), (viii) and (ix) below; (x) to the account specified in writing by
the Paying Agent and the Trustee, as applicable, from time to time of amounts
payable to the Paying Agent and the Trustee from the Certificate Account (and,
insofar as they relate to a B Note, from the related A/B Loan Custodial Account
and, insofar as they relate to a Serviced Companion Mortgage Loan, from the
Serviced Companion Mortgage Loan Custodial Account) pursuant to clauses (ii),
(iii), (v), (vi), (xi), (xii) and (xiii) below; provided that if the Master
Servicer fails to make any remittance required by this clause (x) to be made by
the Master Servicer to the Paying Agent for deposit in the Distribution Account
on the Master Servicer Remittance Date pursuant to clause (iii) or (xi) below,
the Master Servicer shall pay (from its own funds without right of reimbursement
therefor) to the Paying Agent, for the account of the Paying Agent, interest on
any amount not timely remitted at the Advance Rate from and including the day
the remittance was required to be made to, but not including, the day on which
such remittance is actually made, and, (notwithstanding any contrary provision
of Section 8.28) if such remittance and payment of interest are made not later
than 11:00 a.m. (Eastern time) on the related Distribution Date, then, insofar
as the failure to make such remittance otherwise constitutes an Event of Default
on the part of the Master Servicer, then such Event of Default shall thereupon
be deemed to have been cured; and (y) to the Special Servicer from time to time
of amounts payable to the Special Servicer from the Certificate Account (or,
insofar as they relate to a B Note, from the related A/B Loan Custodial Account
or, insofar as they relate to a Serviced Companion Mortgage Loan, from the
related Serviced Companion Mortgage Loan Custodial Account) pursuant to clauses
(i), (iv), (vi), (vii) and (ix) below of the following amounts, from the amounts
specified for the following purposes:
(i) Fees: the Master Servicer shall pay (A) to itself Late Fees
(in excess of amounts used to pay Advance Interest and unreimbursed Additional
Trust Expenses incurred in respect of each related Mortgage Loan arising on or
after the Cut-Off Date) relating to the Mortgage Loans, Serviced Companion
Mortgage Loans or B Notes which are not Specially Serviced Mortgage Loans,
Modification Fees relating to Mortgage Loans, Serviced Companion Mortgage Loans
or B Notes which are not Specially Serviced Mortgage Loans as provided in
Section 8.18, 50% of any assumption fees payable under Section 8.7(a) or 8.7(b),
100% of any extension fees payable under Section 8.10 or other fees payable to
the Master Servicer hereunder and (B) directly to the Special Servicer, 50% of
any assumption fees as
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provided in Section 8.7(a), 50% of any assumption fees as provided in Section
8.7(b), all assumption fees relating to Specially Serviced Mortgage Loans,
Modification Fees and other fees collected on Specially Serviced Mortgage Loans,
in each case to the extent provided for herein from funds paid by the applicable
Mortgagor and Late Fees and, to the extent provided for in Section 9.11(c),
default interest in excess of Advance Interest arising only from that particular
Specially Serviced Mortgage Loan for which Late Fees or default interest were
collected and payable to the Master Servicer or the Trustee in respect of such
Specially Serviced Mortgage Loan (which Advance Interest the Master Servicer
shall retain or pay to the Trustee to the extent provided for in this Agreement)
to the extent the Special Servicer is entitled to such Late Fees and default
interest under Section 4.5;
(ii) Servicing Advances (including amounts later determined to be
Nonrecoverable Advances): (A) in the case of all Mortgage Loans, Serviced
Companion Mortgage Loans and B Notes, subject to clause (B) below and subsection
(iv) of Section 5.2(a)(II), to reimburse or pay to the Master Servicer, the
Special Servicer and the Trustee, pursuant to Section 4.6, (x) prior to a Final
Recovery Determination or determination in accordance with Section 4.4 that any
Advance is a Nonrecoverable Advance, Servicing Advances on the related Mortgage
Loan, Serviced Companion Mortgage Loan or B Note, as applicable, from payments
made by the related Mortgagor of the amounts to which a Servicing Advance
relates or from REO Income from the related REO Property or from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds or Purchase Proceeds and, to
the extent that a Servicing Advance has been or is being reimbursed, any related
Advance Interest thereon first, from Late Fees and default interest collected
during the Collection Period during which such Advance is reimbursed, and then
from Excess Liquidation Proceeds then available and then from any other amounts
on deposit in the Certificate Account; provided that, Late Fees and default
interest will be applied on a "loan-by-loan basis" for non-Specially Serviced
Mortgage Loans (and any Serviced Companion Mortgage Loans and B Notes that are
not Specially Serviced Mortgage Loans) and on a "loan-by-loan basis" (under
which Late Fees and default interest will be offset against the Advance Interest
arising only from the particular Specially Serviced Mortgage Loan) for Specially
Serviced Mortgage Loans, as the case may be, to the payment of Advance Interest
on all Advances on such non-Specially Serviced Mortgage Loans (and any Serviced
Companion Mortgage Loan and B Notes that are not Specially Serviced Mortgage
Loans) or such Specially Serviced Mortgage Loans, as the case may be, then being
reimbursed or (y) after a Final Recovery Determination or determination that any
Servicing Advance on the related Mortgage Loan, Serviced Companion Mortgage Loan
or B Note is a Nonrecoverable Advance, any Servicing Advances made on the
related Mortgage Loan, related Serviced Companion Mortgage Loan, related B Note
or REO Property from any funds on deposit in the Certificate Account (regardless
of whether such amount was recovered from the applicable Mortgage Loan, Serviced
Companion Mortgage Loan, B Note or REO Property) and pay Advance Interest
thereon first, from Late Fees and default interest collected during the
Collection Period during which such Advance is reimbursed (applying such Late
Fees and default interest on a "loan-by-loan basis" for all non-Specially
Serviced Mortgage Loans (and any Serviced Companion Mortgage Loans and B Notes
that are not Specially Serviced Mortgage Loans) and on a "loan-by-loan basis",
as described above, for all Specially Serviced Mortgage Loans, as the case may
be, to the payment of Advance Interest on all Advances on such non-Specially
Serviced Mortgage Loans (and any Serviced Companion Mortgage Loans and B Notes
that are not Specially Serviced Mortgage Loans) or such Specially Serviced
Mortgage Loans, as the case
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may be, then being reimbursed), then from Excess Liquidation Proceeds then
available and then from any other amounts on deposit in the Certificate Account
and (B) in the case of any Non-Serviced Mortgage Loan and from any funds on
deposit in the Certificate Account, to reimburse the applicable Non-Serviced
Mortgage Loan Master Servicer, the applicable Non-Serviced Mortgage Loan Special
Servicer, the applicable Non-Serviced Mortgage Loan Trustee and the applicable
Non-Serviced Mortgage Loan Fiscal Agent for Pari Passu Loan Nonrecoverable
Advances and any accrued and unpaid interest thereon provided for under the
related Non-Serviced Mortgage Loan Intercreditor Agreement and Non-Serviced
Mortgage Loan Pooling and Servicing Agreement;
(iii) P&I Advances (including amounts later to be determined to
be Nonrecoverable Advances): in the case of all Mortgage Loans, subject to
subsection (iv) of Section 5.2(a)(II), to reimburse or pay to the Master
Servicer and the Trustee, pursuant to Section 4.6, (x) if prior to a Final
Recovery Determination or determination that any Advance is a Nonrecoverable
Advance, any P&I Advances from Late Collections made by the Mortgagor of the
amounts to which a P&I Advance relates, or REO Income from the related REO
Property or from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
or Purchase Proceeds and, to the extent that a P&I Advance has been or is being
reimbursed, any related Advance Interest thereon, first, from Late Fees and
default interest collected during the Collection Period during which such
Advance is reimbursed, and then from Excess Liquidation Proceeds then available
and then from any other amounts on deposit in the Certificate Account; provided
that, Late Fees and default interest will be applied on a "loan-by-loan basis"
for non-Specially Serviced Mortgage Loans and on a "loan-by-loan basis" (under
which Late Fees and default interest will be offset against the Advance Interest
arising only from the particular Specially Serviced Mortgage Loan) for Specially
Serviced Mortgage Loans, as the case may be, to the payment of Advance Interest
on all Advances on such non-Specially Serviced Mortgage Loans or such Specially
Serviced Mortgage Loans, as the case may be, then being reimbursed or (y) if
after a Final Recovery Determination or determination in accordance with Section
4.4 that any P&I Advance on the related Mortgage Loan is a Nonrecoverable
Advance, any P&I Advances made on the related Mortgage Loan or REO Property from
funds on deposit in the Certificate Account (regardless of whether such amount
was recovered from the applicable Mortgage Loan or REO Property) and any Advance
Interest thereon, first, from Late Fees and default interest collected during
the Collection Period during which such Advance is reimbursed (applying such
Late Fees and default interest on a "loan-by-loan basis" for all non-Specially
Serviced Mortgage Loans and on a "loan-by-loan basis", as described above, for
all Specially Serviced Mortgage Loans, as the case may be, to the payment of
Advance Interest on all Advances on such non-Specially Serviced Mortgage Loans
or such Specially Serviced Mortgage Loans, as the case may be, then being
reimbursed), then from Excess Liquidation Proceeds then available and then from
any other amounts on deposit in the Certificate Account;
(iv) Servicing Fees and Special Servicer Compensation: to pay to
itself the Master Servicing Fee, subject to reduction for any Compensating
Interest, to pay to the Special Servicer the Special Servicing Fee and the
Work-Out Fee, to pay to the applicable Primary Servicer (or the Master Servicer)
the Primary Servicing Fees, and to pay to the parties entitled thereto the
Excess Servicing Fees (to the extent not previously retained by any of such
parties);
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(v) Trustee Fee and Paying Agent Fee: to pay to the Distribution
Account for withdrawal by the Paying Agent for payment to itself and the
Trustee, the Paying Agent Fee and the Trustee Fee;
(vi) Expenses of Trust: to pay to the Person entitled thereto any
amounts specified herein to be Additional Trust Expenses (at the time set forth
herein or in the definition thereof), and any other amounts that in fact
constitute Additional Trust Expenses whose payment is not more specifically
provided for in this Agreement; provided that the Depositor shall not be
entitled to receive reimbursement for performing its duties under this
Agreement;
(vii) Liquidation Fees: upon the occurrence of a Final Recovery
Determination to pay to the Special Servicer from the Certificate Account, the
amount certified by the Special Servicer equal to the Liquidation Fee, to the
extent provided in Section 9.11 hereof;
(viii) Investment Income: to pay to itself income and gain
realized on the investment of funds deposited in the Certificate Account
(including any A/B Loan Custodial Accounts and Serviced Companion Mortgage Loan
Custodial Accounts);
(ix) Prepayment Interest Excesses: to pay to the Master Servicer
the amount of the aggregate Prepayment Interest Excesses relating to Mortgage
Loans which are not Specially Serviced Mortgage Loans (to the extent not offset
by Prepayment Interest Shortfalls relating to such Mortgage Loans); and to pay
to the Special Servicer the amount of the aggregate Prepayment Interest Excesses
relating to Specially Serviced Mortgage Loans which have received voluntary
Principal Prepayments (not from Liquidation Proceeds or from modifications to
Specially Serviced Mortgage Loans), to the extent not offset by Prepayment
Interest Shortfalls relating to such Mortgage Loans.
(x) Correction of Errors: to withdraw funds deposited in the
Certificate Account in error;
(xi) Distribution Account: to make payment on each Master
Servicer Remittance Date of (a) the remaining amounts in the Certificate Account
(including any Excess Interest) to the Distribution Account (or in the case of
any Excess Interest (other than Excess Interest on the DCT Industrial Portfolio
C Note), deposit to the Excess Interest Sub-account under Section 5.3(b), other
than amounts held for payment in future periods or pursuant to clause (xii)
below, the obligation to make such payments to be offset by the amount of any
Net Swap Payment, as set forth in Section 8.32(b) and Section 6.13 and (b) the
DCT Industrial Portfolio C Note Remittance Amount to the DCT Industrial
Portfolio C Note Distribution Account;
(xii) Reserve Account: to make payment on each Master Servicer
Remittance Date to the Reserve Account, any Excess Liquidation Proceeds (subject
to Section 4.6(c)); and
(xiii) Clear and Terminate: to clear and terminate the
Certificate Account pursuant to Section 8.29;
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provided, however, that in the case of any B Note for which an A/B Loan
Custodial Account is required to be established by the Master Servicer:
(A) the Master Servicer shall be entitled to make transfers from time
to time, from the related A/B Loan Custodial Account to the portion of
the Certificate Account that does not constitute the A/B Loan
Custodial Account, of amounts necessary for the payments or
reimbursement of amounts described in any one or more of clauses (i),
(ii), (iii), (iv), (vi), (vii), (viii), (ix) and (xii) above, but only
insofar as the payment or reimbursement described therein arises from
or is related solely to such A/B Mortgage Loan and is allocable to the
A/B Mortgage Loan pursuant to this Agreement or the related
Intercreditor Agreement, and the Master Servicer shall also be
entitled to make transfers from time to time, from the related A/B
Loan Custodial Account to the portion of the Certificate Account that
does not constitute the A/B Loan Custodial Account, of amounts
transferred to such related A/B Loan Custodial Account in error, and
amounts necessary for the clearing and termination of the Certificate
Account pursuant to Section 8.29;
(B) the Master Servicer shall be entitled to make transfers from time
to time, from the related A/B Loan Custodial Account to the portion of
the Certificate Account that does not constitute the A/B Loan
Custodial Account, of amounts not otherwise described in clause (A)
above to which the holder of an A Note is entitled under the A/B
Mortgage Loan and the related Intercreditor Agreement (including in
respect of interest, principal and Prepayment Premiums in respect of
the A Note (whether or not by operation of any provision of the
related Intercreditor Agreement that entitles the holder of such A
Note to receive remittances in amounts calculated without regard to
any modification, waiver or amendment of the economic terms of such A
Note)); and
(C) the Master Servicer shall on each Master Servicer Remittance Date
remit to the holder of the related B Note all amounts on deposit in
such A/B Loan Custodial Account (net of amounts permitted or required
to be transferred therefrom as described in clauses (A) and/or (B)
above), to the extent that the holder of such B Note is entitled
thereto under the related Intercreditor Agreement (including by way of
the operation of any provision of the related Intercreditor Agreement
that entitles the holder of such B Note to reimbursement of cure
payments made by it).
and provided further, however, that in the case of any Serviced Companion
Mortgage Loan:
(A) the Master Servicer shall be entitled to make transfers from time
to time, from the related Serviced Companion Mortgage Loan Custodial
Account to the portion of the Certificate Account that does not
constitute any Serviced Companion Mortgage Loan Custodial Account, of
amounts necessary for the payments or reimbursement of amounts
described in any one or more of clauses (i), (ii), (iii), (iv), (v),
(vi), (vii), (viii), (ix) and (xii) above, but only insofar as the
payment or reimbursement described therein arises from or is related
solely to such Loan Pair and is allocable to the Serviced Companion
Mortgage Loan, and
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the Master Servicer shall also be entitled to make transfers from time
to time, from the related Serviced Companion Mortgage Loan Custodial
Account to the portion of the Certificate Account that does not
constitute any Serviced Companion Mortgage Loan Custodial Account, of
amounts transferred to such related Serviced Companion Mortgage Loan
Custodial Account in error, and amounts necessary for the clearing and
termination of the Certificate Account pursuant to Section 8.29;
provided, however that the Master Servicer shall not be entitled to
make transfers from the portion of the Certificate Account that does
not constitute any Serviced Companion Mortgage Loan Custodial Account
(other than amounts previously transferred from the related Serviced
Companion Mortgage Loan Custodial Account in accordance with this
clause (A)) of amounts necessary for the payment or reimbursement of
amounts described in any one or more of the foregoing clauses;
(B) the Master Servicer shall be entitled to make transfers from time
to time, from the related Serviced Companion Mortgage Loan Custodial
Account to the portion of the Certificate Account that does not
constitute any Serviced Companion Mortgage Loan Custodial Account, of
amounts not otherwise described in clause (A) above to which the
holder of a Serviced Pari Passu Mortgage Loan is entitled under the
related Loan Pair Intercreditor Agreement (including in respect of
interest, principal and Prepayment Premiums); and
(C) the Master Servicer shall, on either (x) the later of (i) one (1)
Business Day after the related Determination Date or (ii)
alternatively, but only if the related Serviced Companion Mortgage
Loan is primary serviced under the applicable Primary Servicing
Agreement, one (1) Business Day after receipt from the applicable
Primary Servicer or (y) such other date as may be agreed to between
the Master Servicer and the holder of the related Serviced Companion
Mortgage Loan (in their respective sole discretion), remit to the
holder of the related Serviced Companion Mortgage Loan all amounts on
deposit in such related Serviced Companion Mortgage Loan Custodial
Account (net of amounts permitted or required to be transferred
therefrom as described in clauses (A) and/or (B) above), to the extent
that the holder of such Serviced Companion Mortgage Loan is entitled
thereto under the related Loan Pair Intercreditor Agreement.
No decision by the Master Servicer or the Trustee under either this
Section 5.2(a) or subsection (iv) of Section 5.2(a)(II), to defer the
reimbursement of Advances and/or Advance Interest shall be construed as an
agreement by the Master Servicer or the Trustee to subordinate (in respect of
realizing losses), to any Class of Certificates, such party's right to such
reimbursement during such period of deferral.
Expenses incurred with respect to any Loan Pair shall be allocated in
accordance with the related Loan Pair Intercreditor Agreement. Expenses incurred
with respect to an A/B Mortgage Loan shall be allocated in accordance with the
related Intercreditor Agreement. The Master Servicer shall keep and maintain a
separate accounting for each Mortgage Loan, Serviced Companion Mortgage Loan and
B Note for the purpose of justifying any withdrawal or transfer
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from the Certificate Account, each Serviced Companion Mortgage Loan Custodial
Account and any A/B Loan Custodial Account, as applicable. If funds collected in
respect of the A Notes are insufficient to pay the Master Servicing Fee, then
the Master Servicer shall be entitled to withdraw the amount of such shortfall
from the collections on, and other proceeds of, the B Note that are held in the
related A/B Loan Custodial Account. The Master Servicer shall not be permitted
to withdraw any funds from the portion of the Certificate Account that does not
constitute the A/B Loan Custodial Account unless there are no remaining funds in
the related A/B Loan Custodial Account available and required to be paid in
accordance with the related Intercreditor Agreement.
Subsection (II). The provisions of this subsection II of this Section
5.2(a) shall apply notwithstanding any contrary provision of subsection (I) of
this Section 5.2(a):
(i) Identification of Workout-Delayed Reimbursement Amounts. If
any Advance made with respect to any Mortgage Loan on or before the
date on which such Mortgage Loan becomes (or, but for the requirement
that the Mortgagor shall have made three consecutive scheduled
payments under its modified terms, would then constitute) a
Rehabilitated Mortgage Loan, together with Advance Interest accrued
thereon, is not, pursuant to the operation of the provisions of
Section 5.2(a)(I), reimbursed to the Person who made such Advance on
or before the date, if any, on which such Mortgage Loan becomes a
Rehabilitated Mortgage Loan, such Advance, together with such Advance
Interest, shall constitute a "Workout-Delayed Reimbursement Amount" to
the extent that such amount has not been determined to constitute a
Nonrecoverable Advance. All references herein to "Workout-Delayed
Reimbursement Amount" shall be construed always to mean the related
Advance and any Advance Interest thereon, together with any further
Advance Interest that accrues on the unreimbursed portion of such
Advance from time to time in accordance with the other provisions of
this Agreement. That any amount constitutes all or a portion of any
Workout-Delayed Reimbursement Amount shall not in any manner limit the
right of any Person hereunder to determine that such amount instead
constitutes a Nonrecoverable Advance.
(ii) General Relationship of Provisions. Subsection (iii) below
(subject to the terms and conditions thereof) sets forth the terms of
and conditions to the right of a Person to be reimbursed for any
Workout-Delayed Reimbursement Amount to the extent that such Person is
not otherwise entitled to reimbursement and payment of such
Workout-Delayed Reimbursement Amount pursuant to the operation of
Section 5.2(a)(I) above. Subsection (iv) below (subject to the terms
and conditions thereof) authorizes the Master Servicer to abstain from
reimbursing itself (or, if applicable, the Trustee to abstain from
obtaining reimbursement) for Nonrecoverable Advances under certain
circumstances at its sole option. Upon any determination that all or
any portion of a Workout-Delayed Reimbursement Amount constitutes a
Nonrecoverable Advance, then the reimbursement or payment of such
amount (and any further Advance Interest that may accrue thereon)
shall cease to be subject to the operation of subsection (iii) below,
such amount (and further Advance Interest)
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shall be as fully payable and reimbursable to the relevant Person as
would any other Nonrecoverable Advance (and Advance Interest thereon)
and, as a Nonrecoverable Advance, such amount may become the subject
of the Master Servicer's (or, if applicable, the Trustee's) exercise
of its sole option authorized by subsection (iv) below.
(iii) Reimbursements of Workout-Delayed Reimbursement Amounts.
The Master Servicer, the Special Servicer and the Trustee, as
applicable, shall be entitled to reimbursement and payment for all
Workout-Delayed Reimbursement Amounts in each Collection Period;
provided, however, that the aggregate amount (for all such Persons
collectively) of such reimbursements and payments in such Collection
Period shall not exceed (and the reimbursement and payment shall be
made from) the aggregate amount in the Collection Account allocable to
principal received or advanced with respect to the Mortgage Loans for
such Collection Period contemplated by clause (I)(A) of the definition
of Principal Distribution Amount (but not including any such amounts
that constitute Advances) and net of any Nonrecoverable Advances then
outstanding and reimbursable from such principal in accordance with
Section 5.2(a)(II)(iv) below. As and to the extent provided in clause
(II)(A) of the definition thereof, the Principal Distribution Amount
for the Distribution Date related to such Collection Period shall be
reduced to the extent that such payment or reimbursement of a
Workout-Delayed Reimbursement Amount is made from the aggregate amount
in the Collection Account allocable to principal pursuant to the
preceding sentence.
(iv) Reimbursement of Nonrecoverable Advances; Sole Option to
Abstain from Reimbursements of Certain Nonrecoverable Advances. To the
extent that Section 5.2(a)(I) otherwise entitles the Master Servicer,
Special Servicer or Trustee to reimbursement for any Nonrecoverable
Advance (including Workout Delayed Reimbursement Amounts that have
been determined by the Master Servicer, the Special Servicer or the
Trustee to be Nonrecoverable Advances) (or payment of Advance Interest
thereon from a source other than Late Fees and default interest on the
related Mortgage Loan) during any Collection Period, then,
notwithstanding any contrary provision of subsection (I) above, (a) to
the extent that one or more such reimbursements and payments of
Nonrecoverable Advances (and such Advance Interest thereon) are made,
such reimbursements and payments shall be made, first, from the
aggregate amount in the Collection Account allocable to principal
received or advanced with respect to the Mortgage Loans for such
Collection Period contemplated by clause (I)(A) of the definition of
Principal Distribution Amount (but not including any such amounts that
constitute Advances, and prior to any deduction for Workout-Delayed
Reimbursement Amounts (and Advance Interest thereon) that were
reimbursed or paid during the related Collection Period from amounts
allocable to principal received with respect to the Mortgage Loans, as
described by clause (II)(A) of the definition of Principal
Distribution Amount and pursuant to subsection (iii) of Section
5.2(a)(II)), and then from other collections (including interest) on
the Mortgage Loans for such Collection Period, provided, that if
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interest is used to reimburse such Nonrecoverable Advances, the party
entitled to such reimbursement shall notify the Rating Agencies at
least fifteen (15) days prior to such reimbursement, unless
circumstances exist that are extraordinary in the sole discretion of
such party, and (b) if and to the extent that the amount of such a
Nonrecoverable Advance (and Advance Interest thereon), together with
all Nonrecoverable Advances (and Advance Interest thereon) theretofore
reimbursed during such Collection Period, would exceed such principal
on the Mortgage Loans for such Collection Period (and Advance Interest
thereon), the Master Servicer (or the Trustee, if it made the relevant
Advance) is hereby authorized (but shall not be construed to have any
obligation whatsoever), if it elects at its sole option, to abstain
from reimbursing itself (notwithstanding that it is entitled to such
reimbursement) during that Collection Period for all or a portion of
such Nonrecoverable Advance (and Advance Interest thereon), provided
that the aggregate amount that is deferred with respect to all
Nonrecoverable Advances (and Advance Interest thereon) with respect to
all Mortgage Loans for any particular Collection Period is less than
or equal to such excess described above in this clause (b). The Master
Servicer (or the Trustee) or the Special Servicer, in considering
whether an Advance is a Nonrecoverable Advance, shall be entitled to
give due regard to the existence of any outstanding Nonrecoverable
Advance or Workout Delayed Reimbursement Amount with respect to other
Mortgage Loans which, at the time of such consideration, the
reimbursement of which is being deferred or delayed by the Master
Servicer, the Special Servicer or the Trustee because there is
insufficient principal available for such reimbursement, in light of
the fact that proceeds on the related Mortgage Loan are a source of
reimbursement not only for the P&I Advance or Servicing Advance under
consideration, but also as a potential source of reimbursement of such
Nonrecoverable Advance or Workout Delayed Reimbursement Amount which
is or may be being deferred or delayed. If the Master Servicer (or the
Trustee) makes such an election at its sole option to defer
reimbursement with respect to all or a portion of a Nonrecoverable
Advance (and Advance Interest thereon), then such Nonrecoverable
Advance (and Advance Interest thereon) or portion thereof shall
continue to be fully reimbursable in any subsequent Collection Period
to the same extent as set forth above. In connection with a potential
election by the Master Servicer to abstain from the reimbursement of a
particular Nonrecoverable Advance or portion thereof during the
Collection Period for any Distribution Date, the Master Servicer (or
the Trustee) shall further be authorized to wait for principal
collections to be received before making its determination of whether
to abstain from the reimbursement of a particular Nonrecoverable
Advance or portion thereof until the end of the Collection Period.
The reimbursements of Nonrecoverable Advances and Workout-Delayed
Reimbursement Amounts set forth in clauses (iii) and (iv) above shall take
into account the allocation of amounts described in the last sentence of
the definition of "Liquidation Realized Loss."
None of the Master Servicer or the Trustee shall have any
liability whatsoever for making an election, or refraining from making an
election, that is
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authorized under this subsection (II)(iv). The foregoing shall not,
however, be construed to limit any liability that may otherwise be imposed
on such Person for any failure by such Person to comply with the conditions
to making such an election under this subsection (II)(iv) or to comply with
the terms of this subsection (II)(iv) and the other provisions of this
Agreement that apply once such an election, if any, has been made.
Any election by the Master Servicer (or the Trustee) to abstain
from reimbursing itself for any Nonrecoverable Advance (and Advance
Interest thereon) or portion thereof with respect to any Collection Period
shall not be construed to impose on the Master Servicer (or the Trustee)
any obligation to make such an election (or any entitlement in favor of any
Certificateholder or any other Person to such an election) with respect to
any subsequent Collection Period or to constitute a waiver or limitation on
the right of the Master Servicer (or the Trustee) to otherwise be
reimbursed for such Nonrecoverable Advance (and Advance Interest thereon).
Any election by the Master Servicer or the Trustee to abstain from
reimbursing itself for any Nonrecoverable Advance or portion thereof with
respect to any one or more Collection Periods shall not limit the accrual
of Advance Interest on the unreimbursed portion of such Nonrecoverable
Advance for the period prior to the actual reimbursement of such
Nonrecoverable Advance. None of the Master Servicer, the Trustee or the
other parties to this Agreement shall have any liability to one another or
to any of the Certificateholders or any holder of a B Note or Serviced
Companion Mortgage Loan for any such election that such party makes as
contemplated by this subsection or for any losses, damages or other adverse
economic or other effects that may arise from such an election. The
foregoing statements in this paragraph shall not limit the generality of
the statements made in the immediately preceding paragraph. Notwithstanding
the foregoing, neither the Master Servicer nor the Trustee shall have the
right to abstain from reimbursing itself for any Nonrecoverable Advance to
the extent of the amount described in clause (I)(A) of the definition of
Principal Distribution Amount.
(v) Reimbursement Rights of the Master Servicer, Special Servicer
and Trustee Are Senior. Nothing in this Agreement shall be deemed to
create in any Certificateholder a right to prior payment of
distributions over the Master Servicer's, the Special Servicer's or
the Trustee's right to reimbursement for Advances plus Advance
Interest (whether those that constitute Workout-Delayed Reimbursement
Amounts, those that have been the subject of the Master Servicer's
election authorized in subsection (iv) or otherwise).
(b) Scheduled Payments due in a Collection Period succeeding the
Collection Period relating to such Master Servicer Remittance Date, Principal
Prepayments received after the related Collection Period, or other amounts not
distributable on the related Distribution Date, shall be held in the Certificate
Account (or sub-account thereof) and shall be distributed on the Master Servicer
Remittance Date or Dates to which such succeeding Collection Period or Periods
relate, provided, however, that as to the Mortgage Loans set forth on Schedule
XI, for which the Scheduled Payment due each month is due on a Due Date
(including any grace period) that may occur after the end of the Collection
Period in such month, sums received by the Master Servicer with respect to such
Scheduled Payment but after the end of such Collection Period shall be applied
by the Master Servicer to reimburse any related P&I Advance made pursuant to
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Section 5.1(h), and the Master Servicer shall remit to the Distribution Account
on any Master Servicer Remittance Date for a Collection Period any Principal
Prepayments and Balloon Payments received after the end of such Collection
Period but no later than the second Business Day immediately preceding such
Master Servicer Remittance Date on the Mortgage Loans set forth on Schedule XI.
The Master Servicer shall use its best efforts to remit to the Distribution
Account on any Master Servicer Remittance Date for a Collection Period any
Balloon Payments received after the date that is two Business Days immediately
preceding the related Master Servicer Remittance Date and prior to the
Distribution Date. In connection with the deposit of any Balloon Payments to the
Distribution Account in accordance with the immediately preceding sentence, the
Master Servicer shall promptly notify the Paying Agent and the Paying Agent
shall, if it has already reported anticipated distributions to the Depository,
use commercially reasonable efforts to cause the Depository to make the revised
distribution on a timely basis on such Distribution Date. Neither the Master
Servicer nor the Paying Agent shall be liable or held responsible for any
resulting delay or failure (including any claim by the Depository) in the making
of such distribution to Certificateholders and any expenses incurred by the
Master Servicer or the Paying Agent in connection with its efforts to cause the
Depository to make such revised distributions on a timely basis shall be
reimbursed by the Trust. For purposes of the definition of "Available
Distribution Amount" and "Principal Distribution Amount," (i) the Scheduled
Payments relating to the Mortgage Loans set forth on Schedule XI that are
collected after the end of the related Collection Period and (ii) Principal
Prepayments and Balloon Payments relating to the Mortgage Loans set forth on
Schedule XI received after the end of the related Collection Period but prior to
the Master Servicer Remittance Date shall each be deemed to have been collected
in the prior Collection Period.
(c) On each Master Servicer Remittance Date in March of every year
commencing in March 2007, the Master Servicer shall withdraw all amounts then in
the Interest Reserve Account and deposit such amounts into the Distribution
Account.
SECTION 5.3 DISTRIBUTION ACCOUNT AND RESERVE ACCOUNT.
(a) The Paying Agent, on behalf of the Trustee shall establish (with
respect to clause (i), on or prior to the Closing Date, and with respect to
clause (ii), on or prior to the date the Paying Agent determines is necessary)
and maintain in its name, on behalf of the Trustee, (i) an account (the
"Distribution Account"), to be held in trust for the benefit of the Holders
until disbursed pursuant to the terms of this Agreement, titled: "LaSalle Bank
National Association, as Paying Agent on behalf of HSBC Bank USA, National
Association, as Trustee, in trust for the benefit of the Holders of Xxxxxx
Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
2006-HQ9, Distribution Account" and (ii) an account (the "Reserve Account") to
be held in trust for the benefit of the holders of interests in the Trust until
disbursed pursuant to the terms of this Agreement, titled: "LaSalle Bank
National Association, as Paying Agent on behalf of HSBC Bank USA, National
Association, as Trustee, in trust for the benefit of the Holders of Xxxxxx
Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
2006-HQ9, Reserve Account." The Distribution Account and the Reserve Account
shall be Eligible Accounts or in the case of the Reserve Account, a subaccount
of the Distribution Account. Funds in the Reserve Account shall not be invested.
The Distribution Account and Reserve Account shall be held separate and apart
from and shall not be commingled with any other monies including, without
limitation, other monies of the Paying Agent held under this
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Agreement, it being understood that the Reserve Account may be a subaccount of
the Distribution Account.
Funds in the Distribution Account may be invested and, if invested,
shall be invested by, and at the risk of, the Paying Agent in Eligible
Investments selected by the Paying Agent which shall mature, unless payable on
demand, not later than such time on the Distribution Date which will allow the
Paying Agent to make withdrawals from the Distribution Account under Section
5.3(b), and any such Eligible Investment shall not be sold or disposed of prior
to its maturity unless payable on demand. All such Eligible Investments shall be
made in the name of "HSBC Bank USA, National Association, as Trustee for the
Holders of the Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2006-HQ9 and the holder of any related B Note as their
interests may appear." None of the Depositor, the Mortgagors, the Special
Servicer, the Master Servicer, any Primary Servicer, the Paying Agent or the
Trustee shall be liable for any loss incurred on such Eligible Investments.
An amount equal to all income and gain realized from any such
investment shall be paid to the Paying Agent as additional compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Paying Agent which shall deposit the amount of such loss (to the extent
not offset by income from other investments) in the Distribution Account, as the
case may be, out of its own funds immediately as realized. If the Paying Agent
deposits in or transfers to the Distribution Account, as the case may be, any
amount not required to be deposited therein or transferred thereto, it may at
any time withdraw such amount or retransfer such amount from the Distribution
Account, as the case may be, any provision herein to the contrary
notwithstanding.
(b) The Paying Agent shall deposit into the Distribution Account or
the Reserve Account, as applicable, on the Business Day received all moneys
remitted by the Master Servicer pursuant to this Agreement, including P&I
Advances made by the Master Servicer and the Trustee other than Excess
Liquidation Proceeds, into the Distribution Account and all Excess Liquidation
Proceeds into the Reserve Account. The Paying Agent shall deposit (i) amounts
constituting collections of Excess Interest on the Mortgage Loans (other than
the DCT Industrial Portfolio C Note) into the Excess Interest Sub-account, (ii)
amounts constituting collections on the DCT Industrial Portfolio C Note
(including any Excess Interest thereon but excluding any Excess Liquidation
Proceeds thereon) into the DCT Industrial Portfolio C Note Distribution Account
and (iii) amounts constituting collections on the 000 00xx Xxxxxx X Note (but
excluding any Excess Liquidation Proceeds thereon) into the 000 00xx Xxxxxx X
Note Distribution Account. On any Master Servicer Remittance Date, the Master
Servicer shall have no duty to remit to the Distribution Account any amounts
other than amounts held in the Certificate Account and collected during the
related Collection Period as provided in clauses (v) and (xi) of Section 5.2(a)
and the P&I Advance Amount and, on the Master Servicer Remittance Date occurring
in March of any year, commencing in March 2007, amounts held in the Interest
Reserve Account. The Paying Agent shall make withdrawals from the Distribution
Account (including the Excess Interest Sub-account and excluding the DCT
Industrial Portfolio C Note Distribution Account and 000 00xx Xxxxxx X Note
Distribution Account) and the Reserve Account only for the following purposes:
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(i) to withdraw amounts deposited in the Distribution Account and
the Reserve Account in error and pay such amounts to the Persons entitled
thereto;
(ii) to pay any amounts payable to the Master Servicer, any
Primary Servicer, the Special Servicer and the Trustee (including the Trustee's
Fee (other than that portion thereof, that constitutes the Paying Agent's Fee))
and the Paying Agent (including the Paying Agent Fee), or other expenses or
other amounts permitted to be paid hereunder and not previously paid to such
Persons pursuant to Section 5.2;
(iii) to make distributions to the Certificateholders (other than
the Class A-4FL Certificateholders) pursuant to Sections 6.5 and 6.11 and to
make distributions to the Class A-4FL Grantor Trust in respect of the Class
A-4FL Regular Interest, with a credit for the amount of the Net Swap Payment
deemed distributed by the Paying Agent to the Master Servicer's Floating Rate
Account pursuant to Sections 5.3(c) and 6.13; and
(iv) to clear and terminate the Distribution Account and the
Reserve Account pursuant to Section 10.2.
(c) On or before the Closing Date, the Paying Agent shall, and, with
respect to Net Swap Payments, the Master Servicer shall, establish and maintain
separate Floating Rate Accounts for the benefit of the Class A-4FL
Certificateholders. The Floating Rate Account established by the Master Servicer
and referenced in the immediately succeeding sentence shall be described herein
as the "Master Servicer's Floating Rate Account." Each Floating Rate Account
shall (i) at all times be an Eligible Account, (ii) be entitled: "LaSalle Bank
National Association, as Paying Agent on behalf of HSBC Bank USA, National
Association, as Trustee, in trust for Holders of the Xxxxxx Xxxxxxx Capital I
Trust 2006-HQ9, Floating Rate Account, Class A-4FL" and "Xxxxx Fargo Bank,
National Association, as Master Servicer for HSBC Bank USA, National
Association, as Trustee for the Holders of Xxxxxx Xxxxxxx Capital I Trust
2006-HQ9, Floating Rate Account, Class A-4FL", as applicable and (iii) relate
solely to the Class A-4FL Certificates, and the Paying Agent (and, with respect
to the Master Servicer's Floating Rate Account, the Master Servicer) shall have
the exclusive right to withdraw funds therefrom. The Paying Agent shall deposit
into the Floating Rate Account (other than the Master Servicer's Floating Rate
Account) on or prior to each Distribution Date an amount equal to those amounts
payable under the related Class A-4FL Regular Interest (net of any payments to
the Swap Counterparty made pursuant to Section 8.32(b) hereof) pursuant to
Article VI hereof and shall deposit into the Floating Rate Account (other than
the Master Servicer's Floating Rate Account) all amounts received on the Swap
Contract in respect of such Distribution Date. With respect to the Master
Servicer's Floating Rate Account established by the Master Servicer on behalf of
the Trustee, the Paying Agent, pursuant to Section 6.13, shall be deemed to have
transferred, and to have directed the Master Servicer to deposit, into the
Master Servicer's Floating Rate Account on or prior to each Master Servicer
Remittance Date an amount equal to that portion payable under the Class A-4FL
Regular Interest pursuant to Article VI hereof that is equal to the Net Swap
Payments due to the Swap Counterparty under the Swap Contract. Amounts in the
Floating Rate Account shall be held uninvested. The Paying Agent shall make
withdrawals from the Floating Rate Account under its control in the following
order of priority and only for the following purposes:
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(i) to withdraw amounts deposited in the Floating Rate Account in
error and pay such amounts to the Persons entitled thereto;
(ii) to make distributions to the Holders of the Class A-4FL
Certificates pursuant to Section 6.13;
(iii) to withdraw termination payments to purchase a replacement
Swap Contract, if applicable;
(iv) to pay the costs and expenses incurred by the Paying Agent
in connection with enforcing the rights of the Trust under the Swap Contract
only to the extent such costs and expenses were incurred in accordance with
Section 6.13; provided, that the Paying Agent shall only be permitted to incur
and reimburse itself out of the Floating Rate Account with respect to any such
costs and expenses which are in excess of any termination payment received from
the Swap Counterparty and not otherwise applied to offset the expense of
entering into a replacement Swap Contract if it has received the written consent
of 100% of the holders of the Class A-4FL Certificates or has received a Rating
Agency Confirmation (with respect to the Class A-4FL Certificates) from each
Rating Agency (the expense of such confirmation to be paid by the holders of the
Class A-4FL Certificates); and
(v) to clear and terminate the Floating Rate Account pursuant to
Section 9.1.
(d) Pursuant to Section 8.32(b), on the second Business Day prior to
each Distribution Date the Paying Agent shall notify the Master Servicer of the
amount of any payments from the Master Servicer's Floating Rate Account to be
made to the Swap Counterparty on or before 3:00 p.m. New York time on each
Master Servicer Remittance Date, and the Master Servicer shall cause such
payments to be made in accordance with this Agreement and the Swap Contract.
SECTION 5.3A DCT INDUSTRIAL PORTFOLIO C NOTE DISTRIBUTION ACCOUNT.
The Paying Agent shall establish and maintain a segregated trust
account (the "DCT Industrial Portfolio C Note Distribution Account"), to be held
on behalf of the Trustee in trust for the benefit of the Class DP
Certificateholders. The DCT Industrial Portfolio C Note Distribution Account
shall be an Eligible Account. Funds in the DCT Industrial Portfolio C Note
Distribution Account may be invested and, if invested, shall be invested by, and
at the risk of, the Paying Agent in Eligible Investments selected by the Paying
Agent which shall mature, unless payable on demand, not later than the
Distribution Date, and any such Eligible Investment shall not be sold or
disposed of prior to its maturity unless payable on demand. All such Eligible
Investments shall be made in the name of "HSBC Bank USA, National Association,
as Trustee, in trust for the registered holders of Xxxxxx Xxxxxxx Capital I
Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-HQ9, Class DP
Certificates." None of the Depositor, the Trustee, the related Mortgagor, the
Master Servicer or the Special Servicer shall be liable for any loss incurred on
such Eligible Investments. An amount equal to all income and gain realized from
any such investment shall be paid to the Paying Agent as additional compensation
and shall be subject to its withdrawal at any time from time to time. The amount
of any losses incurred in
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respect of such investments shall be for the account of the Paying Agent which
shall deposit the amount of such loss (to the extent not offset by income from
other investments) in the DCT Industrial Portfolio C Distribution Account out of
its own funds immediately as realized. If the Paying Agent deposits in or
transfers to the DCT Industrial Portfolio C Note Distribution Account, as the
case may be, any amount not required to be deposited therein or transferred
thereto, it may at any time withdraw such amount or retransfer such amount from
the DCT Industrial Portfolio C Note Distribution Account any provision herein to
the contrary notwithstanding.
The Paying Agent shall deposit into the DCT Industrial Portfolio C
Note Distribution Account, on the Business Day received, the DCT Industrial
Portfolio C Note Remittance Amount, remitted by the Master Servicer pursuant to
this Agreement and the related Intercreditor Agreement. The Paying Agent shall
make withdrawals from the DCT Industrial Portfolio C Note Distribution Account,
out of payments and other collections received by it with respect to the DCT
Industrial Portfolio C Note or any successor REO Mortgage Loan, only for the
following purposes:
(i) on each Distribution Date, to make distributions to Class DP
Certificateholders pursuant to Section 6.5A or 10.1, as applicable, and to
distribute the amount attributable to Excess Interest on the DCT Industrial
Portfolio C Note to the Special Servicer pursuant to Section 6.5A;
(ii) to pay itself any investment earnings on amounts on deposit in
the DCT Industrial Portfolio C Note Distribution Account and to pay to the
Trustee the Trustee Fee with respect to the DCT Industrial Portfolio C
Note;
(iii) to pay the Depositor, the Trustee, the Paying Agent or any of
their respective directors, officers, employees and agents, as the case may
be, out of general collections on the DCT Industrial Portfolio C Note or
the Mortgaged Property, any amounts payable or reimbursable to any such
Person pursuant to Section 7.6, Section 7.11(a), Section 7.12 and/or
Section 12.5, as applicable;
(iv) to pay, out of general collections on the DCT Industrial
Portfolio C Note or the REO Property, for the cost of the Opinions of
Counsel sought (A) by the Paying Agent as contemplated by Section 12.1, or
(B) by the Trustee as contemplated by Section 14.3 in connection with any
amendment to this Agreement requested by the Trustee, which amendment is in
furtherance of the rights and interests of the Class DP Certificateholders;
(v) to pay any federal, state and local taxes imposed on the Class DP
REMIC, its assets and/or transactions, together with all incidental costs
and expenses, to the extent required to be borne by the Class DP REMIC, as
provided in this Agreement;
(vi) to pay for the cost of the Paying Agent's or the Trustee's, as
applicable, obtaining any information regarding the DCT Industrial
Portfolio C Note and/or the Mortgaged Property that is not included in the
standard reports provided by the Master Servicer or otherwise under this
Agreement and that is required by the Paying Agent or
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the Trustee, as applicable, to perform its respective duties under this
Agreement or satisfy its respective fiduciary obligations to Class DP
Certificateholders;
(vii) to reimburse the Trustee and the Paying Agent for any costs and
expenses incurred by it if it is terminated without cause;
(viii) to pay, out of general collections on the DCT Industrial
Portfolio C Note or the REO Property, any amounts payable by the Trustee,
as holder of the related Mortgage Note, to third parties pursuant to the
related Intercreditor Agreement or this Agreement; and
(ix) to clear and terminate the DCT Industrial Portfolio C Note
Distribution Account at the termination of this Agreement pursuant to
Section 10.2.
If at any time any amount is deposited in the DCT Industrial Portfolio
C Note Distribution Account in error, the Paying Agent is authorized to withdraw
such amount and appropriately apply it for its intended purpose or otherwise pay
it to the party entitled thereto.
SECTION 5.3B 000 00XX XXXXXX X NOTE DISTRIBUTION ACCOUNT.
The Paying Agent shall establish and maintain a segregated trust
account (the "633 00xx Xxxxxx X Note Distribution Account"), to be held on
behalf of the Trustee in trust for the benefit of the Class ST
Certificateholders. The 000 00xx Xxxxxx X Note Distribution Account shall be an
Eligible Account. Funds in the 000 00xx Xxxxxx X Note Distribution Account may
be invested and, if invested, shall be invested by, and at the risk of, the
Paying Agent in Eligible Investments selected by the Paying Agent which shall
mature, unless payable on demand, not later than the Distribution Date, and any
such Eligible Investment shall not be sold or disposed of prior to its maturity
unless payable on demand. All such Eligible Investments shall be made in the
name of "HSBC Bank USA, National Association, as Trustee, in trust for the
registered holders of Xxxxxx Xxxxxxx Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 2006-HQ9, Class ST Certificates." None of the
Depositor, the Trustee, the related Mortgagor, the Master Servicer, the Special
Servicer, the MLMT 2006-C1 Master Servicer or the MLMT 2006-C1 Special Servicer
shall be liable for any loss incurred on such Eligible Investments. An amount
equal to all income and gain realized from any such investment shall be paid to
the Paying Agent as additional compensation and shall be subject to its
withdrawal at any time from time to time. The amount of any losses incurred in
respect of such investments shall be for the account of the Paying Agent which
shall deposit the amount of such loss (to the extent not offset by income from
other investments) in the 000 00xx Xxxxxx X Note Distribution Account out of its
own funds immediately as realized. If the Paying Agent deposits in or transfers
to the 000 00xx Xxxxxx X Note Distribution Account, as the case may be, any
amount not required to be deposited therein or transferred thereto, it may at
any time withdraw such amount or retransfer such amount from the 000 00xx Xxxxxx
X Note Distribution Account any provision herein to the contrary
notwithstanding.
The Paying Agent shall deposit into the 000 00xx Xxxxxx X Note
Distribution Account, on the Business Day received, the 000 00xx Xxxxxx X Note
Remittance Amount remitted by the MLMT 2006-C1 Master Servicer pursuant to the
MLMT 2006-C1 Pooling and Servicing
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Agreement and the related Intercreditor Agreement. The Paying Agent shall make
withdrawals from the 000 00xx Xxxxxx X Note Distribution Account, out of
payments and other collections received by it with respect to the 000 00xx
Xxxxxx X Note or any successor REO Mortgage Loan (as defined in the MLMT 2006-C1
Pooling and Servicing Agreement), only for the following purposes (the following
not constituting an order of priority):
(i) to make distributions to Class ST Certificateholders on each
Distribution Date pursuant to Section 6.5B or 10.1, as applicable;
(ii) to pay itself any investment earnings on amounts on deposit in
the 000 00xx Xxxxxx X Note Distribution Account and to pay to the Trustee
the Trustee Fee;
(iii) to pay the Depositor, the Trustee, the Paying Agent or any of
their respective directors, officers, employees and agents, as the case may
be, out of general collections on the 000 00xx Xxxxxx X Note or the
Mortgaged Property, its allocable share of any amounts payable or
reimbursable to any such Person pursuant to Section 7.6, Section 7.11(a),
Section 7.12 and/or Section 12.5, as applicable;
(iv) to pay, out of general collections on the 000 00xx Xxxxxx X Note
or the REO Property (as defined in the MLMT 2006-C1 Pooling and Servicing
Agreement), for the cost of the Opinions of Counsel sought (A) by the
Paying Agent as contemplated by Section 12.1, or (B) by the Trustee as
contemplated by Section 14.3 in connection with any amendment to this
Agreement requested by the Trustee, which amendment is in furtherance of
the rights and interests of the Class ST Certificateholders;
(v) to pay any federal, state and local taxes imposed on the Class ST
REMIC, its assets and/or transactions, together with all incidental costs
and expenses, to the extent required to be borne by the Class ST REMIC, as
provided in this Agreement;
(vi) to pay for the cost of the Paying Agent's or the Trustee's, as
applicable, obtaining any information regarding the 000 00xx Xxxxxx X Note
and/or the Mortgaged Property that is not included in the standard reports
provided by the MLMT 2006-C1 Master Servicer or otherwise under the MLMT
2006-C1 Pooling and Servicing Agreement and that is required by the Paying
Agent or the Trustee, as applicable, to perform its respective duties under
this Agreement or satisfy its respective fiduciary obligations to Class ST
Certificateholders;
(vii) to reimburse the Trustee and the Paying Agent for any costs and
expenses incurred by it if it is terminated without cause, to the extent
such costs and expenses are allocable to the 000 00xx Xxxxxx X Note;
(viii) to pay, out of general collections on the 000 00xx Xxxxxx X
Note or the REO Property (as defined in the MLMT 2006-C1 Pooling and
Servicing Agreement), any amounts payable by the Trustee, as holder of the
related Mortgage Note, to third parties pursuant to the related
Intercreditor Agreement or the MLMT 2006-C1 Pooling and Servicing
Agreement; and
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(ix) to clear and terminate the 000 00xx Xxxxxx X Note Distribution
Account at the termination of this Agreement pursuant to Section 10.2.
If at any time any amount is deposited in the 000 00xx Xxxxxx X Note
Distribution Account in error, the Paying Agent is authorized to withdraw such
amount and appropriately apply it for its intended purpose or otherwise pay it
to the party entitled thereto.
SECTION 5.4 PAYING AGENT REPORTS.
(a) On or prior to each Distribution Date (in the aggregate and by
Loan Group, as appropriate), based on information provided in monthly reports
prepared by the Master Servicer and the Special Servicer and delivered to the
Paying Agent by the Master Servicer (no later than 1:00 p.m., New York time on
the Report Date), the Paying Agent shall make available to the general public
via its internet website initially located at "www. xxxxxxxx.xxx" (the "Paying
Agent's Website"), (i) the Monthly Certificateholders Report (substantially in
the form of Exhibit M), (ii) a report containing information regarding the
Mortgage Loans as of the end of the related Collection Period, which report
shall contain substantially the categories of information regarding the Mortgage
Loans set forth in Appendix I to the Final Prospectus Supplement and shall be
presented in tabular format substantially similar to the format utilized in such
Appendix I which report may be included as part of the Monthly
Certificateholders Report, (iii) the Loan Periodic Update File, Loan Setup File,
Bond Level File and the Collateral Summary File, (iv) the CMSA Advance Recovery
Report, (v) the supplemental reports set forth in paragraph (b) of the
definition of Unrestricted Servicer Reports and (vi) as a convenience for
interested parties (and not in furtherance of the distribution thereof under the
securities laws), the Final Prospectus Supplement and this Agreement. In
addition, the Paying Agent will make available on its website any reports of
Forms 10-D, 10-K and 8-K promptly after they have been filed with respect to the
Trust through the XXXXX system.
In addition, on or prior to each Distribution Date, based on
information provided in monthly reports prepared by the Master Servicer and the
Special Servicer and delivered to the Paying Agent in accordance herewith, the
Paying Agent shall make available via the Paying Agent's Website, on a
restricted basis, the Restricted Servicer Reports (including the Property File
on or prior to each Distribution Date, commencing in September 2006). The Paying
Agent shall provide access to the Restricted Servicer Reports, upon request, to
each Certificateholder, each of the parties to this Agreement, each of the
Rating Agencies, each of the Financial Market Publishers, each of the
Underwriters, the Operating Adviser, the Placement Agents, any prospective
purchaser of the Certificates and any Certificate Owner upon receipt (which may
be in electronic form) from such person of an Investor Certificate in the form
of Exhibit Y, and any other person upon the direction of the Depositor, the
Placement Agents or any Underwriter. For assistance with the above-mentioned
Paying Agent services, Certificateholders or any party hereto may initially call
(000) 000-0000.
The Paying Agent makes no representations or warranties as to the
accuracy or completeness of any report, document or other information made
available on the Paying Agent's Website and assumes no responsibility therefor.
The Paying Agent shall be entitled to conclusively rely on any information
provided to it by the Master Servicer or the Special Servicer and shall have no
obligation to verify such information and the Paying Agent may
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disclaim responsibility for any information distributed by the Paying Agent for
which it is not the original source. In connection with providing access to the
Paying Agent's Website, the Paying Agent, may require registration and the
acceptance of a disclaimer. None of the Master Servicer, the Special Servicer,
any Primary Servicer or the Paying Agent shall be liable for the dissemination
of information in accordance with this Agreement; provided that this sentence
shall not in any way limit the liability the Paying Agent may otherwise have in
the performance of its duties hereunder.
(b) Subject to Section 8.15, upon advance written request, if required
by federal regulation, of any Certificateholder (or holder of a Serviced
Companion Mortgage Loan or B Note) that is a savings association, bank, or
insurance company, the Paying Agent shall provide (to the extent in its
possession) to each such Certificateholder (or such holder of a Serviced
Companion Mortgage Loan or B Note) such reports and access to non-privileged
information and documentation regarding the Mortgage Loans and the Certificates
as such Certificateholder (or such holder of a Serviced Companion Mortgage Loan
or B Note) may reasonably deem necessary to comply with applicable regulations
of the Office of Thrift Supervision or successor or other regulatory authorities
with respect to investment in the Certificates; provided that the Paying Agent
shall be entitled to be reimbursed by such Certificateholder (or such holder of
a Serviced Companion Mortgage Loan or B Note) for the Paying Agent's actual
expenses incurred in providing such reports and access. The holder of a B Note
shall be entitled to receive information and documentation only with respect to
its related A/B Mortgage Loan and the holder of a Serviced Companion Mortgage
Loan shall be entitled to receive information and documentation only with
respect to its related Loan Pair, pursuant hereto.
(c) Upon written request, the Paying Agent shall send to each Person
who at any time during the calendar year was a Certificateholder of record,
customary information as the Paying Agent deems necessary or desirable for such
Holders to prepare their federal income tax returns.
(d) Reserved
(e) The Paying Agent shall afford the Rating Agencies, the Financial
Market Publishers, the Depositor, the Master Servicer, the Special Servicer, any
Primary Servicer, the Trustee, the Operating Adviser, any Certificateholder, the
Luxembourg Paying Agent, prospective Certificate Owner or any Person reasonably
designated by any Placement Agent, or any Underwriter upon reasonable notice and
during normal business hours, reasonable access to all relevant, non-attorney
privileged records and documentation regarding the applicable Mortgage Loans,
REO Property and all other relevant matters relating to this Agreement, and
access to Responsible Officers of the Paying Agent.
(f) Copies (or computer diskettes or other digital or electronic
formats of such information if reasonably available in lieu of paper copies) of
any and all of the foregoing items of this Section 5.4 shall be made available
by the Paying Agent upon request; provided, however, that the Paying Agent shall
be permitted to require payment by the requesting party (other than the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the Operating
Adviser, any Placement Agent or any Underwriter or any Rating Agency) of a sum
sufficient to cover the
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reasonable expenses actually incurred by the Paying Agent of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(g) The Paying Agent shall make available at its Corporate Trust
Office (either in physical or electronic form), during normal business hours,
upon reasonable advance written notice for review by any Certificateholder, any
Certificate Owner, any prospective Certificate Owner, the Placement Agents, the
Underwriters, each Rating Agency, the Special Servicer, the Depositor, and
solely as with respect to any A/B Mortgage Loan, the holder of the B Note and
solely as with respect to any Loan Pair, the holder of the Serviced Companion
Mortgage Loan, originals or copies of, among other things, any Phase I
Environmental Report or engineering report prepared or appraisals performed in
respect of each Mortgaged Property provided, however, that the Paying Agent
shall be permitted to require payment by the requesting party (other than either
Rating Agency or the Operating Adviser) of a sum sufficient to cover the
reasonable expenses actually incurred by the Paying Agent or the Trustee of
providing access or copies (including electronic or digital copies) of any such
information reasonably requested in accordance with the preceding sentence.
SECTION 5.4A STATEMENTS TO CERTIFICATEHOLDERS; CERTAIN OTHER REPORTS
REGARDING THE DCT INDUSTRIAL PORTFOLIO C NOTE.
The Paying Agent, solely based on information provided to the Paying
Agent by the Master Servicer, shall prepare (or cause to be prepared) and, on
each Distribution Date, provide or make available electronically via its
internet website initially located at xxx.xxxxxxxx.xxx to the Depositor and its
designees, each party to this Agreement, the Placement Agent, the Depository,
each Class DP Certificateholder, the Class DP Certificateholder Representative
(if any) and, upon their written request to the Paying Agent, any Class DP
Certificate Owners of the Book-Entry Certificates who provide the Paying Agent
with a certification in the form of Exhibit Y-3 hereto or any Prospective
Purchaser who provides the Paying Agent with a certification in the form of
Exhibit Y-3 hereto, a statement, substantially in the form of Exhibit M hereto
(the "Paying Agent Report") and which may be included in the Monthly
Certificateholders Report, in respect of the distribution made on such
Distribution Date setting forth, among other things:
(i) the amount of distributions, if any, made on such Distribution
Date to the Holders of the Class DP Certificates that were applied to
reduce the Aggregate Principal Balance thereof;
(ii) the amount of distributions, if any, made on such Distribution
Date to the Holders of the Class DP Certificates allocable to Accrued
Certificate Interest, and Yield Maintenance Charges;
(iii) the DCT Industrial Portfolio C Note Available Distribution
Amount for such Distribution Date;
(iv) the unpaid principal balance of the DCT Industrial Portfolio C
Note as of the close of business on the immediately preceding
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(v) the unpaid principal balance of the DCT Industrial Portfolio
Mortgage Loan and DCT Industrial Portfolio B Note outstanding as of the
close of business on the immediately preceding Determination Date;
(vi) if the DCT Industrial Portfolio C Note is delinquent, whether (A)
it is delinquent one month, (B) it is delinquent two months, (C) it is
delinquent three or more months, (D) foreclosure proceedings have been
commenced, or (E) to the knowledge of the Paying Agent, bankruptcy
proceedings have commenced in respect of the related Mortgagor;
(vii) if the DCT Industrial Portfolio C Note is in material default,
(A) whether a notice of acceleration has been sent to the related Mortgagor
and, if so, the date of such notice, (B) whether a "Phase I" environmental
assessment of the Mortgaged Property has been performed and (C) a brief
description of the status of any foreclosure or bankruptcy proceedings or
any workout or loan modification negotiations with the Mortgagor;
(viii) if a Liquidation Event occurred during the related Collection
Period with respect to the DCT Industrial Portfolio A/B/C Loan or the
Mortgaged Property (other than a payment in full), (A) a brief description
of the nature of the Liquidation Event and (B) a statement regarding the
aggregate amount of Liquidation Proceeds and other amounts received in
connection with such Liquidation Event (separately identifying the portion
thereof allocable to distributions on the Class DP Certificates);
(ix) if the related Mortgaged Property has become REO Property as of
the close of business on the related Determination Date, the book value of
the related Mortgaged Property and the amount of income and other amounts,
if any, received with respect to such Mortgaged Property during the related
Collection Period (separately identifying the portion thereof allocable to
distributions on the Class DP Certificates), and, if available, the
appraised value of such Mortgaged Property as expressed in the most recent
appraisal thereof and the date of such appraisal;
(x) the Principal Balance of the DCT Industrial Portfolio C Note
immediately after such Distribution Date;
(xi) the DCT Industrial Portfolio C Note Accrued Certificate Interest
in respect of the Class DP Certificates for such Distribution Date;
(xii) any unpaid DCT Industrial Portfolio C Note Accrued Certificate
Interest in respect of the Class DP Certificates after giving effect to the
distributions made on such Distribution Date;
(xiii) the Aggregate Principal Balance of the Class DP Certificates
immediately before and immediately after such Distribution Date;
(xiv) any related Appraisal Reduction Amount (including an itemized
calculation thereof) in respect of the DCT Industrial Portfolio C Note as
of the related Determination Date; and
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(xv) the aggregate amount of servicing compensation in respect of the
DCT Industrial Portfolio C (separately identifying the amount of each
category of compensation) paid to the Master Servicer and the Special
Servicer during the related Collection Period.
On each Distribution Date, the Paying Agent shall also provide or make
available electronically via its internet website to each Person who is or
becomes entitled to the Paying Agent Report, each of the CMSA Reports with
respect to the DCT Industrial Portfolio Mortgage Loan delivered to it by the
Master Servicer or the Special Servicer, as well as the CMSA Bond Level File and
the Collateral Summary File with respect to the DCT Industrial Portfolio
Mortgage Loan prepared by the Paying Agent, or otherwise in accordance with the
direction of the Depositor. The Paying Agent shall not be responsible for the
accuracy or completeness of any information supplied to it by the related
Mortgagor or a third party that is included in any reports, statements,
materials or information prepared or provided by the Master Servicer or the
Special Servicer, as applicable. The Paying Agent shall have no obligation to
verify the accuracy or completeness of any information provided by the related
Mortgagor or a third party.
The foregoing reports shall be made available by the Paying Agent via
the Paying Agent's internet website and so long as the Class DP Certificates are
held by a single Holder, the Paying Agent shall also send such reports to such
Holder electronically as directed by such Holder in writing. All the foregoing
reports will be accessible only on a restricted basis and after its receipt from
the Person(s) seeking access of a confirmation executed by the requested Person
substantially in the form of Exhibit Y hereto. The Paying Agent's internet
website will initially be located at xxx.xxxxxxxx.xxx. The Paying Agent will not
make any representations or warranties as to the accuracy or completeness of,
and may disclaim responsibility for, any information made available by the
Paying Agent for which it is not the original source. The Paying Agent may
require the acceptance of a disclaimer and an agreement of confidentiality in
connection with providing access to its internet websites. The Paying Agent
shall not be liable for the dissemination of information in accordance with this
Agreement.
Within a reasonable period of time after the end of each calendar
year, upon request, the Paying Agent shall prepare, or cause to be prepared, and
mail to each Person who at any time during the calendar year was a Class DP
Certificateholder a statement summarizing on an annual basis (if appropriate)
the distributions of interest and Yield Maintenance Charges, and principal to
such Person and such other customary information as the Paying Agent reasonably
deems necessary or desirable for Class DP Certificateholders to prepare their
federal, state and local income tax returns, including the amount of original
issue discount accrued on the Class DP Certificates, if applicable. The
obligations of the Paying Agent in the immediately preceding sentence shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Paying Agent pursuant to any requirements
of the Code from time to time in force.
As soon as practicable following the request of any Class DP
Certificateholder in writing, the Paying Agent shall furnish to such Class DP
Certificateholder such information regarding the DCT Industrial Portfolio C Note
and the Mortgaged Property as such Class DP Certificateholder may reasonably
request and as has been furnished to, or may otherwise be in the possession of,
the Paying Agent. If in connection with such request, the Paying Agent
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procures such information regarding the DCT Industrial Portfolio C Note and the
related Mortgaged Property, any reasonable expenses incurred by the Paying Agent
related to such procurement shall be borne by such Class DP Certificateholder,
including any amounts charged by the Master Servicer or the Special Servicer
under this Agreement to provide such information to the Paying Agent.
If any Class DP Certificate Owner does not receive through the
Depository or any of its Depository Participants any of the statements, reports
and/or other written information described above in Section 5.4A(a) and Section
5.4A(b) that it would otherwise be entitled to receive if it were the Holder of
a Definitive Certificate evidencing its ownership interest in the related Class
DP Certificates, then the Paying Agent shall forward such statements, reports
and/or other written information to such Class DP Certificate Owner, or make
them available as provided above, upon the request of such Class DP Certificate
Owner made in writing to the Corporate Trust Office (accompanied by current
verification of such Class DP Certificate Owner's ownership interest in the form
of Exhibit Y hereto). Such portion of such information as may be agreed upon by
the party requesting such information and the Paying Agent shall be furnished to
any such Person via overnight courier delivery or telecopy from the Paying
Agent; provided that the cost of such overnight courier delivery or telecopy
shall be an expense of the party requesting such information.
SECTION 5.4B STATEMENTS TO CERTIFICATEHOLDERS; CERTAIN OTHER REPORTS
REGARDING THE 000 00XX XXXXXX X NOTE.
Based solely (subject to Section 6.12) on information provided to the
Paying Agent by the MLMT 2006-C1 Master Servicer monthly in accordance with the
MLMT 2006-C1 Pooling and Servicing Agreement in an electronic form mutually
acceptable to the Paying Agent and the MLMT 2006-C1 Master Servicer, the Paying
Agent shall prepare (or cause to be prepared) and, on each Distribution Date,
provide or make available electronically via its internet website initially
located at xxx.xxxxxxxx.xxx to the Depositor and its designees, each party to
this Agreement, the Placement Agent, the Depository, each Class ST
Certificateholder, the Class ST Certificateholder Representative (if any) and,
upon their written request to the Paying Agent, any Class ST Certificate Owners
of the Book-Entry Certificates who provides the Paying Agent with a
certification in the form of Exhibit Y-2 hereto or any Prospective Purchaser who
provides the Paying Agent with a certification in the form of Exhibit Y-2
hereto, a statement, substantially in the form of Exhibit M hereto (the "Paying
Agent Report") and which may be included in the Monthly Certificateholders
Report, in respect of the distribution made on such Distribution Date setting
forth, among other things:
(i) the amount of distributions, if any, made on such Distribution
Date to the Holders of the Class ST Certificates that were applied to
reduce the Aggregate Principal Balance thereof;
(ii) the amount of distributions, if any, made on such Distribution
Date to the Holders of the Class ST Certificates allocable to 000 00xx
Xxxxxx X Note Accrued Certificate Interest, and Yield Maintenance Charges;
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(iii) the 000 00xx Xxxxxx X Note Available Distribution Amount for
such Distribution Date;
(iv) the unpaid principal balance of the 000 00xx Xxxxxx X Note as of
the close of business on the immediately preceding Determination Date;
(v) the unpaid principal balance of the 000 00xx Xxxxxx A Note
outstanding as of the close of business on the immediately preceding
Determination Date;
(vi) if the 000 00xx Xxxxxx X Note is delinquent, whether (A) it is
delinquent one month, (B) it is delinquent two months, (C) it is delinquent
three or more months, (D) foreclosure proceedings have been commenced, or
(E) to the knowledge of the Paying Agent, bankruptcy proceedings have
commenced in respect of the related Mortgagor;
(vii) if the 000 00xx Xxxxxx X Note is in material default, (A)
whether a notice of acceleration has been sent to the related Mortgagor
and, if so, the date of such notice, (B) whether a "Phase I" environmental
assessment of the Mortgaged Property has been performed as contemplated by
the MLMT 2006-C1 Pooling and Servicing Agreement and (C) a brief
description of the status of any foreclosure or bankruptcy proceedings or
any workout or loan modification negotiations with the Mortgagor;
(viii) if a Liquidation Event (as defined in the MLMT 2006-C1 Pooling
and Servicing Agreement) occurred during the related Collection Period with
respect to the 000 00xx Xxxxxx X Note or the Mortgaged Property (other than
a payment in full), (A) a brief description of the nature of the
Liquidation Event (as defined in the MLMT 2006-C1 Pooling and Servicing
Agreement) and (B) a statement regarding the aggregate amount of
Liquidation Proceeds and other amounts received in connection with such
Liquidation Event (as defined in the MLMT 2006-C1 Pooling and Servicing
Agreement) (separately identifying the portion thereof allocable to
distributions on the Class ST Certificates);
(ix) if the related Mortgaged Property has become REO Property (as
defined in the MLMT 2006-C1 Pooling and Servicing Agreement) as of the
close of business on the related Determination Date, the book value of the
related Mortgaged Property and the amount of income and other amounts, if
any, received with respect to such Mortgaged Property during the related
Collection Period (separately identifying the portion thereof allocable to
distributions on the Class ST Certificates), and, if available, the
appraised value of such Mortgaged Property as expressed in the most recent
appraisal thereof and the date of such appraisal;
(x) the Principal Balance (as defined in the MLMT 2006-C1 Pooling and
Servicing Agreement) of the 000 00xx Xxxxxx X Note immediately after such
Distribution Date;
(xi) the 000 00xx Xxxxxx X Note Accrued Certificate Interest in
respect of the Class ST Certificates for such Distribution Date;
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(xii) any unpaid 000 00xx Xxxxxx X Note Accrued Certificate Interest
in respect of the Class ST Certificates after giving effect to the
distributions made on such Distribution Date;
(xiii) the Aggregate Principal Balance of the Class ST Certificates
immediately before and immediately after such Distribution Date;
(xiv) any related Appraisal Reduction (as defined in the MLMT 2006-C1
Pooling and Servicing Agreement) Amount (as defined in the MLMT 2006-C1
Pooling and Servicing Agreement) (including an itemized calculation
thereof) in respect of the 000 00xx Xxxxxx X Note as of the related
Determination Date; and
(xv) the aggregate amount of servicing compensation in respect of the
000 00xx Xxxxxx X Note (separately identifying the amount of each category
of compensation) paid to the XXXX 0000-X0 Master Servicer and the MLMT
2006-C1 Special Servicer during the related Collection Period.
On each Distribution Date, the Paying Agent shall also provide or make
available electronically via its internet website to each Person who is or
becomes entitled to the Paying Agent Report, each of the CMSA Reports with
respect to the 000 00xx Xxxxxx A/B/C Loan (as defined in the MLMT 2006-C1
Pooling and Servicing Agreement) delivered to it by the MLMT 2006-C1 Master
Servicer or the MLMT 2006-C1 Special Servicer, as well as the CMSA Bond Level
File and the Collateral Summary File with respect to the 000 00xx Xxxxxx A/B/C
Loan prepared by the Paying Agent, or otherwise in accordance with the direction
of the Depositor. The Paying Agent shall not be responsible for the accuracy or
completeness of any information supplied to it by the related Mortgagor or a
third party that is included in any reports, statements, materials or
information prepared or provided by the XXXX 0000-X0 Master Servicer or the MLMT
2006-C1 Special Servicer, as applicable. The Paying Agent shall have no
obligation to verify the accuracy or completeness of any information provided by
the related Mortgagor or a third party.
The foregoing reports shall be made available by the Paying Agent via
the Paying Agent's internet website and so long as the Class ST Certificates are
held by a single Holder, the Paying Agent shall also send such reports to such
Holder electronically as directed by such Holder in writing. All the foregoing
reports will be accessible only on a restricted basis and after its receipt from
the Person(s) seeking access of a confirmation executed by the requested Person
substantially in the form of Exhibit Y hereto. The Paying Agent's internet
website will initially be located at xxx.xxxxxxxx.xxx. The Paying Agent will not
make any representations or warranties as to the accuracy or completeness of,
and may disclaim responsibility for, any information made available by the
Paying Agent for which it is not the original source. The Paying Agent may
require the acceptance of a disclaimer and an agreement of confidentiality in
connection with providing access to its internet websites. The Paying Agent
shall not be liable for the dissemination of information in accordance with this
Agreement.
Within a reasonable period of time after the end of each calendar
year, upon request, the Paying Agent shall prepare, or cause to be prepared, and
mail to each Person who at any time during the calendar year was a Class ST
Certificateholder a statement summarizing on
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an annual basis (if appropriate) the distributions of interest and Yield
Maintenance Charges, and principal to such Person and such other customary
information as the Paying Agent reasonably deems necessary or desirable for
Class ST Certificateholders to prepare their federal, state and local income tax
returns, including the amount of original issue discount accrued on the Class ST
Certificates, if applicable. The obligations of the Paying Agent in the
immediately preceding sentence shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Paying
Agent pursuant to any requirements of the Code from time to time in force.
As soon as practicable following the request of any Certificateholder
in writing, the Paying Agent shall furnish to such Class ST Certificateholder
such information regarding the 000 00xx Xxxxxx X Note and the Mortgaged Property
as such Class ST Certificateholder may reasonably request and as has been
furnished to, or may otherwise be in the possession of, the Paying Agent. If in
connection with such request, the Paying Agent procures such information
regarding the 000 00xx Xxxxxx X Note and the related Mortgaged Property, any
reasonable expenses incurred by the Paying Agent related to such procurement
shall be borne by such Class ST Certificateholder, including any amounts charged
by the MLMT 2006-C1 Master Servicer or the MLMT 2006-C1 Special Servicer under
the MLMT 2006-C1 Pooling and Servicing Agreement to provide such information to
the Paying Agent.
If any Class ST Certificate Owner does not receive through the
Depository or any of its Depository Participants any of the statements, reports
and/or other written information described above in Section 5.4B(a) and Section
5.4B(b) that it would otherwise be entitled to receive if it were the Holder of
a Definitive Certificate evidencing its ownership interest in the related Class
ST Certificates, then the Paying Agent shall forward such statements, reports
and/or other written information to such Class ST Certificate Owner, or make
them available as provided above, upon the request of such Class ST Certificate
Owner made in writing to the Corporate Trust Office (accompanied by current
verification of such Class ST Certificate Owner's ownership interest in the form
of Exhibit Y hereto). Such portion of such information as may be agreed upon by
the party requesting such information and the Paying Agent shall be furnished to
any such Person via overnight courier delivery or telecopy from the Paying
Agent; provided that the cost of such overnight courier delivery or telecopy
shall be an expense of the party requesting such information.
SECTION 5.5 PAYING AGENT TAX REPORTS. The Paying Agent shall perform
all reporting and other tax compliance duties that are the responsibility of
each REMIC Pool, the Class A-4FL Grantor Trust and the Excess Interest Grantor
Trust under the Code, REMIC Provisions, or other compliance guidance issued by
the Internal Revenue Service or any state or local taxing authority. Consistent
with this Pooling and Servicing Agreement, the Paying Agent shall provide or
cause to be provided (i) to the United States Treasury or other Persons
(including, but not limited to, the Transferor of a Class R-I, Class R-II or
Class R-III Certificate, to a Disqualified Organization or to an agent that has
acquired a Class R-I, Class R-II or Class R-III Certificate on behalf of a
Disqualified Organization) such information as is necessary for the application
of any tax relating to the transfer of a Class R-I, Class R-II or Class R-III
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions; in
the case of (i), subject to reimbursement of expenses relating thereto in
accordance with Section 7.12. The Master Servicer shall on a timely
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basis provide the Paying Agent with such information concerning the Mortgage
Loans as is necessary for the preparation of the tax or information returns or
receipts of each REMIC Pool, the Class A-4FL Grantor Trust and the Excess
Interest Grantor Trust as the Paying Agent may reasonably request from time to
time. The Special Servicer is required to provide to the Master Servicer all
information in its possession with respect to the Specially Serviced Mortgage
Loans in order for the Master Servicer to comply with its obligations under this
Section 5.5. The Paying Agent shall be entitled to conclusively rely on any such
information provided to it by the Master Servicer or the Special Servicer and
shall have no obligation to verify any such information.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS GENERALLY. Subject to Section 10.2(a) with
respect to the final distribution on the Certificates, on each Distribution
Date, the Paying Agent shall (1) first, withdraw from the Distribution Account
and pay to the Trustee any unpaid fees, expenses and other amounts then required
to be paid pursuant to this Agreement, and then, to the Paying Agent, any unpaid
fees, expenses and other amounts then required to be paid pursuant to this
Agreement, and then at the written direction of the Master Servicer, withdraw
from the Distribution Account and pay to the Master Servicer, any Primary
Servicer and Special Servicer any unpaid servicing compensation or other amounts
currently required to be paid pursuant to this Agreement (to the extent not
previously retained or withdrawn by the Master Servicer from the Certificate
Account), and (2) second, make distributions in the manner and amounts set forth
below.
Each distribution to Holders of Certificates shall be made by check
mailed to such Holder's address as it appears on the Certificate Register of the
Certificate Registrar or, upon written request to the Paying Agent on or prior
to the related Record Date (or upon standing instructions given to the Paying
Agent on the Closing Date prior to any Record Date, which instructions may be
revoked at any time thereafter upon written notice to the Paying Agent five days
prior to the related Record Date) made by a Certificateholder by wire transfer
in immediately available funds to an account specified in the request of such
Certificateholder; provided, that (i) remittances to the Paying Agent shall be
made by wire transfer of immediately available funds to the Distribution Account
and the Reserve Account; and (ii) the final distribution in respect of any
Certificate shall be made only upon presentation and surrender of such
Certificate at such location specified by the Paying Agent in a notice delivered
to Certificateholders pursuant to Section 10.2(a). If any payment required to be
made on the Certificates is to be made on a day that is not a Business Day, then
such payment will be made on the next succeeding Business Day without
compensation for such delay. All distributions or allocations made with respect
to Holders of Certificates of a Class on each Distribution Date shall be made or
allocated among the outstanding Certificates of such Class in proportion to
their respective Percentage Interests.
SECTION 6.2 REMIC I.
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(a) Subject to the provisions of Section 6.2(b) with respect to
amounts collected or deemed collected on or with respect to the Millenium
Portfolio Mortgage Loan and 6.2(c) with respect to amounts collected or deemed
collected on or with respect to the Ritz-Xxxxxxx Xxxx Passu Loan, on each
Distribution Date, the Paying Agent shall be deemed to distribute (with a credit
for an amount equal to any Net Swap Payment that was deemed distributed by the
Paying Agent to the Master Servicer's Floating Rate Account on the immediately
preceding Master Servicer Remittance Date pursuant to Section 8.32(b)) to itself
on behalf of the Trustee, as holder of the REMIC I Regular Interests (other than
the REMIC I MP IO Component Regular Interest, the REMIC I MP Non-IO Component
Regular Interest, the REMIC I RC IO Component Regular Interest and the REMIC I
RC Non-IO Component Regular Interest), for the following purposes and in the
following order of priority:
(i) from the portion of the Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to each Majority Mortgage Loan (other than the
Millenium Portfolio Mortgage Loan and the Ritz-Xxxxxxx Xxxx Passu Loan) or
related REO Property, Distributable Certificate Interest to each Corresponding
REMIC I Regular Interest;
(ii) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected on or with respect to
each Majority Mortgage Loan (other than the Millenium Portfolio Mortgage Loan
and the Ritz-Xxxxxxx Xxxx Passu Loan) or related REO Property, principal to the
Corresponding REMIC I Regular Interest, until the Certificate Balance thereof is
reduced to zero;
(iii) any remaining amount of the Available Distribution Amount
with respect to each Majority Mortgage Loan (other than with respect to the
Millenium Portfolio Mortgage Loan and the Ritz-Xxxxxxx Xxxx Passu Loan and any
Excess Interest) or related REO Property, to reimburse any Realized Losses
previously allocated to the REMIC I Regular Interests, plus interest on such
Realized Losses at the related REMIC I Net Mortgage Rate previously allocated
thereto; and
(iv) thereafter, to the Class R-I Certificateholders at such time
as the Certificate Balance of all Classes of REMIC I Regular Interests (other
than the REMIC I MP IO Component Regular Interest, the REMIC I MP Non-IO
Component Regular Interest, the REMIC I RC IO Component Regular Interest and the
REMIC I RC Non-IO Component Regular Interest) have been reduced to zero, and
Realized Losses (including interest thereon) previously allocated thereto have
been reimbursed to the Holders of the REMIC I Regular Interests (other than
REMIC I MP IO Component Regular Interest, the REMIC I MP Non-IO Component
Regular Interest, the REMIC I RC IO Component Regular Interest and the REMIC I
RC Non-IO Component Regular Interest), any amounts of the Available Distribution
Amount remaining with respect to each Majority Mortgage Loan (other than with
respect to Millenium Portfolio Mortgage Loan, the Ritz-Xxxxxxx Xxxx Passu Loan
and any Excess Interest) or related REO Property, to the extent of the Trust's
interest therein.
(b) On each Distribution Date, the Paying Agent shall be deemed to
distribute to itself on behalf of the Trustee, as holder of the REMIC I MP IO
Component Regular Interest,
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the REMIC I MP Non-IO Component Regular Interest and the Class R-I Certificates,
for the following purposes and in the following order of priority:
(i) from the portion of Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to the Millenium Portfolio Mortgage Loan or related
REO Property, Distributable Certificate Interest to the REMIC I MP IO Component
Regular Interest;
(ii) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected on or with respect to
the Millenium Portfolio Mortgage Loan or related REO Property, principal to the
REMIC I MP IO Component, until the Certificate Balance thereof is reduced to
zero;
(iii) from the portion of Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to the Millenium Portfolio Mortgage Loan or related
REO Property, Distributable Certificate Interest to the REMIC I MP Non-IO
Component Regular Interest;
(iv) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected on or with respect to
the Millenium Portfolio Mortgage Loan or related REO Property, principal to the
REMIC I MP Non-IO Component, until the Certificate Balance thereof is reduced to
zero;
(v) any remaining amount of the Available Distribution Amount
with respect to the Millenium Portfolio Mortgage Loan (other than Excess
Interest) or related REO Property, to reimburse any Realized Losses previously
allocated to the REMIC I MP IO Component Regular Interest, plus interest on such
Realized Losses at the related REMIC I Net Mortgage Rate previously allocated
thereto;
(vi) any remaining amount of the Available Distribution Amount
with respect to the Millenium Portfolio Mortgage Loan (other than Excess
Interest) or related REO Property, to reimburse any Realized Losses previously
allocated to the REMIC I MP Non-IO Component Regular Interest, plus interest on
such Realized Losses at the related REMIC I Net Mortgage Rate previously
allocated thereto; and
(vii) thereafter, to the Class R-I Certificateholders at such
time as the Certificate Balance of the REMIC I MP IO Component Regular Interest
and the REMIC I MP Non IO Component Regular Interest has been reduced to zero,
and Realized Losses previously allocated thereto (including interest on such
Realized Losses) have been reimbursed to the Holders thereof, any amounts of the
Available Distribution Amount with respect to the Millenium Portfolio Mortgage
Loan (other than Excess Interest) or related REO Property, to the extent of the
Trust's interest therein.
(c) On each Distribution Date, the Paying Agent shall be deemed to
distribute to itself on behalf of the Trustee, as holder of the REMIC I RC IO
Component Regular Interest, the REMIC I RC Non-IO Component Regular Interest and
the Class R-I Certificates, for the following purposes and in the following
order of priority:
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(i) from the portion of Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to the Ritz-Xxxxxxx Xxxx Passu Loan or related REO
Property, Distributable Certificate Interest to the REMIC I RC IO Component
Regular Interest;
(ii) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected on or with respect to
the Ritz-Xxxxxxx Xxxx Passu Loan or related REO Property, principal to the REMIC
I RC IO Component, until the Certificate Balance thereof is reduced to zero;
(iii) from the portion of Available Distribution Amount
attributable to interest (other than Excess Interest) collected or deemed
collected on or with respect to the Ritz-Xxxxxxx Xxxx Passu Loan or related REO
Property, Distributable Certificate Interest to the REMIC I RC Non-IO Component
Regular Interest;
(iv) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected on or with respect to
the Ritz-Xxxxxxx Xxxx Passu Loan or related REO Property, principal to the REMIC
I RC Non-IO Component, until the Certificate Balance thereof is reduced to zero;
(v) any remaining amount of the Available Distribution Amount
with respect to the Ritz-Xxxxxxx Xxxx Passu Loan (other than Excess Interest) or
related REO Property, to reimburse any Realized Losses previously allocated to
the REMIC I RC IO Component Regular Interest, plus interest on such Realized
Losses at the related REMIC I Net Mortgage Rate previously allocated thereto;
(vi) any remaining amount of the Available Distribution Amount
with respect to the Ritz-Xxxxxxx Xxxx Passu Loan (other than Excess Interest) or
related REO Property, to reimburse any Realized Losses previously allocated to
the REMIC I RC Non-IO Component Regular Interest, plus interest on such Realized
Losses at the related REMIC I Net Mortgage Rate previously allocated thereto;
and
(vii) thereafter, to the Class R-I Certificateholders at such
time as the Certificate Balance of the REMIC I RC IO Component Regular Interest
and the REMIC I RC Non IO Component Regular Interest has been reduced to zero,
and Realized Losses previously allocated thereto (including interest on such
Realized Losses) have been reimbursed to the Holders thereof, any amounts of the
Available Distribution Amount with respect to the Ritz-Xxxxxxx Xxxx Passu Loan
(other than Excess Interest) or related REO Property, to the extent of the
Trust's interest therein.
SECTION 6.3 REMIC II.
(a) On each Distribution Date, the Paying Agent shall be deemed to
distribute (with a credit for an amount equal to any Net Swap Payment that was
deemed distributed by the Paying Agent to the Master Servicer's Floating Rate
Account on the immediately preceding Master Servicer Remittance Date pursuant to
Section 8.32(b)) to itself on behalf of the Trustee, as holder of the REMIC II
Regular Interests, amounts distributable to any Class of Principal Balance
Certificates (other than the Class DP and Class ST Certificates), the Class X-MP
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Certificates or the Class X-RC Certificates, or in the case of the Class A-4FL
Certificates, distributable to the Class A-4FL Regular Interest, pursuant to
Section 6.5 or Section 10.1 to its Corresponding REMIC II Regular Interest set
forth in the Preliminary Statement hereto.
(b) All distributions made in respect of the Class X Certificates on
each Distribution Date pursuant to Section 6.5 or Section 10.1, and allocable to
any particular REMIC III Regular Interest in accordance with the definition of
"Class X Strip Rate", shall be deemed to have first been distributed from REMIC
II to REMIC III in respect of such Class's Corresponding REMIC II Regular
Interest. All distributions of reimbursements of Realized Losses made in respect
of any Class of Principal Balance Certificates (other than the Class DP and
Class ST Certificates) or, in the case of the Class A-4FL Certificates, in
respect of the Class A-4FL Regular Interest on each Distribution Date pursuant
to Section 6.5 shall be deemed to have first been distributed from REMIC II to
REMIC III in respect of its Corresponding REMIC II Regular Interest set forth in
the Preliminary Statement hereto. Any amounts remaining in the Distribution
Account with respect to REMIC II on any Distribution Date after the foregoing
distributions shall be distributed to the holders of the Class R-II
Certificates.
SECTION 6.4 RESERVED.
SECTION 6.5 REMIC III AND EXCESS INTEREST GRANTOR TRUST.
(a) On each Distribution Date, the Paying Agent shall withdraw from
the Distribution Account an amount equal to the Available Distribution Amount
and shall distribute such amount (other than the amount attributable to any
Excess Liquidation Proceeds which shall be distributed in accordance with
Section 6.5(b), any Excess Interest, which shall be distributed in accordance
with Section 6.5(c), and an amount equal to any Net Swap Payment that was deemed
distributed in respect of the Class A-4FL Regular Interest on the immediately
preceding Master Servicer Remittance Date pursuant to Section 8.32(b)), any
Class X-MP Strip Amount for such Distribution Date which shall be distributed in
accordance with Section 6.5(d) or any Class X-RC Strip Amount for such
Distribution Date which shall be distributed in accordance with Section 6.5(e))
in the following amounts and order of priority:
(i) to the Holders of the Class A-1 Certificates, Class A-1A
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-AB
Certificates, Class A-4 Certificates, Class A-4FL Regular Interest and Class X
Certificates, concurrently,
(A) to the Holders of the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-AB Certificates and
Class A-4 Certificates and the Class A-4FL Regular Interest, the
Distributable Certificate Interest in respect of each such Class for
such Distribution Date (which shall be payable from amounts in the
Available Distribution Amount attributable to Loan Group 1), pro rata
in proportion to the Distributable Certificate Interest payable in
respect of each such Class;
(B) to the Holders of the Class A-1A Certificates, the
Distributable Certificate Interest in respect of such Class for such
Distribution Date (which
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shall be payable from amounts in the Available Distribution Amount
attributable to Loan Group 2); and
(C) to the Holders of the Class X Certificates, the Distributable
Certificate Interest in respect of such Class for such Distribution
Date;
provided, however, that if the portion of Available Distribution
Amount attributable to either Loan Group is insufficient to pay in full the
total amount of interest to be distributed with respect to any of the Class A
Senior Certificates or the Class X Certificates on such Distribution Date as
described above, the Available Distribution Amount will be allocated among all
those Classes pro rata in proportion to the respective amounts of interest
payable thereon for such Distribution Date, without regard to Loan Group;
(ii) concurrently:
(A) to the Holders of the Class A-1, Class A-2, Class A-3, Class
A-AB Certificates and Class A-4 Certificates and the Class A-4FL
Regular Interest: first to the Holders of the Class A-AB Certificates,
the Loan Group 1 Principal Distribution Amount for such Distribution
Date and, after the Certificate Balance of the Class A-1A Certificates
have been reduced to zero, the Loan Group 2 Principal Distribution
Amount for such Distribution Date, until the Aggregate Certificate
Balance of the Class A-AB Certificates has been reduced to the Planned
Principal Balance for such Distribution Date; the portion of the Loan
Group 2 Principal Distribution Amount distributed hereunder will be
reduced by any portion thereof distributed to the Holders of the Class
A-1A Certificates; second upon payment to the Class A-AB Certificates
of the above distribution, to the Holders of the Class A-1
Certificates, the Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Certificate Balance of the Class A-1A
Certificates has been reduced to zero, the Loan Group 2 Principal
Distribution Amount for such Distribution Date, until the Aggregate
Certificate Balance of the Class A-1 Certificates has been reduced to
zero; the portion of the Loan Group 1 Principal Distribution Amount
and Loan Group 2 Principal Distribution Amount distributed hereunder
will be reduced by any portion thereof distributed to the Holders of
the Class A-AB Certificates (in respect of the Planned Principal
Balance) and (solely with respect to the Loan Group 2 Principal
Distribution Amount) Class A-1A Certificates; third upon payment in
full of the Aggregate Certificate Balance of the Class A-1
Certificates, to the Holders of the Class A-2 Certificates, the Loan
Group 1 Principal Distribution Amount for such Distribution Date and,
after the Certificate Balance of the Class A-1A Certificates has been
reduced to zero, the Loan Group 2 Principal Distribution Amount, until
the Aggregate Certificate Balance of the Class A-2 Certificates has
been reduced to zero; the portion of the Loan Group 1 Principal
Distribution Amount and Loan Group 2 Principal Distribution Amount
distributed hereunder will be reduced by any portion thereof
distributed to the Holders of the Class A-AB Certificates (in respect
of the Planned Principal Balance), Class A-1 Certificates and (solely
with respect to the Loan Group 2 Principal Distribution Amount) Class
A-1A Certificates; fourth upon payment in full of the Aggregate
Certificate Balance of
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the Class A-2 Certificates, to the Holders of the Class A-3
Certificates, the Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Certificate Balance of the Class A-1A
Certificates has been reduced to zero, the Loan Group 2 Principal
Distribution Amount, until the Aggregate Certificate Balance of the
Class A-3 Certificates has been reduced to zero; the portion of the
Loan Group 1 Principal Distribution Amount and Loan Group 2 Principal
Distribution Amount distributed hereunder will be reduced by any
portion thereof distributed to the Holders of the Class A-AB
Certificates (in respect of the Planned Principal Balance), Class A-1
Certificates, Class A-2 Certificates and (solely with respect to the
Loan Group 2 Principal Distribution Amount) Class A-1A Certificates;
fifth upon payment in full of the Aggregate Certificate Balance of the
Class A-3 Certificates, to the Holders of the Class A-AB Certificates,
the Loan Group 1 Principal Distribution Amount for such Distribution
Date and, after the Certificate Balance of the Class A-1A Certificates
has been reduced to zero, the Loan Group 2 Principal Distribution
Amount, until the Aggregate Certificate Balance of the Class A-AB
Certificates has been reduced to zero; the portion of the Loan Group 1
Principal Distribution Amount and Loan Group 2 Principal Distribution
Amount distributed hereunder will be reduced by any portion thereof
distributed to the Holders of the Class A-AB Certificates (in respect
of the Planned Principal Balance), Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates and (solely with respect to the
Loan Group 2 Principal Distribution Amount) Class A-1A Certificates;
sixth upon payment in full of the Aggregate Certificate Balance of the
Class A-AB and Class A-3 Certificates, to the Holders of the Class A-4
Certificates and the Class A-4FL Regular Interest, pro rata, the Loan
Group 1 Principal Distribution Amount for such Distribution Date and,
after the Certificate Balance of the Class A-1A Certificates has been
reduced to zero, the Loan Group 2 Principal Distribution Amount, until
the Aggregate Certificate Balance of the Class A-4 Certificates and
the Class A-4FL Regular Interest has been reduced to zero; the portion
of the Loan Group 1 Principal Distribution Amount and Loan Group 2
Principal Distribution Amount distributed hereunder will be reduced by
any portion thereof distributed to the Holders of the Class A-AB
Certificates, Class A-1 Certificates, Class A-2 Certificates, Class
A-3 Certificates and (solely with respect to the Loan Group 2
Principal Distribution Amount) Class A-1A Certificates; and
(B) to the Holders of the Class A-1A Certificates, the Loan Group
2 Principal Distribution Amount for such Distribution Date and, after
the Certificate Balance of the Class A-4 Certificates and Class A-4FL
Regular Interest has been reduced to zero, the Loan Group 1 Principal
Distribution Amount for such Distribution Date, until the Aggregate
Certificate Balance of the Class A-1A Certificates has been reduced to
zero, the portion of the Loan Group 1 Principal Distribution Amount
will be reduced by any portion thereof distributed to the Holders of
the Class A-AB, Class A-1, Class A-2, Class A-3, and Class A-4
Certificates and Class A-4FL Regular Interest;
(iii) to the Holders of the Class A Senior Certificates (other
than the Class A-4FL Certificates), the Class A-4FL Regular Interest and Class X
Certificates, pro rata in
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proportion to their respective entitlements to reimbursement described in this
clause (treating principal and interest losses separately), to reimburse any
Realized Losses previously allocated thereto and not previously fully reimbursed
(in the case of the Class X Certificates, insofar as Realized Losses have
resulted in shortfalls in the amount of interest distributed other than by
reason of a reduction of the Notional Amount), plus one month's interest at the
applicable Pass-Through Rate on such Realized Losses;
(iv) to the Holders of the Class A-M Certificates, Distributable
Certificate Interest for such Distribution Date;
(v) upon payment in full of the Certificate Balance of the Class
A-4 and Class A-1A Certificates and Class A-4FL Regular Interest, to the Holders
of the Class A-M Certificates, the Principal Distribution Amount for such
Distribution Date (reduced by any prior distributions thereof hereunder), until
the Certificate Balance of the Class A-M Certificates has been reduced to zero;
(vi) to the Holders of the Class A-M Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(vii) to the Holders of the Class A-J Certificates, Distributable
Certificate Interest for such Distribution Date;
(viii) upon payment in full of the Certificate Balance of the
Class A-M Certificates, to the Holders of the Class A-J Certificates, the
Principal Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class A-J
Certificates has been reduced to zero;
(ix) to the Holders of the Class A-J Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(x) to the Holders of the Class B Certificates, Distributable
Certificate Interest for such Distribution Date;
(xi) upon payment in full of the Certificate Balance of the Class
A-J Certificates, to the Holders of the Class B Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class B
Certificates has been reduced to zero;
(xii) to the Holders of the Class B Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xiii) to the Holders of the Class C Certificates, Distributable
Certificate Interest for such Distribution Date;
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(xiv) upon payment in full of the Certificate Balance of the
Class B Certificates, to the Holders of the Class C Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class C
Certificates has been reduced to zero;
(xv) to the Holders of the Class C Certificates, to reimburse any
Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xvi) to the Holders of the Class D Certificates, Distributable
Certificate Interest for such Distribution Date;
(xvii) upon payment in full of the Certificate Balance of the
Class C Certificates, to the Holders of the Class D Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class D
Certificates has been reduced to zero;
(xviii) to the Holders of the Class D Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xix) to the Holders of the Class E Certificates, Distributable
Certificate Interest for such Distribution Date;
(xx) upon payment in full of the Certificate Balance of the Class
D Certificates, to the Holders of the Class E Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class E
Certificates has been reduced to zero;
(xxi) to the Holders of the Class E Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxii) to the Holders of the Class F Certificates, Distributable
Certificate Interest for such Distribution Date;
(xxiii) upon payment in full of the Certificate Balance of the
Class E Certificates, to the Holders of the Class F Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class F
Certificates has been reduced to zero;
(xxiv) to the Holders of the Class F Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxv) to the Holders of the Class G Certificates, Distributable
Certificate Interest for such Distribution Date;
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(xxvi) upon payment in full of the Certificate Balance of the
Class F Certificates, to the Holders of the Class G Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class G
Certificates has been reduced to zero;
(xxvii) to the Holders of the Class G Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxviii) to the Holders of the Class H Certificates,
Distributable Certificate Interest for such Distribution Date;
(xxix) upon payment in full of the Certificate Balance of the
Class G Certificates, to the Holders of the Class H Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class H
Certificates has been reduced to zero;
(xxx) to the Holders of the Class H Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxxi) to the Holders of the Class J Certificates, Distributable
Certificate Interest for such Distribution Date;
(xxxii) upon payment in full of the Certificate Balance of the
Class H Certificates, to the Holders of the Class J Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class J
Certificates has been reduced to zero;
(xxxiii) to the Holders of the Class J Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxxiv) to the Holders of the Class K Certificates, Distributable
Certificate Interest for such Distribution Date;
(xxxv) upon payment in full of the Certificate Balance of the
Class J Certificates, to the Holders of the Class K Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class K
Certificates has been reduced to zero;
(xxxvi) to the Holders of the Class K Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xxxvii) to the Holders of the Class L Certificates,
Distributable Certificate Interest for such Distribution Date;
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(xxxviii) upon payment in full of the Certificate Balance of the
Class K Certificates, to the Holders of the Class L Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class L
Certificates has been reduced to zero;
(xxxix) to the Holders of the Class L Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xl) to the Holders of the Class M Certificates, Distributable
Certificate Interest for such Distribution Date;
(xli) upon payment in full of the Certificate Balance of the
Class L Certificates, to the Holders of the Class M Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class M
Certificates has been reduced to zero;
(xlii) to the Holders of the Class M Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xliii) to the Holders of the Class N Certificates, Distributable
Certificate Interest for such Distribution Date;
(xliv) upon payment in full of the Certificate Balance of the
Class M Certificates, to the Holders of the Class N Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class N
Certificates has been reduced to zero;
(xlv) to the Holders of the Class N Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xlvi) to the Holders of the Class O Certificates, Distributable
Certificate Interest for such Distribution Date;
(xlvii) upon payment in full of the Certificate Balance of the
Class N Certificates, to the Holders of the Class O Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class O
Certificates has been reduced to zero;
(xlviii) to the Holders of the Class O Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(xlix) to the Holders of the Class P Certificates, Distributable
Certificate Interest for such Distribution Date;
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(l) upon payment in full of the Certificate Balance of the Class
O Certificates, to the Holders of the Class P Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class P
Certificates has been reduced to zero;
(li) to the Holders of the Class P Certificates, to reimburse any
Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(lii) to the Holders of the Class Q Certificates, Distributable
Certificate Interest for such Distribution Date;
(liii) upon payment in full of the Certificate Balance of the
Class P Certificates, to the Holders of the Class Q Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class Q
Certificates has been reduced to zero;
(liv) to the Holders of the Class Q Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses;
(lv) to the Holders of the Class S Certificates, Distributable
Certificate Interest for such Distribution Date;
(lvi) upon payment in full of the Certificate Balance of the
Class Q Certificates, to the Holders of the Class S Certificates, the Principal
Distribution Amount for such Distribution Date (reduced by any prior
distributions thereof hereunder), until the Certificate Balance of the Class S
Certificates has been reduced to zero;
(lvii) to the Holders of the Class S Certificates, to reimburse
any Realized Losses previously allocated thereto and not previously fully
reimbursed, plus one month's interest at the applicable Pass-Through Rate on
such Realized Losses; and
(lviii) to the Holders of the Class R-III Certificates at such
time as the Certificate Balances of all Classes of REMIC III Regular
Certificates and the Class A-4FL Regular Interest have been reduced to zero, and
Realized Losses (including interest thereon) previously allocated to each Holder
have been reimbursed to the Holders of the REMIC III Regular Certificates and
the Class A-4FL Regular Interest, any amounts remaining of Available
Distribution Amount on deposit in the Distribution Account.
Notwithstanding the foregoing, on each Distribution Date occurring on
or after the earliest date, if any, upon which the Certificate Balances of all
the Classes of Subordinate Certificates have been reduced to zero or the
aggregate Appraisal Reduction in effect is greater than or equal to the
Certificate Balances of all the Classes of Subordinate Certificates, the
Principal Distribution Amount will be distributed, first, to the Holders of the
Class A-1, Class A-1A, Class A-2, Class A-3, Class A-AB and Class A-4
Certificates and the Class A-4FL Regular Interest, pro rata, based on their
respective Certificate Balances, in reduction of their respective Certificate
Balances, until the Certificate Balance of each such Class is reduced to zero;
and,
169
second, to the Holders of the Class A-1, Class A-1A, Class A-2, Class A-3, Class
A-AB and Class A-4 Certificates and the Class A-4FL Regular Interest, pro rata,
based on the respective amounts of unreimbursed Realized Losses previously
allocated to each such Class, plus one month's interest on such Realized Losses
at the applicable Pass-Through Rate. A similar rule shall apply to the
distribution of the Principal Distribution Amount to REMIC II Regular Interests.
(b) On each Distribution Date, the Paying Agent shall withdraw amounts
in the Reserve Account and shall pay the Certificateholders and the Class A-4FL
Regular Interest on such Distribution Date such amounts in the following
priority:
(i) first, from amounts in the Reserve Account with respect to
any Majority Mortgage Loan, to reimburse Holders of the Principal Balance
Certificates (other than the Class A-4FL, Class DP and Class ST Certificates)
and the Class A-4FL Regular Interest, in order of alphabetical Class
designation, provided that the Class A-M Certificates will be senior in right to
the Class A-J Certificates) for any, and to the extent of, Unpaid Interest then
owing to such Classes;
(ii) second, from amounts in the Reserve Account with respect to
any Majority Mortgage Loan, to reimburse the Holders of the Principal Balance
Certificates (other than the Class A-4FL, Class DP and Class ST Certificates)
and the Class A-4FL Regular Interest in order of alphabetical Class designation,
provided that the Class A-M Certificates will be senior in right to the Class
A-J Certificates) for any, and to the extent of, Realized Losses previously
allocated to them;
(iii) third, upon the reduction of the Aggregate Certificate
Balance of the Principal Balance Certificates (other than the Class A-4FL, Class
DP and Class ST Certificates) and the Class A-4FL Regular Interest to zero, to
pay any amounts remaining on deposit in such account, other than amounts with
respect to the DCT Industrial Portfolio C Note and the 000 00xx Xxxxxx X Note,
to the Special Servicer as additional Special Servicer Compensation;
(iv) fourth, from amounts in the Reserve Account with respect to
the DCT Industrial Portfolio C Note, to reimburse Holders of the Class DP
Certificates, for any, and to the extent of, Unpaid Interest then owing to such
Class;
(v) fifth, from amounts in the Reserve Account with respect to
the DCT Industrial Portfolio C Note, to reimburse the Holders of the Class DP
Certificates for any, and to the extent of Realized Losses previously allocated
to them;
(vi) sixth, upon the reduction of the Aggregate Certificate
Balance of the Class DP Certificates to zero, to pay any amounts remaining on
deposit in such account with respect to the DCT Industrial Portfolio C Note to
the Special Servicer as additional Special Servicer Compensation;
(vii) seventh, from amounts in the Reserve Account with respect
to the 000 00xx Xxxxxx X Note, to reimburse Holders of the Class ST Certificates
(in order of
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alphabetical Class designation), for any, and to the extent of, Unpaid Interest
then owing to such Classes;
(viii) eighth, from amounts in the Reserve Account with respect
to the 000 00xx Xxxxxx X Note, to reimburse the Holders of the Class ST
Certificates (in order of alphabetical class designation) for any, and to the
extent of Realized Losses previously allocated to them; and
(ix) ninth, upon the reduction of the Aggregate Certificate
Balance of the Class ST Certificates to zero, to pay any amounts remaining on
deposit in such account with respect to the 000 00xx Xxxxxx X Note to the
Special Servicer as additional Special Servicer Compensation.
Amounts reimbursed to Holders of REMIC III Regular Certificates and
the Class A-4FL Regular Interest pursuant to Section 6.5(b)(i) and (ii) shall be
deemed to be applied to reimbursement of Unpaid Interest and Realized Losses
previously allocated to the Corresponding REMIC II Regular Interests.
(c) On each Distribution Date, the Paying Agent shall withdraw from
the Excess Interest Sub-account any Excess Interest on deposit therein, and the
Paying Agent shall pay such Excess Interest on such Distribution Date to the
Class T Certificates.
(d) On each Distribution Date, the Paying Agent shall withdraw from
the Distribution Account an amount equal to the Class X-MP Strip Amount for such
Distribution Date and shall distribute such amount to the Holders of the Class
X-MP Certificates.
(e) On each Distribution Date, the Paying Agent shall withdraw from
the Distribution Account an amount equal to the Class X-RC Strip Amount for such
Distribution Date and shall distribute such amount to the Holders of the Class
X-RC Certificates.
SECTION 6.5A DISTRIBUTIONS ON THE CLASS DP CERTIFICATES.
(a) On each Distribution Date, the Paying Agent shall withdraw from
the DCT Industrial Portfolio C Note Distribution Account an amount equal to the
DCT Industrial Portfolio C Note Available Distribution Amount and shall
distribute such amount (other than the amount attributable to Excess Liquidation
Proceeds which shall be distributed in accordance with Section 6.5(b) and the
amount attributable to Excess Interest on such DCT Industrial Portfolio C Note
which shall be paid on such Distribution Date to the Special Servicer as
additional compensation) in the following amounts and order of priority:
(i) to pay interest to the Holders of the Class DP Certificates, up to
an amount equal to the DCT Industrial Portfolio Distributable Certificate
Interest Amount for the related Interest Accrual Period and, to the extent
not previously paid to such Holders, for all prior Interest Accrual
Periods;
(ii) to pay principal, if any, to the Holders of the Class DP
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class DP Certificates for such Distribution Date and, to the
extent not previously paid to such
171
Holders, for all prior Distribution Dates (or, if the related Mortgaged
Property has become an REO Property, up to an amount equal to the entire
Aggregate Certificate Balance of the Class DP Certificates immediately
prior to such Distribution Date);
(iii) to reimburse the Holders of the Class DP Certificates for
unreimbursed cure payments on the DCT Industrial Portfolio Mortgage Loan or
the DCT Industrial Portfolio B Note previously made by such Holders, if
applicable; and
(iv) to the Holders of the Class R-I Certificates (in respect of the
Class R-DP Residual Interest) at such time as the Aggregate Certificate
Balances of all Classes of Class DP Certificates have been reduced to zero,
and Realized Losses previously allocated to each Holder have been
reimbursed to the Holders of the Class DP Certificates, any amounts
remaining on deposit in the DCT Industrial Portfolio C Note Distribution
Account.
SECTION 6.5B DISTRIBUTIONS ON THE CLASS ST CERTIFICATES.
(a) On each Distribution Date, the Paying Agent shall withdraw from
the 000 00xx Xxxxxx X Note Distribution Account an amount equal to the 000 00xx
Xxxxxx X Note Available Distribution Amount and shall distribute such amount
(other than the amount attributable to Excess Liquidation Proceeds which shall
be distributed in accordance with Section 6.5(b) and any amount attributable to
Excess Interest which shall be distributed in accordance with Section 6.5(c)) in
the following amounts and order of priority:
(i) to pay interest to the Holders of the Class ST-A Certificates, up
to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-A Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(ii) to pay principal, if any, to the Holders of the Class ST-A
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-A Certificates for such Distribution Date and, to
the extent not previously paid to such Holders, for all prior Distribution
Dates (or, if the related Mortgaged Property has become an REO Property, up
to an amount equal to the entire Aggregate Certificate Balance of the Class
ST-A Certificates immediately prior to such Distribution Date);
(iii) to reimburse the Holders of the Class ST-A Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable;
(iv) to pay interest to the Holders of the Class ST-B Certificates, up
to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-B Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(v) to pay principal, if any, to the Holders of the Class ST-B
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-B Certificates for such Distribution Date and, to
the extent not previously paid to such
172
Holders, for all prior Distribution Dates (or, if the related Mortgaged
Property has become an REO Property, up to an amount equal to the entire
Aggregate Certificate Balance of the Class ST-B Certificates immediately
prior to such Distribution Date);
(vi) to reimburse the Holders of the Class ST-B Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable;
(vii) to pay interest to the Holders of the Class ST-C Certificates,
up to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-C Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(viii) to pay principal, if any, to the Holders of the Class ST-C
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-C Certificates for such Distribution Date and, to
the extent not previously paid to such Holders, for all prior Distribution
Dates (or, if the related Mortgaged Property has become an REO Property, up
to an amount equal to the entire Aggregate Certificate Balance of the Class
ST-C Certificates immediately prior to such Distribution Date);
(ix) to reimburse the Holders of the Class ST-C Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable;
(x) to pay interest to the Holders of the Class ST-D Certificates, up
to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-D Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(xi) to pay principal, if any, to the Holders of the Class ST-D
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-D Certificates for such Distribution Date and, to
the extent not previously paid to such Holders, for all prior Distribution
Dates (or, if the related Mortgaged Property has become an REO Property, up
to an amount equal to the entire Aggregate Certificate Balance of the Class
ST-D Certificates immediately prior to such Distribution Date);
(xii) to reimburse the Holders of the Class ST-D Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable;
(xiii) to pay interest to the Holders of the Class ST-E Certificates,
up to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-E Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(xiv) to pay principal, if any, to the Holders of the Class ST-E
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-E Certificates for such Distribution Date and, to
the extent not previously paid to such
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Holders, for all prior Distribution Dates (or, if the related Mortgaged
Property has become an REO Property, up to an amount equal to the entire
Aggregate Certificate Balance of the Class ST-E Certificates immediately
prior to such Distribution Date);
(xv) to reimburse the Holders of the Class ST-E Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable;
(xvi) to pay interest to the Holders of the Class ST-F Certificates,
up to an amount equal to the 000 00xx Xxxxxx Distributable Certificate
Interest Amount in respect of the Class ST-F Certificates for the related
Interest Accrual Period and, to the extent not previously paid to such
Holders, for all prior Interest Accrual Periods;
(xvii) to pay principal, if any, to the Holders of the Class ST-F
Certificates, up to an amount equal to the Principal Distribution Amount in
respect of the Class ST-F Certificates for such Distribution Date and, to
the extent not previously paid to such Holders, for all prior Distribution
Dates (or, if the related Mortgaged Property has become an REO Property, up
to an amount equal to the entire Aggregate Certificate Balance of the Class
ST-F Certificates immediately prior to such Distribution Date);
(xviii) to reimburse the Holders of the Class ST-F Certificates for
unreimbursed Cure payments on the 000 00xx Xxxxxx A Note previously made by
such Holder, if applicable; and
(xix) to the Holders of the Class R-I Certificates (in respect of the
Class R-ST Residual Interest) at such time as the Aggregate Certificate Balances
of all Classes of Class ST Certificates have been reduced to zero, and Realized
Losses previously allocated to each Holder have been reimbursed to the Holders
of the Class ST Certificates, any amounts remaining on deposit in the 000 00xx
Xxxxxx X Note Distribution Account.
SECTION 6.6 ALLOCATION OF REALIZED LOSSES, EXPENSE LOSSES AND
SHORTFALLS DUE TO NONRECOVERABILITY.
(a) REMIC I. On each Distribution Date, except as provided in
subsection (b) below,
(i) Realized Principal Losses on each Mortgage Loan (other than
the DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note) or the DCT
Industrial Portfolio Mortgage Loan realized during the related Collection Period
shall reduce the Certificate Balance of the Corresponding REMIC I Regular
Interest (provided that Realized Principal Losses on the Millenium Portfolio
Mortgage Loan shall reduce the Certificate Balance of the REMIC I MP IO
Component Regular Interest and REMIC I MP Non-IO Component Regular Interest, pro
rata in proportion to their respective Certificate Balances and that Realized
Principal Losses on the Ritz-Xxxxxxx Xxxx Passu Loan shall reduce the
Certificate Balance of the REMIC I RC IO Component Regular Interest and REMIC I
RC Non-IO Component Regular Interest, pro rata in proportion to their respective
Certificate Balances);
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(ii) Realized Interest Losses on each Mortgage Loan (other than
the DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note) or the DCT
Industrial Portfolio Mortgage Loan shall be allocated to reduce first,
Distributable Certificate Interest for such Distribution Date, and then Unpaid
Interest in each case owing on the Corresponding REMIC I Regular Interest
(provided that Realized Interest Losses on the Millenium Portfolio Mortgage Loan
shall reduce first, Distributable Certificate Interest with respect to the REMIC
I MP Non-IO Component Regular Interest; second, Unpaid Interest owing on the
REMIC I MP Non-IO Component Regular Interest; third, Distributable Certificate
Interest with respect to the REMIC I MP IO Component Regular Interest; and
fourth, Unpaid Interest owing on the REMIC I MP IO Component Regular Interest
and that Realized Interest Losses on the Ritz-Xxxxxxx Xxxx Passu Loan shall
reduce first, Distributable Certificate Interest with respect to the REMIC I RC
Non-IO Component Regular Interest; second, Unpaid Interest owing on the REMIC I
RC Non-IO Component Regular Interest; third, Distributable Certificate Interest
with respect to the REMIC I RC IO Component Regular Interest; and fourth, Unpaid
Interest owing on the REMIC I RC IO Component Regular Interest); and to the
extent that such Realized Interest Loss exceeds such amount, shall be treated as
an Expense Loss; and
(iii) Expense Losses (not otherwise applied above) realized
during the related Collection Period shall be allocated among the REMIC I
Regular Interests in proportion to their Certificate Balances and treated as
Realized Principal Losses to the extent so allocated (and shall proportionately
reduce the Certificate Balance of each REMIC I Regular Interest) after making
all other allocations for such Distribution Date.
(b) If the Master Servicer, the Special Servicer or the Trustee
determines that an Advance previously made by it (whether such Advance (together
with Advance Interest thereon) was in respect of principal or interest on the
related Mortgage Loan (other than the DCT Industrial Portfolio C Note or the 000
00xx Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage Loan or a Servicing
Advance) is a Nonrecoverable Advance and the Master Servicer withdraws the
amount of such Advance from the Certificate Account pursuant to Section 5.2(a)
hereof (which amount shall be treated as an Available Advance Reimbursement
Amount pursuant to Section 4.6) or if the Master Servicer determines that any
Unliquidated Advance has become a Nonrecoverable Advance, the Master Servicer
(after consultation with the Special Servicer) shall compute the Realized Loss
with respect to such Mortgage Loan (other than the DCT Industrial Portfolio C
Note or the 000 00xx Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage
Loan (and the Paying Agent shall allocate the Realized Loss) as follows:
(i) the amount withdrawn from the Certificate Account shall be
treated as Realized Principal Losses up to the amount of the aggregate amount in
the Collection Account allocable to principal received with respect to the
Mortgage Loans (other than the DCT Industrial Portfolio C Note or the 000 00xx
Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage Loan for such Collection
Period contemplated by clause (I)(A) of the definition of Principal Distribution
Amount, and shall be allocated to the Corresponding REMIC I Regular Interest in
accordance with Section 6.6(a)(i) (and to the extent that any Realized Principal
Loss exceeds the Certificate Balance of the Corresponding REMIC I Regular
Interest, such Realized Principal Loss shall be allocated to the other
Corresponding REMIC I Regular Interests in accordance with Section 6.6(a)(iii)),
and such withdrawal shall reduce the principal paid on each
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such REMIC I Regular Interest on which principal would otherwise be paid on such
Distribution Date, in proportion to such principal payments; and
(ii) if the amount that the Master Servicer withdraws from the
Certificate Account as referenced in clause (b)(i) above exceeds such amount
allocable to principal received with respect to the Mortgage Loans (other than
the DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note) or the DCT
Industrial Portfolio Mortgage Loan for such Collection Period, then such
additional amounts shall constitute Unpaid Interest, and shall be allocated to
the REMIC I Regular Interests on a pro rata basis based upon the amount of
accrued and unpaid interest thereon.
(c) If (x) a Final Recovery Determination is made with respect to any
Mortgage Loan (other than the DCT Industrial Portfolio C Note or the 000 00xx
Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage Loan with respect to
which the Master Servicer previously had withdrawn amounts from the Certificate
Account following a determination that Advances previously made were
Nonrecoverable Advances and Realized Losses were computed and allocated pursuant
to clauses (a) and (b) above, and (y) amounts are recovered thereafter:
(i) the portion of the amount of collections recovered on the
Mortgage Loan (other than the DCT Industrial Portfolio C Note or the 000 00xx
Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage Loan that is identified
and applied by the Master Servicer as recoveries of principal shall be applied
by the Paying Agent first, to make payments of principal on the Corresponding
REMIC I Regular Interest up to an amount equal to the Realized Principal Losses
previously allocated thereto as a result of the reimbursement of Nonrecoverable
Advances or Advance Interest (and the Principal Balance of the Mortgage Loan
(other than the DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note)
or the DCT Industrial Portfolio Mortgage Loan and the related Certificate
Balance of the Corresponding REMIC I Regular Interest shall be correspondingly
increased), and thereafter to make payments of principal to the Corresponding
REMIC I Regular Interests with respect to which principal distributions were
reduced pursuant to Section 6.6(b)(i) above, in proportion to the amount of such
reductions; and
(ii) the portion of the amount recovered on the Mortgage Loan
(other than the DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note)
or the DCT Industrial Portfolio Mortgage Loan that is identified and applied by
the Master Servicer as recoveries of interest shall be applied by the Paying
Agent to make payments of Unpaid Interest on the REMIC I Regular Interests with
respect to which Unpaid Interest was allocated pursuant to Section 6.6(b)(ii).
(d) REMIC II. On each Distribution Date, all Realized Losses on the
REMIC I Regular Interests for such Distribution Date (or for prior Distribution
Dates, to the extent not previously allocated) shall be allocated to the
Corresponding REMIC II Regular Interests in the amounts and in the manner as are
allocated to the REMIC III Regular Interests related thereto pursuant to Section
6.6(f). Realized Losses allocated to the Class X Certificates shall reduce the
amount of interest payable on the REMIC II Regular Interests other than the
REMIC II Regular Interest X-MP and the REMIC II Regular Interest X-RC, which
reduction shall be allocated pro rata based on the product of the Certificate
Balance of such REMIC II Regular Interest and the Class X Strip Rate applicable
to the Class of REMIC III Regular Interest (other than the Class X
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Certificates) relating to such REMIC II Regular Interest. Realized Losses
allocated to the Class X-MP Certificates shall reduce the amount of interest
payable on the REMIC II Regular Interest X-MP. Realized Losses allocated to the
Class X-RC Certificates shall reduce the amount of interest payable on the REMIC
II Regular Interest X-RC.
(e) Reserved
(f) REMIC III.
(i) On each Distribution Date, all Realized Losses on the REMIC
II Regular Interests for such Distribution Date (or for prior Distribution
Dates, to the extent not previously allocated) that are attributable to Realized
Losses on the REMIC I MP IO Component Regular Interest shall be allocated first
to the REMIC III Regular Interests other than the Class X-MP and Class X-RC
Certificates up to an amount equal to the sum of (A) the Certificate Balance of
the REMIC I MP IO Component Regular Interest, and (B) Unpaid Interest owing to
the REMIC I MP IO Component Regular Interest, and (C) Distributable Certificate
Interest owing to the REMIC I MP IO Component Regular Interest other than
amounts attributable to any Class X-MP Strip Amount, in the manner provided for
below in Section 6.6(f)(iii), and second to the Class X-MP Certificates.
(ii) On each Distribution Date, all Realized Losses on the REMIC
II Regular Interests for such Distribution Date (or for prior Distribution
Dates, to the extent not previously allocated) that are attributable to Realized
Losses on the REMIC I RC IO Component Regular Interest shall be allocated first
to the REMIC III Regular Interests other than the Class X-MP and Class X-RC
Certificates up to an amount equal to the sum of (A) the Certificate Balance of
the REMIC I RC IO Component Regular Interest, and (B) Unpaid Interest owing to
the REMIC I RC IO Component Regular Interest, and (C) Distributable Certificate
Interest owing to the REMIC I RC IO Component Regular Interest other than
amounts attributable to any Class X-RC Strip Amount, in the manner provided for
below in Section 6.6(f)(iii), and second to the Class X-RC Certificates.
(iii) On each Distribution Date, all Realized Losses on the REMIC
II Regular Interests that are not allocated to the Class X-MP and Class X-RC
Certificates pursuant to Section 6.6(f)(i) and (ii) above shall be allocated to
the REMIC III Regular Interests other than the Class X-MP and Class X-RC
Certificates in Reverse Sequential Order, in each case reducing (A) first, the
Certificate Balance of such Class until such Certificate Balance is reduced to
zero (in the case of the REMIC III Regular Interests other than the Class X,
Class X-MP and the Class X-RC Certificates); (B) second, Unpaid Interest owing
to such Class to the extent thereof and (C) third, Distributable Certificate
Interest owing to such Class, provided, that such reductions shall be allocated
among the Class A-1 Certificates, Class A-1A Certificates, Class A-2
Certificates, Class A-3 Certificates, Class A-AB Certificates, Class A-4
Certificates and Class X Certificates and the Class A-4FL Regular Interest, pro
rata, based upon their outstanding Certificate Balances or accrued interest, as
the case may be, and provided further, that Realized Losses shall not reduce the
Aggregate Certificate Balance of the REMIC III Regular Interests below the sum
of the Aggregate Certificate Balances of the REMIC II Regular Interests. Losses
of interest allocated to the Class A-4FL Regular Interest reduce the interest
distributable to the Class A-4FL Certificates by an equivalent amount. Losses of
principal that reduce the Certificate Balance of
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the Class A-4FL Regular Interest reduce the Aggregate Certificate Balance of the
Class A-4FL Certificates by an equivalent amount.
(g) On each Distribution Date, all Realized Losses on the DTC
Industrial Portfolio C Note for such Distribution Date (or for prior
Distribution Dates, to the extent not previously allocated) shall be allocated
to the Class DP Certificates to reduce (A) the Certificate Balance of such Class
until such Certificate Balance is reduced to zero; (B) Unpaid Interest owing to
such Class to the extent thereof; and (C) Distributable Certificate Interest
owing to such Class.
(h) On each Distribution Date, all Realized Losses on the 000 00xx
Xxxxxx X Note for such Distribution Date (or for prior Distribution Dates, to
the extent not previously allocated) shall be allocated to the Class ST
Certificates in Reverse Sequential Order, in each case reducing, in order (A)
the Certificate Balance of such Class until such Certificate Balance is reduced
to zero; (B) Unpaid Interest owing to such Class to the extent thereof; and (C)
Distributable Certificate Interest owing to such Class.
SECTION 6.7 PREPAYMENT INTEREST SHORTFALLS AND NET AGGREGATE
PREPAYMENT INTEREST SHORTFALLS.
(a) With respect to the Millenium Portfolio Mortgage Loan, Prepayment
Interest Shortfalls will be allocated first to the Millenium Portfolio Non-IO
Component and then to the Millenium Portfolio IO Component, to reduce
Distributable Certificate Interest on the REMIC I MP Non-IO Component Regular
Interest and the REMIC I MP IO Component Regular Interest, respectively. Any
Prepayment Interest Shortfall in the Millenium Portfolio Mortgage Loan, to the
extent not allocated to the Millenium Portfolio IO Component and resulting in a
Net Aggregate Prepayment Interest Shortfall, will be allocated to the REMIC III
Regular Interests (other than the Class X-RC and Class X-MP Certificates) as
described in Section 6.7(b) below and any Prepayment Interest Shortfalls with
respect to the REMIC II Regular Interest X-MP shall be allocated to the Class
X-MP Certificates to reduce Distributable Certificate Interest thereon. With
respect to the Ritz-Xxxxxxx Xxxx Passu Loan, Prepayment Interest Shortfalls will
be allocated first to the Xxxx-Xxxxxxx Non-IO Component and then to the
Xxxx-Xxxxxxx IO Component, to reduce Distributable Certificate Interest on the
REMIC I RC Non-IO Component Regular Interest and the REMIC I RC IO Component
Regular Interest, respectively. Any Prepayment Interest Shortfall on the
Ritz-Xxxxxxx Xxxx Passu Loan, to the extent not allocated to the Xxxx-Xxxxxxx IO
Component and resulting in a Net Aggregate Prepayment Interest Shortfall, will
be allocated to the REMIC III Regular Interests (other than the Class X-MP and
Class X-RC Certificates) as described in Section 6.7(b) below and any Prepayment
Interest Shortfalls with respect to the REMIC II Regular Interest X-RC shall be
allocated to the Class X-RC Certificates to reduce Distributable Certificate
Interest thereon. No Prepayment Interest Shortfall with respect to a Serviced
Companion Mortgage Loan or a B Note shall be allocated to any Class of
Certificates.
(b) On each Distribution Date, the amount of any Net Aggregate
Prepayment Interest Shortfalls in the Majority Mortgage Loans in REMIC I shall
be allocated among the REMIC I Regular Interests (other than the REMIC I MP IO
Component Regular Interest and the REMIC I RC IO Component Regular Interest),
pro rata in proportion to the Accrued Certificate
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Interest for each such REMIC I Regular Interest for such Distribution Date and
shall reduce Distributable Certificate Interest for each such Interest, and any
Prepayment Interest Shortfalls with respect to the Millenium Portfolio IO
Component shall be allocated to the REMIC I MP IO Component Regular Interest to
reduce Distributable Certificate Interest thereon and any Prepayment Interest
Shortfalls with respect to the Xxxx-Xxxxxxx IO Component shall be allocated to
the REMIC I RC IO Component Regular Interest to reduce Distributable Certificate
Interest thereon. On each Distribution Date, the amount of any Net Aggregate
Prepayment Interest Shortfalls in the REMIC I Regular Interests in REMIC II
shall be allocated among the REMIC II Regular Interests (other than REMIC II
Regular Interest X-MP and other than REMIC II Regular Interest X-RC), pro rata
in proportion to the Accrued Certificate Interest for each such REMIC II Regular
Interest for such Distribution Date and shall reduce Distributable Certificate
Interest for each such Interest, and any Prepayment Interest Shortfalls with
respect to the REMIC I MP IO Component Regular Interest and the REMIC I RC IO
Component Regular Interest shall be allocated to the REMIC II Regular Interest
X-MP and the REMIC II Regular Interest X-RC, respectively, in each case to
reduce Distributable Certificate Interest thereon. On each Distribution Date,
the amount of any Net Aggregate Prepayment Interest Shortfalls in the REMIC II
Regular Interests (other than the REMIC II Regular Interest X-MP and the REMIC
II Regular Interest X-RC) in REMIC III, shall be allocated to each Class of
REMIC III Regular Interests (other than the Class X-MP and X-RC Certificates)
pro rata, in proportion to the amount of Accrued Certificate Interest payable to
such Class on such Distribution Date and shall reduce the Distributable
Certificate Interest for such Class for such Distribution Date, and any
Prepayment Interest Shortfalls with respect to the REMIC II Regular Interest
X-MP and the REMIC II Regular Interest X-RC shall be allocated to the Class X-MP
and Class X-RC Certificates, respectively, in each case to reduce Distributable
Certificate Interest thereon. Any amounts of Net Aggregate Prepayment Interest
Shortfalls allocated to the Class A-4FL Regular Interest shall reduce the amount
of interest distributable to the Class A-4FL Certificates by an equivalent
amount.
(c) On each Distribution Date, Prepayment Interest Shortfalls on the
DCT Industrial Portfolio C Note in the Class DP REMIC shall reduce Distributable
Certificate Interest on the Class DP Certificates for such Distribution Date. On
each Distribution Date, Prepayment Interest Shortfalls on the 000 00xx Xxxxxx X
Note in the Class ST REMIC shall be allocated to each Class of Class ST
Certificates, pro rata, in proportion to the amount of Accrued Certificate
Interest payable to such Class of Certificates on such Distribution Date and
shall reduce the Distributable Certificate Interest for such Class for such
Distribution Date.
SECTION 6.8 ADJUSTMENT OF SERVICING FEES. The Master Servicing Fee
payable to the Master Servicer shall be adjusted as provided in Section 8.10(c)
herein. Any amount retained by REMIC I as a result of a reduction of the Master
Servicing Fee shall be treated as interest collected with respect to the prepaid
Mortgage Loans with respect to which the Master Servicing Fee adjustment occurs.
SECTION 6.9 APPRAISAL REDUCTIONS. Not later than the date on which an
Appraisal Event occurs, the Special Servicer shall have obtained (A) an
Appraisal of the Mortgaged Property securing the related Mortgage Loan, Loan
Pair or A/B Mortgage Loan, if the Principal Balance of such Mortgage Loan, Loan
Pair or A/B Mortgage Loan exceeds $2,000,000 or (B) at the option of the Special
Servicer, if such Principal Balance is less than or
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equal to $2,000,000, either an internal valuation prepared by the Special
Servicer in accordance with MAI standards or an Appraisal which in all cases
shall be completed as of the date that such Mortgage Loan, Loan Pair or A/B
Mortgage Loan becomes a Required Appraisal Loan; provided that if the Special
Servicer had completed or obtained an Appraisal or internal valuation within the
immediately prior 12 months, the Special Servicer may rely on such Appraisal or
internal valuation and shall have no duty to prepare a new Appraisal or internal
valuation, unless such reliance would not be in accordance with the Servicing
Standard; provided, further, that if the Special Servicer is required to obtain
an Appraisal of a Mortgaged Property after receipt of the notice described in
clause (ii) of the definition of Appraisal Event, such Appraisal will be
obtained no later than 60 days after receipt of such notice and an internal
valuation will be obtained no later than 60 days after receipt of such notice.
Notwithstanding the foregoing, an Appraisal shall not be required so long as a
guaranty or surety bond that is rated at least "BBB-" (or its equivalent) by a
nationally recognized statistical rating organization, or debt service reserve
or a letter of credit is available and has the ability to pay off the then
outstanding Principal Balance of the Mortgage Loan in full, except to the extent
that the Special Servicer, in accordance with the Servicing Standard, determines
that obtaining an Appraisal is in the best interests of the Certificateholders.
Such Appraisal or valuation shall be conducted in accordance with the definition
of "market value" as set forth in 12 C.F.R. Section 225.62 and shall be updated
at least annually to the extent such Mortgage Loan remains a Required Appraisal
Loan. The cost of any such Appraisal or valuation, if not performed by the
Special Servicer, shall be an expense of the Trust (and any related B Note) and
may be paid from REO Income or, to the extent collections from such related
Mortgage Loan, B Note, Loan Pair or Mortgaged Property does not cover the
expense, such unpaid expense shall be, subject to Section 4.4 hereof, advanced
by the Master Servicer at the request of the Special Servicer or by the Special
Servicer pursuant to Section 4.2 in which event it shall be treated as a
Servicing Advance. The Master Servicer, based on the Appraisal or internal
valuation provided to it by the Special Servicer, shall calculate any Appraisal
Reduction. The Master Servicer shall calculate or recalculate the Appraisal
Reduction for any Mortgage Loan, B Note and Loan Pair based on updated
Appraisals or internal valuations provided from time to time to it by the
Special Servicer and report such amount to the Trustee annually. Notwithstanding
the foregoing, the terms of this Section 6.9 shall not be applicable to any
Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note if the applicable
Non-Serviced Mortgage Loan Special Servicer or the MLMT 2006-C1 Special
Servicer, as applicable, shall have performed such obligations with respect to
such Mortgage Loan pursuant to the terms of the related Non-Serviced Mortgage
Loan Pooling and Servicing Agreement or MLMT 2006-C1 Pooling and Servicing
Agreement, as applicable. Appraisal Reductions allocated to any Loan Pair, the
DCT Industrial Portfolio C Note or the 000 00xx Xxxxxx X Note shall be allocated
to the Certificate Principal Balance of the related Classes of Principal Balance
Certificates in the order of their subordination, i.e., in the case of Appraisal
Reductions with respect to any Mortgage Loan or Loan Pair other than the DCT
Industrial Portfolio A/B/C Loan or 000 00xx Xxxxxx A/B/C Mortgage Loan, to the
Classes of Principal Balance Certificates, other than the Class DP Certificates
and Class ST Certificates, in Reverse Sequential Order; in the case of Appraisal
Reductions with respect to the DCT Industrial Portfolio A/B/C Loan, to the Class
DP Certificates; and in the case of Appraisal Reductions with respect to the 000
00xx Xxxxxx A/B/C Mortgage Loan, to the Classes of Class ST Certificates in the
same order as Realized Losses are allocated thereto.
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SECTION 6.10 COMPLIANCE WITH WITHHOLDING REQUIREMENTS. Notwithstanding
any other provision of this Agreement to the contrary, the Paying Agent on
behalf of the Trustee shall comply with all federal withholding requirements
with respect to payments to Certificateholders of interest, original issue
discount, or other amounts that the Paying Agent reasonably believes are
applicable under the Code. The consent of Certificateholders shall not be
required for any such withholding and any amount so withheld shall be regarded
as distributed to the related Certificateholders for purposes of this Agreement.
In the event the Paying Agent withholds any amount from payments made to any
Certificateholder pursuant to federal withholding requirements, the Paying Agent
shall indicate to such Certificateholder the amount withheld. The Trustee shall
not be responsible for the Paying Agent's failure to comply with any withholding
requirements.
SECTION 6.11 PREPAYMENT PREMIUMS.
(a) Subject to Section 6.11(b) with respect to Prepayment Premiums
collected on the Millenium Portfolio Mortgage Loan and Section 6.11(c) with
respect to Prepayment Premiums collected on the Ritz-Xxxxxxx Xxxx Passu Loan,
any Prepayment Premium collected with respect to a Mortgage Loan (other than the
DCT Industrial Portfolio C Note or 000 00xx Xxxxxx X Note) or the DCT Industrial
Portfolio Mortgage Loan (but not a B Note or Serviced Companion Mortgage Loan,
which Prepayment Premium is payable to the holder of the related B Note or the
holder of the related Serviced Companion Mortgage Loan, as applicable) during
any particular Collection Period will be deemed distributed to the Trustee by
the Paying Agent on the following Distribution Date as follows: (i) first, the
Paying Agent shall be deemed to distribute to the Trustee, as holder of the
REMIC I Regular Interest to which such Mortgage Loan (other than the DCT
Industrial Portfolio C Note or 000 00xx Xxxxxx X Note) or the DCT Industrial
Portfolio Mortgage Loan relates, any Prepayment Premiums collected on or with
respect to such Mortgage Loan (other than the DCT Industrial Portfolio C Note or
000 00xx Xxxxxx X Note) or the DCT Industrial Portfolio Mortgage Loan; and (ii)
second, the Paying Agent shall be deemed to distribute to the Trustee, as holder
of the REMIC II Regular Interests, any Prepayment Premiums deemed distributed to
the REMIC I Regular Interests, and shall be deemed to distribute such Prepayment
Premiums to the REMIC II Regular Interest then entitled to distributions of
principal from the Principal Distribution Amount (or, if more than one Class of
REMIC II Regular Interests is then entitled to distributions of principal from
the Principal Distribution Amount, such Prepayment Premiums shall be deemed
distributed among such Classes pro rata in accordance with the relevant amounts
of entitlements to distributions of principal). Following such deemed
distributions, (x) in respect of any Prepayment Premiums collected in respect of
each Mortgage Loan included in Loan Group 1 during the related Collection
Period, the Holders of the respective Classes of Principal Balance Certificates
(other than the Class A-1A, Class L, Class M, Class N, Class O, Class P, Class
Q, Class S, Class DP and Class ST Certificates) and the Class A-4FL Regular
Interest, then entitled to distributions of principal from the Principal
Distribution Amount for such Distribution Date, will be entitled to, and the
Paying Agent on behalf of the Trustee will pay to such Holder(s), an amount
equal to, in the case of each such Class, the product of (a) a fraction, the
numerator of which is the amount distributed as principal to the Holders of that
Class on that Distribution Date, and the denominator of which is the total
amount distributed as principal to the Holders of all such Classes of
Certificates on that Distribution Date, (b) the Base Interest Fraction for the
related Principal Prepayment and that Class of Certificates and (c) the
aggregate amount of all such
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Prepayment Premiums collected with respect to the Mortgage Loans (other than the
DCT Industrial Portfolio C Note or 000 00xx Xxxxxx X Note) during the related
Collection Period and (y) in respect of any Prepayment Premiums collected in
respect of each Mortgage Loan included in Loan Group 2 during the related
Collection Period, the Holders of the Class A-1A Certificates, then entitled to
distributions of principal from the Principal Distribution Amount for such
Distribution Date, will be entitled to, and the Paying Agent on behalf of the
Trustee will pay to such Holder(s), an amount equal to the product of (a) a
fraction, the numerator of which is the amount distributed as principal to the
Holders of that Class on that Distribution Date, and the denominator of which is
the total amount distributed as principal to the Holders of the Class A-1A
Certificates on that Distribution Date, (b) the Base Interest Fraction for the
related Principal Prepayment and that Class of Certificates and (c) the
aggregate amount of Prepayment Premiums collected with respect to the Mortgage
Loans (other than the DCT Industrial Portfolio C Note or 000 00xx Xxxxxx X Note)
during the related Collection Period. Any portion of such Prepayment Premium
that is not so distributed to the Holders of such Principal Balance Certificates
or the Class A-4FL Regular Interest (other than the Class DP and the Class ST
Certificates) will be distributed to the Holders of the Class X Certificates.
For so long as the Swap Contract or any replacement Swap Contract is in effect,
the Prepayment Premium allocated to the Class A-4FL Regular Interest shall be
payable to the Swap Counterparty pursuant to the terms of the Swap Contract. If
the Swap Contract and any replacement Swap Contracts are no longer in effect,
any Prepayment Premium allocated to the Class A-4FL Regular Interest shall be
distributed to the Class A-4FL Certificates.
Any Prepayment Premium or Yield Maintenance Charges collected with
respect to the DCT Industrial Portfolio C Note during any particular Collection
Period will be distributed by the Paying Agent on behalf of the Trustee to the
Holders of the Class DP Certificates in the aggregate amount of Prepayment
Premiums or Yield Maintenance Charges collected with respect to the DCT
Industrial Portfolio C Note during the related Collection Period.
Any Prepayment Premium or Yield Maintenance Charges collected with
respect to the 000 00xx Xxxxxx X Note during any particular Collection Period
will be distributed by the Paying Agent on behalf of the Trustee to the Holders
of the Class ST Certificates then entitled to distributions of principal from
the Principal Distribution Amount with respect to the Class ST Certificates for
the related Distribution Date, in an amount equal to, in the case of each such
Class, the product of (a) a fraction, the numerator of which is the amount
distributed as principal to the holders of such Class of Class ST Certificates
on that Distribution Date and the denominator of which is the total amount
distributed as principal to the holders of all Classes of Class ST Certificates
on that Distribution Date and (b) the aggregate amount of Prepayment Premiums or
Yield Maintenance Charges collected with respect to the 000 00xx Xxxxxx X Note
during the related Collection Period. If there is more than one such Class of
Class ST Certificates entitled to distributions of principal on such
Distribution Date, the aggregate amount described in the preceding sentence will
be allocated among such Classes on a pro rata basis in accordance with the
relative amounts of entitlement to such distribution of principal.
(b) Any Prepayment Premium collected with respect to the Millenium
Portfolio Mortgage Loan during any particular Collection Period will be deemed
distributed to the Trustee by the Paying Agent on the following Distribution
Date as follows: (A) for so long as the Class X-MP Notional Amount is greater
than zero, (x)(i) the Paying Agent shall be
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deemed to distribute to the Trustee, as holder of the REMIC I MP IO Component
Regular Interest, 85% of any Prepayment Premiums collected on or with respect to
the Millenium Portfolio Mortgage Loan, and (ii) the Paying Agent shall be deemed
to distribute to the Trustee, as holder of the REMIC I MP Non-IO Component
Regular Interest, 15% of any Prepayment Premiums collected on or with respect to
the Millenium Portfolio Mortgage Loan; (y)(i) the Paying Agent shall be deemed
to distribute to the Trustee, as holder of the REMIC II Regular Interest X-MP,
any Prepayment Premiums deemed distributed to the REMIC I MP IO Component
Regular Interest, and (ii) the Paying Agent shall be deemed to distribute to the
Trustee, as holder of the REMIC II Regular Interests other than the REMIC II
Regular Interest X-MP, any Prepayment Premiums deemed distributed to the REMIC I
MP Non-IO Component Regular Interest, and shall be deemed to distribute such
Prepayment Premiums to the REMIC II Regular Interest then entitled to
distributions of principal from the Principal Distribution Amount (or, if more
than one Class of REMIC II Regular Interests is then entitled to distributions
of principal from the Principal Distribution Amount, such Prepayment Premiums
shall be deemed distributed among such Classes pro rata in accordance with the
relevant amounts of entitlements to distributions of principal); and (z)(i) the
Paying Agent will distribute to the Holders of the Class X-MP Certificates, any
Prepayment Premiums deemed distributed to the REMIC II Regular Interest X-MP and
(ii) any Prepayment Premiums deemed distributed to the REMIC II Regular
Interests other than the REMIC II Regular Interest X-MP will be distributed in
accordance with the penultimate sentence of Section 6.11(a) and (B) after the
Notional Amount of the Class X-MP Certificates is reduced to zero, in accordance
with Section 6.11(a).
(c) Any Prepayment Premium collected with respect to the Ritz-Xxxxxxx
Xxxx Passu Loan (but not the Xxxx-Xxxxxxx Companion Loan, which Prepayment
Premium is payable to the holder of the Xxxx-Xxxxxxx Companion Loan) during any
particular Collection Period will be deemed distributed to the Trustee by the
Paying Agent on the following Distribution Date as follows: (A) for so long as
the Class X-RC Notional Amount is greater than zero, (x)(i) the Paying Agent
shall be deemed to distribute to the Trustee, as holder of the REMIC I RC IO
Component Regular Interest, 85% of any Prepayment Premiums collected on or with
respect to the Ritz-Xxxxxxx Xxxx Passu Loan, and (ii) the Paying Agent shall be
deemed to distribute to the Trustee, as holder of the REMIC I RC Non-IO
Component Regular Interest, 15% of any Prepayment Premiums collected on or with
respect to the Ritz-Xxxxxxx Xxxx Passu Loan; (y)(i) the Paying Agent shall be
deemed to distribute to the Trustee, as holder of the REMIC II Regular Interest
X-RC, any Prepayment Premiums deemed distributed to the REMIC I RC IO Component
Regular Interest and (ii) the Paying Agent shall be deemed to distribute to the
Trustee, as holder of the REMIC II Regular Interests other than the REMIC II
Regular Interest X-RC, any Prepayment Premiums deemed distributed to the REMIC I
RC Non-IO Component Regular Interest, and shall be deemed to distribute such
Prepayment Premiums to the REMIC II Regular Interest then entitled to
distributions of principal from the Principal Distribution Amount (or, if more
than one Class of REMIC II Regular Interests is then entitled to distributions
of principal from the Principal Distribution Amount, such Prepayment Premiums
shall be deemed distributed among such Classes pro rata in accordance with the
relevant amounts of entitlements to distributions of principal); and (z)(i) the
Paying Agent will distribute to the Holders of the Class X-RC Certificates, any
Prepayment Premiums deemed distributed to the REMIC II Regular Interest X-RC,
and (ii) any Prepayment Premiums deemed distributed to the REMIC II Regular
Interests other than the REMIC II Regular Interest X-RC will be distributed in
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accordance with the penultimate sentence of Section 6.11(a) and (B) after the
Notional Amount of the Class X-RC Certificates is reduced to zero, in accordance
with Section 6.11(a).
SECTION 6.12 CALCULATIONS WITH RESPECT TO THE 000 00XX XXXXXX X NOTE
AND CLASS ST CERTIFICATES.
(a) The Paying Agent shall, provided it receives the necessary
information from the MLMT 2006-C1 Master Servicer and the MLMT 2006-C1 Special
Servicer, be responsible for performing all calculations necessary in connection
with the distributions to be made pursuant to Section 6.5B and the preparation
of the Paying Agent Reports pursuant to Section 5.4B(a). The Paying Agent shall
calculate the 000 00xx Xxxxxx X Note Available Distribution Amount for each
Distribution Date and shall allocate such amount among the Class ST
Certificateholders in accordance with this Agreement. The Paying Agent shall
have no obligation to recompute, recalculate or otherwise verify any information
provided to it by the MLMT 2006-C1 Master Servicer or the MLMT 2006-C1 Special
Servicer. The calculations by the Paying Agent contemplated by this Section 6.12
shall, in the absence of manifest error, be presumptively deemed to be correct
for all purposes hereunder.
The Paying Agent or the Trustee, as the case may be, shall afford to
the Class ST Certificateholder Representative and to the OTS, the FDIC and any
other banking or insurance regulatory authority that may exercise authority over
any Class ST Certificateholder or Certificate Owner, access to any documentation
regarding the 000 00xx Xxxxxx X Note or the other related assets of the Trust
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 Paying Agent or the Trustee, as the case
may be, designated by it.
(b) The Paying Agent, the Custodian or the Trustee, as applicable,
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 Class ST Certificateholder Representative and, subject to the succeeding
paragraph, any Class ST Certificateholder, Certificate Owner or Person
identified to the Paying Agent as a prospective Transferee of a Class ST
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 Paying
Agent): (i) the Memorandum in the form most recently provided to the Paying
Agent by the Depositor or any Person designated thereby; (ii) this Agreement,
the related Intercreditor Agreement, the MLMT 2006-C1 Pooling and Servicing
Agreement and any amendments hereto or thereto; (iii) all Paying Agent Reports
and any other reports delivered or made available to Certificateholders pursuant
to Section 5.4B(a) since the Closing Date; (iv) any and all annual performance
certifications delivered by the XXXX 0000-X0 Xxxxxx Xxxxxxxx xx XXXX 0000-X0
Special Servicer to the Paying Agent since the Closing Date; (v) any and all
annual accountants' reports caused to be delivered by the XXXX 0000-X0 Xxxxxx
Xxxxxxxx xx XXXX 0000-X0 Special Servicer to the Paying Agent since the Closing
Date; (vi) the most recent inspection report prepared by the XXXX 0000-X0 Xxxxxx
Xxxxxxxx xx XXXX 0000-X0 Special Servicer and delivered to the Paying Agent in
respect of the Mortgaged Property; (vii) the most recent monthly, quarterly
and/or annual operating statements and rent rolls of the Mortgaged Property and
financial statements of the related Mortgagor collected by the XXXX 0000-X0
Xxxxxx Xxxxxxxx xx XXXX 0000-X0 Special Servicer and
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delivered to the Paying Agent; (viii) any and all reports and statements
prepared by the XXXX 0000-X0 Xxxxxx Xxxxxxxx xx XXXX 0000-X0 Special Servicer
and delivered to the Paying Agent; (ix) a copy of the related Mortgage Note and
any other documents constituting the related Mortgage File, including any
agreements or instruments evidencing modifications, waivers and amendments of
the terms of the 000 00xx Xxxxxx X Note entered into or consented to by the MLMT
2006-C1 Master Servicer or the MLMT 2006-C1 Special Servicer and delivered to
the Custodian; (x) the most recent appraisals for the Mortgaged Property or REO
Property (as defined in the MLMT 2006-C1 Pooling and Servicing Agreement) that
has been delivered to the Trustee; and (xi) any other information in the
possession of or reasonably obtainable by the Paying Agent and designated by the
Depositor as necessary to meet the requirements of Rule 144A(d)(4) under the
Securities Act. The Paying Agent shall upon request provide to any such Person
copies of any and all of the foregoing items; however, the Paying Agent shall be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing such copies.
In connection with providing access to or copies of the items
described in the preceding paragraph pursuant to this Section 6.12, the Paying
Agent shall require: (a) in the case of Class ST Certificate Owners, a
confirmation executed by the requested Person substantially in the form of
Exhibit Y hereto (or such other form as may be reasonably acceptable to the
Paying Agent) generally to the effect that such Person is a beneficial holder of
Book-Entry Certificates and will keep such information confidential (except that
such Class ST Certificate Owner may provide such information to any other Person
that holds or is contemplating the purchase of any Class ST 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
Class ST Certificate or an interest therein, confirmation executed by the
requesting Person substantially in the form of Exhibit Y hereto (or such other
form as may be reasonably acceptable to the Paying Agent) generally to the
effect that such Person is a prospective purchaser of a Class ST Certificate or
an interest therein, is requesting the information for use in evaluating a
possible investment in Class ST Certificates and will otherwise keep such
information confidential. The Holders of the Class ST Certificates, by their
acceptance thereof, will be deemed to have agreed to keep such information
confidential (except that any Holder may provide any such information obtained
by it to any other Person that holds or is contemplating the purchase of any
Class ST 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).
(c) Neither the Trustee, the Custodian nor the Paying Agent shall be
liable for providing or disseminating information in accordance with this
Section 6.12.
SECTION 6.13 OTHER DISTRIBUTIONS
On each Master Servicer Remittance Date, the Paying Agent shall be
deemed to distribute to the Master Servicer, for deposit in the Master
Servicer's Floating Rate Account with respect to Net Swap Payments, that amount
specified by the Paying Agent pursuant to Section 8.32(b). The Master Servicer
shall offset and retain such amount from the payment it delivers to the Paying
Agent on the Master Servicer Remittance Date pursuant to Section 5.2(a)(xi) and
shall deposit such amount, on behalf of the Trustee, in the Master Servicer's
Floating Rate
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Account, and such payment shall be deemed to have been made by the Paying Agent
as a payment of a portion of the interest and Prepayment Premiums, as
applicable, on the Class A-4FL Regular Interest. On each Distribution Date, the
Paying Agent shall distribute the Class A-4FL Available Funds for such
Distribution Date to the Holders of record of the Class A-4FL Certificates as of
the related Record Date in the following amounts: (i) the Class A-4FL Interest
Distribution Amount, (ii) the Class A-4FL Principal Distribution Amount and
(iii) only if the Swap Contract has been terminated and no replacement Swap
Contract has been entered into, any Prepayment Premiums that were allocated to
the Class A-4FL Regular Interest. No Holder of a Class A-4FL Certificate shall
be entitled to receive any portion of any Prepayment Premium paid on the Class
A-4FL Regular Interest unless the Swap Contract has been terminated and no
replacement Swap Contract has been entered into. Such amount shall be payable to
the Swap Counterparty pursuant to the terms of the Swap Contract. Following a
Swap Default under the Swap Contract or other default or event of termination of
the Swap Contract, and during the period when the Paying Agent is pursuing
remedies under such Swap Contract, the Class A-4FL Interest Distribution Amount
for each Class A-4FL Certificate shall equal the Distributable Certificate
Interest Amount for the Class A-4FL Regular Interest, until such time as the
conditions giving rise to such Swap Default or other default or event of
termination have been cured or such Swap Contract has been replaced. Any such
Swap Default, other default or event of termination, and the consequent change
to a fixed Pass-Through Rate shall not constitute a default under this
Agreement. To the extent that The Depository Trust Company is not provided with
sufficient notice of a change to a fixed Pass-Through Rate, a Swap Default can
result in a delay in the distribution of amounts payable to the Class A-4FL
Certificates and such delay will not constitute a default by any party to this
Agreement nor result in the accrual of interest on such delayed payment and no
party hereto shall be obligated to advance such amounts. Notwithstanding the
foregoing, to the extent provided in the Swap Contract, the Swap Counterparty
will remain liable for such Swap Default or other default or event of
termination pursuant to the Swap Contract.
For as long as a Swap Default or other default or event of termination
has occurred and is continuing and a Class A-4FL Certificate is receiving
interest at the fixed Pass-Through Rate, such Class A-4FL Certificate shall
accrue interest at the same rate, on the same basis and in the same manner as
the related Class A-4FL Regular Interest.
If the Swap Contract becomes subject to early termination due to the
occurrence of a Rating Agency Trigger Event, a Swap Default, an event of default
or a termination event thereunder, the Paying Agent on behalf of the Trustee
shall promptly provide written notice to the Depository, the Holders of the
Class A-4FL Certificates and the Paying Agent shall take such commercially
reasonable actions (following the expiration of any applicable grace period),
unless otherwise directed in writing by the holders of 100% of the Class A-4FL
Certificates (and only to the extent that, and only for so long as, doing so
does not lead the Paying Agent to incur expenses in excess of the amounts
available to it from such holders for reimbursement), to enforce the rights of
the Trust under the Swap Contract as may be permitted by the terms of the Swap
Contract and consistent with the terms hereof, and shall apply the proceeds
collected from the Swap Counterparty in connection with any such actions
(including, without limitation, the proceeds of the liquidation of any
collateral pledged by the Swap Counterparty) to enter into a replacement
interest rate swap contract on substantially identical terms or on such other
terms acceptable to the Rating Agencies. The Paying Agent shall be permitted
(subject to the final two
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paragraphs of this Section 6.13) to retain and rely upon investment banking
firms of national reputation in connection with identifying and entering into
any replacement interest rate swap contracts, and the Paying Agent's reliance on
the advice of such investment banking firms shall provide full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice. Each
Rating Agency shall confirm in writing that the execution and delivery of any
proposed interest rate swap contract will not result in a qualification,
downgrade or withdrawal of the then-current ratings of the Certificates. If the
costs attributable to entering into a replacement interest rate swap contract
will exceed the sum of the net proceeds of the liquidation of the Swap Contract,
a replacement interest rate swap contract shall not be entered into. Prior to
the application of any proceeds in accordance with the terms of this paragraph,
such proceeds shall be deposited in a segregated trust account, which shall be
an Eligible Account, established by the Paying Agent and identified as held in
trust for the benefit of the Certificateholders of the Class A-4FL Certificates.
Any proceeds of the liquidation of the Swap Contract which exceed the costs
attributable to entering into a replacement interest rate swap contract (or if
no replacement interest rate swap contract is entered into) shall be deposited
into the Floating Rate Account and shall be distributed to the holders of the
Class A-4FL Certificates.
The Trustee and the Paying Agent shall be entitled to conclusively
rely on the report from the Swap Counterparty that specifies LIBOR for any
Interest Accrual Period.
As long as the Swap Contract (or any replacement thereof) is in
effect, each beneficial owner of a Class A-4FL Certificate, or any interest
therein, shall be deemed to have represented that either (i) it is not an
employee benefit plan subject to Title I of ERISA, a plan subject to Section
4975 of the Code, or a plan subject to any Similar Laws or any person investing
on behalf of or with plan assets of such employee benefit plan or plan or (ii)
the acquisition and holding of such Certificate are eligible for the exemptive
relief available under at least one of the Investor-Based Exemptions.
Notwithstanding anything herein to the contrary, any expenses incurred
by the Paying Agent under this Section 6.13 shall be paid solely by the Class
A-4FL Grantor Trust after the application of funds held in the Floating Rate
Account in accordance with Section 5.3(c), but only upon the Paying Agent's
determination that such expenses cannot be recovered from the Swap Counterparty
or any proceeds due under the Swap Contract; provided, that the Paying Agent
shall only be permitted to incur any costs and expenses which are in excess of
any termination payment received from the Swap Counterparty and not otherwise
applied to offset the expense of entering into a replacement Swap Contract if it
has received the written consent of 100% of the holders of the Class A-4FL
Certificates or has received a Rating Agency Confirmation (with respect to the
Class A-4FL Certificates) from each Rating Agency (the expense of such
confirmation to be paid by the holders of the Class A-4FL Certificates). Factors
that the Paying Agent may consider when making a recoverability determination
with respect to the reimbursement of such expenses include, but are not limited
to, (i) the financial condition of the Swap Counterparty and (ii) the likelihood
that the Swap Counterparty will make such reimbursements in the event the Paying
Agent pursues appropriate legal action or other commercially reasonable
enforcement and collection measures.
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The Paying Agent shall not be required to expend any amounts in
connection with enforcing the rights of the Trust under the Swap Contract or
entering into a replacement interest rate swap contract to the extent amounts
are not available (or, in the Paying Agent's sole discretion, reasonably
anticipated to be available) in the Class A-4FL Grantor Trust after the
application of funds held in the Floating Rate Account in accordance with
Section 5.3(c).
ARTICLE VII
CONCERNING THE TRUSTEE, THE CUSTODIAN, THE PAYING AGENT AND
THE LUXEMBOURG PAYING AGENT
SECTION 7.1 DUTIES OF THE TRUSTEE, THE CUSTODIAN AND THE PAYING AGENT.
(a) The Trustee, the Custodian and the Paying Agent each shall
undertake to perform only those duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Trustee, the Custodian or the Paying Agent. Any permissive
right of the Trustee, the Custodian or the Paying Agent provided for in this
Agreement shall not be construed as a duty of the Trustee, the Custodian or the
Paying Agent. The Trustee, the Custodian and the Paying Agent each shall
exercise such of the rights and powers vested in it by this Agreement and
following the occurrence and during the continuation of any Event of Default
hereunder, the Trustee, the Custodian and the Paying Agent each shall use the
same degree of care and skill in its exercise as a prudent Person would exercise
or use under the circumstances in the conduct of such Person's own affairs.
(b) The Trustee or the Paying Agent, as applicable, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Trustee or the Paying Agent, as the case
may be, 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 of this Agreement), shall
examine them to determine whether they on their face conform to the requirements
of this Agreement; provided that the Trustee or the Paying Agent, as the case
may be, shall not be responsible for the accuracy or content of any such
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer or any other Person to it pursuant
to this Agreement. If any such instrument is found on its face not to conform to
the requirements of this Agreement, the Trustee or the Paying Agent shall
request the providing party to correct the instrument and if not so corrected,
the Paying Agent shall inform the Certificateholders.
(c) None of the Trustee, the Custodian nor the Paying Agent, nor any
of their respective directors, officers, employees, agents or Controlling
Persons shall have any liability to the Trust or the Certificateholders arising
out of or in connection with this Agreement, except for their respective
negligence or willful misconduct. No provision of this Agreement shall be
construed to relieve the Trustee, the Custodian, the Paying Agent or any of
their respective directors, officers, employees, agents or Controlling Persons
from liability for their own negligent action, their own negligent failure to
act or their own willful misconduct or bad faith; provided that:
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(i) none of the Trustee, the Custodian nor the Paying Agent nor
any of their respective directors, officers, employees, agents or Controlling
Persons shall be personally liable with respect to any action taken, suffered or
omitted to be taken by it in its reasonable business judgment in accordance with
this Agreement or at the direction of Holders of Certificates evidencing not
less than a majority of the outstanding Certificate Balance of the Certificates;
(ii) no provision of this Agreement shall require either the
Trustee, the Custodian or the Paying Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it;
(iii) none of the Trustee, the Custodian nor the Paying Agent,
nor any of their respective directors, officers, employees, agents or
Controlling Persons shall be responsible for any act or omission of the Master
Servicer, the Special Servicer, the Depositor or either Seller, or for the acts
or omissions of each other, including, without limitation, in connection with
actions taken pursuant to this Agreement;
(iv) the execution by the Trustee or the Paying Agent of any
forms or plans of liquidation in connection with any REMIC Pool shall not
constitute a representation by the Trustee or the Paying Agent as to the
adequacy of such form or plan of liquidation;
(v) neither the Trustee, the Custodian nor the Paying Agent shall
be under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties as Trustee, the Custodian or the Paying Agent,
as in accordance with this Agreement. In such event, all legal expense and costs
of such action shall be expenses and costs of the Trust, and the Trustee, the
Custodian and the Paying Agent shall be entitled to be reimbursed therefor from
the Certificate Account pursuant to Section 5.2(a)(vi); and
(vi) neither the Trustee, the Custodian nor the Paying Agent
shall be charged with knowledge of a Rating Agency Trigger Event or of any
failure by the Master Servicer or the Special Servicer or the Swap Counterparty
or by each other to comply with its obligations under this Agreement or the Swap
Contract or any act, failure, or breach of any Person upon the occurrence of
which the Trustee, the Custodian or the Paying Agent may be required to act,
unless a Responsible Officer of the Trustee, the Custodian or the Paying Agent,
as the case may be, obtains actual knowledge of such failure.
(d) For so long as the Certificates are listed on the Luxembourg Stock
Exchange, the Depositor shall cause the continuing obligations under the listing
rules for the Luxembourg Stock Exchange to be complied with in respect of the
Certificates. The Trustee and the Paying Agent shall not be liable for a failure
in compliance with such continuing obligations under the listing rules of the
Luxembourg Stock Exchange.
SECTION 7.2 CERTAIN MATTERS AFFECTING THE TRUSTEE, THE CUSTODIAN AND
THE PAYING AGENT.
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(a) Except as otherwise provided in Section 7.1:
(i) the Trustee, the Custodian and the Paying Agent each may
request, and may rely and shall be protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) the Trustee, the Custodian and the Paying Agent each may
consult with counsel and the advice of such counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) neither the Trustee, the Custodian nor the Paying Agent,
nor any of their respective directors, officers, employees, agents or
Controlling Persons shall be personally liable for any action taken, suffered or
omitted by such Person in its reasonable business judgment and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) the Trustee, the Custodian and the Paying Agent shall not be
under any obligation to exercise any remedies after default as specified in this
Agreement or to institute, conduct or defend any litigation hereunder or
relating hereto or make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document (provided the
same appears regular on its face), unless requested in writing to do so by
Holders of at least 25% of the Aggregate Certificate Balance of the Certificates
then outstanding provided that, if the payment within a reasonable time to the
Trustee, the Custodian or the Paying Agent, as applicable, of the costs,
expenses or liabilities likely to be incurred by it in connection with the
foregoing is, in the opinion of such Person not reasonably assured to such
Person by the security afforded to it by the terms of this Agreement, such
Person may require reasonable indemnity against such expense or liability or
payment of such estimated expenses as a condition to proceeding. The reasonable
expenses of the Trustee, the Custodian or the Paying Agent, as applicable, shall
be paid by the Certificateholders requesting such examination;
(v) the Trustee, the Custodian and the Paying Agent each may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys, which agents or attorneys
shall have any or all of the rights, powers, duties and obligations of the
Trustee, the Custodian and the Paying Agent conferred on them by such
appointment; provided that each of the Trustee, the Custodian and the Paying
Agent, as the case may be, shall continue to be responsible for its duties and
obligations hereunder and shall not be liable for the actions or omissions of
the Master Servicer, the Special Servicer, the Depositor or the actions or
omissions of each other;
(vi) neither the Trustee, the Custodian nor the Paying Agent
shall be required to obtain a deficiency judgment against a Mortgagor;
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(vii) neither the Trustee, the Custodian nor the Paying Agent
shall be required to expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such liability is not assured to it;
(viii) neither the Trustee, the Custodian nor the Paying Agent
shall be liable for any loss on any investment of funds pursuant to this
Agreement;
(ix) unless otherwise specifically required by law, neither the
Trustee, the Custodian nor the Paying Agent shall be required to post any surety
or bond of any kind in connection with the execution or performance of its
duties hereunder; and
(x) except as specifically provided hereunder in connection with
the performance of its specific duties, neither the Trustee, the Custodian nor
the Paying Agent shall be responsible for any act or omission of the Master
Servicer, the Special Servicer, the Depositor or of each other.
(b) Following the Closing Date, the Trustee shall not accept any
contribution of assets to the Trust not specifically contemplated by this
Agreement unless the Trustee shall have received a Nondisqualification Opinion
at the expense of the Person desiring to contribute such assets with respect to
such contribution.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
any proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(d) The Trustee shall timely pay, from its own funds, the amount of
any and all federal, state and local taxes imposed on the Trust or its assets or
transactions including, without limitation, (A) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code, if, when and as the same shall be
due and payable, (B) any tax on contributions to a REMIC after the Closing Date
imposed by Section 860G(d) of the Code and (C) any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, but only to the
extent such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
(e) The Paying Agent shall timely pay, from its own funds, the amount
of any and all federal, state and local taxes imposed on the Trust or its assets
or transactions including, without limitation, (A) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only to the extent such taxes arise out of a breach by the Paying Agent of its
obligations hereunder, which breach constitutes negligence or willful misconduct
of the Paying Agent.
SECTION 7.3 THE TRUSTEE AND THE PAYING AGENT NOT LIABLE FOR
CERTIFICATES OR INTERESTS OR MORTGAGE LOANS. The Trustee and the Paying Agent
each makes no
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representations as to the validity or sufficiency of this Agreement, the
information contained in the Private Placement Memorandum, the Preliminary
Prospectus Supplement, the Final Prospectus Supplement or Prospectus for the
REMIC III Certificates or Residual Certificates (other than the Certificate of
Authentication on the Certificates if the Paying Agent is the Authenticating
Agent) or of any Mortgage Loan, Assignment of Mortgage or related document save
that each of the Trustee and the Paying Agent represents that, assuming due
execution and delivery by the other parties hereto, this Agreement has been duly
authorized, executed and delivered by it and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms except that such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally, and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law. None of the
Trustee or the Paying Agent shall be accountable for the use or application by
the Depositor or the Master Servicer or the Special Servicer or by each other of
any of the Certificates or any of the proceeds of such Certificates, or for the
use or application by the Depositor or the Master Servicer or the Special
Servicer or by each other of funds paid in consideration of the assignment of
the Mortgage Loans to the Trust or deposited into the Distribution Account or
any other fund or account maintained with respect to the Certificates or any
account maintained pursuant to this Agreement or for investment of any such
amounts. No recourse shall be had against the Trustee or the Paying Agent for
any claim based on any provisions of this Agreement, the Private Placement
Memorandum, the Preliminary Prospectus Supplement, the Final Prospectus
Supplement, the Prospectus or the Certificates (except with respect to the
Trustee to the extent of information furnished by the Trustee in the first two
paragraphs under the caption entitled "TRANSACTION PARTIES-- The Trustee" and
with respect to the Paying Agent, to the extent of information furnished by the
Paying Agent under the caption "TRANSACTION PARTIES-- The Paying Agent,
Custodian, Certificate Registrar, and Authenticating Agent" each in the
Preliminary Prospectus Supplement and the Final Prospectus Supplement), the
Mortgage Loans or the assignment thereof, and any such claim shall be asserted
solely against the Trust or any indemnitor who shall furnish indemnity as
provided herein. Neither the Trustee nor the Paying Agent shall be liable for
any action or failure of any action by the Depositor or the Master Servicer or
the Special Servicer or by each other hereunder. Neither the Trustee nor the
Paying Agent shall at any time have any responsibility or liability for or with
respect to the legality, validity or enforceability of the Mortgages or the
Mortgage Loans, or the perfection and priority of the Mortgages or the
maintenance of any such perfection and priority, or for or with respect to the
efficacy of the Trust or its ability to generate the payments to be distributed
to Certificateholders under this Agreement, including, without limitation, the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon; the validity of the assignment
of the Mortgage Loans to the Trust or of any intervening assignment; the
completeness of the Mortgage Loans; the performance or enforcement of the
Mortgage Loans (other than if the Trustee shall assume the duties of the Master
Servicer); the compliance by the Depositor, each Seller, the Mortgagor or the
Master Servicer or the Special Servicer or by each other with any warranty or
representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation made under this Agreement or in
any related document prior to the receipt by a Responsible Officer of the
Trustee of notice or other discovery of any non-compliance therewith or any
breach thereof; any investment of monies by or at the direction of the Master
Servicer or the Special Servicer or any loss resulting
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therefrom; the failure of the Master Servicer or any Sub-Servicer or the Special
Servicer to act or perform any duties required of it on behalf of the Trustee
hereunder; or any action by the Trustee taken at the instruction of the Master
Servicer or the Special Servicer.
SECTION 7.4 THE TRUSTEE AND THE PAYING AGENT MAY OWN CERTIFICATES.
Each of the Trustee and the Paying Agent in its individual or any other capacity
may become the owner or pledgee of Certificates with the same rights it would
have if it were not the Trustee or the Paying Agent, as the case may be.
SECTION 7.5 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE AND THE PAYING
AGENT.
(a) The Trustee hereunder shall at all times be (i) an institution
insured by the FDIC, (ii) a corporation, national bank or national banking
association authorized to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority, and (iii) an institution whose
short-term debt obligations are at all times rated not less than "A-1" by S&P
and whose long-term senior unsecured debt is at all times rated not less than
"A+" by S&P and "AA-" by Fitch (or "A+" by Fitch if the Trustee's short-term
unsecured debt is rated at least "F-1" by Fitch), or otherwise acceptable to the
Rating Agencies as evidenced by a Rating Agency Confirmation. If such
corporation, national bank or national banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then, for the purposes of this
Section, the combined capital and surplus of such corporation, national bank or
national banking association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.6.
(b) The Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers and shall be
rated at least "A-" by S&P and "A" by Fitch, or a rating otherwise acceptable to
the Rating Agencies, as evidenced by Rating Agency Confirmation.
SECTION 7.6 RESIGNATION AND REMOVAL OF THE TRUSTEE OR THE PAYING
AGENT.
(a) The Trustee or the Paying Agent may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor, the Master Servicer, the Swap Counterparty and the Rating
Agencies; provided that such resignation shall not be effective until its
successor shall have accepted the appointment. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee or paying
agent, as the case may be, except in the case of the initial Trustee in which
case it shall be so replaced but may be replaced under this paragraph, by
written instrument, one copy of which instrument shall be delivered to the
resigning Trustee, one copy to the successor trustee and one copy to each of the
Master Servicer, the Paying Agent and the Rating Agencies. If no successor
trustee or paying agent shall have been so appointed, as the case may be, and
shall have accepted appointment within 30 days after the giving of such notice
of resignation, the resigning Trustee or the Paying Agent, as the case may be,
may petition any court of competent jurisdiction for the appointment of a
successor trustee or paying agent, as the case may be. It shall be a condition
to
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the appointment of a successor trustee that such entity satisfies the
eligibility requirements set forth in Section 7.5 and, for so long as the Trust,
and with respect to any Serviced Companion Mortgage Loan, the trust in the
related Other Securitization, are subject to the reporting requirements of the
Exchange Act, shall have been consented to by the Depositor or the depositor in
such Other Securitization, as the case may be (which consent shall not be
unreasonably withheld).
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.5(a) and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust or any REMIC Pool by any state
in which the Trustee or the Trust held by the Trustee is located solely because
of the location of the Trustee in such state; provided, however, that, if the
Trustee agrees to indemnify the Trust for such taxes, it shall not be removed
pursuant to this clause (iii) or (iv) the continuation of the Trustee as such
would result in a downgrade, qualification or withdrawal of the rating by the
Rating Agencies of any Class of Certificates with a rating as evidenced in
writing by the Rating Agencies, then the Depositor may remove such Trustee and
appoint a successor trustee by written instrument, one copy of which instrument
shall be delivered to the Trustee so removed, one copy to the successor trustee
and one copy to each of the Master Servicer and the Rating Agencies. In the case
of removal under clauses (i), (ii), (iii) and (iv) above, the Trustee shall bear
all such costs of transfer. Such succession shall take effect after a successor
trustee has been appointed.
(c) Following the Closing Date, for so long as the Trust, and with
respect to any Serviced Companion Mortgage Loan, the trust in the related Other
Securitization, are subject to the reporting requirements of the Exchange Act,
the Paying Agent may not appoint any sub-servicer that is or could become a
Reporting Servicer without the prior written consent of the Depositor or the
depositor in such Other Securitization, as the case may be, which consent shall
not be unreasonably withheld.
(d) If at any time (i) the Paying Agent shall cease to be eligible in
accordance with the provisions of Section 7.5(b) and shall fail to resign after
written request therefor by the Depositor, (ii) the Paying Agent shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Paying Agent or of its property shall be appointed, or any public officer
shall take charge or control of the Paying Agent or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust or any REMIC Pool by any state
in which the Paying Agent is located solely because of the location of the
Paying Agent in such state; provided, however, that, if the Paying Agent agrees
to indemnify the Trust for such taxes, it shall not be removed pursuant to this
clause (iii), or (iv) the continuation of the Paying Agent as such would result
in a downgrade, qualification or withdrawal, as applicable, of the rating by any
Rating Agency of any Class of Certificates with a rating as evidenced in writing
by the Rating Agencies, then the Depositor or the Trustee shall send a written
notice of termination to the Paying Agent (which notice shall specify the reason
for such termination) and remove such Paying Agent and the Depositor shall
appoint a successor Paying Agent by written instrument, one copy of which
instrument shall be
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delivered to the Paying Agent so removed, one copy to the successor Paying
Agent, and one copy to each of the Trustee, the Master Servicer and the Rating
Agencies. In all such cases, the Paying Agent shall bear all costs of transfer
to a successor Paying Agent, such succession only to take effect after a
successor Paying Agent has been appointed.
(e) The Holders of more than 50% of the Aggregate Certificate Balance
of the Principal Balance Certificates then outstanding may for cause upon 30
days' written notice to the Trustee or the Paying Agent, as the case may be, and
to the Depositor remove the Trustee or the Paying Agent, as the case may be, by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor and
one copy to the Trustee or the Paying Agent, as the case may be, so removed; the
Depositor shall thereupon use its best efforts to appoint a successor Trustee or
Paying Agent, as the case may be, in accordance with this Section.
(f) Any resignation or removal of the Trustee or the Paying Agent, as
the case may be, and appointment of a successor trustee or paying agent pursuant
to any of the provisions of this Section shall become effective upon acceptance
of appointment by the successor trustee or paying agent, as the case may be, as
provided in Section 7.7. Upon any succession of the Trustee or the Paying Agent
under this Agreement, the predecessor Trustee or Paying Agent, as the case may
be, shall be entitled to the payment of compensation and reimbursement agreed to
under this Agreement for services rendered and expenses incurred. The Trustee or
the Paying Agent shall not be liable for any action or omission of any successor
Trustee or Paying Agent, as the case may be.
SECTION 7.7 SUCCESSOR TRUSTEE OR PAYING AGENT.
(a) Any successor Trustee or Paying Agent appointed as provided in
Section 7.6 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee or Paying Agent, as the case may be, an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee or Paying Agent, as the case may be, shall become effective
and such successor Trustee or Paying Agent, as the case may be, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as Trustee or Paying Agent herein. The predecessor Trustee
or Paying Agent shall deliver (at such predecessor's own expense) to the
successor Trustee or Paying Agent all Mortgage Files and documents and
statements related to the Mortgage Files held by it hereunder (other than any
Mortgage Files at the time held on behalf of the Trust by a Custodian), and the
predecessor Trustee shall duly assign, transfer, deliver and pay over (at such
predecessor's own expense) to the successor Trustee, the entire Trust, together
with all instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer. The predecessor Trustee or Paying
Agent, as the case may be, shall also deliver all records or copies thereof
maintained by the predecessor Trustee or Paying Agent in the administration
hereof as may be reasonably requested by the successor Trustee or Paying Agent,
as applicable, and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor Trustee or Paying Agent shall execute and deliver such other
instruments and do such other things as may reasonably be required to more fully
and certainly vest and confirm in the successor Trustee or Paying Agent, as the
case may be, all such rights,
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powers, duties and obligations. Anything herein to the contrary notwithstanding,
in no event shall the combined fees payable to a successor Trustee exceed the
Trustee Fee.
(b) No successor Trustee or Paying Agent shall accept appointment as
provided in this Section unless at the time of such appointment such successor
Trustee or Paying Agent, as the case may be, shall be eligible under the
provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee or Paying
Agent as provided in this Section, the successor Trustee or Paying Agent shall
mail notice of the succession of such Trustee or Paying Agent hereunder to all
Holders of Certificates at their addresses as shown in the Certificate Register
and to the Rating Agencies. The expenses of such mailing shall be borne by the
successor Trustee or Paying Agent. If the successor Trustee or Paying Agent
fails to mail such notice within 10 days after acceptance of appointment by the
successor Trustee or Paying Agent, the Master Servicer shall cause such notice
to be mailed at the expense of the successor Trustee or Paying Agent, as
applicable.
SECTION 7.8 MERGER OR CONSOLIDATION OF TRUSTEE, CUSTODIAN OR PAYING
AGENT. Any Person into which the Trustee, the Custodian or Paying Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee,
the Custodian or Paying Agent shall be a party, or any Persons succeeding to the
business of such Trustee, the Custodian or Paying Agent, shall be the successor
of such Trustee, the Custodian or Paying Agent, as the case may be, hereunder,
as applicable, provided that (i) in the case of the Trustee or Paying Agent,
such Person shall be eligible under the provisions of Section 7.5, and (ii) for
so long as the Trust, and with respect to any Serviced Companion Mortgage Loan,
the trust in the related Other Securitization, are subject to the reporting
requirements of the Exchange Act, shall have been consented to by the Depositor
or the depositor in such Other Securitization, as the case may be, (which
consent shall not be unreasonably withheld), without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 7.9 APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE, AGENTS OR
CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or, in the case of the Trust, the Certificateholders
evidencing more than 50% of the Aggregate Certificate Balance of the
Certificates then outstanding shall each have the power from time to time to
appoint one or more Persons to act either as co-trustees jointly with the
Trustee or as separate trustees, or as custodians, for the purpose of holding
title to, foreclosing or otherwise taking action with respect to any Mortgage
Loan outside the state where the Trustee has its principal place of business
where such separate trustee or co-trustee is necessary or advisable (or the
Trustee is advised by the Master Servicer or Special Servicer that such separate
trustee or co-trustee is necessary or advisable) under the laws of any state in
which a property securing a Mortgage Loan is located or for the purpose of
otherwise conforming to any legal requirement, restriction or condition in any
state in which a property securing a Mortgage Loan is located or in any state in
which any portion of the Trust is located. The separate trustees, co-trustees,
or custodians so appointed shall be trustees or custodians for the benefit of
all the
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Certificateholders, shall have such powers, rights and remedies as shall be
specified in the instrument of appointment and shall be deemed to have accepted
the provisions of this Agreement; provided that no such appointment shall, or
shall be deemed to, constitute the appointee an agent of the Trustee; provided,
further that the Trustee shall be liable for the actions of any co-trustee or
separate trustee appointed by it and shall have no liability for the actions of
any co-trustee or separate trustee appointed by the Depositor or the
Certificateholders pursuant to this paragraph.
(b) The Trustee or the Paying Agent, as the case may be, may from time
to time appoint one or more independent third-party agents to perform all or any
portion of its administrative duties hereunder (i.e., collection and
distribution of funds, preparation and dissemination of reports, monitoring
compliance, etc.). The Trustee or the Paying Agent, as the case may be, shall
supervise and oversee such agents appointed by it. The terms of any arrangement
or agreement between the Trustee or the Paying Agent, as the case may be, and
such agent, may be terminated, without cause and without the payment of any
termination fees in the event the Trustee or the Paying Agent, as the case may
be, is terminated in accordance with this Agreement. In addition, neither the
Trust nor the Certificateholders shall have any liability or direct obligation
to such agent. Notwithstanding the terms of any such agreement, the Trustee or
the Paying Agent, as the case may be, shall remain at all times obligated and
liable to the Trust and the Certificateholders for performing its duties
hereunder.
(c) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee, co-trustee, or custodian
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder) the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations, including the holding of title to the Trust or any
portion thereof in any such jurisdiction, shall be exercised and performed by
such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally
liable by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee or, in the case of the Trust, the
Certificateholders evidencing more than 50% of the Aggregate Principal Amount of
the Certificates then outstanding may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so appointed by it or
them, if such resignation or removal does not violate the other terms of this
Agreement.
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(d) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
(e) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
(f) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
(g) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(h) The Trustee shall pay the reasonable compensation of the
co-trustees, separate trustees or custodians appointed by the Trustee pursuant
to this Section 7.9 to the extent, and in accordance with the standards,
specified in Section 7.12 hereof.
(i) Subject to the Depositor's consent, which consent shall not be
unreasonably withheld, the Trustee, at its sole cost and expense, may appoint at
any time a successor Custodian. Until such time as the Trustee appoints a
successor Custodian, the Trustee shall be the Custodian hereunder. Upon the
appointment of a successor custodian, the Trustee and the Custodian shall enter
into a custodial agreement.
SECTION 7.10 AUTHENTICATING AGENTS.
(a) The Paying Agent shall serve as the initial Authenticating Agent
hereunder for the purpose of executing and authenticating Certificates. Any
successor Authenticating Agent must be acceptable to the Depositor and must be a
corporation or national bank organized and doing business under the laws of the
United States of America or of any state and having a principal office and place
of business in the Borough of Manhattan in the City and State of New York,
having a combined capital and surplus of at least $50,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by
federal or state authorities.
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(b) Any Person into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of the
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) The Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of the Authenticating Agent by
giving written notice of termination to the Authenticating Agent and the
Depositor; provided that the Trustee may not terminate the Paying Agent as
Authenticating Agent unless the Paying Agent shall be removed as Paying Agent
hereunder. Upon receiving a notice of resignation or upon such a termination, or
in case at any time the Authenticating Agent shall cease to be eligible in
accordance with the provisions of Section 7.10(a), the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No such Authenticating Agent shall be
appointed unless eligible under the provisions of Section 7.10(a). No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee.
SECTION 7.11 INDEMNIFICATION OF TRUSTEE, THE CUSTODIAN AND THE PAYING
AGENT.
(a) The Trustee, the Custodian, the Certificate Registrar and the
Paying Agent (each such institution in its respective individual capacity and
including in each case any other capacity it holds under this Agreement) and
each of their respective directors, officers, employees, agents and Controlling
Persons shall be entitled to indemnification from the Trust for any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, liabilities, fees and expenses incurred in
connection with any legal action incurred without negligence or willful
misconduct on their respective part, arising out of, or in connection with this
Agreement, the Certificates and the acceptance or administration of the trusts
or duties created hereunder (including, without limitation, any unanticipated
loss, liability or expense incurred in connection with any action or inaction of
the Master Servicer, the Special Servicer or the Depositor or of each other such
Person hereunder but only to the extent the Trustee, the Custodian, the
Certificate Registrar or the Paying Agent, as the case may be, is unable to
recover within 30 days of the date of request for payment of such amount from
such third party pursuant to this Agreement) including the costs and expenses of
defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder and the Trustee, the
Custodian, the Certificate Registrar and the Paying Agent and each of their
respective directors, officers, employees, agents and Controlling Persons shall
be entitled to indemnification from the Trust for any unanticipated loss,
liability or expense incurred in connection with the provision by the Trustee,
the Custodian, the Certificate Registrar and the Paying Agent of the reports
required to be provided by it pursuant to this Agreement; provided that:
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(i) with respect to any such claim, the Trustee, the Custodian,
the Certificate Registrar or the Paying Agent, as the case may be, shall have
given the Depositor, the Master Servicer, the Sellers, each other and the
Holders of the Certificates written notice thereof promptly after a Responsible
Officer of the Trustee, the Custodian, the Certificate Registrar or the Paying
Agent, as the case may be, shall have actual knowledge thereof; provided,
however, that failure to give such notice to the Depositor, Master Servicer, the
Sellers, each other and the Holders of Certificates shall not affect the
Trustee's, the Custodian's, Certificate Registrar's or Paying Agent's, as the
case may be, rights to indemnification herein unless the Depositor's defense of
such claim on behalf of the Trust is materially prejudiced thereby;
(ii) while maintaining control over its own defense, the Trustee,
the Custodian, the Certificate Registrar or the Paying Agent, as the case may
be, shall cooperate and consult fully with the Depositor in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section
7.11, the Trust shall not be liable for settlement of any such claim by the
Trustee, the Custodian, the Certificate Registrar or the Paying Agent, as the
case may be, entered into without the Depositor's prior consent, which consent
shall not be unreasonably withheld.
(b) The provisions of this Section 7.11 shall survive any termination
of this Agreement and the resignation or removal of the Trustee, the Custodian,
the Certificate Registrar or the Paying Agent, as the case may be.
(c) The Depositor shall indemnify and hold harmless the Trustee, the
Custodian, the Certificate Registrar or the Paying Agent, as the case may be,
their respective directors, officers, employees or agents and Controlling
Persons from and against any loss, claim, damage or liability, joint or several,
and any action in respect thereof, to which the Trustee, the Custodian,
Certificate Registrar or the Paying Agent, as the case may be, their respective
directors, officers, employees or agents or Controlling Person may become
subject under the Securities Act, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Private Placement Memorandum, the
Preliminary Prospectus Supplement, the Final Prospectus Supplement or the
Prospectus, or arises out of, or is based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under which they were
made, not misleading and shall reimburse the Trustee, the Custodian, the
Certificate Registrar or the Paying Agent, as the case may be, their respective
directors, officers, employees, agents or Controlling Person for any legal and
other expenses reasonably incurred by the Trustee, the Custodian, the
Certificate Registrar or the Paying Agent, as the case may be, or any such
director, officer, employee, agent or Controlling Person in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action; provided, that the Depositor shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
made in any such Private Placement Memorandum, Preliminary Prospectus
Supplement, Final Prospectus Supplement or Prospectus in reliance upon and in
conformity with written information concerning the Trustee, the Custodian, the
Certificate Registrar or the Paying Agent, as the case may be, furnished to the
Depositor by or on behalf of such person specifically for inclusion therein. It
is hereby expressly
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agreed that the only written information provided by the Trustee, the Custodian,
the Certificate Registrar or the Paying Agent, as the case may be, for inclusion
in the Preliminary Prospectus Supplement and Final Prospectus Supplement is set
forth in the case of the Trustee in the third, fourth and fifth sentences under
the caption entitled "TRANSACTION PARTIES--The Trustee" and in the case of the
Paying Agent, the third and fourth sentences under the "TRANSACTION PARTIES--The
Paying Agent, the Custodian, the Certificate Registrar, and the Authenticating
Agent." The Trustee, the Custodian, the Certificate Registrar or the Paying
Agent, as the case may be, shall immediately notify the Depositor and the
Sellers if a claim is made by a third party with respect to this Section 7.11(c)
entitling such person, its directors, officers, employees, agents or Controlling
Person to indemnification hereunder, whereupon the Depositor shall assume the
defense of any such claim (with counsel reasonably satisfactory to such person)
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or them in respect of such claim. Any failure to so notify the
Depositor shall not affect any rights the Trustee, the Custodian, the
Certificate Registrar or the Paying Agent, as the case may be, their respective
directors, officers, employees, agents or Controlling Person may have to
indemnification under this Section 7.11(c), unless the Depositor's defense of
such claim is materially prejudiced thereby. The indemnification provided herein
shall survive the termination of this Agreement and the resignation or removal
of the Trustee, the Custodian or the Paying Agent. The Depositor shall not be
indemnified by the Trust for any expenses incurred by the Depositor arising from
any violation or alleged violation of the Securities Act or Exchange Act by the
Depositor.
SECTION 7.12 FEES AND EXPENSES OF TRUSTEE AND THE PAYING AGENT. The
Trustee shall be entitled to receive the Trustee Fee (other than the portion
thereof constituting the Paying Agent Fee) and the Paying Agent shall be
entitled to receive the Paying Agent Fee, pursuant to Section 5.3(b)(ii) (which
shall not be limited by any provision of law with respect to the compensation of
a trustee of an express trust), for all services rendered by it in the execution
of the trusts hereby created and in the exercise and performance of any of the
powers and duties respectively, hereunder of the Trustee and the Paying Agent.
The Trustee and the Paying Agent shall also be entitled to recover from the
Trust all reasonable unanticipated expenses and disbursements incurred or made
by the Trustee and the Paying Agent in accordance with any of the provisions of
this Agreement (including the reasonable compensation and the reasonable
expenses and disbursements of its counsel and other Persons not regularly in its
employ), not including expenses incurred in the ordinary course of performing
its duties as Trustee or Paying Agent, respectively hereunder, and except any
such expense, disbursement or advance as may arise from the negligence or bad
faith of such Person or which is the responsibility of the Holders of the
Certificates hereunder. The provisions of this Section 7.12 shall survive any
termination of this Agreement and the resignation or removal of the Trustee or
the Paying Agent.
SECTION 7.13 COLLECTION OF MONEYS. Except as otherwise expressly
provided in this Agreement, the Trustee and the Paying Agent may demand payment
or delivery of, and shall receive and collect, all money and other property
payable to or receivable by the Trustee or the Paying Agent, as the case may be,
pursuant to this Agreement. The Trustee or the Paying Agent, as the case may be,
shall hold all such money and property received by it as part of the Trust and
shall distribute it as provided in this Agreement. If the Trustee or the Paying
Agent, as the case may be, shall not have timely received amounts to be remitted
with respect to the Mortgage Loans from the Master Servicer, the Trustee or the
Paying Agent, as the case may be, shall
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request the Master Servicer to make such distribution as promptly as practicable
or legally permitted. If the Trustee or the Paying Agent, as the case may be,
shall subsequently receive any such amount, it may withdraw such request.
SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Master Servicer is terminated pursuant
to this Agreement, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity under this Agreement and the transactions set
forth or provided for therein and shall have all the rights and powers and be
subject to all the responsibilities, duties and liabilities relating thereto and
arising thereafter placed on the Master Servicer by the terms and provisions of
this Agreement; provided that, any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide required
information shall not be considered a default by the Trustee hereunder. In
addition, the Trustee shall have no liability relating to (i) the
representations and warranties of the Master Servicer contained in this
Agreement or (ii) any obligation incurred by the Master Servicer prior to its
termination or resignation (including, without limitation, the Master Servicer's
obligation to repay losses resulting from the investment of funds in any account
established under this Agreement), except any ongoing obligations to the
applicable Primary Servicer arising after the termination of the Master Servicer
from their servicing rights and obligations under the applicable Primary
Servicing Agreement. In the Trustee's capacity as such successor, the Trustee
shall have the same limitations on liability granted to the Master Servicer in
this Agreement. As compensation therefor, the Trustee shall be entitled to
receive all the compensation payable to the Master Servicer set forth in this
Agreement, including, without limitation, the Master Servicing Fee.
(b) Notwithstanding the above, the Trustee (A) may, if the Trustee is
unwilling to so act, or (B) shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint any established commercial
or multifamily mortgage finance institution, servicer or special servicer or
mortgage servicing institution having a net worth of not less than $15,000,000,
meeting such other standards for a successor servicer as are set forth in this
Agreement and with respect to which Rating Agency Confirmation is obtained, as
the successor to the Master Servicer hereunder in the assumption of all of the
responsibilities, duties or liabilities of a servicer as Master Servicer
hereunder. Pending any such appointment, the Trustee shall act as the Master
Servicer as hereinabove provided. Any entity designated by the Trustee as
successor Master Servicer may be an Affiliate of the Trustee; provided that,
such Affiliate must meet the standards for the Master Servicer as set forth
herein. In connection with such appointment and assumption, the Trustee may make
such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree subject to Section 8.10. The
Trustee and such successor shall take such actions, consistent with this
Agreement as shall be necessary to effectuate any such succession. The Master
Servicer shall cooperate with the Trustee and any successor servicer in
effecting the termination of the Master Servicer's responsibilities and rights
under this Agreement, including, without limitation, notifying Mortgagors of the
assignment of the servicing function and providing the Trustee and successor
servicer all documents and records in its possession in electronic or other form
reasonably requested by the successor servicer to enable the successor servicer
to assume the Master Servicer's functions hereunder and the transfer to the
Trustee or such successor servicer of all amounts which shall at the time be or
should have been deposited by the Master Servicer in
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the Certificate Account and any other account or fund maintained with respect to
the Certificates or thereafter be received by the Master Servicer with respect
to the Mortgage Loans. Neither the Trustee nor any other successor servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Master Servicer. The Trustee shall be
reimbursed for all of its out-of-pocket expenses incurred in connection with
obtaining such successor Master Servicer by the Trust within 30 days of the
Trustee's submission of an invoice with respect thereto, to the extent such
expenses have not been reimbursed by the Master Servicer as provided herein;
such expenses paid by the Trust shall be deemed to be an Additional Trust
Expense.
(c) On and after the time the Special Servicer is terminated pursuant
to this Agreement, in accordance with Section 9.30, the Trustee shall be the
successor in all respects to the Special Servicer in its capacity under this
Agreement and the transactions set forth or provided for therein and shall have
all the rights and powers and be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Special
Servicer by the terms and provisions of this Agreement; provided that, any
failure to perform such duties or responsibilities caused by the Special
Servicer's failure to provide required information shall not be considered a
default by the Trustee hereunder. In addition, the Trustee shall have no
liability relating to (i) the representations and warranties of the Special
Servicer contained in this Agreement or (ii) any obligation incurred by the
Special Servicer prior to its termination or resignation. In the Trustee's
capacity as such successor, the Trustee shall have the same limitations on
liability granted to the Special Servicer in this Agreement. As compensation
therefor, the Trustee shall be entitled to receive all the compensation payable
to the Special Servicer set forth in this Agreement, including, without
limitation the Special Servicer Compensation (other than any Work-Out Fee
payable pursuant to Section 9.11).
(d) Notwithstanding the above, the Trustee may, if the Trustee shall
be unwilling to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
commercial or multifamily mortgage finance institution, special servicer or
mortgage servicing institution having a net worth of not less than $15,000,000,
and meeting such other standards for a successor Special Servicer as are set
forth in Section 9.21, and with respect to which Rating Agency Confirmation is
obtained, as the successor to the Special Servicer hereunder in the assumption
of all of the responsibilities, duties or liabilities of a special servicer as
Special Servicer hereunder. Pending any such appointment, the Trustee shall act
as the Special Servicer as hereinabove provided. Any entity designated by the
Trustee as successor Special Servicer may be an Affiliate of the Trustee;
provided that, such Affiliate must meet the standards for a successor Special
Servicer set forth herein. In connection with such appointment and assumption,
the Trustee may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree; provided
that no such compensation shall be in excess of that permitted to the Special
Servicer under this Agreement. The Trustee and such successor shall take such
actions, consistent with this Agreement as shall be necessary to effectuate any
such succession. The Special Servicer shall cooperate with the Trustee and any
successor Special Servicer in effecting the termination of the Special
Servicer's responsibilities and rights under this Agreement, including, without
limitation, notifying Mortgagors of Specially Serviced Mortgage Loans of the
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assignment of the special servicing function and providing the Trustee and
successor Special Servicer all documents and records in its possession in
electronic or other form reasonably requested by the successor Special Servicer
to enable the successor Special Servicer to assume the Special Servicer's
functions hereunder and the transfer to the Trustee or such successor Special
Servicer of all amounts which shall at the time be or should have been deposited
by the Special Servicer in the Certificate Account and any other account or fund
maintained with respect to the Certificates or thereafter be received by the
Special Servicer with respect to the Mortgage Loans. Neither the Trustee nor any
other successor Special Servicer shall be deemed to be in default hereunder by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Special
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions imposed by any regulatory authority having jurisdiction
over the Special Servicer. The Trustee shall be reimbursed for all of its
out-of-pocket expenses incurred in connection with obtaining such successor
Special Servicer by the Trust within 30 days of submission of an invoice with
respect thereto but only to the extent such expenses have not been reimbursed by
the Special Servicer as provided herein; and such expenses paid by the Trust
shall be deemed to be an Additional Trust Expense.
SECTION 7.15 NOTIFICATION TO HOLDERS. Upon termination of, or an Event
of Default by, the Master Servicer, the Paying Agent or the Special Servicer, or
appointment of a successor to the Master Servicer, the Paying Agent or the
Special Servicer, the Trustee shall promptly mail notice thereof by first class
mail to the Rating Agencies, the Operating Adviser, the Sellers and the
Certificateholders at their respective addresses appearing on the Certificate
Register.
SECTION 7.16 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE, THE
CUSTODIAN AND THE PAYING AGENT.
(a) The Trustee hereby represents and warrants as of the date hereof
that:
(i) the Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws governing its
creation and existence and has full power and authority to own its property, to
carry on its business as presently conducted, and to enter into and perform its
obligations under this Agreement;
(ii) the execution and delivery by the Trustee of this Agreement
have been duly authorized by all necessary action on the part of the Trustee;
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated in this Agreement, nor compliance with the
provisions of this Agreement, will conflict with or result in a breach of, or
constitute a default under, (i) any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Trustee or its
properties that would materially and adversely affect the Trustee's ability to
perform its obligations under this Agreement, (ii) the organizational documents
of the Trustee, or (iii) the terms of any material agreement or instrument to
which the Trustee is a party or by which it is bound; the Trustee is not in
default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
agency, which default would materially and adversely affect its performance
under this Agreement;
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(iii) the execution, delivery and performance by the Trustee of
this Agreement and the consummation of the transactions contemplated by this
Agreement do not require the consent, approval, authorization or order of, the
giving of notice to or the registration with any state, federal or other
governmental authority or agency, except such as has been or will be obtained,
given, effected or taken in order for the Trustee to perform its obligations
under this Agreement;
(iv) this Agreement has been duly executed and delivered by the
Trustee and, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other similar laws affecting creditors' rights generally as from
time to time in effect, and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
and
(v) no litigation is pending or, to the Trustee's knowledge,
threatened, against the Trustee that, either in one instance or in the
aggregate, would draw into question the validity of this Agreement, or which
would be likely to impair materially the ability of the Trustee to perform under
the terms of this Agreement.
(b) The Paying Agent and Custodian hereby represents and warrants as
of the date hereof that:
(i) it is a national banking association, duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full power and authority to own its property, to carry on its
business as presently conducted, and to enter into and perform its obligations
under this Agreement;
(ii) the execution and delivery by it of this Agreement have been
duly authorized by all necessary action on the part of the Paying Agent and
Custodian; neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated in this Agreement, nor compliance
with the provisions of this Agreement, will conflict with or result in a breach
of, or constitute a default under, (i) any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on it or its
properties that would materially and adversely affect its ability to perform its
obligations under this Agreement, (ii) its organizational documents, or (iii)
the terms of any material agreement or instrument to which it is a party or by
which it is bound; it is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state, municipal or
other governmental agency, which default would materially and adversely affect
its performance under this Agreement;
(iii) the execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated by this
Agreement do not require the consent, approval, authorization or order of, the
giving of notice to or the registration with any state, federal or other
governmental authority or agency, except such as has been or will be obtained,
given, effected or taken in order for it to perform its obligations under this
Agreement;
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(iv) this Agreement has been duly executed and delivered by the
Paying Agent and Custodian and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding obligation
of the Paying Agent and Custodian, enforceable against the Paying Agent and
Custodian in accordance with its terms, subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting creditors' rights generally as from time to time in
effect, and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
(v) there are no actions, suits or proceeding pending or, to the
best of its knowledge, threatened, against it that, either in one instance or in
the aggregate, would draw into question the validity of this Agreement, or which
would be likely to impair materially its ability to perform under the terms of
this Agreement.
SECTION 7.17 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY
MAINTAINED BY THE TRUSTEE, THE CUSTODIAN AND THE PAYING AGENT. Each of the
Trustee, the Custodian and the Paying Agent, at its own respective expense,
shall maintain in effect a Fidelity Bond and a Errors and Omissions Insurance
Policy. The Errors and Omissions Insurance Policy and Fidelity Bond shall be
issued by a Qualified Insurer in form and in amount customary for trustees or
paying agents in similar transactions (unless the Trustee, the Custodian or the
Paying Agent, as the case may be, self insures as provided below). In the event
that any such Errors and Omissions Insurance Policy or Fidelity Bond ceases to
be in effect, the Trustee, the Custodian or the Paying Agent, as the case may
be, shall obtain a comparable replacement policy or bond from an insurer or
issuer meeting the requirements set forth above as of the date of such
replacement. So long as the long-term debt rating of the Trustee, the Custodian
or the Paying Agent, as the case may be, is not less than "A" as rated by Fitch,
if rated by Fitch, and "A" as rated by S&P, if rated by S&P, respectively, the
Trustee, the Custodian or the Paying Agent, as the case may be, may self-insure
for the Fidelity Bond and the Errors and Omissions Insurance Policy.
SECTION 7.18 APPOINTMENT OF LUXEMBOURG PAYING AGENT; NOTIFICATION TO
CERTIFICATEHOLDERS.
(a) The Depositor shall maintain a paying agent in Luxembourg (the
"Luxembourg Paying Agent") for payments on the Certificates as well as a
transfer agent in Luxembourg (the "Luxembourg Transfer Agent") for so long as
such Certificates are listed on the Luxembourg Stock Exchange and the rules of
such exchange so require and the Depositor shall pay the reasonable fees of such
Luxembourg Paying Agent and Luxembourg Transfer Agent. The Depositor shall
appoint a successor Luxembourg Paying Agent if necessary. Except as set forth in
this Section 7.18(a), neither the Trustee nor the Paying Agent shall have any
responsibility for the actions or inactions of the Luxembourg Paying Agent,
including any failure of the Luxembourg Paying Agent to make timely
distributions to Certificateholders or beneficial owners (other than any such
failure resulting from the failure of the Paying Agent to timely remit funds but
only to the extent such failure is caused by the Paying Agent's negligence or
willful misconduct). The Certificate Registrar shall not be responsible for
transfers or exchanges requested at the office of the Luxembourg Transfer Agent
in Luxembourg until it receives written notice from such transfer agent,
together with the Certificates to be transferred or
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exchanged. The Luxembourg Paying Agent shall each month download copies of all
information made available on the Paying Agent's internet website, print such
information and make it available to the Certificateholders upon request. The
Luxembourg Paying Agent shall not be the Paying Agent and the duties of the
Luxembourg Paying Agent hereunder shall be distinct from the duties of the
Paying Agent.
(b) For so long as the Certificates are listed on the Luxembourg Stock
Exchange and the rules of the Luxembourg Stock Exchange so require, the
Depositor undertakes to cause the Luxembourg Paying Agent to publish all notices
to Certificateholders in a daily newspaper of general circulation in Luxembourg.
(c) For so long as any of the Certificates are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, the Paying Agent shall make available or provide the following
information on the Paying Agent's internet website:
(i) to Clearstream Bank, Euroclear Bank and the Luxembourg Paying
Agent promptly upon determination, the Pass-Through Rates for the related
Interest Accrual Period, the amount of principal and interest distributable on
the related Distribution Date for each Class of Certificates, per $1,000 initial
Certificate Balance or Notional Amount and the date each distribution will be
made;
(ii) to the Luxembourg Paying Agent on each Distribution Date,
the Certificate Balance or Notional Amount of the Certificates;
(iii) to the Luxembourg Paying Agent promptly following
availability, each report, certificate or statement required to be delivered to
the Luxembourg Paying Agent pursuant to Section 5.4;
(iv) to the Luxembourg Paying Agent promptly following receipt
thereof, all notices and reports regarding any termination of the Trustee or the
Paying Agent or appointment of a successor to the Trustee or the Paying Agent;
and
(v) to the Luxembourg Paying Agent promptly following receipt
thereof, all notices and reports regarding any occurrence of an Event of
Default.
Information provided, as set forth above, by the Paying Agent to the
Luxembourg Paying Agent shall be supplied by the Luxembourg Paying Agent to the
Luxembourg Stock Exchange. Such information shall be made available to the
Certificateholders at the main office of the Luxembourg Paying Agent.
None of the Certificates will be listed on the Luxembourg Stock
Exchange or any other stock exchange.
ARTICLE VIII
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 8.1 SERVICING STANDARD; SERVICING DUTIES.
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(a) Subject to the express provisions of this Agreement, for and on
behalf of the Trust and for the benefit of the Certificateholders as a whole,
and, solely as it relates to any A/B Mortgage Loan, for the benefit of the
holder of the related B Note and, solely as it relates to any Loan Pair, for the
benefit of the holder of the related Serviced Companion Mortgage Loan, the
Master Servicer shall service and administer the Mortgage Loans, any B Note and
any Serviced Companion Mortgage Loan in accordance with the Servicing Standard
and the terms of this Agreement (subject to the servicing of any Non-Serviced
Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master Servicer and
the applicable Non-Serviced Mortgage Loan Special Servicer in accordance with
the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement and
subject to the servicing of the 000 00xx Xxxxxx X Note by the MLMT 2006-C1
Master Servicer and the MLMT 2006-C1 Special Servicer in accordance with the
MLMT 2006-C1 Pooling and Servicing Agreement). Certain of the provisions of this
Article VIII make explicit reference to their applicability to Mortgage Loans,
any B Note and any Serviced Companion Mortgage Loan; notwithstanding such
explicit references, references to "Mortgage Loans" contained in this Article
VIII, unless otherwise specified, shall be construed to refer also to such B
Note and Serviced Companion Mortgage Loan (but any other terms that are defined
in Article I and used in this Article VIII shall be construed according to such
definitions without regard to this sentence).
In connection with such servicing and administration, the Master
Servicer shall seek to maximize the timely recovery of principal and interest on
the Mortgage Notes in the best economic interests of the Certificateholders as a
whole (or, in the case of any A/B Mortgage Loan or Loan Pair, the
Certificateholders and the holder of the related B Note and Serviced Companion
Mortgage Loan, all taken as a collective whole taking into account the
subordinate nature of the B Note); provided, however, that nothing herein
contained shall be construed as an express or implied guarantee by the Master
Servicer of the collectability of payments on the Mortgage Loans or shall be
construed as impairing or adversely affecting any rights or benefits
specifically provided by this Agreement to the Master Servicer, including with
respect to Master Servicing Fees or the right to be reimbursed for Advances.
(b) The Master Servicer, in the case of an event specified in clause
(x) of this subclause (b), and the Special Servicer, in the case of an event
specified in clause (y) of this subclause (b), shall each send a written notice
to the other and to the Trustee and the Paying Agent, the Operating Adviser,
each Seller and, in the case of an A/B Mortgage Loan, the holder of the related
B Note and, in the case of a Loan Pair, the holder of the related Serviced
Companion Mortgage Loan, within two Business Days after becoming aware (x) that
a Servicing Transfer Event has occurred with respect to a Mortgage Loan or (y)
that a Mortgage Loan has become a Rehabilitated Mortgage Loan, which notice
shall identify the applicable Mortgage Loan and, in the case of an event
specified in clause (x) of this subclause (b) above, the Servicing Transfer
Event that occurred.
(c) With respect to each Mortgage Loan that is subject to an
Environmental Insurance Policy, for as long as it is not a Specially Serviced
Mortgage Loan, if the Master Servicer has actual knowledge of any event giving
rise to a claim under an Environmental Insurance Policy, the Master Servicer or
the applicable Primary Servicer shall notify the Special Servicer to such effect
and the Master Servicer shall take reasonable actions as are in accordance with
the Servicing Standard and the terms and conditions of such Environmental
Insurance
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Policy to make a claim thereunder and achieve the payment of all amounts to
which the Trust is entitled thereunder. Any legal fees or other out-of-pocket
costs incurred in accordance with the Servicing Standard in connection with any
such claim shall be paid by, and reimbursable to, the Master Servicer or the
Special Servicer as a Servicing Advance.
(d) In connection with any extension of the Maturity Date of a
Mortgage Loan, the Master Servicer shall give prompt written notice of such
extension to the insurer under the Environmental Insurance Policy and shall
execute such documents as are reasonably required by such insurer to procure an
extension of such policy (if available).
(e) The parties hereto acknowledge that each Serviced Pari Passu
Mortgage Loan and Serviced Companion Mortgage Loan is subject to the terms and
conditions of the related Loan Pair Intercreditor Agreement and that the A/B
Mortgage Loans are subject to the terms and conditions of the related
Intercreditor Agreement, and each such party agrees that the provisions of each
Loan Pair Intercreditor Agreement and Intercreditor Agreement that are required
by their terms to be set forth in this Agreement are hereby incorporated herein.
With respect to each Serviced Pari Passu Mortgage Loan and Serviced Companion
Mortgage Loan, the Trustee, the Master Servicer and the Special Servicer
recognize the respective rights and obligations of the Trust and the holders of
each Serviced Companion Mortgage Loan under the related Loan Pair Intercreditor
Agreement, including, with respect to the allocation of collections on or in
respect of any Serviced Pari Passu Mortgage Loan and Serviced Companion Mortgage
Loan in accordance with the related Loan Pair Intercreditor Agreement. The
Master Servicer shall comply with the applicable provisions of each Loan Pair
Intercreditor Agreement, and if any Serviced Pari Passu Mortgage Loan and
Serviced Companion Mortgage Loan are then Specially Serviced Mortgage Loans, the
Special Servicer shall comply with the applicable provisions of the related Loan
Pair Intercreditor Agreement. The parties hereto agree that any conflict between
the terms of this Agreement and the terms of any Loan Pair Intercreditor
Agreement or Intercreditor Agreement, as applicable, shall be resolved in favor
of the Loan Pair Intercreditor Agreement or Intercreditor Agreement.
(f) Promptly following the Closing Date, the Master Servicer shall
send written notice to each Non-Serviced Mortgage Loan Master Servicer and the
MLMT 2006-C1 Master Servicer, stating that, as of the Closing Date, the Trustee
is the holder of the applicable Non-Serviced Mortgage Loan and the 000 00xx
Xxxxxx X Note, and directing such Non-Serviced Mortgage Loan Master Servicer and
MLMT 2006-C1 Master Servicer to remit to the Master Servicer (or in the case of
the 000 00xx Xxxxxx X Note, to the Paying Agent) all amounts payable to, and
directing such Non-Serviced Mortgage Loan Master Servicer and MLMT 2006-C1
Master Servicer (and, in the case of the 000 00xx Xxxxxx X Note, the Paying
Agent) to forward, deliver or otherwise make available, as the case may be, to,
the Master Servicer all reports, statements, documents, communications and other
information that are to be forwarded, delivered or otherwise made available to,
such holder of the applicable Non-Serviced Mortgage Loan and the 000 00xx Xxxxxx
X Note under the related Non-Serviced Mortgage Loan Pooling and Servicing
Agreement and Non-Serviced Mortgage Loan Intercreditor Agreement (in the case of
the 000 00xx Xxxxxx X Note, the MLMT 2006-C1 Pooling and Servicing Agreement and
the related Intercreditor Agreement).
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(g) Each Non-Serviced Mortgage Loan shall be serviced and administered
by the applicable Non-Serviced Mortgage Loan Master Servicer and Non-Serviced
Mortgage Loan Special Servicer pursuant to the related Non-Serviced Mortgage
Loan Pooling and Servicing Agreement and Non-Serviced Mortgage Loan
Intercreditor Agreement, except as otherwise specifically provided in this
Agreement. If any Non-Serviced Companion Mortgage Loan that is an asset under
the trust created by the related Non-Serviced Mortgage Loan Pooling and
Servicing Agreement is removed from the pool of mortgage loans created under
such Non-Serviced Mortgage Loan Pooling and Servicing Agreement, or if such
Non-Serviced Mortgage Loan Pooling and Servicing Agreement is otherwise
terminated, the servicing of the Non-Serviced Mortgage Loan shall be
transferred, pursuant to the related Non-Serviced Mortgage Loan Intercreditor
Agreement, and shall be serviced and administered by a successor servicing
agreement, which shall have similar provisions to such Non-Serviced Mortgage
Loan Pooling and Servicing Agreement to the extent set forth in the related
Non-Serviced Mortgage Loan Intercreditor Agreement, and such transfer shall be
subject to the receipt of a Rating Agency Confirmation.
SECTION 8.1A SERVICING OF THE DCT INDUSTRIAL PORTFOLIO A/B/C LOAN.
The DCT Industrial Portfolio A/B/C Loan and, if it has become REO
Property, the related Mortgaged Property shall be serviced and administered in
accordance with this Agreement or as otherwise contemplated by the related
Intercreditor Agreement, as and to the extent provided in the related
Intercreditor Agreement. The Trustee (as assignee of the related Intercreditor
Agreement hereunder) and the Paying Agent (on behalf of the Trustee) shall use
reasonable efforts to enforce the terms of the related Intercreditor Agreement.
If the Trustee is requested to take any action in its capacity as
holder of the DCT Industrial Portfolio C Note under this Agreement or the
related Intercreditor Agreement, other than an action as to which the Master
Servicer or the Special Servicer are permitted or required to exercise hereunder
or the Class DP Certificateholder Representative has the right to exercise the
rights and powers of the Trustee pursuant to Section 9.41, or if a Responsible
Officer of the Trustee becomes aware of a default, including any Event of
Default, on the part of any party under this Agreement, the Trustee shall cause
the Paying Agent to promptly notify all the Class DP Certificateholders in
writing of such request or default, as the case may be, and of the time period
within which the Trustee must respond (or, if there is no specified time period,
the Trustee shall designate a reasonable time period for the Class DP
Certificateholders to respond) (in any event, the "DP Response Period"). In
connection with such request or default, subject to Sections 7.1 and 7.2, the
Trustee shall act in accordance with the instructions of the Class DP
Certificateholder Representative; provided that, if such instructions are not
forthcoming within the DP Response Period, the Trustee shall, subject to
Sections 7.1 and 7.2, take such action or inaction as it deems to be in the best
interests of the Class DP Certificateholders (as a collective whole) and shall
have all rights and powers incident thereto; and provided, further, that the
Trustee shall not be required to take any action not permitted under applicable
law or the terms of the related Intercreditor Agreement or this Agreement.
Notwithstanding the foregoing, in the event that the holder of the DCT
Industrial Portfolio C Note has a cure right under the related Intercreditor
Agreement, the Trustee, as holder of the DCT Industrial Portfolio C Note, shall
exercise such cure right only if all of the
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Class DP Certificateholders have directed the Trustee to exercise such right and
have provided funds therefor. The Trustee shall promptly cause the Paying Agent
to notify the Class DP Certificateholders and the Class DP Certificateholder
Representative if it receives notice of an event of default under the DCT
Industrial Portfolio A/B/C Loan.
SECTION 8.1B SERVICING OF THE 000 00XX XXXXXX A/B/C MORTGAGE LOAN.
The 000 00xx Xxxxxx A/B/C Mortgage Loan and, if it has become REO
Property (as defined in the MLMT 2006-C1 Pooling and Servicing Agreement), the
related Mortgaged Property shall be serviced and administered in accordance with
the MLMT 2006-C1 Pooling and Servicing Agreement or as otherwise contemplated by
the related Intercreditor Agreement, as and to the extent provided in the
related Intercreditor Agreement. The Trustee (as assignee of the related
Intercreditor Agreement hereunder) and the Paying Agent (on behalf of the
Trustee) shall use reasonable efforts to enforce the terms of the related
Intercreditor Agreement.
If the Trustee is requested to take any action in its capacity as
holder of the 000 00xx Xxxxxx X Note under the MLMT 2006-C1 Pooling and
Servicing Agreement or the related Intercreditor Agreement, other than an action
as to which the Class ST Certificateholder Representative has the right to
exercise the rights and powers of the Trustee pursuant to Section 9.41, or if a
Responsible Officer of the Trustee becomes aware of a default, including any
Event of Default (as defined in the MLMT 2006-C1 Pooling and Servicing
Agreement), on the part of any party under the MLMT 2006-C1 Pooling and
Servicing Agreement, the Trustee shall cause the Paying Agent to promptly notify
all the Class ST Certificateholders in writing of such request or default, as
the case may be, and of the time period within which the Trustee must respond
(or, if there is no specified time period, the Trustee shall designate a
reasonable time period for the Class ST Certificateholders to respond) (in any
event, the "ST Response Period"). In connection with such request or default,
subject to Sections 7.1 and 7.2, the Trustee shall act in accordance with the
instructions of the Class ST Certificateholder Representative; provided that, if
such instructions are not forthcoming within the ST Response Period, the Trustee
shall, subject to Sections 7.1 and 7.2, take such action or inaction as it deems
to be in the best interests of the Class ST Certificateholders (as a collective
whole) and shall have all rights and powers incident thereto; and provided,
further, that the Trustee shall not be required to take any action not permitted
under applicable law or the terms of the related Intercreditor Agreement or the
MLMT 2006-C1 Pooling and Servicing Agreement.
During the continuance of any Event of Default (as defined in the MLMT
2006-C1 Pooling and Servicing Agreement) or other default under the MLMT 2006-C1
Pooling and Servicing Agreement, so long as such Event of Default or other
default shall not have been remedied or waived in accordance with the terms
hereof and thereof, the Trustee shall have the right (exercisable subject to
Section 7.1(a) and the first paragraph of this Section 8.1(B)), in its own name
and as trustee of an express trust, to take all actions now or hereafter
existing at law that are available to it, in equity or by statute to enforce its
rights and remedies and to protect the interests, and enforce the rights and
remedies, of the Class ST 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).
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Notwithstanding the foregoing, in the event that the holder of the 000
00xx Xxxxxx X Note has a cure right under the related Intercreditor Agreement,
the Trustee, as holder of the 000 00xx Xxxxxx X Note, shall exercise such cure
right only if the Class ST Certificateholder Representative has directed the
Trustee to exercise such right and have provided funds therefor. The Trustee
shall promptly cause the Paying Agent to notify the Class ST Certificateholders
and the Class ST Certificateholder Representative if it receives notice of an
Event of Default (as defined in the MLMT 2006-C1 Pooling and Servicing
Agreement).
SECTION 8.2 FIDELITY BOND AND ERRORS AND OMISSIONS INSURANCE POLICY
MAINTAINED BY THE MASTER SERVICER. The Master Servicer, at its expense, shall
maintain in effect a Servicer Fidelity Bond and a Servicer Errors and Omissions
Insurance Policy. The Servicer Errors and Omissions Insurance Policy and
Servicer Fidelity Bond shall be issued by a Qualified Insurer (unless the Master
Servicer self insures as provided below) and be in form and amount consistent
with the Servicing Standard. In the event that any such Servicer Errors and
Omissions Insurance Policy or Servicer Fidelity Bond ceases to be in effect, the
Master Servicer shall obtain a comparable replacement policy or bond from an
insurer or issuer meeting the requirements set forth above as of the date of
such replacement. So long as the long-term rating of the Master Servicer is not
in any event less than "BBB" as rated by S&P and "A" as rated by Fitch,
respectively, the Master Servicer may self-insure for the Servicer Fidelity Bond
and the Servicer Errors and Omissions Insurance Policy.
SECTION 8.3 MASTER SERVICER'S GENERAL POWER AND DUTIES.
(a) The Master Servicer shall service and administer the Mortgage
Loans (other than the 000 00xx Xxxxxx X Note) and shall, subject to Sections
8.7, 8.18, 8.19, 8.27 and Article XII hereof and as otherwise provided herein
and by the Code, have full power and authority to do any and all things which it
may deem necessary or desirable in connection with such servicing and
administration in accordance with the Servicing Standard. To the extent
consistent with the foregoing and subject to any express limitations and
provisions set forth in this Agreement (and, in the case of any A/B Mortgage
Loan and any Loan Pair, subject to the applicable Intercreditor Agreement or
Loan Pair Intercreditor Agreement and, in the case of any Non-Serviced Mortgage
Loan, subject to the servicing of such Non-Serviced Mortgage Loan by the
applicable Non-Serviced Mortgage Loan Master Servicer and the applicable
Non-Serviced Mortgage Loan Special Servicer, as applicable), such power and
authority shall include, without limitation, the right, subject to the terms
hereof, (A) to execute and deliver, on behalf of the Certificateholders (and in
connection with any B Note, the holder of the B Note and, in connection with any
Loan Pair, the holder of the Serviced Companion Mortgage Loan) and the Trustee,
customary consents or waivers and other instruments and documents (including,
without limitation, estoppel certificates, financing statements, continuation
statements, title endorsements and reports and other documents and instruments
necessary to preserve and maintain the lien on the related Mortgaged Property
and related collateral), (B) to consent to assignments and assumptions or
substitutions, and transfers of interest of any Mortgagor, in each case subject
to and in accordance with the terms of the related Mortgage Loan and Section
8.7, (C) to collect any Insurance Proceeds, (D) subject to Section 8.7, to
consent to any subordinate financings to be secured by any related Mortgaged
Property to the extent that such consent is required pursuant to the terms of
the related Mortgage or which otherwise is required, and, subject to Section
8.7, to consent to any mezzanine debt to the extent such consent is required
pursuant to
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the terms of the related Mortgage; (E) to consent to the application of any
proceeds of insurance policies or condemnation awards to the restoration of the
related Mortgaged Property or otherwise and to administer and monitor the
application of such proceeds and awards in accordance with the terms of the
Mortgage Loan as the Master Servicer deems reasonable under the circumstances,
(F) to execute and deliver, on behalf of the Certificateholders (and, if
applicable, the holders of the B Note and Serviced Companion Mortgage Loan) and
the Trustee, documents relating to the management, operation, maintenance,
repair, leasing and marketing of the related Mortgaged Properties, including
agreements and requests by the Mortgagor with respect to modifications of the
standards of operation and management of the Mortgaged Properties or the
replacement of asset managers, (G) to consent to any operation or action under a
Mortgage Loan that is contemplated or permitted under a Mortgage or other
documents evidencing or securing the applicable Mortgage Loan (either as a
matter of right or upon satisfaction of specified conditions), (H) to obtain,
release, waive or modify any term other than a Money Term of a Mortgage Loan and
related documents subject to and to the extent permitted by Section 8.18, (I) to
exercise all rights, powers and privileges granted or provided to the holder of
the Mortgage Notes, any Serviced Companion Mortgage Loan and any B Note under
the terms of the Mortgage, including all rights of consent or approval
thereunder, subject to Sections 8.7 and 8.18 of this Agreement, (J) to enter
into lease subordination agreements, non-disturbance and attornment agreements
or other leasing or rental arrangements which may be requested by the Mortgagor
or the Mortgagor's tenants, (K) to join the Mortgagor in granting, modifying or
releasing any easements, covenants, conditions, restrictions, equitable
servitudes, or land use or zoning requirements with respect to the Mortgaged
Properties to the extent such does not adversely affect the value of the related
Mortgage Loan or Mortgaged Property, (L) to execute and deliver, on behalf of
itself, the Trustee, the Trust (and, if applicable, the holders of the B Note
and Serviced Companion Mortgage Loan) or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties, and (M) hold in accordance with the terms
of any Mortgage Loan and this Agreement, Defeasance Collateral. The foregoing
clauses (A) through (M) are referred to collectively as "Master Servicer Consent
Matters." Notwithstanding the above, the Master Servicer shall have no power to
(i) waive any Prepayment Premiums or (ii) consent to any modification of a Money
Term of a Mortgage Loan. In addition, subject to the Servicing Standard, the
Master Servicer shall not accept any prepayment of principal with respect to any
Mortgage Loan on any date other than the related Due Date unless (i) such
payment is accompanied by a payment of the interest due with respect to such
Mortgage Loan up to the next succeeding Due Date, (ii) such prepayment does not
result in the Trust incurring a Prepayment Interest Shortfall or (iii) such
prepayment is required to be permitted under the related Mortgage Loan documents
or applicable law on a date other than the related Due Date; provided that the
payment of the related Prepayment Interest Shortfall shall be deemed to cure a
breach of the covenant in this sentence. Nothing contained in this Agreement
shall limit the ability of the Master Servicer to lend money to (to the extent
not secured, in whole or in part, by any Mortgaged Property), accept deposits
from and otherwise generally engage in any kind of business or dealings with any
Mortgagor as though the Master Servicer was not a party to this Agreement or to
the transactions contemplated hereby; provided, however, that this sentence
shall not modify the Servicing Standard.
(b) The Master Servicer shall not be obligated to service and
administer the Mortgage Loans which have become and continue to be Specially
Serviced Mortgage Loans,
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except as specifically provided herein. The Master Servicer shall be required to
make all calculations and prepare all reports required hereunder with respect to
such Specially Serviced Mortgage Loans (other than calculations and reports
expressly required to be made by the Special Servicer hereunder) as if no
Servicing Transfer Event had occurred and shall continue to collect all
Scheduled Payments, make Servicing Advances as set forth herein, make P&I
Advances as set forth herein and render such incidental services with respect to
such Specially Serviced Mortgage Loans, all as are specifically provided for
herein, but shall have no other servicing or other duties with respect to such
Specially Serviced Mortgage Loans. The Master Servicer shall give notice within
three Business Days to the Special Servicer of any collections it receives from
any Specially Serviced Mortgage Loans, subject to changes agreed upon from time
to time by the Special Servicer and the Master Servicer. The Special Servicer
shall instruct within one Business Day after receiving such notice the Master
Servicer on how to apply such funds. The Master Servicer within one Business Day
after receiving such instructions shall apply such funds in accordance with the
Special Servicer's instructions. Each Mortgage Loan that becomes a Specially
Serviced Mortgage Loan shall continue as such until such Mortgage Loan becomes a
Rehabilitated Mortgage Loan. The Master Servicer shall not be required to
initiate extraordinary collection procedures or legal proceedings with respect
to any Mortgage Loan or to undertake any pre-foreclosure procedures.
(c) Concurrently with the execution of this Agreement, the Trustee
shall sign the Power of Attorney attached hereto as Exhibit S-1. The Master
Servicer, shall promptly notify the Trustee of the execution and delivery of any
document on behalf of the Trustee under such Power-of-Attorney. From time to
time until the termination of the Trust, upon receipt of additional unexecuted
powers of attorney from the Master Servicer or the Special Servicer, the Trustee
shall execute and return to the Master Servicer, the Special Servicer or any
Primary Servicer any additional powers of attorney and other documents necessary
or appropriate to enable the Master Servicer and the Special Servicer to service
and administer the Mortgage Loans including, without limitation, documents
relating to the management, operation, maintenance, repair, leasing or marketing
of the Mortgaged Properties. The Master Servicer shall indemnify the Trustee for
any costs, liabilities and expenses (including attorneys' fees) incurred by the
Trustee in connection with the intentional or negligent misuse of such power of
attorney by the Master Servicer. Notwithstanding anything contained herein to
the contrary, neither the Master Servicer nor the Special Servicer shall without
the Trustee's written consent: (i) initiate any action, suit or proceeding
solely under the Trustee's name without indicating the Master Servicer's or
Special Servicer's, as applicable, representative capacity, or (ii) knowingly
take any action that causes the Trustee to be registered to do business in any
state, provided, however, that the preceding clause (i) shall not apply to the
initiation of actions relating to a Mortgage Loan that the Master Servicer or
the Special Servicer, as the case may be, is servicing pursuant to its
respective duties herein (in which case the Master Servicer or the Special
Servicer, as the case may be, shall give three (3) Business Days prior notice to
the Trustee of the initiation of such action). The limitations of the preceding
clause shall not be construed to limit any duty or obligation imposed on the
Trustee under any other provision of this Agreement.
(d) The Master Servicer shall make efforts consistent with the
Servicing Standard and the terms of this Agreement to collect all payments
called for under the terms and provisions of the applicable Mortgage Loans
(other than Specially Serviced Mortgage Loans or REO Properties).
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(e) The Master Servicer (or the applicable Primary Servicer on its
behalf) shall segregate and hold all funds collected and received pursuant to
any Mortgage Loan (other than any Non-Serviced Mortgage Loan) constituting
Escrow Amounts separate and apart from any of its own funds and general assets
and shall establish and maintain one or more segregated custodial accounts
(each, an "Escrow Account") into which all Escrow Amounts shall be deposited
within one (1) Business Day after receipt. Each Escrow Account shall be an
Eligible Account, except with respect to Mortgage Loans identified on Schedule
VI for which Escrow Accounts shall be transferred to Eligible Accounts at the
earliest date permitted under the related Mortgage Loan documents. The Master
Servicer shall also deposit into each Escrow Account any amounts representing
losses on Eligible Investments pursuant to the immediately succeeding paragraph
and any Insurance Proceeds or Liquidation Proceeds which are required to be
applied to the restoration or repair of any Mortgaged Property pursuant to the
related Mortgage Loan. Each Escrow Account shall be maintained in accordance
with the requirements of the related Mortgage Loan and in accordance with the
Servicing Standard. Withdrawals from an Escrow Account may be made only:
(i) to effect timely payments of items constituting Escrow
Amounts for the related Mortgage Loan;
(ii) to transfer funds to the Certificate Account (or any
sub-account thereof) to reimburse the Master Servicer for any Advance (or the
Trust for any Unliquidated Advance) relating to Escrow Amounts, but only from
amounts received with respect to the related Mortgage Loan which represent late
collections of Escrow Amounts thereunder;
(iii) for application to the restoration or repair of the related
Mortgaged Property in accordance with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the
termination of this Agreement or pay-off of the related Mortgage Loan;
(v) to pay from time to time to the related Mortgagor any
interest or investment income earned on funds deposited in the Escrow Account if
such income is required to be paid to the related Mortgagor under applicable law
or by the terms of the Mortgage Loan, or otherwise to the Master Servicer; and
(vi) to remove any funds deposited in a Escrow Account that were
not required to be deposited therein or to refund amounts to the Mortgagors
determined to be overages.
Subject to the immediately succeeding sentence, (i) the Master
Servicer may direct any depository institution or trust company in which the
Escrow Accounts are maintained to invest the funds held therein in one or more
Eligible Investments; provided, however, that such funds shall be either (x)
immediately available or (y) available in accordance with a schedule which will
permit the Master Servicer to meet the payment obligations for which the Escrow
Account was established; (ii) the Master Servicer shall be entitled to all
income and gain realized from any such investment of funds as additional
servicing compensation; and (iii) the Master Servicer shall deposit from its own
funds in the applicable Escrow Account the amount
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of any loss incurred in respect of any such investment of funds immediately upon
the realization of such loss. The Master Servicer shall not direct the
investment of funds held in any Escrow Account and retain the income and gain
realized therefrom if the terms of the related Mortgage Loan or applicable law
permit the Mortgagor to be entitled to the income and gain realized from the
investment of funds deposited therein, and the Master Servicer shall not be
required to invest amounts on deposit in Escrow Accounts in Eligible Investments
or Eligible Accounts to the extent that the Master Servicer is required by
either law or under the terms of any related Mortgage Loan to deposit or invest
(or the Mortgagor is entitled to direct the deposit or investment of) such
amounts in another type of investments or accounts. In the event the Master
Servicer is not entitled to direct the investment of such funds, (1) the Master
Servicer shall direct the depository institution or trust company in which such
Escrow Accounts are maintained to invest the funds held therein in accordance
with the Mortgagor's written investment instructions, if the terms of the
related Mortgage Loan or applicable law require the Master Servicer to invest
such funds in accordance with the Mortgagor's directions; and (2) in the absence
of appropriate written instructions from the Mortgagor, the Master Servicer
shall have no obligation to, but may be entitled to, direct the investment of
such funds; provided, however, that in either event (i) such funds shall be
either (y) immediately available or (z) available in accordance with a schedule
which will permit the Master Servicer to meet the payment obligations for which
the Escrow Account was established, and (ii) the Master Servicer shall have no
liability for any loss in investments of such funds that are invested pursuant
to written instructions from the Mortgagor.
(f) The relationship of each of the Master Servicer and the Special
Servicer to the Trustee and the Paying Agent and to each other under this
Agreement is intended by the parties to be that of an independent contractor and
not of a joint venturer, partner or agent.
(g) With respect to each Mortgage Loan, if required by the terms of
the related Mortgage Loan, any Lock-Box Agreement or similar agreement, the
Master Servicer shall establish and maintain, in accordance with the Servicing
Standard, one or more lock-box, cash management or similar accounts ("Lock-Box
Accounts") to be held outside the Trust and maintained by the Master Servicer in
accordance with the terms of the related Mortgage. No Lock-Box Account is
required to be an Eligible Account, unless otherwise required pursuant to the
related Mortgage Loan documents. The Master Servicer shall apply the funds
deposited in such accounts in accordance with terms of the related Mortgage Loan
documents, any Lock-Box Agreement and in accordance with the Servicing Standard.
(h) The Master Servicer or the applicable Primary Servicer on its
behalf shall process all defeasances of Mortgage Loans in accordance with the
terms of the Mortgage Loan documents, and shall be entitled to any fees paid
relating thereto. The Master Servicer shall not permit defeasance (or partial
defeasance if permitted under the Mortgage Loan) of any Mortgage Loan on or
before the second anniversary of the Closing Date unless such defeasance will
not result in an Adverse REMIC Event and the Master Servicer has received an
opinion of counsel to such effect and all items in the following sentence have
been satisfied. Subsequent to the second anniversary of the Closing Date, the
Master Servicer, in connection with the defeasance of a Mortgage Loan shall
require (to the extent it is not inconsistent with the Servicing Standard) that:
(i) the defeasance collateral consists of Qualifying Government Securities as
defined in Section 2(a)(16) of the Investment Company Act of 1940, as amended,
that are acceptable as defeasance
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collateral under the current guidelines of the Rating Agencies, (ii) the Master
Servicer has determined that the defeasance will not result in an Adverse REMIC
Event, (iii) either (A) the related Mortgagor designates a Single-Purpose Entity
(if the Mortgagor no longer complies) to own the Defeasance Collateral (subject
to customary qualifications) or (B) the Master Servicer has established a
Single-Purpose Entity to hold all Defeasance Collateral relating to the
Defeasance Loans, (iv) the Master Servicer has requested and received from the
Mortgagor (A) an opinion of counsel that the Trustee will have a perfected,
first priority security interest in such Defeasance Collateral and (B) written
confirmation from a firm of independent accountants stating that payments made
on such Defeasance Collateral in accordance with the terms thereof will be
sufficient to pay the subject Mortgage Loan (or the defeased portion thereof in
connection with a partial defeasance) in full on or before its Maturity Date
(or, in the case of an ARD Loan, on or before its Anticipated Repayment Date)
and to timely pay each subsequent Scheduled Payment, (v) (A) a Rating Agency
Confirmation is received if the Mortgage Loan (together with any other Mortgage
Loan with which it is cross-collateralized) has a Principal Balance greater than
the lesser of $20,000,000 and 5% of the Aggregate Certificate Balance, unless
such Rating Agency has waived in writing such Rating Agency Confirmation
requirement (or such higher threshold, if any, as shall be published by the
Rating Agencies) or (B) if the Mortgage Loan is less than or equal to both of
the amounts set forth in clause (A) and the successor Mortgagor with respect to
the subject Mortgage Loan and its affiliates collectively have assumed Mortgage
Loans comprising an aggregate principal amount at least equal to the lesser of
$20,000,000 and 5% of the Aggregate Certificate Balance, either a Notice and
Certification in the form attached hereto as Exhibit Z (or such less restrictive
forms, if any, as shall be adopted by the Rating Agencies) or a Rating Agency
Confirmation is received from S&P and (vi) a Rating Agency Confirmation is
received if the Mortgage Loan is one of the ten largest Mortgage Loans, by
Principal Balance. Any customary and reasonable out-of-pocket expense incurred
by the Master Servicer pursuant to this Section 8.3(h) shall be paid by the
Mortgagor of the Defeasance Loan pursuant to the related Mortgage, Mortgage Note
or other pertinent document, if so allowed by the terms of such documents.
The parties hereto acknowledge that if the payments described in
paragraph 39 of Exhibit 2 to the Mortgage Loan Purchase Agreements regarding the
obligation of a Mortgagor to pay the reasonable costs and expenses associated
with a defeasance of the related Mortgage Loan are insufficient to reimburse the
Trust, including, but not limited to, rating agency fees, then the sole
obligation of the related Seller shall be to pay an amount equal to such
insufficiency or expense to the extent the related Mortgagor is not required to
pay such amount. If any amount is due under the preceding sentence for the G&L
Portfolio Mortgage Loan then each of PCFII and MSMC shall be required to pay
only such party's pro rata share (i.e., 50% each with respect to the G&L
Portfolio Mortgage Loan of such amount). Promptly upon receipt of notice of such
insufficiency or unpaid expense, the Master Servicer shall request the related
Seller to make such payment by deposit to the Certificate Account.
In the case of a Specially Serviced Mortgage Loan, the Master Servicer
shall process any defeasance of such Specially Serviced Mortgage Loan in
accordance with the original terms of the respective Mortgage Loan documents
following a request by the Special Servicer that the Master Servicer do so,
which request shall be accompanied by a waiver of any condition of defeasance
that an "event of default" under such Specially Serviced Mortgage Loan not have
occurred or be continuing, and the Master Servicer shall be entitled to any fees
paid
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relating to such defeasance. If such "event of default" is on account of an
uncured payment default, the Special Servicer will process the defeasance of
such Specially Serviced Mortgage Loan, and the Special Servicer shall be
entitled to any fees paid relating to such defeasance.
(i) The Master Servicer shall, as to each Mortgage Loan which is
secured by the interest of the related Mortgagor under a ground lease, confirm
whether or not on or prior to the date that is thirty (30) days after the
Closing Date, the Seller has notified the related ground lessor of the transfer
of such Mortgage Loan to the Trust pursuant to this Agreement and informed such
ground lessor that any notices of default under the related Ground Lease should
thereafter be forwarded to the Master Servicer (as evidenced by delivery of a
copy thereof to the Master Servicer). The Master Servicer shall promptly notify
the ground lessor if the Seller has failed to do so by the thirtieth day after
the Closing Date.
(j) Pursuant to the related Intercreditor Agreement, the owner of any
B Note has agreed that the Master Servicer and the Special Servicer are
authorized and obligated to service and administer the B Note pursuant to this
Agreement. The Master Servicer shall be entitled, during any period when the A
Note and B Note under any A/B Mortgage Loan do not constitute Specially Serviced
Mortgage Loans, to exercise the rights and powers granted under the related
Intercreditor Agreement to the "Note A Holder" and/or the "Servicer" referred to
therein. For the avoidance of doubt, the parties acknowledge that neither the
Master Servicer nor the Special Servicer shall be entitled or required to
exercise the rights and powers granted to any "Note B Holder" as defined under
the related Intercreditor Agreement.
(k) Pursuant to the applicable Non-Serviced Mortgage Loan
Intercreditor Agreement, the owner of any Non-Serviced Mortgage Loan has agreed
that such owner's rights in, to and under such Non-Serviced Mortgage Loan are
subject to the servicing and all other rights of the applicable Non-Serviced
Mortgage Loan Master Servicer and the applicable Non-Serviced Mortgage Loan
Special Servicer, and the applicable Non-Serviced Mortgage Loan Master Servicer
and the applicable Non-Serviced Mortgage Loan Special Servicer are authorized
and obligated to service and administer such Non-Serviced Mortgage Loan pursuant
to the related Non-Serviced Mortgage Loan Pooling and Servicing Agreement.
Notwithstanding anything herein to the contrary, the parties hereto acknowledge
and agree that the Master Servicer's obligations and responsibilities hereunder
and the Master Servicer's authority with respect to any Non-Serviced Mortgage
Loan are limited by and subject to the terms of the related Non-Serviced
Mortgage Loan Intercreditor Agreement and the rights of the applicable
Non-Serviced Mortgage Loan Master Servicer and the applicable Non-Serviced
Mortgage Loan Special Servicer with respect thereto under the related
Non-Serviced Mortgage Loan Pooling and Servicing Agreement. The Master Servicer
shall use reasonable best efforts consistent with the Servicing Standard to
monitor the servicing of any Non-Serviced Mortgage Loan by the applicable
Non-Serviced Mortgage Loan Master Servicer and the applicable Non-Serviced
Mortgage Loan Special Servicer pursuant to the related Non-Serviced Mortgage
Loan Pooling and Servicing Agreement and to enforce the rights of the Trustee
(as holder of the Non-Serviced Mortgage Loans) under the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement and the related Non-Serviced
Mortgage Loan Intercreditor Agreement. The Master Servicer shall take such
actions as it shall deem reasonably necessary to facilitate the servicing of any
Non-Serviced Mortgage Loan by the applicable Non-Serviced Mortgage Loan Master
Servicer and the applicable Non-Serviced Mortgage Loan Special Servicer
including, but not
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limited to, delivering appropriate Requests for Release to the Trustee and
Custodian (if any) in order to deliver any portion of the related Mortgage File
to the applicable Non-Serviced Mortgage Loan Master Servicer or applicable
Non-Serviced Mortgage Loan Special Servicer under the related Non-Serviced
Mortgage Loan Pooling and Servicing Agreement.
(l) Pursuant to each Loan Pair Intercreditor Agreement, the owner of
the related Serviced Companion Mortgage Loan has agreed that the Master Servicer
and the Special Servicer are authorized and obligated to service and administer
the Serviced Companion Mortgage Loan pursuant to this Agreement. The Master
Servicer, the Special Servicer, and the Trustee are, to the extent applicable,
authorized and directed to execute and deliver to the owner or owners of the
Serviced Companion Mortgage Loan a letter agreement dated as of the Closing Date
setting forth provisions as to, among other things, the timing of remittances,
advances and reports relating to the Serviced Companion Mortgage Loan, and
references herein to the related Loan Pair Intercreditor Agreement shall be
construed to refer to such Loan Pair Intercreditor Agreement and such letter
agreement taken together, as applicable. To the extent that the Master Servicer,
the Special Servicer, and/or the Trustee have duties and obligations under any
such letter agreement, each successor master servicer, successor special
servicer, and/or successor trustee, respectively, under this Agreement shall
perform such duties and satisfy such obligations.
SECTION 8.4 PRIMARY SERVICING AND SUB-SERVICING.
(a) The parties hereto (A) acknowledge that the Master Servicer has
delegated certain of its obligations and assigned certain of its rights under
this Agreement to the Primary Servicer pursuant to the Primary Servicing
Agreement; and (B) agree: (1) in addition to those obligations specifically
delegated by the Master Servicer to the Primary Servicer under the Primary
Servicing Agreement, the Primary Servicer shall also perform the Master
Servicer's obligations set forth in Section 2.1(d) of this Agreement as such
Section relates to the Mortgage Loans serviced by it; (2) in addition to those
rights specifically granted by the Master Servicer to the Primary Servicer under
the Primary Servicing Agreement, those rights set forth in Section 8.24 hereof
accruing to the benefit of the Master Servicer shall also accrue to the benefit
of the Primary Servicer; (3) any indemnification or release from liability set
forth in this Agreement accruing to the benefit of the Master Servicer shall
also, to the extent applicable, benefit the Primary Servicer; and (4) for each
notice, certification, report, schedule, statement or other type of writing that
a party hereto is obligated to deliver to the Master Servicer, such party shall
deliver to the Primary Servicer (to the extent related to the Mortgage Loans
serviced by it) a copy of such notice, certification, report, schedule,
statement or other type of writing at the time and in the same manner that any
of the foregoing is required to be delivered to the Master Servicer.
Notwithstanding the provisions of the Primary Servicing Agreement or any other
provisions of this Agreement, the Master Servicer shall remain obligated and
liable to the Trustee, the Paying Agent, the Special Servicer, the
Certificateholders, the holder of any Serviced Companion Mortgage Loan and the
holder of any B Note for servicing and administering of the Mortgage Loans and
any Serviced Companion Mortgage Loan in accordance with the provisions of this
Agreement to the same extent as if the Master Servicer was alone servicing and
administering the Mortgage Loans and the Serviced Companion Mortgage Loans. The
Master Servicer or the Primary Servicer shall supervise, administer, monitor,
enforce and oversee the servicing of the applicable Mortgage Loans by any
Sub-
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Servicer appointed by it. The terms of any arrangement or agreement between the
Master Servicer or the Primary Servicer and a Sub-Servicer shall provide that
such agreement or arrangement may be terminated, without cause and without the
payment of any termination fees, by the Trustee in the event such Master
Servicer or the Primary Servicer is terminated in accordance with this Agreement
or the Primary Servicing Agreement (except any sub-servicing agreement (which
for the avoidance of doubt does not include the Primary Servicing Agreement)
involving other Mortgage Loans that is in effect on the Closing Date which shall
be terminable only with "cause", provided that "cause" will be determined in a
materially similar manner as Events of Default are determined with respect to
the Master Servicer under Section 8.28(a)(i) through (ix)). In addition, none of
the Trustee, the Paying Agent, the Certificateholders, the holder of any
Serviced Companion Mortgage Loan or the holder of any B Note shall have any
direct obligation or liability (including, without limitation, indemnification
obligations) with respect to any Sub-Servicer. The Master Servicer or the
Primary Servicer shall pay the costs of enforcement against any of its
Sub-Servicers at its own expense, but shall be reimbursed therefor only (i) from
a general recovery resulting from such enforcement only to the extent that such
recovery exceeds all amounts due in respect of the related Mortgage Loans or
(ii) from a specific recovery of costs, expenses or attorneys fees against the
party against whom such enforcement is directed. Notwithstanding the provisions
of any primary servicing agreement or sub-servicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer or the Primary Servicer or a Sub-Servicer, or reference to
actions taken through a Sub-Servicer or otherwise, the Master Servicer or the
Primary Servicer shall remain obligated and liable to the Trustee, the Paying
Agent, the Special Servicer and the Certificateholders for the servicing and
administering of the applicable Mortgage Loans and the Serviced Companion
Mortgage Loans in accordance with (and subject to the limitations contained
within) the provisions of this Agreement or the Primary Servicing Agreement
without diminution of such obligation or liability by virtue of indemnification
from a Sub-Servicer and to the same extent and under the same terms and
conditions as if the Master Servicer or the Primary Servicer alone were
servicing and administering the Mortgage Loans.
(b) Subject to the limitations of subsection (a), the Master Servicer
and the Primary Servicer may appoint one or more sub-servicers to perform all or
any portion of its duties hereunder for the benefit of the Trustee and the
Certificateholders, provided, however, that any decision or recommendation
involving the exercise of the Primary Servicer's discretion as a "lender" under
any loan document with respect to a Mortgage Loan shall be exercised only by the
Primary Servicer and may not be delegated to a sub-servicer, provided, further,
that after the Closing Date, for so long (but only for so long) as the Trust,
and, with respect to any Serviced Companion Mortgage Loan, the trust in the
related Other Securitization, are subject to the reporting requirements of the
Exchange Act, no Master Servicer, Primary Servicer or Special Servicer shall
enter into a sub-servicing agreement with any party that is a Prohibited Party.
The Master Servicer shall enter into the Primary Servicing Agreement
with the Primary Servicer and shall not terminate such agreements except in
accordance with the terms thereof. To the extent consistent with the rights of
the Primary Servicer under this Agreement and the Primary Servicing Agreement,
but not in limitation of any other rights granted to the Primary Servicer in
this Agreement and/or in the Primary Servicing Agreement, the Primary Servicer
shall have all of the rights and obligations of a Sub-Servicer set forth herein.
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Notwithstanding any other provision set forth in this Agreement to the
contrary, (i) the Primary Servicer's rights and obligations under the Primary
Servicing Agreement shall expressly survive a termination of the Master
Servicer's servicing rights under this Agreement; provided that the Primary
Servicing Agreement has not been terminated in accordance with its provisions;
(ii) any successor Master Servicer, including, without limitation, the Trustee
(if it assumes the servicing obligations of the Master Servicer) shall be deemed
to automatically assume and agree to the then current Primary Servicing
Agreement without further action upon becoming the successor Master Servicer and
(iii) this Agreement may not be modified in any manner which would increase the
obligations or limit the rights of the Primary Servicer hereunder and/or under
the Primary Servicing Agreement, without the prior written consent of the
Primary Servicer (which consent shall not be unreasonably withheld).
If a task, right or obligation of Master Servicer is delegated to the
Primary Servicer under the Primary Servicing Agreement, and such task, right or
obligation involves or requires the consent of the Special Servicer, then the
Special Servicer shall accept the performance of such task, right or obligation
by the Primary Servicer in accordance with the terms of this Agreement
(including without limitation any time periods for consent or deemed consent to
be observed by the Special Servicer) as if Master Servicer were performing it.
Notwithstanding any provision of this Agreement, each of the parties
hereto acknowledges and agrees that the Special Servicer is neither a party to
the Primary Servicing Agreement, nor is it bound by any provision of the Primary
Servicing Agreement. The Special Servicer hereby acknowledges the delegation of
rights and duties hereunder by the Master Servicer pursuant to the provisions of
the Primary Servicing Agreement.
(c) Notwithstanding anything herein to the contrary, any sub-servicing
agreement with a Sub-Servicer (excluding the Primary Servicing Agreement) shall
provide that (i) the failure of the related Sub-Servicer to comply with any of
the requirements of Article XIII of this Agreement, (ii) the failure of the
related Sub-Servicer to comply with any requirements to deliver any items
required by Items 1122 and 1123 of Regulation AB under any other pooling and
servicing agreement relating to any commercial mortgage loan securitization
similar to the Trust or (iii) any Sub-Servicer who is deemed to be a Prohibited
Party at any time during which the Trust is subject to the reporting
requirements of the Exchange Act shall constitute an event of default by such
Sub-Servicer upon the occurrence of which either the Master Servicer, the
Primary Servicer, the Special Servicer or the Depositor shall immediately
terminate the related Sub-Servicer and that such termination shall be deemed for
cause.
SECTION 8.5 SERVICERS MAY OWN CERTIFICATES. The Master Servicer and
any Primary Servicer and any agent of the Master Servicer or any Primary
Servicer in their individual or any other capacity may become the owner or
pledgee of Certificates with the same rights it would have if it were not the
Master Servicer or such agent. Any such interest of the Master Servicer or any
Primary Servicer or such agent in the Certificates shall not be taken into
account when evaluating whether actions of the Master Servicer are consistent
with its obligations in accordance with the Servicing Standard regardless of
whether such actions may have the effect of benefiting the Class or Classes of
Certificates owned by the Master Servicer.
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SECTION 8.6 MAINTENANCE OF HAZARD INSURANCE, OTHER INSURANCE, TAXES
AND OTHER. Subject to the limitations set forth below, the Master Servicer shall
use reasonable efforts consistent with the Servicing Standard to cause the
related Mortgagor to maintain for each Mortgage Loan (other than any REO
Mortgage Loan) (A) a Standard Hazard Insurance Policy (that, if the terms of the
related Mortgage Loan documents and the related Mortgage so require or so permit
the holder of the Mortgage Loan to require, contains no exclusion for damages
due to any Act or Acts of Terrorism, as defined in the Terrorism Risk Insurance
Act of 2002) and which does not provide for reduction due to depreciation in an
amount that is at least equal to the lesser of (i) the full replacement cost of
improvements securing such Mortgage Loan or (ii) the outstanding Principal
Balance of such Mortgage Loan and any related B Note or Serviced Companion
Mortgage Loan, but, in any event, in an amount sufficient to avoid the
application of any co-insurance clause and (B) any other insurance coverage for
a Mortgage Loan which the related Mortgagor is required to maintain under the
related Mortgage, provided the Master Servicer shall not be required to maintain
earthquake insurance on any Mortgaged Property unless such insurance was
required at origination and is available at commercially reasonable rates;
provided, however, that the Special Servicer shall have the right, but not the
duty, to obtain, at the Trust's expense, earthquake insurance on any Mortgaged
Property securing a Specially Serviced Mortgage Loan or an REO Property so long
as such insurance is available at commercially reasonable rates. If the related
Mortgagor does not maintain the insurance set forth in clauses (A) and (B)
above, then the Master Servicer shall cause such insurance to be maintained with
a Qualified Insurer. The Master Servicer shall be deemed to have satisfied its
obligations with respect to clause (A) above if the Mortgagor maintains, or the
Master Servicer shall have otherwise caused to be obtained, a Standard Hazard
Insurance Policy that is in compliance with the related Mortgage Loan documents,
and, if required by such Mortgage Loan documents or if such Mortgage Loan
documents permit the holder of the Mortgage Loan to require, the Mortgagor pays,
or the Master Servicer shall have otherwise caused to be paid, the premium
required by the related insurance provider that is necessary to avoid an
exclusion in such policy against "acts of terrorism" as defined by the Terrorism
Risk Insurance Act of 2002.
Each Standard Hazard Insurance Policy maintained with respect to any
Mortgaged Property that is not an REO Property shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause. If the
improvements on the Mortgaged Property are located in a designated special flood
hazard area by the Federal Emergency Management Agency in the Federal Register,
as amended from time to time (to the extent permitted under the related Mortgage
Loan or as required by law), the Master Servicer (with respect to any Mortgaged
Property that is not an REO Property) shall cause flood insurance to be
maintained. Such flood insurance shall be in an amount equal to the lesser of
(i) the unpaid principal balance of the related Mortgage Loan or (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program, if the area in which the
improvements on the Mortgaged Property are located is participating in such
program. Any amounts collected by the Master Servicer under any such policies
(other than amounts to be applied to the restoration or repair of the related
Mortgaged Property or property thus acquired or amounts released to the
Mortgagor in accordance with the terms of the applicable Mortgage Loan) shall be
deposited in the Certificate Account.
Any cost (such as insurance premiums and insurance broker fees but not
internal costs and expenses of obtaining such insurance) incurred by the Master
Servicer in maintaining
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any insurance pursuant to this Section 8.6 shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Paying Agent for their benefit, be added to the Principal Balance of the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan permit such
cost to be added to the outstanding Principal Balance thereof. Such costs shall
be paid as a Servicing Advance by the Master Servicer, subject to Section 4.4
hereof.
Notwithstanding the above, the Master Servicer shall have no
obligation beyond using its reasonable efforts consistent with the Servicing
Standard to enforce such insurance requirements. Furthermore, the Master
Servicer shall not be required in any event to cause the Mortgagor to maintain
or itself obtain insurance coverage beyond what is available on commercially
reasonable terms at a cost customarily acceptable (in each case, as determined
by the Master Servicer, which shall be entitled to rely, at its sole expense, on
insurance consultants in making such determination, consistent with the
Servicing Standard) and consistent with the Servicing Standard; provided, that
the Master Servicer shall be obligated to cause the Mortgagor to maintain or
itself obtain insurance against property damage resulting from terrorism or
similar acts if the terms of the related Mortgage Loan documents and the related
Mortgage so require unless the Master Servicer determines that (i) such
insurance is not available at any rate or (ii) such insurance is not available
at commercially reasonable rates and such hazards are not at the time commonly
insured against for properties similar to the related Mortgaged Property and
located in or around the region in which such related Mortgaged Property is
located; provided, that such determination must be made by the Master Servicer
not less frequently (but need not be made more frequently) than annually, but in
any event, shall be made on the approximate date on (but not later than sixty
(60) days thereafter) which the Master Servicer receives notice of the renewal,
replacement or cancellation of coverage (as evidenced by the related insurance
policy or insurance certificate). Notwithstanding the limitation set forth in
the preceding sentence, if the related Mortgage Loan documents and the related
Mortgage require the Mortgagor to maintain insurance against property damage
resulting from terrorism or similar acts, the Master Servicer shall prior to
availing itself of any limitation described in that sentence with respect to any
Mortgage Loan (or any component loan of an A/B Mortgage Loan) that has a
principal balance in excess of $2,500,000, obtain the approval or disapproval of
the Special Servicer and the Operating Adviser (subject to the penultimate
paragraph of Section 9.39). The Master Servicer shall be entitled to rely on the
determination of the Special Servicer made in connection with such approval or
disapproval. The Special Servicer shall decide whether to withhold or grant such
approval in accordance with the Servicing Standard. If any such approval has not
been expressly denied within seven (7) Business Days of receipt by the Special
Servicer and Operating Adviser from the Master Servicer of the Master Servicer's
determination and analysis and all information reasonably requested by the
Special Servicer and reasonably available to the Master Servicer in order to
make an informed decision, such approval shall be deemed to have been granted.
The Master Servicer shall notify the holder of the related Serviced Companion
Mortgage Loan of any determination that it makes pursuant to clauses (i) and
(ii) above with respect to any Serviced Pari Passu Mortgage Loan.
The Master Servicer shall conclusively be deemed to have satisfied its
obligations as set forth in this Section 8.6 either (i) if the Master Servicer
shall have obtained and maintained a master force placed or blanket insurance
policy insuring against hazard losses on all of the applicable Mortgage Loans,
any Serviced Companion Mortgage Loan and any B Note serviced by it, it being
understood and agreed that such policy may contain a deductible clause on terms
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substantially equivalent to those commercially available and maintained by
comparable servicers consistent with the Servicing Standard, and provided that
such policy is issued by a Qualified Insurer or (ii) if the Master Servicer,
provided that its long-term rating is not less than "A-" by S&P and "A-" by
Fitch, self-insures for its obligations as set forth in the first paragraph of
this Section 8.6. In the event that the Master Servicer shall cause any Mortgage
Loan to be covered by such a master force placed or blanket insurance policy,
the incremental cost of such insurance allocable to such Mortgage Loan (i.e.,
other than any minimum or standby premium payable for such policy whether or not
any Mortgage Loan is then covered thereby), if not borne by the related
Mortgagor, shall be paid by the Master Servicer as a Servicing Advance. If such
policy contains a deductible clause, the Master Servicer shall, if there shall
not have been maintained on the related Mortgaged Property a policy complying
with this Section 8.6 and there shall have been a loss that would have been
covered by such policy, deposit in the Certificate Account the amount not
otherwise payable under such master force placed or blanket insurance policy
because of such deductible clause to the extent that such deductible exceeds (i)
the deductible under the related Mortgage Loan or (ii) if there is no deductible
limitation required under the Mortgage Loan, the deductible amount with respect
to insurance policies generally available on properties similar to the related
Mortgaged Property which is consistent with the Servicing Standard, and deliver
to the Trustee an Officer's Certificate describing the calculation of such
amount. In connection with its activities as administrator and servicer of the
Mortgage Loans, any Serviced Companion Mortgage Loan and any B Note, the Master
Servicer agrees to present, on its behalf and on behalf of the Trustee and the
holders of any Serviced Companion Mortgage Loan or any B Note, claims under any
such master force placed or blanket insurance policy.
With respect to each Mortgage Loan, the Master Servicer shall maintain
accurate records with respect to each related Mortgaged Property reflecting the
status of taxes, assessments and other similar items that are or may become a
lien on the related Mortgaged Property and the status of insurance premiums
payable with respect thereto. From time to time, the Master Servicer (other than
with respect to REO Mortgage Loans) shall, except in the case of Mortgage Loans
under which Escrow Amounts are not held by the Master Servicer, (i) obtain all
bills for the payment of such items (including renewal premiums), and (ii)
effect payment of all such bills, taxes and other assessments with respect to
such Mortgaged Properties prior to the applicable penalty or termination date,
in each case employing for such purpose Escrow Amounts as allowed under the
terms of the related Mortgage Loan. If a Mortgagor fails to make any such
payment on a timely basis or collections from the Mortgagor are insufficient to
pay any such item before the applicable penalty or termination date, the Master
Servicer in accordance with the Servicing Standard shall use its reasonable
efforts to pay as a Servicing Advance the amount necessary to effect the payment
of any such item prior to such penalty or termination date, subject to Section
4.4 hereof. No costs incurred by the Master Servicer or the Trustee as the case
may be, in effecting the payment of taxes and assessments on the Mortgaged
Properties and related insurance premiums and ground rents shall, for the
purpose of calculating distributions to Certificateholders, be added to the
Principal Balance of the Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans permit such costs to be added to the outstanding Principal
Balances of such Mortgage Loans.
SECTION 8.7 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS;
DUE-ON-ENCUMBRANCE CLAUSE.
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(a) In the event the Master Servicer receives a request from a
Mortgagor (or other obligor) pursuant to the provisions of any Mortgage Loan,
Serviced Companion Mortgage Loan or B Note (other than a Specially Serviced
Mortgage Loan or a Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note)
that expressly permits, subject to any conditions set forth in the Mortgage Loan
documents, the assignment of the related Mortgaged Property to, and assumption
of such Mortgage Loan, Serviced Companion Mortgage Loan or B Note by, another
Person, the Master Servicer shall obtain relevant information for purposes of
evaluating such request. For the purpose of the foregoing sentence, the term
'expressly permits' shall include outright permission to assign, permission to
assign upon satisfaction of certain conditions or prohibition against assignment
except upon the satisfaction of stated conditions. If the Master Servicer
recommends to approve such assignment, the Master Servicer shall provide to the
Special Servicer (and solely with respect to any A/B Mortgage Loan, the holder
of the B Note) a copy of such recommendation and the materials upon which such
recommendation is based (which information shall consist of the information to
be included in the Assignment and Assumption Submission to Special Servicer, in
the form attached hereto as Exhibit U) and (A) the Special Servicer shall have
the right hereunder to grant or withhold consent to any such request for such
assignment and assumption in accordance with the terms of the Mortgage Loan,
Serviced Companion Mortgage Loan or B Note and this Agreement, and the Special
Servicer shall not unreasonably withhold such consent and any such decision of
the Special Servicer shall be in accordance with the Servicing Standard, (B)
failure of the Special Servicer to notify the Master Servicer in writing, within
five (5) Business Days following the Master Servicer's delivery of the
recommendation described above and the complete Assignment and Assumption
Submission to Special Servicer on which the recommendation is based, of its
determination to grant or withhold such consent shall be deemed to constitute a
grant of such consent and (C) the Master Servicer shall not permit any such
assignment or assumption unless (i) it has received the written consent of the
Special Servicer or such consent has been deemed to have been granted as
described in the preceding sentence and (ii) with respect to any A/B Mortgage
Loan, the Master Servicer has obtained the approval of the holder of the related
B Note, to the extent provided for in the related Intercreditor Agreement, and
in accordance with any procedures therefor set forth in Section 9.40. The
Special Servicer hereby acknowledges the delegation of rights and duties
hereunder by the Master Servicer pursuant to the provisions of the Primary
Servicing Agreements. If the Special Servicer withholds consent pursuant to the
provisions of this Agreement, it shall provide the Master Servicer or the
applicable Primary Servicer with a written statement and a verbal explanation as
to its reasoning and analysis. Upon consent or deemed consent by the Special
Servicer to such proposed assignment and assumption, the Master Servicer shall
process such request of the related Mortgagor (or other obligor) and shall be
authorized to enter into an assignment and assumption or substitution agreement
with the Person to whom the related Mortgaged Property has been or is proposed
to be conveyed, and/or release the original Mortgagor from liability under the
related Mortgage Loan, Serviced Companion Mortgage Loan or B Note and substitute
as obligor thereunder the Person to whom the related Mortgaged Property has been
or is proposed to be conveyed; provided, however, that the Master Servicer shall
not enter into any such agreement to the extent that any terms thereof would
result in an Adverse REMIC Event or create any lien on a Mortgaged Property that
is senior to, or on parity with, the lien of the related Mortgage. To the extent
permitted by applicable law, the Master Servicer shall not enter into such an
assumption or substitution agreement unless the credit status of the prospective
new Mortgagor (or other obligor) is in conformity to the terms of
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the related Mortgage Loan and, if applicable, B Note or Serviced Companion
Mortgage Loan documents. In making its recommendation, the Master Servicer shall
evaluate such conformity in accordance with the Servicing Standard. The Master
Servicer shall notify the Trustee, the Paying Agent and the Special Servicer of
any assignment and assumption or substitution agreement executed pursuant to
this Section 8.7(a). The Master Servicer shall be entitled to (as additional
servicing compensation) 50% of any assumption fee collected from a Mortgagor in
connection with an assignment and assumption or substitution of a non-Specially
Serviced Mortgage Loan executed pursuant to this Section 8.7(a) and the Special
Servicer shall be entitled to (as additional special servicing compensation) the
other 50% of such fee relating to the non-Specially Serviced Mortgage Loans
(except with respect to the Mortgage Loans with respect to which such Special
Servicer's consent was not required in connection therewith or with respect to
any assignment and assumption or substitution that is "expressly permitted"
pursuant to the terms of the related Mortgage Loan) and the Master Servicer
shall be entitled to 100% of the fees in connection therewith; provided that the
Master Servicer shall obtain the Special Servicer's consent in connection with
any substitution of collateral for or in respect of a non-Specially Serviced
Mortgage Loan; provided, further, that any such fees payable to a Master
Servicer pursuant to this paragraph shall be divided between such Master
Servicer and any related Primary Servicer as set forth in the applicable Primary
Servicing Agreement.
Notwithstanding the foregoing, the Special Servicer acknowledges that
the Master Servicer has delegated certain tasks, rights and obligations to the
Primary Servicer with respect to Post Closing Requests (as defined in the
Primary Servicing Agreement) pursuant to Section 8.4 of this Agreement. The
Primary Servicing Agreement classifies certain Post Closing Requests as Category
1 Requests and grants the Primary Servicer certain authority to evaluate and
process such requests in accordance with this Agreement, the Primary Servicing
Agreement and applicable Mortgage Loan documents.
With respect to a Category 1 Request that involves a condition, term
or provision that requires, or specifies a standard of, consent or approval of
the applicable Mortgagee under the Mortgage Loan documents, the Primary
Servicing Agreement provides for the determination of materiality of such
condition, term or provision requiring approval or consent by the Master
Servicer or the Primary Servicer and the referral of such condition, term or
provision to a Special Servicer for consent in accordance with the terms of the
Primary Servicing Agreement upon a determination of materiality. The Special
Servicer acknowledges such provisions. Nothing in this Agreement, however, shall
grant the Primary Servicer greater authority, discretion or delegated rights
over Post Closing Requests than are set forth in the Primary Servicing
Agreement.
Neither the Master Servicer nor the Special Servicer shall have any
liability, and each of them shall be indemnified by the Trust for any liability
to the Mortgagor or the proposed assignee, for any delay in responding to
requests for assumption, if the same shall occur as a result of the failure of
the Rating Agencies, or any of them, to respond to such request in a reasonable
period of time.
In addition, the Special Servicer acknowledges that the Master
Servicer has delegated certain tasks, rights and obligations to the Primary
Servicer with respect to enforcement of due on sale clauses, assumption
agreements and due on encumbrance clauses
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pursuant to Section 8.4 of this Agreement. Such Primary Servicing Agreement
grants the Primary Servicer certain authority to evaluate and process certain
requests with respect thereto in accordance with this Agreement or the Primary
Servicing Agreement and the applicable Mortgage Loan documents; provided
however, that no such authority to evaluate and process certain requests shall
be in contravention of the immediately preceding paragraph. Such Primary
Servicer is not required to obtain the consent of the Master Servicer or the
Special Servicer with respect to requests for transfers that are expressly
permitted pursuant to the applicable Mortgage Loan documents. With respect to
other requests specified in the Primary Servicing Agreement that require the
approval of the Special Servicer and subject to the terms and provisions of the
Primary Servicing Agreement, the Primary Servicer may forward its recommendation
directly to the Special Servicer (with a copy to the Master Servicer) or it may
forward its recommendation with respect to such request to the Master Servicer,
in which case the Master Servicer shall use reasonable efforts to forward such
recommendation to the Special Servicer within five (5) Business Days of the
Master Servicer's receipt thereof. In either case, after such delivery to
Special Servicer, the Special Servicer shall inform the Master Servicer and the
Primary Servicer of its decision on or prior to the date on which the Special
Servicer's time to respond has lapsed, which shall be within five (5) Business
Days after the Special Servicer's receipt of the Primary Servicer's
recommendation (together with any documents necessary to evaluate such request
as expressly required to be delivered to the Special Servicer pursuant to the
terms of this Agreement or the Primary Servicing Agreement, as applicable).
(b) Other than with respect to the assignment and assumptions referred
to in subsection (a) above, if any Mortgage Loan that is not a Specially
Serviced Mortgage Loan, a Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X
Note contains a provision in the nature of a "due-on-sale" clause, which by its
terms (i) provides that such Mortgage Loan shall (or may at the mortgagee's
option) become due and payable upon the sale or other transfer of an interest in
the related Mortgaged Property or ownership interest in the related Mortgagor,
or (ii) provides that such Mortgage Loan may not be assumed, or ownership
interests in the related Mortgagor may not be transferred, without the consent
of the related mortgagee in connection with any such sale or other transfer,
then, the Master Servicer shall review and make a determination to either (i)
enforce such due-on-sale clause or (ii) if in the best economic interest of the
Trust, waive the effect of such provision, such waiver to be processed in the
same manner as in Section 8.7(a) (including the Special Servicer consent
provisions); provided, however, that if the Principal Balance of such Mortgage
Loan (together with any other Mortgage Loan with which it is
cross-collateralized) at such time equals or exceeds 5% of the Aggregate
Certificate Balance or exceeds $35,000,000 or is one of the then current top 10
loans (by Principal Balance) in the pool, then prior to waiving the effect of
such provision, the Master Servicer shall obtain Rating Agency Confirmation
(including with respect to any securities which are rated by a Rating Agency
evidencing direct beneficial interests in the A Notes and any B Note) regarding
such waiver. In connection with the request for such Rating Agency Confirmation,
the Master Servicer shall prepare and deliver to the Rating Agencies a
memorandum outlining its analysis and recommendation in accordance with the
Servicing Standard, together with copies of all relevant documentation. The
Master Servicer shall promptly forward copies of the assignment and assumption
documents relating to any Mortgage Loan to the Special Servicer, Paying Agent
and the Trustee, and the Master Servicer shall promptly thereafter forward such
documents to the Rating Agencies. The Special Servicer and the Master Servicer
shall each be entitled to (as additional compensation) 50% of any fee collected
from a Mortgagor in connection with
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granting or withholding such consent (other than any such fee payable in
connection with any Non-Serviced Mortgage Loan or the 000 00xx Xxxxxx X Note)
(except that the Master Servicer shall be entitled to 100% of such fee in
connection with an assignment and assumption that is expressly permitted
pursuant to the terms of the related Mortgage Loan, provided, further, that such
fee may be further divided pursuant to the applicable Primary Servicing
Agreement).
The parties hereto acknowledge that, if the payments described in
paragraph 39 of Exhibit 2 to the Mortgage Loan Purchase Agreements regarding the
obligation of the Mortgagor to pay the reasonable costs and expenses associated
with the defeasance or assumption of a Mortgage Loan because the underlying loan
documents do not provide for the payment by the Mortgagor of reasonable costs
and expenses associated with the defeasance or assumption of a Mortgage Loan,
and the related Mortgagor's payments made for the reasonable costs and expenses
associated with the defeasance or assumption of a Mortgage Loan are insufficient
and cause the Trust to incur an Additional Trust Expense in an amount equal to
such reasonable costs and expenses not paid by such Mortgagor, the related
Seller has covenanted and agreed to reimburse the Trust within 90 days of the
receipt of notice of such breach in an amount sufficient to avoid such
Additional Trust Expense. The parties hereto acknowledge that such reimbursement
shall be Seller's sole obligation with respect to the breach discussed in the
previous sentence. Promptly upon receipt of notice of such insufficiency, the
Master Servicer or the Special Servicer, as applicable, shall request the
related Seller to make such payment by deposit to the Certificate Account. If
any amount is due under the preceding sentence for the G&L Portfolio Mortgage
Loan, then each of PCFII and MSMC shall be required to pay only such party's pro
rata share (i.e., 50% with respect to the G&L Portfolio Mortgage Loan of such
amount). The Master Servicer may not waive such payment by the Mortgagor and
shall use its reasonable efforts to collect such amounts from the Mortgagor to
the extent the related mortgage loan documents require the related Mortgagor to
pay such amounts.
(c) The Master Servicer shall have the right to consent to any
transfers of an interest of a Mortgagor, to the extent such transfer is to a
party or entity specifically named or described under the terms of the related
Mortgage Loan, including any consent to transfer to any subsidiary or affiliate
of Mortgagor or to a person acquiring less than a majority interest in the
Mortgagor; provided, however, that if (i) the Principal Balance of such Mortgage
Loan (together with any o