CREDIT SUISSE COMMERCIAL MORTGAGE SECURITIES CORP. as Depositor KEYBANK NATIONAL ASSOCIATION, as Servicer AEGON USA REALTY ADVISORS, LLC, as Special Servicer WELLS FARGO BANK, NATIONAL ASSOCIATION, as Certificate Administrator WELLS FARGO BANK,...

Exhibit 4.3

 

 

EXECUTION VERSION

 

 

 

CREDIT SUISSE COMMERCIAL MORTGAGE SECURITIES CORP.

 

as Depositor

 

KEYBANK NATIONAL ASSOCIATION,

 

as Servicer

 

AEGON USA REALTY ADVISORS, LLC,

 

as Special Servicer

 

XXXXX FARGO BANK, NATIONAL ASSOCIATION,

 

as Certificate Administrator

 

XXXXX FARGO BANK, NATIONAL ASSOCIATION,

 

as Trustee

 

and

 

PARK BRIDGE LENDER SERVICES LLC

 

as Operating Advisor

 

 

 

TRUST AND SERVICING AGREEMENT

 

Dated as of July 6, 2017

 

 

  

CSMC 2017-MOON
Commercial Mortgage Pass-Through Certificates, Series 2017-MOON

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1   Definitions   5
Section 1.2   Interpretation   58
Section 1.3   Certain Calculations in Respect of the Trust Loan or the Whole Loan   58

 

ARTICLE 2

 

DECLARATION OF TRUST; ORIGINAL ISSUANCE OF CERTIFICATES

 

Section 2.1   Creation and Declaration of Trust; Conveyance of the Trust Loan   61
Section 2.2   Acceptance by the Trustee and the Certificate Administrator   65
Section 2.3   Representations and Warranties of the Trustee   65
Section 2.4   Representations and Warranties of the Servicer   67
Section 2.5   Representations and Warranties of the Special Servicer   68
Section 2.6   Representations and Warranties of the Depositor   69
Section 2.7   Representations and Warranties of the Certificate Administrator   70
Section 2.8   Representations and Warranties of the Operating Advisor   72
Section 2.9   Representations and Warranties Contained in the Loan Purchase Agreement   73
Section 2.10   Execution and Delivery of Certificates; Issuance of Uncertificated Lower-Tier Interests   76
Section 2.11   Miscellaneous REMIC Provisions   76
Section 2.12   Resignation Upon Prohibited Risk Retention Affiliation   76

 

ARTICLE 3

 

ADMINISTRATION AND SERVICING OF THE WHOLE LOAN

 

Section 3.1   Servicer to Act as the Servicer; Special Servicer to Act as the Special Servicer   77
Section 3.2   Sub-Servicing Agreements   79
Section 3.3   Cash Management Account   81
Section 3.4   Collection Account   81
Section 3.5   Distribution Account   85
Section 3.6   Foreclosed Property Account   86
Section 3.7   Appraisal Reductions   87
Section 3.8   Investment of Funds in the Collection Account and the Foreclosed Property Account   90
Section 3.9   Payment of Taxes, Assessments, etc   91
Section 3.10   Appointment of Special Servicer   92
Section 3.11   Maintenance of Insurance and Errors and Omissions and Fidelity Coverage   98

 

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Section 3.12   Procedures with Respect to the Whole Loan; Realization upon the Property   100
Section 3.13   Certificate Administrator to Cooperate; Release of Items in the Mortgage File   103
Section 3.14   Title and Management of Foreclosed Property   103
Section 3.15   Sale of Foreclosed Property   106
Section 3.16   Sale of the Whole Loan and the Trust Loan   107
Section 3.17   Servicing Compensation   109
Section 3.18   Reports to the Certificate Administrator; Account Statements   113
Section 3.19   [Reserved]   114
Section 3.20   [Reserved]   114
Section 3.21   Access to Certain Documentation Regarding the Whole Loan and Other Information   114
Section 3.22   Inspections   115
Section 3.23   Advances   115
Section 3.24   Modifications of Loan Documents   118
Section 3.25   Servicer and Special Servicer May Own Certificates   121
Section 3.26   Rating Agency Confirmations   121
Section 3.27   Miscellaneous Provisions   122
Section 3.28   Companion Loan Intercreditor Matters   123
Section 3.29   The Operating Advisor   124
Section 3.30   Credit Risk Retention   130

 

ARTICLE 4

 

PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS

 

Section 4.1   Distributions   131
Section 4.2   Withholding Tax   135
Section 4.3   Allocation and Distribution of Prepayment Charges   136
Section 4.4   Statements to Certificateholders   136
Section 4.5   Investor Q&A Forum and Investor Registry   140

 

ARTICLE 5

 

THE CERTIFICATES

 

Section 5.1   The Certificates   142
Section 5.2   Form and Registration   144
Section 5.3   Registration of Transfer and Exchange of Certificates   146
Section 5.4   Mutilated, Destroyed, Lost or Stolen Certificates   153
Section 5.5   Persons Deemed Owners   153
Section 5.6   Access to List of Certificateholders’ Names and Addresses; Special Notices   153
Section 5.7   Maintenance of Office or Agency   154

 

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ARTICLE 6

 

THE DEPOSITOR, THE SERVICER, THE SPECIAL SERVICER, THE OPERATING
ADVISOR AND THE CONTROLLING CLASS REPRESENTATIVE

 

Section 6.1   Respective Liabilities of the Depositor, the Servicer and the Special Servicer   154
Section 6.2   Merger or Consolidation of the Servicer, the Special Servicer or the Operating Advisor   154
Section 6.3   Limitation on Liability of the Depositor, the Servicer, the Special Servicer, the Operating Advisor and Others   155
Section 6.4   Termination of the Special Servicer Without Cause   156
Section 6.5   The Controlling Class Representative   158
Section 6.6   Servicer and Special Servicer Not to Resign   163
Section 6.7   Indemnification by the Servicer, the Special Servicer, the Operating Advisor and the Depositor   164

 

ARTICLE 7

 

SERVICER TERMINATION EVENTS; SPECIAL
SERVICER TERMINATION EVENTS;
TERMINATION OF SPECIAL SERVICER WITHOUT CAUSE

 

Section 7.1   Servicer Termination Events; Special Servicer Termination Events   165
Section 7.2   Trustee to Act; Appointment of Successor   170
Section 7.3   Notification to Certificateholders, the Depositor and the Rating Agencies   173
Section 7.4   Other Remedies of Trustee   173
Section 7.5   Waiver of Past Servicer Termination Events and Special Servicer Termination Events   173
Section 7.6   Trustee as Maker of Advances   174

 

ARTICLE 8

 

THE TRUSTEE AND CERTIFICATE ADMINISTRATOR

 

Section 8.1   Duties of the Trustee and the Certificate Administrator   174
Section 8.2   Certain Matters Affecting the Trustee and the Certificate Administrator   178
Section 8.3   Neither the Trustee nor the Certificate Administrator is Liable for Certificates or the Trust Loan   180
Section 8.4   Trustee and Certificate Administrator May Own Certificates   182
Section 8.5   Trustee’s and Certificate Administrator’s Fees and Expenses   182
Section 8.6   Eligibility Requirements for the Trustee and the Certificate Administrator; Errors and Omissions Insurance   183
Section 8.7   Resignation and Removal of the Trustee or the Certificate Administrator   184
Section 8.8   Successor Trustee or Successor Certificate Administrator   185

 

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Section 8.9   Merger or Consolidation of the Trustee or the Certificate Administrator   186
Section 8.10   Appointment of Co-Trustee or Separate Trustee   186
Section 8.11   Appointment of Authenticating Agent   188
Section 8.12   Indemnification by the Trustee and the Certificate Administrator   189
Section 8.13   Certificate Administrator and Servicer Not Responsible for Inconsistent Payment Information   189
Section 8.14   Access to Certain Information   189

 

ARTICLE 9

 

TERMINATION

 

Section 9.1   Termination   195
Section 9.2   Additional Termination Requirements   196
Section 9.3   Trusts Irrevocable   197

 

ARTICLE 10

 

MISCELLANEOUS PROVISIONS

 

Section 10.1   Amendment   197
Section 10.2   Recordation of Agreement; Counterparts   200
Section 10.3   Governing Law; Submission to Jurisdiction; Waiver of Jury Trial   201
Section 10.4   Notices   202
Section 10.5   Notices to the Rating Agencies   205
Section 10.6   Severability of Provisions   205
Section 10.7   Limitation on Rights of Certificateholders   206
Section 10.8   Certificates Nonassessable and Fully Paid   206
Section 10.9   Reproduction of Documents   207
Section 10.10   No Partnership   207
Section 10.11   Actions of Certificateholders   207
Section 10.12   Successors and Assigns   207
Section 10.13   Acceptance by Authenticating Agent, Certificate Registrar   208
Section 10.14   Xxxxxx Xxx   000
Section 10.15   Assumption by Trust of Duties and Obligations of the Sponsor Under the Loan Documents   208
Section 10.16   Notice to the 17g-5 Information Provider and Each Rating Agency   209
Section 10.17   Exchange Act Rule 17g-5 Procedures   212
Section 10.18   Cooperation with the Sponsor with Respect to Rights Under the Loan Agreement   214

 

ARTICLE 11

 

EXCHANGE ACT REPORTING AND REGULATION AB COMPLIANCE

 

Section 11.1   Intent of the Parties; Reasonableness   215

 

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Section 11.2   Succession; Sub-Servicers; Subcontractors   215
Section 11.3   Other Securitization Trust’s Filing Obligations   217
Section 11.4   Form 10-D Disclosure   217
Section 11.5   Form 10-K Disclosure   218
Section 11.6   Form 8-K Disclosure   218
Section 11.7   Annual Compliance Statements   219
Section 11.8   Annual Reports on Assessment of Compliance with Servicing Criteria   220
Section 11.9   Annual Independent Public Accountants’ Servicing Report   221
Section 11.10   Significant Obligor   222
Section 11.11   Xxxxxxxx-Xxxxx Backup Certification   223
Section 11.12   Indemnification   224
Section 11.13   Amendments   225
Section 11.14   Termination of the Certificate Administrator   225
Section 11.15   Termination of Sub-Servicing Agreements   225
Section 11.16   Notification Requirements and Deliveries in Connection with Securitization of a Companion Loan   225

 

ARTICLE 12

 

REMIC ADMINISTRATION

 

Section 12.1   REMIC Administration   227
Section 12.2   Foreclosed Property   230
Section 12.3   Prohibited Transactions and Activities   232
Section 12.4   Indemnification with Respect to Certain Taxes and Loss of REMIC Status   232

 

EXHIBITS    
     
Exhibit A-1   Form of Class A Certificates
     
Exhibit A-2   Form of Class X Certificates
     
Exhibit A-3   Form of Class B Certificates
     
Exhibit A-4   Form of Class C Certificates
     
Exhibit A-5   Form of Class D Certificates
     
Exhibit A-6   Form of Class E Certificates
     

Exhibit A-7

   Form of Class HRR Certificates
     
Exhibit A-8   Form of Class R Certificates
     
Exhibit B   Form of Request for Release
     
Exhibit C   Form of Transfer Certificate for Rule 144A Global Certificate to Temporary Regulation S Global Certificate

 

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Exhibit D   Form of Transfer Certificate for Rule 144A Global Certificate to Regulation S Global Certificate
     
Exhibit E   Form of Transfer Certificate for Temporary Regulation S Global Certificate to Rule 144A Global Certificate during Restricted Period
     
Exhibit F   Form of Certification to be given by Beneficial Owner of Temporary Regulation S Global Certificate
     
Exhibit G   Form of Transfer Certificate of Non-Book Entry Certificate to Temporary Regulation S Global Certificate
     
Exhibit H   Form of Transfer Certificate of Non-Book Entry Certificate to Regulation S Global Certificate
     
Exhibit I   Form of Transfer Certificate of Non-Book Entry Certificate to Rule 144A Global Certificate
     
Exhibit J-1   Form of Investment Representation Letter
     
Exhibit J-2   Form of Affidavit Pursuant to Section 860E(e) of the Internal Revenue Code of 1986
     
Exhibit J-3   Form of Transferor Letter
     
Exhibit J-4   Form of Transferee Certificate for Transfers of the Class HRR Certificates
     
Exhibit J-5   Form of Transferor Certificate for Transfers of the Class HRR Certificates
     
Exhibit J-6   Form of Request of Retaining Sponsor Consent for Release of the Class HRR Certificates
     
Exhibit K   Form of Investor Certification for Exercising Voting Rights
     
Exhibit L   Applicable Servicing Criteria
     
Exhibit M   Form of NRSRO Certification
     
Exhibit N   Form of Power of Attorney
     
Exhibit O   Form of ERISA Representation Letter
     
Exhibit P   [Reserved]
     
Exhibit Q   Form of Online Vendor Certification
     
Exhibit R-1   Form of Transferor Certificate for Transfer of the Excess Servicing Fee Rights
     
Exhibit R-2   Form of Transferee Certificate for Transfer of the Excess Servicing Fee Rights
     
Exhibit S   Form of Operating Advisor Annual Report
     
Exhibit T   Form of Notice from Operating Advisor Recommending Replacement of Special Servicer

 

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Exhibit U   Additional Form 10-D Disclosure
     
Exhibit V   Additional Form 10-K Disclosure
     
Exhibit W   Form 8-K Disclosure Information
     
Exhibit X   Form of Certificate Administrator Receipt of the Class HRR Certificates
     
Exhibit Y   Additional Disclosure Notification
     
Exhibit Z   Initial Sub-Servicers
     
Exhibit AA   Form of Back-up Certification
     
Exhibit BB-1   Form of Investor Certification for Non- Borrower Related Party
     
Exhibit BB-2   Form of Investor Certification for Borrower Related Party
     
Exhibit CC   Form of Custodial Certification

 

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THIS TRUST AND SERVICING AGREEMENT (“Agreement”) is dated as of July 6, 2017, among Credit Suisse Commercial Mortgage Securities Corp., as Depositor, KeyBank National Association, as Servicer, AEGON USA Realty Advisors, LLC, as Special Servicer, Xxxxx Fargo Bank, National Association, as Certificate Administrator, Xxxxx Fargo Bank, National Association, as Trustee, and Park Bridge Lender Services LLC, as Operating Advisor.

 

INTRODUCTORY STATEMENT

 

Terms not defined in this Introductory Statement shall have the meanings specified in Article 1 hereof.

 

Reference is made to that certain five-year fixed-rate mortgage loan (the “Whole Loan”), evidenced by five promissory notes (the “Notes”).

 

The Whole Loan was originated by Column Financial, Inc. (the “Sponsor”) pursuant to that certain Loan Agreement, dated as of July 5, 2017 (the “Loan Agreement”), by and among the Sponsor and Two Independence Hana OW, LLC (the “Loan Borrower”). As of the Cut-off Date, the aggregate outstanding principal balance of the Whole Loan was $225,700,000.

 

The Whole Loan consists of (a) a portion that has an unpaid principal balance as of the Cut-off Date of $125,700,000, and is evidenced by Promissory Note A-1 (as the same may hereafter be amended, restated, replaced, extended, renewed, supplemented, consolidated, severed, split or otherwise modified, “Note A-1”) and Promissory Note B (as the same may hereafter be amended, restated, replaced, extended, renewed, supplemented, consolidated, severed, split or otherwise modified, “Note B” and together with Note A-1, the “Trust Loan Notes”), and (b) a portion that has an aggregate unpaid principal balance as of the Cut-off Date of $100,000,000, and is evidenced by Promissory Note A-2, Promissory Note A-3-A and Promissory Note A-3-B (as the same may each hereafter be amended, restated, replaced, extended, renewed, supplemented, consolidated, severed, split or otherwise modified, collectively, the “Companion Loan Notes”). Note X-0, Xxxx X-0, Note A-3-A and Note A-3-B are collectively referred to herein as the “A-Notes” and, each, as an “A-Note”. Note B is referred to herein as the “B-Note”. The Trust Loan Notes and the Companion Loan Notes are collectively referred to herein as the “Notes” and, each, as a “Note”.

 

As of the Cut-off Date, the aggregate outstanding principal balance of Note A-1 and Note B is $125,700,000 (the “Trust Loan”). As of the Cut-off Date, the outstanding principal balance of Note A-2 is $30,000,000, the outstanding principal balance of Note A-3-A is $45,000,000 and the outstanding principal balance of Note A-3-B is $25,000,000 (each, a “Companion Loan” and collectively, the “Companion Loans”).

 

On or prior to the Closing Date, the Sponsor sold the Trust Loan to the Depositor pursuant to a Trust Loan Purchase and Sale Agreement, dated as of July 6, 2017, by and between the Sponsor and the Depositor (the “Loan Purchase Agreement”).

 

 

 

 

As of the Closing Date, Note A-1, Note A-2 and Note B were held by the Sponsor, and Note A-3-A and Note A-3-B were held by Natixis Real Estate Capital LLC. The relative rights of the respective lenders in respect of the Whole Loan are set forth in a co-lender agreement dated as of July 13, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Co-Lender Agreement”), by and between the initial holders of the A-Notes and the initial holder of the B-Note. From and after the Closing Date, the entire Whole Loan is to be serviced and administered in accordance with this Agreement.

 

As provided for herein, the Certificate Administrator shall elect or shall cause elections to be made to treat designated portions of the Trust Fund for federal income tax purposes as two separate real estate mortgage investment conduits (the “Upper-Tier REMIC” and the “Lower-Tier REMIC” and, each, a “Trust REMIC”). Each Class of Regular Certificates will represent a single Class of “regular interests” in the Upper-Tier REMIC, as further described herein. Each Class of Uncertificated Lower-Tier Interests will represent a single class of “regular interests” in the Lower-Tier REMIC as further described herein. The Class R Certificates will evidence the sole Class of “residual interests” in each of the Upper-Tier REMIC and Lower-Tier REMIC for purposes of the REMIC Provisions under federal income tax law.

 

In exchange for the Trust Loan and the Uncertificated Lower-Tier Interests, the Trust shall issue to the Depositor all the Class A, Class X, Class B, Class C, Class D, Class E, Class HRR and Class R Certificates (collectively, the “Certificates”), which Certificates in the aggregate shall evidence the entire beneficial interest in the Trust. The Trust consists principally of the Trust Loan Notes, the Mortgage and related Loan Documents (exclusive of the rights of the Companion Loan Holders thereunder) and all payments under, and proceeds of, the Trust Loan on and after the Cut-off Date.

 

The Depositor intends to sell the Certificates to the Initial Purchaser in an offering exempt from the registration requirements of the federal securities laws.

 

UPPER-TIER REMIC

 

As further described in Section 2.11, the Class A, Class X, Class B, Class C, Class D, Class E and Class HRR Certificates will evidence “regular interests” in the Upper-Tier REMIC created hereunder. The Class UT-R Interest will constitute the sole Class of “residual interests” in the Upper-Tier REMIC created hereunder, and will be evidenced by the Class R Certificates. The following table sets forth the class designation, the Pass-Through Rate and the aggregate initial Certificate Balance (the “Initial Certificate Balance”) or Notional Amount (“Initial Notional Amount”), as applicable, for each Class of Certificates and the Class UT-R Interest comprising the interests in the Upper-Tier REMIC created hereunder:

 

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Class
Designation 

  

Approximate Initial
Pass-Through Rate
(per annum) 

  

Initial Certificate
Balance or Initial
Notional Amount 

Class A   3.196470%   $49,100,000
Class X   0.090199%(1)   $58,000,000
Class B   3.303019%(2)   $8,900,000
Class C   3.303019%(2)   $6,000,000
Class D   3.303019%(2)   $25,000,000
Class E   3.303019%(2)   $29,450,000
Class HRR   3.303019%(2)   $7,250,000
Class UT-R   None(3)   None(3)

 

 

  

(1)The Class X Certificates will not have Certificate Balances and will not be entitled to receive distributions of principal. Interest will accrue on such Class at the Pass-Through Rate thereof on the Notional Amount thereof. The Notional Amount of the Class X Certificates will be equal to the aggregate Certificate Balance of the Class A and Class B Certificates. The Class X Pass-Through Rate for any Certificate Interest Accrual Period is a variable per annum rate and will equal the weighted average of the Class X Strip Rates for the Class A and Class B Certificates for such Distribution Date, weighted on the basis of their respective Certificate Balances immediately prior to that Distribution Date.

 

(2)For any Distribution Date, the Pass-Through Rates of the Class B, Class C, Class D, Class E and Class HRR Certificates will be a per annum rate equal to the Net Trust Loan Rate for the related Certificate Interest Accrual Period (adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months).

 

(3)The Class UT-R Interest (evidenced by the Class R Certificates) will not have a Certificate Balance or Notional Amount, will not bear interest and will not be entitled to distributions of Prepayment Charges. Any Available Funds remaining in the Upper-Tier Distribution Account, after all required distributions under this Agreement have been made to each other Class of Certificates and the Class LT-R Interest, will be distributed to the Holders of the Class R Certificates in respect of the UT-R Interest.

 

LOWER-TIER REMIC

 

The Class LA, Class LB, Class LC, Class LD, Class LE and Class LHRR Uncertificated Interests will evidence “regular interests” in the Lower-Tier REMIC created hereunder. The Class LT-R Interest will constitute the sole Class of “residual interests” in the Lower-Tier REMIC created hereunder and will be evidenced by the Class R Certificates. The following table sets forth the initial Lower-Tier Principal Amounts and Pass-Through Rates for the Uncertificated Lower-Tier Interests and the Class LT-R Interest comprising the interests in the Lower-Tier REMIC created hereunder:

 

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Class
Designation 

  

Original Lower-Tier
Principal Amount 

Class LA   $49,100,000
Class LB   $8,900,000
Class LC   $6,000,000
Class LD   $25,000,000
Class LE   $29,450,000
Class LHRR   $7,250,000
Class LT-R   None(1)

 

 

 

(1)The Class LT-R Interest (evidenced by the Class R Certificates) will not have a Certificate Balance or Notional Amount, will not bear interest and will not be entitled to distributions of Prepayment Charges. Any Available Funds constituting assets remaining in the Lower-Tier Distribution Account after distributing the Lower-Tier Distribution Amount shall be distributed to the Holders of the Class R Certificates in respect of the Class LT-R Interest (but only to the extent of the Available Funds for such Distribution Date, if any, remaining in the Lower-Tier Distribution Account).

 

The Depositor, the Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator and the Trustee 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.

 

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W I T N E S S E T H   T H A T:

 

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

 

Article 1

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 and such meanings shall be equally applicable to the singular and plural forms of such terms, as the context may require.

 

“15Ga-1 Notice”: As defined in Section 2.9(a).

 

“15Ga-1 Notice Provider”: As defined in Section 2.9(a).

 

“17g-5 Information Provider”: The Certificate Administrator.

 

“17g-5 Information Provider’s Website”: The internet website of the 17g-5 Information Provider that shall initially be located within the Certificate Administrator’s Website (xxx.xxxxxxx.xxx), under the “NRSRO” tab on the page relating to this transaction, access which is limited to the Depositor and NRSROs who have provided an NRSRO Certification to the 17g-5 Information Provider. Such website shall provide means of navigation for each NRSRO (including the Rating Agencies) to the portion of the Certificate Administrator’s website available to Privileged Persons.

 

“A-Notes”: As defined in the Introductory Statement.

 

“Acceptable Insurance Default”: Any default arising when the Loan Documents require that the Loan Borrower maintain all risk casualty insurance or other insurance that covers damages or losses arising from acts of terrorism and the Special Servicer has determined, in its reasonable judgment in accordance with the Accepted Servicing Practices, that (i) such insurance is not available at commercially reasonable rates and the subject hazards are not commonly insured against by prudent owners of similar real properties located in or near the geographic region in which the Property is located (but only by reference to such insurance that has been obtained by such owners at current market rates) or (ii) such insurance is not available at any rate. In making this determination, the Special Servicer, to the extent consistent with the Accepted Servicing Practices, may rely on the opinion of an insurance consultant.

 

“Accepted Servicing Practices”: As defined in Section 3.1.

 

“Acquisition Date”: The date upon which, under the Code (and in particular the REMIC Provisions and Section 856(e) of the Code), the Trust Fund is deemed to have acquired the Property.

 

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“Additional Disclosure Notification”: 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 to this Agreement as Exhibit Y.

 

“Additional Form 10-D Disclosure” The information described in the Form 10-D items set forth under the “Item on Form 10-D” column on Exhibit U hereto.

 

“Additional Form 10-K Disclosure” The information described in the Form 10-K items set forth under the “Item on Form 10-K” column on Exhibit V hereto.

 

“Additional Servicer”: Each Affiliate of the Servicer or the Special Servicer that Services the Whole Loan and each Person who is not an Affiliate of the Servicer, other than the Special Servicer, who Services the Whole Loan as of any date of determination.

 

“Administrative Advances”: As defined in Section 3.4(c).

 

“Administrative Fee Rate”: The sum of the Servicing Fee Rate, the Certificate Administrator Fee Rate, the Operating Advisor Fee Rate and the CREFC® Intellectual Property Royalty License Fee.

 

“Advance”: Any Administrative Advance, Monthly Payment Advance or any Property Protection Advance.

 

“Advance Rate”: As defined in Section 3.23(d).

 

“Adverse REMIC Event”: As defined in Section 12.1(j).

 

“Advisers Act”: As defined in Section 5.3(p).

 

“Affiliate”: With respect to any specified Person, any other Person, directly or indirectly, 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, relation to individuals or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. For purposes of this definition and the Loan Borrower, any Person that is a Restricted Holder shall be deemed to be an Affiliate of the Loan Borrower. The Trustee and the Certificate Administrator may request and rely upon an Officer’s Certificate of the Servicer, the Special Servicer, the Trustee, the Certificate Administrator, a Loan Borrower or the Depositor, as applicable, to determine whether any Person is an Affiliate of the Servicer, the Special Servicer, the Trustee, the Certificate Administrator, a Loan Borrower or the Depositor.

 

“Affiliate Ethical Wall”: Reasonable policies and procedures to be maintained by an Affiliate of the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, taking into account the nature of its business, to ensure (1) that such Affiliate will not obtain Confidential Information from the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, and (2) that the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, will

 

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not obtain information regarding Investments in the Certificates from such Affiliate. Under such policies and procedures maintained by such Affiliate, (i) policies and procedures restricting the flow of information exist, and shall be maintained by such Affiliate, between such Affiliate, on the one hand and the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, on the other; (ii) such policies and procedures restricting the flow of information operate in both directions so as to include (a) policies and procedures against the disclosure of Confidential Information from the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, to such Affiliate and (b) policies and procedures against the disclosure of information regarding Investments in Certificates from such Affiliate to the Depositor, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable; (iii) the senior management personnel of such Affiliate who have obtained Confidential Information in the course of their exercise of general managerial responsibilities may not participate in or use that information to influence Investment Decisions with respect to the Certificates, nor may they pass that information to others for use in such activities; and (iv) such senior management personnel who have obtained information regarding Investments in the course of their exercise of general managerial responsibilities may not use that information to influence servicing recommendations.

 

“Agreement”: This Trust and Servicing Agreement (including all exhibits hereto) and all amendments and supplements hereto.

 

“Applicable Laws”: As defined in Section 8.2(d).

 

“Applicable Servicing Criteria”: With respect to the Servicer, the Special Servicer or any Servicing Function Participant, the Servicing Criteria applicable to it, as set forth on Exhibit L attached hereto. For clarification purposes, multiple parties can have responsibility for the same Applicable Servicing Criteria and with respect to a Servicing Function Participant engaged by the Servicer or the Special Servicer, the term “Applicable Servicing Criteria” may refer to a portion of the Applicable Servicing Criteria applicable to the Servicer or the Special Servicer, as the case may be.

 

“Applied Realized Loss Amount”: All amounts applied to reduce the Certificate Balance of a Class of Certificates in respect of Realized Losses pursuant to Section 4.1(g).

 

“Appraisal”: With respect to the Property or the Foreclosed Property, an appraisal of such Property or Foreclosed Property, conducted by an Independent Appraiser in accordance with the standards of the Appraisal Institute and certified by such Independent Appraiser as having been prepared in accordance with the requirements of the Standards of Professional Practice of the Appraisal Institute with an “MAI” designation and the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation, as well as the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended; provided that after an initial “Appraisal” has been obtained pursuant to the terms of this Agreement, an update of such initial Appraisal shall be considered an “Appraisal” hereunder for all purposes. All Appraisals (and updates thereof) obtained pursuant to the terms of this Agreement shall include a valuation using the “income capitalization – discounted cash flow approach” and set forth the discount rate and terminal capitalization rate utilized by the Appraiser. All calculations under this Agreement requiring that a “value” or “appraised value” be used with respect to the

 

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Property or the Foreclosed Property shall use the most recently determined appraised value set forth in an Appraisal (or update thereof) unless a different valuation is specifically required (such as the appraised value of the Property at origination).

 

“Appraisal Reduction Amount”: As of any date of determination, an amount equal to the excess of (i) the outstanding principal balance of the Whole Loan on such date plus the sum of (A) all accrued and unpaid interest on each Note at the applicable Note Rate, (B) all unreimbursed Administrative Advances, Property Protection Advances and interest on all Advances (including interest on advances with respect to a Companion Loan made under an Other Pooling and Servicing Agreement) at the Advance Rate in respect of the Whole Loan or the Property, (C) the amount of any Advances (including advances with respect to a Companion Loan made under an Other Pooling and Servicing Agreement) and interest thereon previously reimbursed from principal collections on the Whole Loan that have not otherwise been recovered from the Loan Borrower, (D) all currently due and unpaid real estate taxes and assessments and insurance premiums and all other amounts, including, if applicable, ground rents, due and unpaid in respect of the Property (which taxes, premiums and other amounts have not been the subject of an Advance) and (E) to the extent not duplicative of amounts in clauses (B), (C) or (D), all unpaid Trust Fund Expenses then due under the Loan Agreement over (ii) the sum of (A)(x) 90% of the appraised value (as determined by an updated appraisal of the Property that was performed within 9 months prior to the Appraisal Reduction Event if the Special Servicer is not aware of any material change in the market or condition or value of the Property since the date of such Appraisal, in which case such Appraisal may be used) of the Property or (y) if the events described in clauses (i) through (iii) in Section 3.7(e) occur with respect to the Property, the Assumed Appraised Value of the Property, in each case, less the amount of any liens (exclusive of Permitted Encumbrances) on the Property senior to the lien of the Loan Documents plus (B) any escrows with respect to the Whole Loan, including for taxes, insurance premiums and ground rents.

 

“Appraisal Reduction Event”: The earliest of (i) 60 days after an uncured payment delinquency (other than a delinquency in respect of the Balloon Payment) occurs in respect of the Whole Loan, (ii) 90 days after an uncured delinquency occurs in respect of the Balloon Payment for the Whole Loan unless a refinancing is anticipated within 120 days after the Stated Maturity Date of the Whole Loan (as evidenced by a written refinancing commitment from an acceptable lender and reasonably satisfactory in form and substance to the Servicer and, so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative, that provides that such refinancing shall occur within 120 days after the Stated Maturity Date), in which case 120 days after such uncured delinquency, (iii) 60 days after a reduction in Monthly Payments, (iv) 60 days after an extension of the Stated Maturity Date of the Whole Loan (except for an extension within the time periods described in clause (ii) above), (v) immediately after a receiver has been appointed in respect of the Property on behalf of the Trust or any other creditor, (vi) immediately after the Loan Borrower declares, or becomes the subject of, bankruptcy, insolvency or similar proceedings, admits in writing the inability to pay its debts as they come due or makes an assignment for the benefit of creditors, or (vii) immediately after the Property becomes a Foreclosed Property.

 

“Asset Status Report”: As defined in Section 3.10(h).

 

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“Assignment of Mortgage”: An assignment of the Mortgages without recourse, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction in which the Property are located to reflect of record the assignment of the Mortgage to the Trustee on behalf of the Trust Fund; provided, however, that the Trustee, the Certificate Administrator, the Servicer and the Special Servicer shall not be responsible for determining whether any such assignment is legally sufficient or in recordable form.

 

“Assumed Appraised Value”: As defined in Section 3.7(e).

 

“Assumed Loan Payment Date”: With respect to the Whole Loan for any calendar month following a delinquency in the payment of the Balloon Payment or the foreclosure of the Whole Loan or acceptance by the Special Servicer on behalf of the Trust of a deed-in-lieu of foreclosure or comparable conversion of the Whole Loan, the date that would have been the Loan Payment Date in such calendar month if the Stated Maturity Date or the foreclosure of the Whole Loan or acceptance by the Special Servicer on behalf of the Trust of a deed-in-lieu of foreclosure or comparable conversion of the Whole Loan had not occurred.

 

“Assumed Monthly Payment”: With respect to any Distribution Date (following the Stated Maturity Date or the foreclosure of the Whole Loan or acceptance by the Special Servicer on behalf of the Trust Fund of a deed-in-lieu of foreclosure or comparable conversion of the Trust Loan or a portion of the Trust Loan), the scheduled monthly payment of interest that would have been due in respect of the Trust Loan on its Stated Maturity Date and each subsequent Loan Payment Date (or Assumed Loan Payment Date) if the Trust Loan had been required to continue to accrue interest in accordance with its terms in effect immediately prior to, and without regard to the occurrence of the Stated Maturity Date (or after the occurrence of a foreclosure, in whole or in part, of the Whole Loan or acceptance by the Special Servicer on behalf of the Trust Fund of a deed-in-lieu of foreclosure or comparable conversion of the Trust Loan or a portion of the Trust Loan, the scheduled monthly payment of interest that would have been due in respect of the Trust Loan on the last Loan Payment Date (or Assumed Loan Payment Date) prior to its foreclosure or acceptance of a deed-in-lieu of foreclosure), in each case as such terms and amortization schedule may have been modified, and such Stated Maturity Date may have been extended, in connection with a bankruptcy or similar proceeding involving the parties under the Whole Loan or a modification, waiver or amendment granted or agreed to by the Servicer or Special Servicer.

 

“Authenticating Agent”: As defined in Section 8.11(a).

 

“Available Funds”: On each Distribution Date shall be equal to (i) (x) all amounts (other than Prepayment Charges, if any) received in respect of principal and interest on the Trust Loan during the related Collection Period or advanced in respect of interest with respect to such Distribution Date (including, without limitation, any Repurchase Price of the Trust Loan or purchase price of the Trust Loan received by the Trust, Net Liquidation Proceeds and Condemnation Proceeds and Insurance Proceeds (to the extent not needed for the repair or restoration of the affected portion of the Property) received by the Trust and allocable to the Trust Loan) excluding payments received that are due on a subsequent Loan Payment Date and reduced by (y) the Available Funds Reduction Amount (other than amounts payable in respect of the Companion Loans), plus (ii) (x) if such Distribution Date is the Distribution Date occurring

 

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in March of each year (or February, if such Distribution Date is the final Distribution Date), Withheld Amounts to be withdrawn from the Interest Reserve Account for such Distribution Date, and reduced by (y) an amount equal to the applicable Withheld Amounts in the case of the February Distribution Date and any January Distribution Date occurring in a year that is not a leap year (unless, in either case, such Distribution Date is the final Distribution Date). Available Funds will not include any amounts allocable to the Companion Loans under the Co-Lender Agreement.

 

“Available Funds Reduction Amount”: As of each Distribution Date, all amounts withdrawn on the related Remittance Date or during the related Collection Period from the Collection Account pursuant to Section 3.4(c).

 

“B-Note”: As defined in the Introductory Statement.

 

“Balloon Payment”: The payment of the outstanding principal balance of the Whole Loan, Trust Loan or a Companion Loan, as applicable, together with all unpaid interest, due and payable on the Stated Maturity Date.

 

“Base Interest Fraction”: With respect to any principal prepayment of the Trust Loan and any Class of Sequential Pay Certificates, a fraction (A) whose numerator is the greater of (x) zero and (y) the excess of (i) the Pass-Through Rate on such Class of Sequential Pay Certificates over (ii) the Treasury Constant Yield as provided by the Servicer used in calculating the Prepayment Charges, as applicable, with respect to such principal prepayment and (B) whose denominator is the excess of (i) the Whole Loan Rate over (ii) the Treasury Constant Yield used in calculating the Prepayment Charges, as applicable with respect to such principal prepayment; provided, however, that under no circumstances shall the Base Interest Fraction be greater than one.  If the Treasury Constant Yield is greater than the Whole Loan Rate, then the Base Interest Fraction shall equal zero.

 

“Beneficial Owner”: With respect to a Global Certificate, the Person who is the beneficial owner of such Certificate as reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the rules of such Depository). Each of the Depositor, the Trustee, the Certificate Administrator, the Special Servicer and the Servicer, as applicable, shall have the right to require, as a condition to acknowledging the status of any Person as a Beneficial Owner under this Agreement, that such Person provide an Investor Certification, and each of Depositor, the Trustee, the Certificate Administrator, the Special Servicer and the Servicer shall be entitled to rely on such Investor Certification.

 

“Benefit Plan”: As defined in Section 5.3(m).

 

“Borrower Related Party”: Any of (a) the Loan Borrower, the Borrower Sponsor, the Property Manager or a Restricted Holder, (b) any other Person controlling or controlled by or under common control with the Loan Borrower, the Borrower Sponsor, any Property Manager or a Restricted Holder, as applicable, or (c) any other Person owning, directly or indirectly, twenty-five percent (25%) or more of the beneficial interests in the Loan Borrower, the Borrower Sponsor, any Property Manager or a Restricted Holder, as applicable. For the purposes of this

 

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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.

 

“Borrower Sponsor”: Hana Asset Management Co., Ltd., a Republic of Korea limited company.

 

“Breach”: As defined in Section 2.9(a).

 

“Business Day”: Any day other than a Saturday and a Sunday or any other day on which the following are not open for business: (a) national banks in New York, New York, Cleveland, Ohio, Overland Park, Kansas, Columbia, Maryland or (b) the office of the Trustee, the Certificate Administrator, the Servicer, the Special Servicer, the Operating Advisor or the financial institution that maintains the Collection Account.

 

“Cash Management Account”: As defined in the Loan Agreement.

 

“Cash Management Agreement”: As defined in the Loan Agreement.

 

“Casualty”: As defined in the Loan Agreement.

 

“CERCLA”: The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

 

“Certificate”: Any Class A, Class X, Class B, Class C, Class D, Class E, Class HRR or Class R Certificate.

 

“Certificate Administrator”: Xxxxx Fargo Bank, National Association, in its capacity as certificate administrator, or if any successor certificate administrator is appointed as herein provided, such certificate administrator.

 

“Certificate Administrator Fee”: With respect to any Distribution Date, an amount accrued during the related Certificate Interest Accrual Period at the Certificate Administrator Fee Rate on the outstanding principal balance of the Trust Loan as of the close of business on the Distribution Date in such Certificate Interest Accrual Period; provided that such amounts shall be computed for the same period and on the same interest accrual basis respecting which any related principal and interest payment due or deemed due on the Trust Loan is computed and shall be prorated for partial periods. A portion of the Certificate Administrator Fee, shall be payable to the Trustee as the Trustee Fee. For the avoidance of doubt, the Certificate Administrator Fee shall be deemed to be payable from the Lower-Tier REMIC.

 

“Certificate Administrator Fee Rate”: 0.0219% per annum.

 

“Certificate Administrator Personnel”: The divisions and individuals of the Certificate Administrator who are involved in the performance of the duties of the Certificate Administrator under this Agreement.

 

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“Certificate Administrator’s Website”: The internet website of the Certificate Administrator, initially located at xxx.xxxxxxx.xxx.

 

“Certificate Balance”: With respect to any outstanding Class of Sequential Pay Certificates at any date, an amount equal to the aggregate Initial Certificate Balance of such Class as set forth in Section 5.1(a) less the sum of (a) all amounts distributed to Holders of Certificates of such Class on all previous Distribution Dates and treated under this Agreement as allocable to principal and (b) the aggregate amount of Realized Losses allocated to such Class of Certificates, if any, pursuant to Section 4.1(g) on all previous Distribution Dates. With respect to any individual Certificate in any such Class, the product of (x) the Percentage Interest represented by such Certificate multiplied by (y) the Certificate Balance of such Class.

 

“Certificate Interest Accrual Period”: With respect to the Certificates for any Distribution Date, the calendar month preceding the calendar month in which such Distribution Date occurs.

 

“Certificate Register” and “Certificate Registrar”: The register maintained and the registrar appointed pursuant to Section 5.3(a).

 

“Certificateholder” or “Holder”: With respect to any Certificate, the Person in whose name a Certificate is registered in the Certificate Register; provided, however, that (1) solely for the purposes of providing, distributing or otherwise making available any reports, statements or other information required or permitted to be provided or distributed or made available to a Certificateholder under this Agreement, a Certificateholder shall include any Beneficial Owner to the extent that the Person providing, distributing or making available such reports, statements or other information has received from such Beneficial Owner information and a written certification reasonably acceptable to such Person regarding its name, and address and beneficial ownership of a Certificate; and (2) solely for the purposes of giving any consent or taking of any action pursuant to this Agreement (except as set forth in the following sentence), any Certificate beneficially owned by the Servicer, the Special Servicer, the Certificate Administrator, the Trustee, any Borrower Related Party or any of their subservicers or respective affiliates shall be deemed not to be outstanding and the consent or Voting Rights to which it is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent or take any such action has been obtained. Notwithstanding the foregoing, for purposes of obtaining the consent of Certificateholders to an amendment of this Agreement, any Certificate beneficially owned by the Certificate Administrator, the Trustee, the Servicer or the Special Servicer or any Affiliates thereof shall be deemed to be outstanding, provided that (1) if such amendment relates to the termination, increase in compensation or material reduction of obligations of the Certificate Administrator, the Trustee, the Servicer or the Special Servicer (other than any replacement of the Special Servicer by the Controlling Class Representative under this Agreement), as applicable, or benefit the Certificate Administrator, the Trustee, the Servicer or the Special Servicer, as applicable in its capacity as such or any of its affiliates (other than solely in its capacity as a Certificateholder) in any material respect, then such Certificate will be deemed not to be outstanding; and (2) if the Certificate Administrator, the Trustee, the Servicer or the Special Servicer has provided an Investor Certification in which it has certified as to the existence of an Affiliate Ethical Wall between it and the Trustee, the Certificate Administrator, the Servicer or the Special Servicer, as

 

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applicable, then any Certificates beneficially owned by such affiliate will be deemed to be outstanding. The Trustee and the Certificate Registrar may obtain and conclusively rely upon an Officer’s Certificate of the Servicer, the Special Servicer, the Loan Borrower, the Property Manager, the Borrower Sponsor or any sub-servicer to determine whether a Certificate is beneficially owned by an Affiliate of any of them. Notwithstanding the foregoing, the restrictions above shall not apply (i) to the exercise of the rights of the Servicer, the Special Servicer or an Affiliate of the Servicer or the Special Servicer, if any, as a member of the Controlling Class (but not if it is a Borrower Related Party) or (ii) to any Affiliate of the Depositor, the Servicer, the Special Servicer, the Trustee or the Certificate Administrator that has provided an Investor Certification in which it has certified as to the existence of certain policies and procedures restricting the flow of information between it and the Depositor, the Servicer, the Special Servicer, the Trustee or the Certificate Administrator, as applicable.

 

“Certificateholder Quorum”: In connection with any solicitation of votes in connection with the replacement of the Special Servicer (other than at the recommendation of the Operating Advisor), the holders of Sequential Pay Certificates evidencing at least 66 2/3% of the aggregate Voting Rights (taking into account application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balance of the Certificates) of all Sequential Pay Certificates.

 

“Certification Parties”: As defined in Section 5.3(m).

 

“Certifying Person”: As defined in Section 5.3(m).

 

“Class”: With respect to the Certificates, all of the Certificates bearing the same alphabetical designation, and each Uncertificated Lower-Tier Interest.

 

“Class A Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-1 hereto and designated as a Class A Certificate.

 

“Class A Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

“Class B Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-3 hereto and designated as a Class B Certificate.

 

“Class B Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

“Class C Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-4 hereto and designated as a Class C Certificate.

 

“Class C Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

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“Class D Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-5 hereto and designated as a Class D Certificate.

 

“Class D Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

“Class E Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-6 hereto and designated as a Class E Certificate.

 

“Class E Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

“Class HRR Certificate”: A Certificate executed and authenticated by the Certificate Administrator in substantially the form set forth in Exhibit A-7 hereto and designated as a Class HRR Certificate.

 

“Class HRR Pass-Through Rate”: As set forth in the Upper-Tier REMIC section of the Introductory Statement of this Agreement.

 

“Class LA Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LB Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LC Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LD Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LE Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LHRR Uncertificated Interest”: A regular interest in the Lower-Tier REMIC, which is held as an asset of the Upper-Tier REMIC and has the Original Lower-Tier

 

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Principal Amount and per annum rate of interest set forth in the Lower-Tier section of the Introductory Statement.

 

“Class LT-R Interest”: The residual interest in the Lower-Tier REMIC. The Class LT-R Interest will be represented by the Class R Certificates.

 

“Class R Certificate”: A Certificate executed and authenticated by the Certificate Administrator, in substantially the form set forth in Exhibit A-8 hereto and designated as a Class R Certificate, which shall only be issued as Definitive Certificates. The Class R Certificates will not have a Certificate Balance, Notional Amount or a Pass-Through Rate. The Class R Certificates will evidence the Class LT-R and Class UT-R Interests.

 

“Class UT-R Interest”: The residual interest in the Upper-Tier REMIC. The Class UT-R Interest will be represented by the Class R Certificates.

 

“Class X Certificate”: A Certificate executed and authenticated by the Certificate Administrator, in substantially the form set forth in Exhibit A-2 and designated as a Class X Certificate.

 

“Class X Notional Amount”: An amount equal to the aggregate Certificate Balances of the Class A and Class B Certificates.

 

“Class X Pass-Through Rate”: A variable rate that for each Distribution Date shall be equal to the weighted average of Class X Strip Rates for the Class A and Class B Certificates for such Distribution Date, weighted on the basis of their respective Certificate Balances immediately prior to that Distribution Date.

 

“Class X Strip Rate”: For each of the Class A and Class B Certificates for any Distribution Date shall equal the excess, if any, of (i) the Net Trust Loan Rate for such Distribution Date over (ii) the Pass-Through Rate for such Class of Certificates.

 

“Clearing Agency”: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act. The initial Clearing Agency shall be The Depository Trust Company.

 

“Clearstream”: As defined in Section 5.2(a).

 

“Closing Date”: July 27, 2017.

 

“Code”: The Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto in temporary or final form and any proposed regulations thereunder, to the extent that, by reason of their proposed effective date, such proposed regulations would apply to the Trust Fund.

 

“Collateral”: The Property securing the Whole Loan, the Reserve Accounts (and all sums held, deposited or invested therein and all proceeds thereof) with respect to the Whole

 

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Loan and all other collateral which is subject to security interests and liens granted to secure the Whole Loan.

 

“Collateral Security Documents”: Any document or instrument given to secure or guaranty the Whole Loan, including without limitation, the Mortgage, each as amended, supplemented, assigned, extended or otherwise modified from time to time.

 

“Collection Account”: As defined in Section 3.4(a).

 

“Collection Period”: With respect to any Distribution Date, the period commencing immediately following the Determination Date in the calendar month preceding the calendar month in which such Distribution Date occurs and ending on and including the Determination Date in the calendar month in which such Distribution Date occurs; provided, that the first Collection Period will commence on the Cut-off Date and end on and include the Determination Date in August 2017.

 

“Commission”: The Securities and Exchange Commission.

 

“Companion Loan”: As defined in the Introductory Statement.

 

“Companion Loan Notes”: As defined in the Introductory Statement.

 

“Companion Loan Advance”: With respect to a Companion Loan that is part of an Other Securitization Trust, any advance of delinquent scheduled payments of interest with respect to such Companion Loan made by the master servicer or trustee with respect to such Other Securitization Trust.

 

“Companion Loan Holder”: The holder of a Companion Loan.

 

“Companion Loan Rating Agency”: With respect to a Companion Loan, any rating agency that was engaged by a participant in the securitization of such Companion Loan to assign a rating to the related Companion Loan Securities.

 

“Companion Loan Rating Agency Confirmation”: With respect to any matter involving the servicing and administration of a Companion Loan as to which any Companion Loan Securities exist, confirmation in writing (which may be in electronic form) by each applicable Companion Loan Rating Agency that a proposed action, failure to act or other event so specified will not, in and of itself, result in the downgrade, withdrawal or qualification of the then current rating assigned to any class of such Companion Loan Securities (if then rated by such Companion Loan Rating Agency); provided that upon receipt of a written waiver or other acknowledgment from a Companion Loan Rating Agency indicating its decision not to review or declining to review the matter for which the Companion Loan Rating Agency Confirmation is sought (such written notice, a “Companion Loan Rating Agency Declination”), or as otherwise provided in Section 3.27 of this Agreement, the requirement for the Companion Loan Rating Agency Confirmation from the applicable Companion Loan Rating Agency with respect to such matter shall not apply.

 

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“Companion Loan Securities”: Any commercial mortgage-backed securities that evidence an interest in or are secured by the assets of an Other Securitization Trust, which assets include a Companion Loan (or a portion thereof or interest therein).

 

“Condemnation”: As defined in the Loan Agreement.

 

“Condemnation Proceeds”: The portion of the Net Proceeds relating to a Condemnation other than amounts to be applied to the restoration, preservation or repair of the applicable Property or to be released to the Loan Borrower each in accordance with the terms of the Loan Agreement, or if not required to be so applied or so released under the terms of the Loan Agreement, Accepted Servicing Practices.

 

“Confidential Information”: With respect to the Servicer, the Special Servicer, the Certificate Administrator and the Trustee, all material non-public information obtained in the course of and as a result of such Person’s performance of its duties under the Trust and Servicing Agreement as the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, with respect to the Whole Loan, the Loan Borrower, the Borrower Sponsor and the Property, unless such information (i) was already in the possession of such Person prior to being disclosed to such Person, (ii) is or becomes available to such Person from a source other than its activities as the Servicer or the Special Servicer, as applicable, or (iii) is or becomes generally available to the public other than as a result of a disclosure by Servicer Servicing Personnel, Special Servicer Servicing Personnel or Trustee Personnel, as applicable.

 

“Consultation Termination Event”: The event that occurs when (i) no Class of Control Eligible Certificates has a Certificate Balance (without regard to the application of any Appraisal Reduction Amount) at least equal to 25% of the Initial Certificate Balance of that Class, (ii) the Controlling Class Representative or a majority of the Controlling Class Certificateholders (by Certificate Balance) is a Borrower Related Party or (iii) be deemed to occur pursuant to Section 6.5(c) of this Agreement.

 

“Control Eligible Certificates”: Any of the Class D, Class E and the Class HRR Certificates. No other Class of Certificates will be eligible to act as a Controlling Class or appoint a Controlling Class Representative.

 

“Control Termination Event”: The event that occurs when (i) no Class of Control Eligible Certificates has a Certificate Balance (as notionally reduced by any Appraisal Reduction Amount allocable to such Class in accordance with Section 3.7(a) of this Agreement) that is at least equal to 25% of the Initial Certificate Balance of such Class, (ii) the Controlling Class Representative or a majority of the Controlling Class Certificateholders (by Certificate Balance) is a Borrower Related Party or (iii) such an event is deemed to occur pursuant to Section 6.5(c) of this Agreement.

 

“Controlling Class”: As of any time of determination, the most subordinate Class of Control Eligible Certificates then outstanding that has an aggregate Certificate Balance, as notionally reduced by any Appraisal Reduction Amounts allocable to such Class, at least equal to 25% of the Initial Certificate Balance of such Class or, if no Class of Control Eligible Certificates meets the preceding requirement, the Class D Certificates until the occurrence of a

 

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Consultation Termination Event. The Controlling Class as of the Closing Date will be the Class HRR Certificates.

 

“Controlling Persons”: As defined in Section 6.3(a).

 

“Controlling Class Certificateholder”: Each Holder (or Beneficial Owner, if applicable) of a Certificate of the Controlling Class as determined by the Certificate Administrator from time to time.

 

“Controlling Class Representative”: The Controlling Class Certificateholder (or other representative) selected by more than 50% of the Controlling Class Certificateholders by Certificate Balance, as identified by notice to the Certificate Registrar by the applicable Controlling Class Certificateholders from time to time, with notice of such selection delivered to the Special Servicer, the Servicer, the Operating Advisor, the Trustee and the Certificate Administrator; provided that (i) absent such selection, or (ii) until a Controlling Class Representative is so selected, or (iii) upon receipt of notice from a majority of the Controlling Class Certificateholders, by Certificate Balance, that a Controlling Class Representative is no longer so designated, the Controlling Class Representative shall be the Controlling Class Certificateholder that owns Certificates representing the largest aggregate Certificate Balance of the Controlling Class as identified to the Certificate Administrator.

 

The initial Controlling Class Representative on the Closing Date shall be Prima Capital Advisors LLC as agent for its managed account. The Certificate Registrar and the other parties to this Agreement shall be entitled to assume that Prima Capital Advisors LLC or any successor Controlling Class Representative selected thereby is the Controlling Class Representative, as appointed by PCSD PR Cap IV NR Reten Private Limited, the Holder (or Beneficial Owner) of a majority of the Class HRR Certificates, until the Certificate Registrar receives (a) written notice of a replacement Controlling Class Representative or (b) notice that PCSD PR Cap IV NR Reten Private Limited is no longer the Holder (or Beneficial Owner) of a majority of the Class HRR Certificates due to a transfer of those Certificates (or a beneficial ownership interest in those Certificates).

 

“Corporate Trust Office”: The corporate trust office of the Trustee or the Certificate Administrator, as applicable, at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, or for certificate transfer services, Xxxxx Fargo Center, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services (CMBS): CSMC 2017-MOON, or at such other address as the Trustee or the Certificate Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer and the Special Servicer.

 

“Credit Risk Retention Compliance Agreement”: As defined in Section 3.30(a).

 

“Credit Risk Retention Rules”: The Credit Risk Retention regulations, 79 Fed Reg. 77601, pages 77740 - 77766 (Dec. 24, 2014), jointly promulgated by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Securities and

 

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Exchange Commission, and the Department of Housing and Urban Development (the “Agencies”) to implement the credit risk retention requirements under Section 15G of the Securities Exchange Act of 1934 (as added by Section 941 of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act), as such regulations may be amended from time to time by such Agencies, and subject to such clarification and interpretation as have been provided by such Agencies, whether in the adopting release, or as may be provided by any such Agency or its staff from time to time, in each case, as effective from time to time as of the applicable compliance date specified therein.

 

“CREFC®”: CRE Finance Council, formerly known as Commercial Mortgage Securities Association, or any successor thereto.

 

“CREFC® Advance Recovery Report”: The monthly 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 CREFC® 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 CREFC® for commercial mortgage securities transactions generally and, insofar as it requires the presentation of information in addition to that called for by the form of the “Advance Recovery Report” available as of the Closing Date on the CREFC® Website, is reasonably acceptable to the Servicer.

 

“CREFC® Appraisal Reduction Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Appraisal Reduction Template” available and effective from time to time on the CREFC® 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 CREFC® for commercial mortgage securities transactions generally.

 

“CREFC® Bond Level File”: The monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Bond Level File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Certificate Administrator.

 

“CREFC® Collateral Summary File”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Collateral Summary File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Certificate Administrator.

 

“CREFC® Comparative Financial Status Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Comparative Financial Status Report” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information as may from time to time be

 

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recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Delinquent Loan Status Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Delinquent Loan Status Report” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Financial File”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Financial File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Historical Bond/Collateral Realized Loss Reconciliation Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Historical Bond/Collateral Realized Loss Reconciliation Template” available and effective from time to time on the CREFC® Website or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Historical Liquidation Loss Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Historical Liquidation Loss Template” available and effective from time to time on the CREFC® Website or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Historical Loan Modification Forbearance and Corrected Loan Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Historical Loan Modification Forbearance and Corrected Loan Report” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Intellectual Property Royalty License Fee”: A fee payable monthly to the CREFC® pursuant to Section 3.4(c) which will accrue at the CREFC® Intellectual Property Royalty License Fee Rate, computed on the basis of the same principal amount, in the same manner, and for the same Loan Interest Accrual Period respecting which any related interest payment on the Trust Loan is computed, and will be prorated for partial periods.

 

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“CREFC® Intellectual Property Royalty License Fee Rate”: With respect to the Trust Loan, 0.0005% per annum.

 

“CREFC® Interest Shortfall Reconciliation Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Interest Shortfall Reconciliation Template” available and effective from time to time on the CREFC® Website or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Loan Level Reserve LOC Report”: The monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Level Reserve LOC Report” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Loan Modification Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Modification Report” available and effective from time to time on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Loan Periodic Update File”: The monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Periodic Update File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer, the Special Servicer and the Certificate Administrator.

 

“CREFC® Loan Setup File”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Setup File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer, the Special Servicer and the Certificate Administrator.

 

“CREFC® NOI Adjustment Worksheet”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “NOI Adjustment Worksheet” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is acceptable to the Servicer or the Special Servicer, as applicable, and in any event, shall present the computations made in accordance with the methodology described in such form to

 

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“normalize” the full year net operating income and debt service coverage numbers used in the other reports required by this Agreement.

 

“CREFC® Operating Statement Analysis Report”: A report prepared with respect to each Property substantially in the form of, and containing the information called for in, the downloadable form of the “Operating Statement Analysis Report” available as of the Closing Date on the CREFC® Website or in such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Property File”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Property File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Reconciliation of Funds Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Reconciliation of Funds Template” available and effective from time to time on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally.

 

“CREFC® Reports”: Collectively refers to the following files and reports as may be amended, updated or supplemented from time to time as part of the CREFC® Investor Reporting Package (IRP):

 

(i)          the following seven electronic files (and any other files as may become adopted and promulgated by CREFC® as part of the CREFC® Investor Reporting Package (IRP) from time to time): (i) CREFC® Bond Level File, (ii) CREFC® Collateral Summary File, (iii) CREFC® Property File, (iv) CREFC® Loan Periodic Update File, (v) CREFC® Loan Setup File, (vi) CREFC® Financial File, and (vii) CREFC® Special Servicer Loan File; and

 

(ii)         the following 18 supplemental reports (and any other reports as may become adopted and promulgated by CREFC® as part of the CREFC® Investor Reporting Package (IRP) from time to time): (i) CREFC® Comparative Financial Status Report, (ii) CREFC® Delinquent Loan Status Report, (iii) CREFC® Historical Loan Modification and Corrected Loan Report, (iv) CREFC® Operating Statement Analysis Report, (v) CREFC® NOI Adjustment Worksheet, (vi) CREFC® REO Status Report, (vii) CREFC® Servicer Watch List, (viii) CREFC® Loan Level Reserve – LOC Report, (ix) CREFC® Advance Recovery Report, (x) CREFC® Total Loan Report, (xi) CREFC® Appraisal Reduction Template, (xii) CREFC® Servicer Realized Loss Template, (xiii) CREFC® Reconciliation of Funds Template, (xiv) CREFC® Historical Bond/Collateral Realized Loss Reconciliation Template, (xv) CREFC® Historical

 

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Liquidation Loss Template, (xvi) CREFC® Interest Shortfall Reconciliation Template, (xvii) CREFC® Loan Liquidation Report, and (xviii) CREFC® Loan Modification Report, as such reports may be amended, updated or supplemented from time to time.

 

“CREFC® REO Status Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “REO Status Report” available as of the Closing Date on the CREFC® Website, or in such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer.

 

“CREFC® Servicer Realized Loss Template”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Servicer Realized Loss Template” available and effective from time to time on the CREFC® Website.

 

“CREFC® Servicer Watch List”: For any Determination Date, a report substantially in the form of, and containing the information called for in, the downloadable form of the “Servicer Watch List” available as of the Closing Date on the CREFC® Website, or in such other final form for the presentation of such information and containing such additional information as may from time to time be promulgated as recommended by the CREFC® for commercial mortgage securities transactions generally and, insofar as it requires the presentation of information in addition to that called for by the form of the “Servicer Watch List” available as of the Closing Date on the CREFC® Website, is reasonably acceptable to the Servicer.

 

“CREFC® Special Servicer Loan File”: The monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Special Servicer Loan File” available as of the Closing Date on the CREFC® Website, or such other form for the presentation of such information and containing such additional information as may from time to time be recommended by the CREFC® for commercial mortgage securities transactions generally and is reasonably acceptable to the Servicer and the Special Servicer.

 

“CREFC® Total Loan Report”: A monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Total Loan Report” available as of the Closing Date on the CREFC® Website, or in such other form for the presentation of such information and containing such additional information as may from time to time be adopted by the CREFC® for commercial mortgage-backed securities transactions and is reasonably acceptable to the Servicer.

 

“CREFC® Website”: The CREFC®’s Website located at “xxx.xxxxx.xxx” or such other primary website as the CREFC® may establish for dissemination of its report forms.

 

“Current Interest Distribution Amount”: With respect to any Distribution Date, (x) for any Class of Regular Certificates, the interest accruing during the related applicable Certificate Interest Accrual Period at the applicable Pass-Through Rate for such Distribution Date on the outstanding Certificate Balance (or Notional Amount) of such Class as of the prior Distribution Date (after giving effect to distributions of principal and allocations of Realized Losses on such prior Distribution Date) and (y) any Uncertificated Lower-Tier Interest, interest

 

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accruing during the applicable Certificate Interest Accrual Period at the applicable Pass-Through Rate for such Certificate Interest Accrual Period on the then outstanding Lower-Tier Principal Amount of such Class as of the prior Distribution Date (after giving effect to distributions of principal and allocations of Realized Losses on such prior Distribution Date).

 

“Custodian”: The Certificate Administrator in its capacity as Custodian, which role shall be performed through the Document Custody division of Xxxxx Fargo.

 

“Cut-off Date”: July 6, 2017.

 

“Default Interest”: The amount by which interest accrued on the Notes at their respective Default Rates exceeds the amount of interest that would have accrued on the Notes at their respective Rates.

 

“Default Rate”: As defined in the Loan Agreement.

 

“Defaulted Whole Loan”: The Whole Loan (i) if it is delinquent at least 60 days in respect of its scheduled monthly payments or delinquent in respect of its Balloon Payment, if any, in either case such delinquency to be determined without giving effect to any grace period permitted by the Loan Documents and without regard to any acceleration of payments under the Loan Documents or (ii) if the Servicer or Special Servicer has, by written notice to the Loan Borrower, accelerated the maturity of the indebtedness evidenced by the Notes.

 

“Defect”: As defined in Section 2.9(a).

 

“Definitive Certificate”: Any Certificate in fully registered certificated form without interest coupons.

 

“Delivery Date”: As defined in Section 2.1(b).

 

“Depositor”: Credit Suisse Commercial Mortgage Securities Corp., a Delaware corporation, and its successors in interest.

 

“Depository”: The Depository Trust Company or a successor appointed by the Certificate Registrar (which appointment shall be at the direction of the Depositor if the Depositor is legally able to do so).

 

“Depository Participant”: A Person for whom, from time to time, the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

 

“Determination Date”: The sixth (6th) day of each calendar month in which each Distribution Date occurs, commencing in August 2017 or, if such sixth (6th) day is not a Business Day, the immediately succeeding Business Day.

 

“Directly Operate”: With respect to the Foreclosed Property, the furnishing or rendering of services to the tenants thereof, that are not customarily provided to tenants in connection with the rental of space “for occupancy only” within the meaning of Treasury Regulations Section 1.512(b)-1(c)(5), the management or operation of such Foreclosed Property,

 

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the holding of such Foreclosed Property primarily for sale to customers, the use of such Foreclosed Property in a trade or business conducted by the Trust or the performance of any construction work on the Foreclosed Property, other than through an Independent Contractor; provided, however, that Foreclosed Property shall not be considered to be Directly Operated 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 or capital expenditures with respect to such Foreclosed Property or takes other actions consistent with Treasury Regulations Section 1.856-4(b)(5)(ii).

 

“Disclosable Special Servicer Fees”: With respect to the Whole Loan or the Foreclosed Property, any (A) compensation and other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates, and as a result of any other fee-sharing arrangement received or retained by the Special Servicer or any of its Affiliates that is paid by any person (including, without limitation, the Trust, the Loan Borrower, the Property Manager, any guarantor or indemnitor in respect of the Trust Loan and any purchaser of the Whole Loan, the Trust Loan or the Foreclosed Property)) in connection with the disposition, workout or foreclosure of the Whole Loan, the management or disposition of the Foreclosed Property, and the performance by the Special Servicer or any such Affiliate of any other special servicing duties under this Agreement other than (i) Permitted Special Servicer/Affiliate Fees and (ii) any special servicing compensation to which the Special Servicer is entitled under this Agreement in the form of late payment charges, Default Interest, assumption fees, Modification Fees, consent fees, loan service transaction fees, beneficiary statement fees, assumption application fees or other income earned on deposits in the Foreclosed Property Account to the extent not reported in the CREFC® Reports and (B) any fee-sharing arrangement with any Certificateholder or other controlling interest with respect to any special servicing duties under this Agreement; provided that any compensation and other remuneration that the Servicer or Certificate Administrator is specifically permitted to receive pursuant to the terms of this Agreement in connection with its respective capacity as a Servicer or Certificate Administrator shall not be Disclosable Special Servicer Fees.

 

“Discount Rate”: As defined in the Loan Agreement.

 

“Disqualified Non-U.S. Person”: With respect to a Class R Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S. Person that holds such Class R Certificate in connection with the conduct of a trade or business within the United States and has furnished the transferor and the Certificate Administrator with an effective IRS Form W-8ECI or other prescribed form or (ii) a Non-U.S. Person that has delivered to both the transferor and the Certificate Administrator an Opinion of Counsel of a nationally recognized tax counsel to the effect that the transfer of such Class R Certificate to it is in accordance with the requirements of the Code and the regulations promulgated thereunder and that such transfer of such Class R Certificate will not be disregarded for federal income tax purposes under Treasury Regulations Section 1.860G-3.

 

“Disqualified Organization”: Either (a) the United States, a State, or any political subdivision of a State, any possession of the United States or any agency or instrumentality of any of the foregoing (other than an instrumentality that is a corporation if all of its activities are subject to tax and, except for the FHLMC, a majority of its board of directors is not selected by

 

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any such governmental unit), (b) a foreign government, International Organization or agency or instrumentality of either of the foregoing, (c) an organization that is exempt from tax imposed by chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in Section 860E(c)(1)) of the Code with respect to the Class R Certificates (except certain farmers’ cooperatives described in Section 521 of the Code), (d) rural electric and telephone cooperatives described in Section 1381(a)(2) of the Code or (e) any other Person so designated by the Certificate Administrator based upon an Opinion of Counsel to the effect that any transfer of a Class R Certificate to such Person may cause either Trust REMIC to be subject to a tax or to fail to qualify as a REMIC at any time that the Certificates are outstanding. The terms “United States,” “State” and “International Organization” have the meanings set forth in Section 7701 of the Code or successor provisions.

 

“Distribution Account”: The account established and maintained by the Certificate Administrator pursuant to Section 3.5.

 

“Distribution Date”: The fourth (4th) Business Day after each Determination Date, commencing in August 2017.

 

“Distribution Date Statement”: As defined in Section 4.4(a).

 

“Due Diligence Service Provider”: As defined in Section 3.21(c).

 

“Eligible Account”: A separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity the long-term unsecured debt obligations of which are rated at least “A” by Fitch, which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal or state authority, as applicable. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

 

“Eligible Institution”: (a) KeyBank, provided that (1) if funds are to be held for thirty (30) days or less, KeyBank’s short-term unsecured debt obligations, commercial paper, or deposits are rated at least “P-2” by Moody’s and “F-1” by Fitch and (2) if funds are to be held for thirty (30) days or more, KeyBank’s long-term unsecured debt obligations, commercial paper, or deposits are rated at least “A3” by Moody’s and “A-” by Fitch; (b) A depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least “P-1” by Moody’s and “F-1” by Fitch and the long-term unsecured debt obligations of which are rated at least “A2” by Moody’s and “A” by Fitch; or (c) Xxxxx Fargo Bank, National Association; provided that the ratings by the Rating Agencies for the short-term unsecured debt obligations or commercial paper and long term unsecured debt obligations do not decrease below the ratings set forth in clause (a) above.

 

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“Eligible Operating Advisor”: An institution (a) that is a special servicer or operating advisor on a commercial mortgage-backed securities transaction rated by the Rating Agencies (including, in the case of the Operating Advisor, this transaction) but has not been special servicer or operating advisor on a transaction for which either Rating Agency has qualified, downgraded or withdrawn its rating or ratings of one or more classes of certificates for such transaction and cited servicing concerns with the special servicer or operating advisor as the sole or a material factor in such rating action; (b) that can and will make the representations and warranties of the Operating Advisor set forth in Section 2.8; (c) that is not (and is not a Risk Retention Affiliate of) the Depositor, the Trustee, the Certificate Administrator, the Servicer, the Special Servicer, the Sponsor, any Borrower Related Party, the Controlling Class Representative, or any of their respective Affiliates; (d) that has not been paid by the Special Servicer or successor special servicer any fees, compensation or other remuneration (x) in respect of its obligations hereunder or (y) for the appointment of, or recommendation for replacement of the Special Servicer by, a successor special servicer; (e) that (x) has been regularly engaged in the business of analyzing and advising clients in commercial mortgage-backed securities matters and has at least five (5) years of experience in collateral analysis and loss projections and (y) has at least five (5) years of experience in commercial real estate asset management and experience in the workout and management of distressed commercial real estate assets; and (f) that does not directly or indirectly, through one or more Affiliates or otherwise, own or have derivative exposure in any interest in any Certificates, the Trust Loan or otherwise have any financial interest in the securitization transaction to which this Agreement relates, other than in fees from its role as Operating Advisor.

 

“Environmental Indemnity”: As defined in the Loan Agreement.

 

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

 

“ERISA Plan”: As defined in Section 5.3(p).

 

“Euroclear”: As defined in Section 5.2(a).

 

“Excess Servicing Fees”: With respect to the Whole Loan (and any successor Foreclosed Property with respect thereto), that portion of the Servicing Fees that accrue at a per annum rate equal to the Servicing Fee Rate minus 0.00125%; provided that such rate shall be subject to reduction at any time following any resignation of a Servicer pursuant to Section 6.4 (if no successor is appointed in accordance with Section 6.4) or any termination of a Servicer pursuant to Section 7.1 to the extent reasonably necessary (in the sole discretion of the Trustee) for the Trustee to appoint a qualified successor servicer (which successor may include the Trustee) that meets the requirements of Section 7.2.

 

“Excess Servicing Fee Right”: With respect to the Whole Loan (and any successor Foreclosed Property with respect thereto), the right to receive Excess Servicing Fees. In the absence of any transfer of the Excess Servicing Fee Right, the Servicer shall be the owner of such Excess Servicing Fee Right.

 

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“Exchange Act”: The Securities Exchange Act of 1934, as amended from time to time.

 

“FHLMC”: The Federal Home Loan Mortgage Corporation and its successors in interest.

 

“Final Asset Status Report”: An Asset Status Report that is labeled or otherwise communicated as being a “Final Asset Status Report” and is in the process of being implemented by the Special Servicer in accordance with the terms of this Agreement (as determined by the Special Servicer), together with such other data or supporting information provided by the Special Servicer to the Controlling Class Representative which does not include any communication (other than the related asset status report) between the Special Servicer and the Controlling Class Representative; provided that, so long as a Control Termination Event has not occurred and is not continuing, no asset status report will be considered to be a Final Asset Status Report unless the Controlling Class Representative has either finally approved of and consented to the actions proposed to be taken in connection therewith, or has exhausted all of its rights of approval or consent or has been deemed to have approved or consented to such action or the Asset Status Report is otherwise in the process of being implemented by the Special Servicer in accordance with the terms of this Agreement.

 

“Fitch”: Fitch Ratings, Inc., and its successors-in-interest.

 

“FNMA”: The Federal National Mortgage Association and its successors in interest.

 

“Foreclosed Property”: Any portion of a Property, title to which has been acquired by the Special Servicer on behalf of the Trust and the Companion Loan Holders through foreclosure, deed-in-lieu of foreclosure or otherwise in the name of the Trustee or its nominee.

 

“Foreclosed Property Account”: As defined in Section 3.6.

 

“Foreclosure”: Any foreclosure, the taking of a deed-in-lieu of foreclosure, or the completion of any judicial or non-judicial foreclosure or termination, cancellation or rescission of any such foreclosure of the Mortgages.

 

“Foreclosure Proceeds”: Proceeds, net of any related expenses of the Servicer, Special Servicer, the Certificate Administrator and/or the Trustee, received in respect of the Foreclosed Property(including, without limitation, proceeds from the operation or rental of such Foreclosed Property) prior to the final liquidation of the Foreclosed Property.

 

“Form ABS Due Diligence-15E”: The form certification of a Due Diligence Service Provider prescribed by Section 15E(s)(4)(B) of the Exchange Act and Rule 17g-10 thereunder.

 

“Form 8-K Disclosure” The information described in the Form 8-K items set forth under the “Item on Form 8-K” column on Exhibit W hereto.

 

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“Global Certificates”: As defined in Section 5.2(b).

 

“Impermissible Risk Retention Affiliate”: As defined in Section 2.12

 

“Impermissible Operating Advisor Affiliate”: As defined in Section 2.12

 

“Impermissible TPP Affiliate”: As defined in Section 2.12.

 

“Independent”: When used with respect to any specified Person, such a Person who (i) does not have any direct financial interest or any material indirect financial interest in the Depositor, the Loan Borrower, the Borrower Sponsor, any Companion Loan Holder, the Certificate Administrator, the Trustee, the Controlling Class Representative, the Servicer, the Special Servicer or the Operating Advisor or in any of their respective Affiliates and (ii) is not connected with the Depositor, the Loan Borrower, the Borrower Sponsor, any Companion Loan Holder, the Certificate Administrator, the Trustee, the Servicer, the Special Servicer or the Operating Advisor or any of their respective Affiliates as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

 

“Independent Appraiser”: An Independent professional real estate appraiser who (i) is a member in good standing of the Appraisal Institute, (ii) if the state in which the subject Property or Foreclosed Property is located certifies or licenses appraisers, is certified or licensed in such state, and (iii) has a minimum of five (5) years’ experience in the appraisal of comparable properties in the geographic area in which the subject Property is located.

 

“Independent Contractor”: Either (i) any Person (other than the Special Servicer or Servicer) that would be an “independent contractor” with respect to the Lower-Tier REMIC or the Upper-Tier REMIC within the meaning of Section 856(d)(3) of the Code if such Trust REMIC were a real estate investment trust (except that the ownership test set forth in that Section of the Code shall be considered to be met by any Person that owns, directly or indirectly, 35% or more of any Class of Certificates or 35% or more of the aggregate value of all Classes of Certificates or such other interest in the Certificates as is set forth in an Opinion of Counsel, which shall, at no expense to the Trustee, the Certificate Administrator, the Special Servicer, the Servicer, or the Trust Fund, be delivered to the Trustee, the Certificate Administrator, the Special Servicer or the Servicer on behalf of the Trustee); provided that neither the Lower-Tier REMIC nor the Upper-Tier REMIC receives or derives any income from such Person and the relationship between such Person and such Trust 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 Special Servicer or the Servicer) if the Trustee, the Certificate Administrator and Operating Advisor (or the Servicer or the Special Servicer on behalf of the Trustee) has received an Opinion of Counsel which shall, at no expense to the Trustee, the Certificate Administrator, the Special Servicer, the Servicer (unless the Special Servicer or the Servicer is providing the Opinion of Counsel with respect to itself), the Operating Advisor or the Trust, be to the effect that the taking of any action in respect of the Foreclosed 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 Foreclosed 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

 

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purposes of Section 860D(a) of the Code), or cause any income realized in respect of such Foreclosed Property to fail to qualify as Rents from Real Property.

 

“Initial Purchaser”: Credit Suisse Securities (USA) LLC and its successors-in-interest.

 

“Inquiries”: As defined in Section 4.5.

 

“Institutional Accredited Investor”: An institution that is an “accredited investor” within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities Act or any entity in which all of the equity owners are “accredited investors” within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities Act.

 

“Insurance Proceeds”: (a) The portion of Net Proceeds paid as a result of a Casualty other than amounts to be applied to the restoration, preservation or repair of the Property or to be released to the Loan Borrower each in accordance with the terms of the Loan Agreement, or if not required to be so applied or so released under the terms of the Loan Agreement, Accepted Servicing Practices and (b) amounts paid by any insurer pursuant to any insurance policy required to be maintained by the Servicer pursuant to Section 3.11, to the extent related to this Agreement only.

 

“Interest Distribution Amount”: With respect to any Distribution Date for any Class of Regular Certificates or Uncertificated Lower-Tier Interests, the sum of the Current Interest Distribution Amount for such Distribution Date and such Class of Certificates or Uncertificated Lower-Tier Interests plus the aggregate unpaid Interest Shortfalls in respect of prior Distribution Dates for such Class of Certificates or Uncertificated Lower-Tier Interests.

 

“Interest Reserve Account”: As defined in Section 3.4(d).

 

“Interest Shortfall”: With respect to any Distribution Date for any Class of Regular Certificates or Uncertificated Lower-Tier Interests, the amount by which the Current Interest Distribution Amount for such Class of Certificates exceeds the portion of such amount actually paid in respect of such Class of Certificates on such Distribution Date.

 

“Interested Person”: The Depositor, the Servicer, the Special Servicer, the Certificate Administrator, a holder of 50% or more of the Controlling Class, the Controlling Class Representative (or any of its Affiliates), the Operating Advisor, the Loan Borrower, any Companion Loan Holder, any Other Depositor, any master servicer, special servicer or trustee for an Other Securitization, the Borrower Sponsor, the Property Manager, any mezzanine lender, any independent contractor engaged by the Special Servicer, or any of their respective Affiliates.

 

“Investment”: Any direct or indirect ownership interest in any security, note or other financial instrument issued or executed by a Loan Borrower or any Affiliate of a Loan Borrower, a loan directly or indirectly secured by any of the foregoing or a hedging transaction (however structured) that references or relates to any of the foregoing.

 

“Investment Account”: As defined in Section 3.8(a).

 

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“Investment Decisions”: Investment, trading, lending or other financial decisions, strategies or recommendations with respect to Investments, whether on behalf of the Servicer, the Special Servicer or any of their respective Affiliates, as applicable, or any Person on whose behalf the Servicer, the Special Servicer or any of their respective Affiliates has discretion in connection with Investments.

 

“Investor Certification”: A certification representing that such Person executing the certificate is a Certificateholder, a Companion Loan Holder, the Controlling Class Representative if the Controlling Class Representative is not a Certificateholder (and no Control Termination Event or Consultation Termination Event is in effect), a Beneficial Owner, the Sponsor (in the event it is required under the Loan Purchase Agreement to repurchase the Trust Loan or any other Note), or a prospective purchaser of a Certificate (or any investment advisor or manager of the foregoing) and that (i) for purposes of obtaining certain information and notices pursuant to this Agreement (including access to information and notices on the Certificate Administrator’s Website), (A) (1) such Person is not a Borrower Related Party, a Property manager, a Borrower Sponsor, a Restricted Holder, an Affiliate or any of the foregoing or an agent, principal, partner, member, joint venturer, limited partner, employee, representative, director, trustee, advisor of or investor in or of any of the foregoing, in which case such Person shall have access to all the reports and information made available to Privileged Persons pursuant to this Agreement or (2) such Person is a Borrower Related Party, in which case such person shall be entitled to receive access to the Distribution Date Statements posted on the Certificate Administrator’s Website, and (B) except in the case of a prospective purchaser of a Certificate, such person has received a copy of the final Offering Circular, in the form of Exhibit BB-1 or Exhibit BB-2, as applicable, to this Agreement or in the form of an electronic certification contained on the Certificate Administrator’s Website, and/or (ii) for purposes of exercising Voting Rights (which shall not apply to a prospective purchaser of a Certificate), (A) such Person is not a Borrower Related Party, (B) such Person is or is not the Depositor, the Servicer, the Special Servicer, the Certificate Administrator, the Trustee or an Affiliate of any of the foregoing, (C) such Person has received a copy of the final Offering Circular and (D) such Person agrees to keep any Privileged Information confidential and will not violate any securities laws; provided that if such Person is an Affiliate of the Depositor, the Servicer, the Special Servicer, the Trustee or the Certificate Administrator, such Person certifies to the existence or non-existence of appropriate policies and procedures restricting the flow of information between it and the Depositor, the Servicer, the Special Servicer, the Trustee or the Certificate Administrator, as applicable; provided, further, that a repurchasing Sponsor shall be entitled to receive any and all reports and have access to any and all information that a Certificateholder would otherwise have under the terms of this Agreement. The Certificate Administrator may conclusively rely on any duly submitted Investor Certification and may require that Investor Certifications be resubmitted from time to time in accordance with its policies and procedures.

 

“KeyBank”: KeyBank National Association, and its successors-in-interest.

 

“Liquidated Property”: The Property, if it has been liquidated and the Special Servicer has determined that all amounts which it expects to recover from or on account of the Property has been recovered.

 

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“Liquidation Expenses”: Reasonable and customary expenses (other than expenses covered by any insurance policy) incurred by the Servicer, the Special Servicer, the Certificate Administrator or the Trustee in connection with the liquidation of the Whole Loan or Property (or portions thereof), such expenses including, without limitation, legal fees and expenses, appraisal fees, brokerage fees and commissions, conveyance taxes and trustee and co-trustee fees, if any. Liquidation Expenses shall not include any previously incurred expenses which have been previously reimbursed to the party incurring the same or which were netted against income from the Foreclosed Property and were considered in the calculation of the amount of Foreclosure Proceeds pursuant to the definition thereof.

 

“Liquidation Fee”: A fee payable to the Special Servicer with respect to the Liquidated Property or the liquidation of the Whole Loan or any portion thereof or the Notes pursuant to Section 3.17 as to which the Special Servicer receives any Liquidation Proceeds, equal to the product of the Liquidation Fee Rate and the Net Liquidation Proceeds related to such Liquidated Property, Whole Loan or portion thereof or Notes.

 

“Liquidation Fee Rate”: A rate equal to 0.50%.

 

“Liquidation Proceeds”: Amounts (other than Insurance Proceeds and Condemnation Proceeds) received by the Special Servicer and/or Certificate Administrator in connection with the liquidation of the Whole Loan, the Trust Loan, any Companion Loan or the Property, whether through judicial foreclosure, sale or otherwise, or in connection with the sale, discounted payoff or other liquidation of the Whole Loan, the Trust Loan, any Companion Loan (other than amounts required to be paid to the Loan Borrower pursuant to law or the terms of the Loan Agreement) including the proceeds of any full, partial or discounted payoff of the Whole Loan, the Trust Loan or any Companion Loan (exclusive of any portion of such payoff or proceeds that represents Default Interest or late payment charges).

 

“Loan Agreement”: As defined in the Introductory Statement.

 

“Loan Borrower”: As defined in the Introductory Statement.

 

“Loan Borrower Reimbursable Trust Fund Expenses”: All costs, expenses and fees of the Trust, the Servicer, the Special Servicer, the Certificate Administrator or the Trustee resulting from defaults or the occurrence of a Special Servicing Loan Event pursuant to this Agreement (including enforcement expenses and any Liquidation Fees, Work-out Fees, Special Servicing Fees, or any other similar fees and interest payable on advances made by the Servicer, the Special Servicer, the Certificate Administrator or the Trustee with respect to delinquent debt service payments or expenses of curing the Loan Borrower’s defaults under the Loan Documents, and any expenses paid by the Servicer, the Special Servicer, the Certificate Administrator or the Trustee in respect of the protection and preservation of any Property, such as payment of taxes and insurance premiums); and the costs of all property inspections and/or appraisals (or any updates to any existing inspection or appraisal) that the Servicer or the Special Servicer may be required to obtain pursuant to this Agreement due to a default under the Whole Loan or the occurrence of a Special Servicing Loan Event pursuant to this Agreement, in each case to the extent such costs, expenses and fees are reimbursable by such Loan Borrower as

 

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provided for in the Loan Agreement, and any other costs, expenses and fees to be paid by the Loan Borrower under the Loan Agreement.

 

“Loan Documents”: All documents executed or delivered by the Loan Borrower or any other party evidencing or securing the Whole Loan and any amendment thereof or thereafter or subsequently added to the Mortgage File, including without limitation the Loan Agreement.

 

“Loan Event of Default”: An Event of Default as defined under the Loan Documents.

 

“Loan Interest Accrual Period”: With respect to the Whole Loan for any Loan Payment Date, the period from and including the 6th day of the calendar month preceding the month in which such Loan Payment Date occurs through and including the 5th day of the calendar month in which such Loan Payment Date occurs.

 

“Loan Lender”: Lender as defined in the Loan Agreement.

 

“Loan Payment Date”: The 6th day of each calendar month in which the related Loan Interest Accrual Period ends (or if such date is not a Business Day (as such term is defined the Loan Agreement), the immediately preceding Business Day).

 

“Loan Purchase Agreement”: The Trust Loan Purchase and Sale Agreement, dated as of July 6, 2017, by and between the Sponsor and the Depositor.

 

“Lockbox Agreement”: The Deposit Account Control Agreement entered into on the Origination Date among the Loan Borrower, the Originator, the Property Manager and KeyBank National Association.

 

“Lower-Tier Distribution Account”: A subaccount of the Distribution Account, which shall be an asset of the Trust Fund and the Lower-Tier REMIC.

 

“Lower-Tier Distribution Amount”: As defined in Section 4.1(b).

 

“Lower-Tier Principal Amount”: With respect to any Class of Uncertificated Lower-Tier Interests, (i) on or prior to the first Distribution Date, an amount equal to the Original Lower-Tier Principal Amount of such Class as specified in the Introductory Statement to this Agreement, and (ii) as of any date of determination after the first Distribution Date an amount equal to the Certificate Balance of the Class of Related Certificates on the preceding Distribution Date (after giving effect to distribution of principal and allocation of Realized Losses).

 

“Lower-Tier REMIC”: One of two separate Trust REMICs comprising the Trust Fund, the assets of which consist of all of the assets of the Trust Fund other than the assets of the Upper-Tier REMIC.

 

“MAI Standards”: Standards of Professional Appraisal Practice established for Members of the Appraisal Institute.

 

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“Major Decision”: Any of the following:

 

(i)           any proposed or actual foreclosure upon or comparable conversion (which may include acquisitions of the Foreclosed Property) of the ownership of the Property as comes into and continues in default;

 

(ii)          any modification, consent to a modification or waiver of a monetary term (other than penalty charges) or material non-monetary term (including, without limitation, the timing of payments and acceptance of discounted payoffs but excluding waiver of penalty charges) of the Whole Loan or any extension of the Stated Maturity Date of the Whole Loan;

 

(iii)         any sale of the Whole Loan (other than in connection with the termination of the Trust Fund) if it becomes a Defaulted Whole Loan for less than the applicable Repurchase Price (excluding the amount described in clause (vi) of the definition of “Repurchase Price”);

 

(iv)         any determination to bring the Property or the Foreclosed Property into compliance with applicable environmental laws or to otherwise address hazardous materials located at the Foreclosed Property;

 

(v)          any release of collateral or any acceptance of substitute or additional collateral for the Whole Loan, or any consent to either of the foregoing, other than immaterial condemnation actions and other similar takings or if otherwise required pursuant to the specific terms of the Whole Loan and for which there is no Loan Lender discretion;

 

(vi)         any waiver of a “due on sale” or “due on encumbrance” clause with respect to the Whole Loan or, if Loan Lender consent is required, any consent to such waiver or consent to a transfer of the Property or interests in a Loan Borrower or consent to the incurrence of additional debt, other than any such transfer or incurrence of debt as may be effected without the consent of the Loan Lender under the Loan Agreement or related to an immaterial easement, right of way or similar agreement;

 

(vii)        releases of any escrow accounts, reserve accounts or letters of credit held as performance or “earn out” escrows or reserves other than those required pursuant to the specific terms of the Whole Loan and for which there is no material Loan Lender discretion;

 

(viii)       any acceptance of an assumption agreement or any other agreement permitting transfers of interests in the Loan Borrower releasing the Loan Borrower from liability under the Whole Loan other than pursuant to the specific terms of the Whole Loan and for which there is no material Loan Lender discretion;

 

(ix)         the determination of the Servicer pursuant to clause (vii) or clause (viii) of the definition of “Special Servicing Loan Event”;

 

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(x)          following a default or an event of default with respect to the Whole Loan, any acceleration of the Whole Loan or initiation of judicial, bankruptcy or similar proceedings under the related Loan Documents or with respect to a Loan Borrower or the Property;

 

(xi)         any proposed modification or waiver of any material provision in the Loan Documents governing the type, nature or amount of insurance coverage required to be obtained and maintained by the Loan Borrower;

 

(xii)        any approval of any casualty insurance settlements or condemnation settlements, and any determination to apply casualty proceeds or condemnation awards to the reduction of the debt rather than to the restoration of the Property;

 

(xiii)       any adoption or implementation of the annual budget for which Loan Lender consent is required under the Loan Documents; and

 

(xiv)       execution, termination, modification or renewal of the NASA Lease or any major lease under the Loan Agreement, to the extent Loan Lender approval is required under the Loan Documents, including entering into a non-disturbance agreement.

 

“Major Decision Reporting Package”: As defined in Section 6.5(a).

 

“Material Breach”: As defined in Section 2.9(a).

 

“Material Document Defect”: As defined in Section 2.9(a).

 

“Modification Fees”: With respect to the Whole Loan, any and all fees collected from the Loan Borrower with respect to a modification, extension, waiver or amendment that modifies, extends, amends or waives any term of the Loan Documents agreed to by the Servicer or the Special Servicer, other than (a) any assumption fees, consent fees, defeasance fees or assumption application fees and (b) Special Servicing Fees, Work-out Fees and Liquidation Fees.

 

“Monthly Payment”: (i) With respect to the Whole Loan and any Distribution Date, the scheduled payment of principal (if any) and interest on the Whole Loan pursuant to the Loan Agreement, including the Balloon Payment, as applicable, in each case that is due and payable on the immediately preceding Loan Payment Date, (ii) with respect to the Trust Loan and any Distribution Date, the scheduled payment of principal (if any) and interest on the Trust Loan pursuant to the Loan Agreement, including the Balloon Payment, as applicable, in each case that is due and payable on the immediately preceding Loan Payment Date and (iii) with respect to any Note and any Distribution Date, the scheduled payment of principal (if any) and interest on such Note pursuant to the Loan Agreement and the related Balloon Payment, in each case that is due and payable on the immediately preceding Loan Payment Date.

 

“Monthly Payment Advance”: Any advance made by the Servicer or the Trustee pursuant to Section 3.23(a) or (c) as applicable. Each reference to the reimbursement or payment of a Monthly Payment Advance shall be deemed to include, whether or not specifically referred to, payment or reimbursement of interest thereon at the Advance Rate through the date of payment or reimbursement.

 

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“Moody’s”: Xxxxx’x Investors Service, Inc. or its successors in interest. If neither Moody’s nor any successor remains in existence, “Moody’s” shall be deemed to refer to such other nationally recognized statistical rating agency or other comparable Person designated by the Depositor, notice of which designation shall be given to the Trustee, the Certificate Administrator, the Servicer, the Special Servicer and the Operating Advisor and specific ratings of Moody’s herein referenced shall be deemed to refer to the equivalent ratings of the party so designated.

 

“Morningstar”: Morningstar Credit Ratings, LLC, or any of its successors in interest, assigns, and/or changed entity name or designation resulting from any acquisition by Morningstar, Inc. or other similar entity of Morningstar Credit Ratings, LLC.

 

“Mortgage”: As defined in the Loan Agreement.

 

“Mortgage File”: As defined in Section 2.1(b), and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

 

“NASA Lease”: That certain U.S. Government Lease for Real Property, dated as of February 16, 2011, by and between the Loan Borrower as successor in interest to Piedmont-Independence Square, LLC, as landlord, and the United States of America, as tenant, as amended and supplemented.

 

“Net Foreclosure Proceeds”: With respect to the Foreclosed Property, the Foreclosure Proceeds with respect to such Foreclosed Property net of any insurance premiums, taxes, assessments, ground rents and other costs permitted to be paid therefrom pursuant to Section 3.14.

 

“Net Liquidation Proceeds”: The excess of Liquidation Proceeds received with respect to a Property or the Whole Loan, as the case may be, over the amount of Liquidation Expenses incurred with respect thereto.

 

“Net Proceeds”: As defined in the Loan Agreement.

 

“Net Trust Loan Rate”: With respect to any Distribution Date and the Trust Loan, the annualized rate at which interest would have to accrue in respect of the Trust Loan on the basis of a 360-day year consisting of twelve 30-day months in the Loan Interest Accrual Period preceding the Loan Payment Date that precedes such Distribution Date in order to produce the aggregate amount of interest (net of interest at the Servicing Fee Rate, the CREFC® Intellectual Property Royalty License Fee Rate, the Operating Advisor Fee Rate and the Certificate Administrator Fee Rate and exclusive of Default Interest) that actually accrues on the Trust Loan during such Loan Interest Accrual Period; provided, that any modification that changes the Net Trust Loan Rate shall be disregarded for purposes of calculating the Pass-Through Rates for the corresponding Class(es) of Certificates; provided, further, that (i) the Net Trust Loan Rate for the Loan Interest Accrual Period preceding the Loan Payment Dates in (a) January and February in each year that is not a leap year or (b) in February only in each year that is a leap year (unless in the case of either (a) or (b) the related Distribution Date is the final Distribution Date), shall be 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 produce the aggregate amount of interest (net of

 

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interest at the Servicing Fee Rate, the CREFC® Intellectual Property Royalty License Fee Rate, the Operating Advisor Fee Rate and the Certificate Administrator Fee Rate and exclusive of Default Interest) actually accrued on the Trust Loan during such Loan Interest Accrual Period, minus the applicable Withheld Amount and (ii) the Net Trust Loan Rate for the Loan Interest Accrual Period preceding the Loan Payment Date in March (or February, if the related Distribution Date is the final Distribution Date), shall be 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 produce the aggregate amount of interest (net of interest at the Servicing Fee Rate, the CREFC® Intellectual Property Royalty License Fee Rate, the Operating Advisor Fee Rate and the Certificate Administrator Fee Rate and exclusive of Default Interest) actually accrued on the Trust Loan during such Loan Interest Accrual Period, plus the applicable Withheld Amounts.

 

“New Lease”: Any lease with respect to the Foreclosed Property entered into at the direction of the Special Servicer on behalf of the Trust, including any lease renewed, modified or extended on behalf of the Trust, if the Trust has the right to renegotiate the terms of such lease.

 

“Nondisqualification Opinion”: An Opinion of Counsel, prepared at the Trust’s expense and payable from the Collection Account, to the effect that a contemplated action will not result in an Adverse REMIC Event.

 

“Nonrecoverable Advance”: Any Advance or portion of an Advance previously made and not previously reimbursed, or proposed to be made, including interest on such Advance, which, the Servicer, the Special Servicer or the Trustee determines in accordance with Accepted Servicing Practices (in the case of the Servicer or the Special Servicer) or reasonable business judgment (in the case of the Trustee) would not be ultimately recoverable from subsequent payments or collections (including Foreclosure Proceeds, Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds) in respect of the Trust Loan or Whole Loan, as applicable, or the Property or from funds on deposit in the Collection Account pursuant to Section 3.4(c). The Trustee will be entitled to rely conclusively on the Servicer’s determination that an Advance is a Nonrecoverable Advance, and the Servicer will be entitled to rely conclusively on the Special Servicer’s determination that an Advance is a Nonrecoverable Advance.

 

“Non-Reduced Certificates”: As of any date of determination, any Class of Sequential Pay Certificates then outstanding for which (a) (1) the initial Certificate Balance of such Class of Certificates minus (2) the sum (without duplication) of (x) any payments of principal (whether as principal prepayments or otherwise) previously distributed to the Certificateholders of such Class of Certificates, (y) any Appraisal Reduction Amounts allocated to such Class of Certificates as of the date of determination and (z) any Realized Losses previously allocated to such Class of Certificates, is equal to or greater than (b) 25% of the remainder of (i) the initial Certificate Balance of such Class of Certificates less (ii) any payments of principal (whether as principal prepayments or otherwise) previously distributed to the Certificateholders of such Class of Certificates.

 

“Non-Book Entry Certificates”: As defined in Section 5.2(c).

 

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“Non-U.S. Beneficial Ownership Certification”: As defined in Section 5.3(f).

 

“Non-U.S. Person”: A Person other than a U.S. Person.

 

“Notes”: As defined in the Introductory Statement.

 

“Notional Amount”: With respect to the Class X Certificates, an amount equal to the aggregate Certificate Balance of the Class A and Class B Certificates, as reduced by the aggregate amount of Realized Losses allocated to the Class A Certificates and Class B Certificates, pursuant to Section 4.1(g).

 

“NRSRO”: A nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act..

 

“NRSRO Certification”: A certification executed by an NRSRO in favor of the 17g-5 Information Provider substantially in the form attached hereto as Exhibit M, which may be provided electronically by means of a “click-through” confirmation on the 17g-5 Information Provider’s Website, stating that such certifying party is a Rating Agency under this Agreement or that such certifying party has provided the Depositor with the appropriate certifications under Exchange Act Rule 17g-5(e), has access to the 17g-5 Information Provider’s Website and that any confidentiality agreement applicable to such certifying party with respect to the information obtained from the 17g-5 Information Provider’s Website shall also be applicable to information obtained from the 17g-5 Information Provider’s Website and the Certificate Administrator’s Website.

 

“Offering Circular”: That certain Confidential Offering Circular, dated as of July 14, 2017, relating to the offering of the Certificates.

 

“Officer’s Certificate”: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President (however denominated), the Treasurer, the Secretary, one of the Assistant Treasurers or Assistant Secretaries, any Servicing Officer, Responsible Officer or other officer of the Servicer, the Special Servicer, the Depositor, the Sponsor or any other entity referred to herein, as the case may be, customarily performing functions similar to those performed by any of the above designated officers and also with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Operating Advisor”: Park Bridge Lender Services LLC, a New York limited liability company, and its successors-in-interest and assigns, or any successor operating advisor appointed as herein provided.

 

“Operating Advisor Annual Report”: As defined in Section 3.29(c).

 

“Operating Advisor Consultation Event”: The event that occurs when (i) the Class HRR Certificates have a Certificate Balance (as notionally reduced by any Appraisal Reduction Amounts allocable to such Class in accordance with Section 3.7(a) of this Agreement) equal to or less than 25% of the Initial Certificate Balance of such Class or (ii) a Control Termination Event has occurred and is continuing.

 

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“Operating Advisor Consulting Fee”: A fee with respect to each Asset Status Report and Major Decision in respect of which the Operating Advisor has consultation obligations and performed its duties with respect to such Asset Status Report or Major Decision equal to $10,000 (or such lesser amount as the Loan Borrower agrees to pay), payable pursuant to Section 3.4 of this Agreement; provided, however, that the Operating Advisor may in its sole discretion reduce the Operating Advisor Consulting Fee with respect to any Asset Status Report or Major Decision; provided, further, that the Servicer or Special Servicer, as applicable, may waive or reduce the amount of any Operating Advisor Consulting Fee payable by the Loan Borrower if it determines that such full or partial waiver is in accordance with Accepted Servicing Practices (provided that the Servicer or the Special Servicer, as applicable, shall consult, on a non-binding basis, with the Operating Advisor prior to any such waiver or reduction), but may in no event take any enforcement action with respect to the collection of such Operating Advisor Consulting Fee other than requests for collection.

 

“Operating Advisor Expenses”: With respect to any Distribution Date, an amount equal to any unreimbursed indemnification amounts or Trust Fund Expenses payable to the Operating Advisor pursuant to this Agreement (other than the Operating Advisor Fee and the Operating Advisor Consulting Fee).

 

“Operating Advisor Fee”: With respect to the Trust Loan, the fee payable to the Operating Advisor pursuant to Section 3.29(h).

 

“Operating Advisor Fee Rate”: With respect to each Certificate Interest Accrual Period related to any applicable Distribution Date, a per annum rate of 0.00863%.

 

“Operating Advisor Standard”: The requirement that the Operating Advisor must act solely on behalf of the Trust and in the best interest of, and for the benefit of, the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and not for any particular class of Certificateholders, as determined by the Operating Advisor in the exercise of its good faith and reasonable judgment, but without regard to any conflict of interest arising from any relationship that the Operating Advisor or any of its Affiliates may have with the Loan Borrower, any manager of the Property, the Borrower Sponsor, the U.S. REIT Sponsor, the Sponsor, the Depositor, the Servicer, the Special Servicer, the Controlling Class Representative or any of their respective Affiliates.

 

“Operating Advisor Termination Event”: Any of the following events, whether any such event is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:

 

(b)           any failure by the Operating Advisor to observe or perform in any material respect any of its covenants or agreements or the material breach of any of its representations or warranties under this Agreement, which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, is given to the Operating Advisor by any party to this Agreement or to the Operating Advisor, the Certificate Administrator and the Trustee by the holders of Certificates having greater than 25% of the aggregate Voting Rights, provided that any such failure which is not curable within such

 

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thirty (30) day period, the Operating Advisor shall have an additional cure period of thirty (30) days to effect such cure so long as it has commenced to cure such failure within the initial thirty (30) day period and has provided the Trustee and the Certificate Administrator with an officer’s certificate certifying that it has diligently pursued, and is continuing to pursue, such cure;

 

(c)           any failure by the Operating Advisor to perform in accordance with the Operating Advisor Standard which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, is given in writing to the Operating Advisor by any party to this Agreement;

 

(d)           any failure by the Operating Advisor to be an Eligible Operating Advisor, which failure continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, is given to the Operating Advisor by any party to this Agreement;

 

(e)           a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law for the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, shall have been entered against the Operating Advisor, and such decree or order shall have remained in force undischarged or unstayed for a period of sixty (60) days;

 

(f)           the Operating Advisor consents to the appointment of a conservator, receiver, liquidator or liquidation committee in any insolvency, readjustment of debt, marshaling of assets and liabilities, voluntary liquidation, or similar proceedings of or relating to the Operating Advisor or of or relating to all or substantially all of its property; or

 

(g)           the Operating Advisor 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.

 

“Opinion of Counsel”: A written opinion of counsel (which counsel, in the case of any such opinion of counsel relating to the taxation of the Trust Fund or any portion thereof or the status of each Trust REMIC as a REMIC for taxation purposes, shall be Independent of the Depositor, the Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator and the Trustee), who may, without limitation, be counsel for the Depositor, the Servicer, the Special Servicer, the Operating Advisor or the Trustee, reasonably acceptable to the Certificate Administrator or the Trustee, as applicable.

 

“Original Lower-Tier Principal Amount”: With respect to any Class of Uncertificated Lower-Tier Interests, the initial Lower-Tier Principal Amount thereof as of the Closing Date, in each case as specified in the Introductory Statement to this Agreement.

 

“Origination Date”: means July 5, 2017.

 

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“Other Depositor”: With respect to any Other Securitization Trust, the related “depositor” (within the meaning of Item 1101(e) of Regulation AB).

 

“Other Exchange Act Reporting Party”: With respect to any Other Securitization Trust that is subject to the reporting requirements of the Exchange Act, the trustee, certificate administrator, master servicer, special servicer or depositor under the related Other Pooling and Servicing Agreement that is responsible for the preparation and/or filing of Form 8-K, Form 10-D and/or Form 10-K with respect to such Other Securitization Trust, as identified in writing to the parties to this Agreement; and, with respect to any Other Securitization Trust that is not subject to the reporting requirements of the Exchange Act and for the purposes of Section 11.7, Section 11.8, Section 11.9 and Section 11.16 only, the trustee, certificate administrator, master servicer, special servicer or depositor under the related Other Pooling and Servicing Agreement that is responsible for the preparation and/or dissemination of periodic distribution date statements or similar reports, as identified in writing to the parties to this Agreement.

 

“Other Pooling and Servicing Agreement”: The pooling and servicing agreement or other comparable agreement governing the creation of any Other Securitization Trust and the issuance of securities backed by the assets of such Other Securitization Trust.

 

“Other Securitization Trust”: Any “issuing entity” (within the meaning of Item 1101(f) of Regulation AB) that holds a Companion Loan (or any portion thereof or interest therein), as identified in writing to the parties to this Agreement.

 

“Par Price”: Without duplication the sum of (i) the outstanding principal balances of the A Notes and the B Note, (ii) the accrued and unpaid interest on the outstanding principal balance of the A Notes and the B Note at the related Note Rate, up to (but excluding) the date of purchase and if such date of purchase is not a Payment Date, up to (but excluding) the Payment Date next succeeding the date of purchase, provided that payment is made in good funds by 3:00 p.m. New York local time, (iii) any Property Protection Advances that have not been reimbursed from collections on the Loan and the related Advance Interest amount, (iv) any interest accrued on any Monthly Payment Advance made on any A Note or B Note by a party to this Agreement or another pooling and servicing agreement at the rate specified in the related servicing agreement, (v) any accrued and unpaid Servicing Fees, Special Servicing Fees, Work-out Fees, Liquidation Fees and additional servicing compensation, and (vi) any unreimbursed Costs (as defined in the Co-Lender Agreement) incurred by any A Note holder or B Note holder or any party acting on such holder’s behalf (which are not included in the preceding clauses of this definition).

 

“Pass-Through Rate”: With respect to each Class of Regular Certificates, the per annum rate at which interest accrues on the Certificate Balance or Notional Amount, as applicable, of such Class as set forth in Section 5.1(a), and for each Uncertificated Lower-Tier Interest, the Net Trust Loan Rate, being, in each case, the rate at which interest accrues on the Certificate Balance, Notional Amount or Lower-Tier Principal Amount, as applicable, of such Class as set forth in the Introductory Statement to this Agreement.

 

“Percentage Interest”: As to any Certificate, the percentage interest evidenced thereby in distributions required to be made with respect to the related Class. With respect to

 

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any Regular Certificate, such “percentage interest” is equal to the Initial Certificate Balance or Notional Amount, as applicable, of such Certificate divided by the Initial Certificate Balance or Notional Amount, as applicable, of all of the Certificates of the related Class. With respect to the Class R Certificates, the percentage specified on the Certificate held by the Holder of such Certificate.

 

“Performing Party”: As defined in Section 11.12.

 

“Permitted Encumbrances”: As defined in the Loan Agreement.

 

“Permitted Investments”: Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, payable on demand or having a maturity date not later than the Business Day immediately prior to the first Loan Payment Date following the date of acquiring such investment and meeting one of the appropriate standards set forth below:

 

(i)           direct obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States of America, Xxxxxx Xxx, Xxxxxxx Mac 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 that mature in one (1) year or less from the date of acquisition; provided that any obligation of, or guarantee by, any agency or instrumentality of the United States of America shall be a Permitted Investment only if such investment would not result in the downgrading, withdrawal or qualification of the then-current rating assigned by each Rating Agency to any Certificate as evidenced in writing, other than (a) unsecured senior debt obligations of the U.S. Treasury (direct or fully funded obligations), U.S. Department of Housing and Urban Development public housing agency bonds, Federal Housing Administration debentures, Government National Mortgage Association guaranteed mortgage-backed securities or participation certificates, RefCorp debt obligations and SBA-guaranteed participation certificates and guaranteed pool certificates and (b) Farm Credit System consolidated systemwide bonds and notes, Federal Home Loan Banks’ consolidated debt obligations, Xxxxxxx Mac debt obligations, and Xxxxxx Xxx debt obligations;

 

(ii)          time deposits, demand unsecured certificates of deposit, or bankers’ acceptances with maturities of not more than 365 days that are issued or held by any depository institution or trust company (including the Certificate Administrator) 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 which (A) in the case of such investments with maturities of 30 days or less, the short term obligations of which are rated in the highest short term rating category by Fitch or the long term obligations of which are rated at least “A” by Fitch, (B) in the case of such investments with maturities of three months or less, but more than 30 days, the short term obligations of which are rated in the highest short term rating category by Fitch and the long term obligations of which are rated at least “A” by Fitch, (C) in the case of such investments with maturities of six months or less, but more than three months, the short term obligations of which are rated in the highest short term rating category by Fitch and the long term obligations of which are rated at least “AA-” by Fitch and (D) in the case of

 

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such investments with maturities of more than six months, the short term obligations of which are rated in the highest short term rating category by Fitch and the long term obligations of which are rated “AAA” by Fitch (or, in each case, if permitted by the Whole Loan, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to the Certificates);

 

(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;

 

(iv)         debt obligations 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 mature in one (1) year or less from the date of acquisition, which (A) in the case of such investments with maturities of 30 days or less, the short term obligations of which are rated in the highest short term rating category by Fitch or the long term obligations of which are rated at least “A” by Fitch, (B) in the case of such investments with maturities of three months or less, but more than 30 days, the short term obligations of which are rated in the highest short term rating category by Fitch and the long term obligations of which are rated at least “A” by Fitch, (C) in the case of such investments with maturities of six months or less, but more than three months, the long term obligations of which are rated at least “AA-” by Fitch, and (D) in the case of such investments with maturities of more than six months, the long term obligations of which are rated “AAA” by Fitch; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investment therein will cause the then outstanding principal amount of securities issued by such corporation and held in the accounts established hereunder to exceed 10% of the sum of the aggregate principal balance and the aggregate principal amount of all Permitted Investments in such accounts;

 

(v)          commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations) payable on demand or on a specified date maturing in one year or less after the date of issuance thereof and which (i) is (A) if maturing in three months or less, such commercial paper carries either a short term rating of “F1” by Fitch or a long term rating of “A” or better by Fitch, (B) if maturing in six months or less but more than three months, carries a short term rating of “F1” by Fitch and a long term rating of “AA-” or better by Fitch and (C) if maturing in longer than six months, carries a short term rating of “F1” by Fitch and a long term rating of “AAA” by Fitch or (ii) have such other ratings as confirmed in a Rating Agency Confirmation;

 

(vi)         any money market fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clause (i) above, (b) has net assets of not less than $5,000,000,000, and (c) has the highest rating obtainable from Fitch;

 

(vii)        units of money market funds (including those managed or advised by the Trustee or its Affiliates) which maintain a constant net asset value, such as the Xxxxx

 

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Fargo Money Market Funds, provided that such units of money market funds are rated in the highest applicable rating category by Fitch and Morningstar (if rated by Morningstar); and

 

(viii)       any other demand, money market or time deposit, obligation, security or investment with respect to which Rating Agency Confirmation has been obtained from each Rating Agency;

 

Notwithstanding the foregoing, “Permitted Investments” (i) shall be limited to investments that have an unqualified rating (i.e., one with no qualifying suffix), with the exception of ratings with regulatory indicators, such as the (sf) subscript, and unsolicited ratings; (ii) shall be limited to those instruments that have a predetermined fixed dollar of principal due at maturity that cannot vary or change; and (iii) shall exclude any investment where the right to receive principal and interest derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment. Interest may either be fixed or variable, and any variable interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index; and provided, that each Permitted Investment qualifies as a “cashflow investment” pursuant to Section 860G(a)(6) of the Code and no amount beneficially owned by the Upper-Tier REMIC or the Lower-Tier REMIC (even if not yet deposited in the Trust) may be invested in investments (other than money market funds) treated as equity interests for federal income tax purposes, unless the Servicer receives an Opinion of Counsel, at its own expense, to the effect that such investment will not adversely affect the status of the Upper-Tier REMIC or the Lower-Tier REMIC. No investment shall be made that requires a payment above par for an obligation if the obligation may be prepaid at the option of the issuer thereof prior to its maturity. All investments shall mature or be redeemable upon the option of the holder thereof on or prior to the earlier of (x) three months from the date of their purchase and (y) the Business Day preceding the day before the date such amounts are required to be applied hereunder.

 

“Permitted Special Servicer/Affiliate Fees”: Any commercially reasonable treasury management fees, banking fees, title agency fees or insurance commissions or fees received or retained by the Special Servicer or any of its Affiliates in connection with any services performed by such party with respect to the Whole Loan, subject to Section 3.17 of this Agreement.

 

“Permitted Transferee”: Any Person or agent of such Person other than (a) a Disqualified Organization, (b) any other Person so designated by the Certificate Registrar who is unable to provide an Opinion of Counsel (provided at the expense of such Person or the Person requesting the transfer) to the effect that the transfer of an ownership interest in any Class R Certificate to such Person would not cause either Trust REMIC to fail to qualify as a Trust REMIC at any time that the Certificates are outstanding, (c) a Disqualified Non-U.S. Person, (d) any partnership if any of its interests are (or under the partnership agreement are permitted to be) owned, directly or indirectly (other than through a U.S. corporation), by a Disqualified Non-U.S. Person or (e) a U.S. Person with respect to whom income from the Class R Certificate is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of the transferee or any other U.S. Person.

 

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“Person”: Any individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

 

“Plan Fiduciary”: As defined in Section 5.3(p).

 

“Prepayment Charge”: Any Yield Maintenance Default Premium and/or Yield Maintenance Premium, as and to the extent applicable.

 

“Prepayment Date”: As defined in the Loan Agreement.

 

“Prepayment Treasury Rate”: As defined in the Loan Agreement.

 

“Prime Rate”: The “prime rate” published in The Wall Street Journal. If The Wall Street Journal ceases to publish the “prime rate”, then the Servicer shall select an equivalent publication that publishes such “prime rate”, and if such “prime rate” is no longer generally published or is limited, regulated or administered by a governmental or quasi-governmental body, then the Servicer shall reasonably select a comparable interest rate index.

 

“Principal Distribution Amount”: For each Distribution Date and any Class of Sequential Pay Certificates, the sum of (i) the Regular Principal Distribution Amount for such Distribution Date and such Class and (ii) the aggregate Principal Shortfalls in respect of prior Distribution Dates for such Class of Certificates.

 

“Principal Shortfall”: For each Distribution Date and any Class of Sequential Pay Certificates, the amount by which the Regular Principal Distribution Amount for such Class exceeds the amount actually distributed to such Class in respect of principal on such Distribution Date.

 

“Privileged Information”: Any (i) correspondence or other communications between the Controlling Class Representative and the Special Servicer related to a Specially Serviced Loan or the exercise of the consent or consultation rights of the Controlling Class Representative under this Agreement, (ii) strategically sensitive information that the Special Servicer has reasonably determined (and has identified as privileged or confidential information) could compromise the Trust Fund’s position in any ongoing or future negotiations with the Loan Borrower or other interested party, and (iii) information subject to attorney client privilege.

 

“Privileged Information Exception”: With respect to any Privileged Information, at any time (a) such Privileged Information becomes generally available and known to the public other than as a result of a disclosure directly or indirectly by the party restricted from disclosing such Privileged Information (the “Restricted Party”), (b) it is reasonable and necessary for the Restricted Party to disclose such Privileged Information in working with legal counsel, auditors, arbitration parties, taxing authorities or other governmental agencies, (c) such Privileged Information was already known to such Restricted Party and not otherwise subject to a confidentiality obligation and/or (d) the Restricted Party is (in the case of the Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator and the Trustee, as evidenced by written advice of counsel (which will be an additional expense of the Trust)

 

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delivered to each of the Servicer, the Special Servicer, the Controlling Class Representative, the Operating Advisor, the Certificate Administrator and the Trustee), required by law, rule, regulation, order, judgment or decree to disclose such Privileged Information.

 

“Privileged Person”: The Depositor, the Initial Purchaser, the Servicer, the Special Servicer, the Trustee, the Certificate Administrator, the Operating Advisor, the Sponsor, a designee of the Depositor, each Companion Loan Holder, any NRSRO that provides the 17g-5 Information Provider with an NRSRO Certification, and any Person that provides the Certificate Administrator with an Investor Certification in the form of Exhibit BB-1, which Investor Certification may be submitted electronically via the Certificate Administrator’s Website; provided that in no event shall a Borrower Related Party be considered a Privileged Person. However, such Borrower Related Party shall be entitled to receive access to the Distribution Date Statements posted on the Certificate Administrator’s Website. The provisions herein shall not limit the Servicer’s or the Special Servicer’s ability to make accessible certain information regarding the Trust Loan at a website maintained by the Servicer or the Special Servicer. None of the Servicer, the Special Servicer or the Certificate Administrator shall be liable for any communication to the Controlling Class Representative or Controlling Class Certificateholder or disclosure of information if the Servicer, the Special Servicer or the Certificate Administrator, as applicable, did not receive prior written notice that the Controlling Class Representative or Controlling Class Certificateholder is a Borrower Related Party. Each of the Servicer, the Special Servicer and the Certificate Administrator shall be entitled to conclusively rely on any written notice from the Controlling Class Representative or Controlling Class Certificateholder that it is or is no longer a Borrower Related Party.

 

“Property”: As defined in the Loan Agreement.

 

“Property Protection Advances”: As defined in Section 3.23(b).

 

“Property Manager”: The “Manager” as defined in the Loan Agreement.

 

“QIB”: A “qualified institutional buyer” within the meaning of Rule 144A.

 

“Qualified Bidder”: As defined in Section 7.2(b).

 

“Qualified Insurer Rating”: With respect to an insurer, (a) if such insurer has a claims paying ability that is rated at least equal to (i) “A-” by Standard & Poor’s Ratings Services, a Standard & Poor’s Ratings Services, (ii) “A-” by Fitch, (iii) “A3” by Moody’s, (iv) “A-VIII” by A.M. Best, (v) “A(low)” by DBRS, Inc. or (vi) “A-”or its equivalent by Xxxxx Bond Rating Agency, Inc. or (b) in any case, such other rating acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.

 

“Qualified Replacement Special Servicer”: A replacement Special Servicer (i) that is a Qualified Servicer, (ii) that is not the Operating Advisor or an affiliate of the Operating Advisor, (iii) that is not obligated to pay the Operating Advisor (x) any fees or otherwise compensate the Operating Advisor in respect of its obligations under this Agreement, or (y) for the appointment of the successor Special Servicer or the recommendation by the Operating Advisor for the replacement Special Servicer to become the Special Servicer, (iv) that is not entitled to receive any compensation from the Operating Advisor other than compensation that is

 

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not material and is unrelated to the Operating Advisor’s recommendation that such party be appointed as the replacement Special Servicer, (v) that is not entitled to receive any fee from the Operating Advisor for its appointment as successor Special Servicer, in each case, unless expressly approved by 100% of the Certificateholders, (vi) currently has a special servicer rating of at least “CSS3” from Fitch, and (vii) either (A) has a then-current ranking by Morningstar equal to or higher than “MOR CS3” as a special servicer or (B)(i) is acting as special servicer in a CMBS transaction that was rated by a NRSRO within the twelve (12) month period prior to the date of determination and (ii) Morningstar has not qualified, downgraded or withdrawn the then-current rating or ratings of one or more classes of certificates citing servicing concerns with the special servicer as the sole or material factor in such rating action.

 

“Qualified Servicer”: With respect to the applicable replacement Servicer or Special Servicer and the applicable non-responding Rating Agency pursuant to Section 3.26 hereof, the applicable replacement (a) with respect to Fitch, if the replacement Servicer or Special Servicer is rated at least “CMS3” (in the case of the Servicer) or “CSS3” (in the case of the Special Servicer) if Fitch is the non-responding Rating Agency and (b) with respect to Morningstar, if the replacement servicer or special servicer either (A) has a then-current ranking by Morningstar equal to or higher than “MOR CS3” as a master servicer or special servicer or (B) (i) is acting as master servicer or special servicer, as applicable, in a commercial mortgage loan securitization that was rated by a Rating Agency within the twelve (12) month period prior to the date of determination and (ii) Morningstar has not qualified, downgraded or withdrawn the then-current rating or ratings of one or more classes of such commercial mortgage backed certificates citing servicing concerns with the replacement servicer or special servicer, as applicable, as the sole or material factor in such rating action.

 

“Rated Final Distribution Date”: The Distribution Date occurring in July 2034.

 

“Rating Agencies”: Any of Fitch and Morningstar.

 

“Rating Agency Confirmation”: With respect to any matter, confirmation in writing (which may be in the form of electronic mail, facsimile, press release, posting to its internet website or such other means then considered industry standard as determined by such Rating Agency) by a Rating Agency that a proposed action, failure to act or other event so specified will not, in and of itself, result in the downgrade, withdrawal or qualification of the then-current rating assigned to any Class of Certificates (if then rated by the Rating Agency); provided, that if a written waiver or other acknowledgment from such Rating Agency indicating its decision not to review or to decline to review the matter for which the Rating Agency Confirmation is sought is received (such written notice, a “Rating Agency Declination”), the requirement to receive a Rating Agency Confirmation from such Rating Agency with respect to such matter will not apply; provided, further that any Rating Agency Confirmation is subject to the terms set forth in Section 3.26.

 

“Realized Loss”: With respect to any Distribution Date, the amount, if any, by which (i) the aggregate of the Certificate Balances of the Sequential Pay Certificates after giving effect to distributions made on such Distribution Date exceeds (ii) the outstanding principal balance of the Trust Loan after giving effect to (a) any payments of principal received with respect to the Loan Payment Date occurring immediately prior to such Distribution Date and

 

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(b) the aggregate reductions of the principal balance of the Trust Loan that have been permanently made as a result of a bankruptcy proceeding, modification or otherwise.

 

“Record Date”: With respect to any Distribution Date, the close of business on the last day of the calendar month preceding the calendar month in which such Distribution Date occurs, or if such last day is not a Business Day, the Business Day preceding such last day.

 

“Regular Certificates”: The Class A, Class X, Class B, Class C, Class D, Class E and Class HRR Certificates.

 

“Regular Principal Distribution Amount”: For each Distribution Date and any Class of Sequential Pay Certificates, (i) all amounts collected in respect of principal during the related Collection Period with respect to the Trust Loan and (ii) the principal portion of any Repurchase Price, Liquidation Proceeds, Insurance Proceeds or Condemnation Proceeds (to the extent not needed for the repair or restoration of the Property), in each case received during the related Collection Period, in the case of either (i) or (ii), that would be allocated to such Class of Certificates if distributed to the holders of the Certificates in sequential order to reduce the outstanding Certificate Balance of each Class of Sequential Pay Certificates to zero pursuant to this Agreement.

 

“Regulation AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§ 229.1100-229.1125, as such rules may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time, in each case as effective from time to time as of the compliance dates specified therein. Each of the parties hereto acknowledge that the Regulation AB provisions herein shall be construed as if the Certificates were publicly registered and reporting were required at all times.

 

“Regulation S”: Regulation S under the Securities Act.

 

“Regulation S Global Certificate”: As defined in Section 5.2(a).

 

“Related Certificates”, “Related Uncertificated Lower-Tier Interests”: For the following Classes of Certificates and Classes of Uncertificated Lower Tier Interests, the related Class of Certificates or Class of Uncertificated Lower Tier Interest, as applicable, set forth below:

 

Related Uncertificated
Lower-Tier Interests

  

Related Certificates

     
Class LA Uncertificated Interest   Class A
Class LB Uncertificated Interest   Class B
Class LC Uncertificated Interest   Class C
Class LD Uncertificated Interest   Class D
Class LE Uncertificated Interest   Class E
Class LHRR Uncertificated Interest   Class HRR

 

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“REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

 

“REMIC Provisions”: Provisions of the Code relating to “real estate mortgage investment conduits,” including Sections 860A through 860G of the Code and any related regulations or announcements promulgated thereunder by the U.S. Department of the Treasury.

 

“Relevant Action”: As defined in Section 5.2(a).

 

“Remittance Date”: With respect to each Distribution Date, the Business Day immediately preceding such Distribution Date.

 

“Rents from Real Property”: With respect to the Foreclosed Property, gross income of the character described in Section 856(c)(3)(A) of the Code.

 

“REO Management Fee”: As to the Property when it is a Foreclosed Property, a fee payable out of the Foreclosed Property Account to the Successor Manager for managing such Property while it is owned by the Trust, which shall be reasonable and customary in the market in which such Property is located.

 

“Reportable Event”: As defined in Section 5.2(a).

 

“Reporting Servicer”: The Servicer, the Special Servicer or a Servicing Function Participant engaged by any such party, as the case may be.

 

“Repurchase Communication”: For purposes of Section 2.9(a) only, any communication, whether oral or written, which need not be in any specific form.

 

“Repurchase Mortgage File”: With respect to any repurchase of the Trust Loan (or any portion thereof), the Mortgage File.

 

“Repurchase Price”: An amount (without duplication) equal to the sum of (i) the unpaid principal balance of the Trust Loan, (ii) accrued and unpaid interest on each Trust Loan Note at the related Note Rate (in each case, exclusive of a Default Interest) to and including the last day of the related Loan Interest Accrual Period in which the repurchase is to occur, (iii) unreimbursed Property Protection Advances and Administrative Advances together with interest on such Advances, (iv) an amount equal to all interest on outstanding Monthly Payment Advances, (v) any unpaid Trust Fund Expenses and (vi) any other expenses reasonably incurred or expected to be incurred by the Servicer, the Special Servicer, the Certificate Administrator or the Trustee arising out of the enforcement of the repurchase obligation. With respect to the Whole Loan, the Repurchase Price shall be the amount calculated in accordance with the first sentence of this definition in respect of the Trust Loan as if the Trust Loan consisted of the Trust Loan and the Companion Loans. No Liquidation Fee shall be payable by the Sponsor in connection with a repurchase of the Trust Loan pursuant to the Loan Purchase Agreement due to a Material Breach or a Material Document Defect pursuant to the Loan Purchase Agreement.

 

“Repurchase Request”: As defined in Section 2.9(a).

 

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“Repurchase Request Withdrawal”: As defined in Section 2.9(a).

 

“Requesting Party”: As defined in Section 3.26(a).

 

“Required Advance Amount”: With respect to any Distribution Date, an amount equal to (a) the amount of the Monthly Payment Advance (taking into account any Appraisal Reduction Amount with respect to the Trust Loan as of such Distribution Date) that would be required to be made on the related Remittance Date by the Servicer pursuant to this Agreement had the Loan Borrower not made any portion of the Monthly Payment of principal (if any) and interest (or an Assumed Monthly Payment) for the related Loan Payment Date or Assumed Loan Payment Date less (b) the aggregate compensation payable on such Remittance Date to the Certificate Administrator in respect of the Certificate Administrator Fee (including the portion that constitutes the Trustee Fee), to the Operating Advisor in respect of the Operating Advisor Fee and to CREFC® in respect of the CREFC® Intellectual Property Royalty License Fee.

 

“Required Third Party Purchaser Retention Amount”: $7,250,000 of the Certificate Balance of the Class HRR Certificates.

 

“Reserve Account”: Any reserve account required to be maintained under the Loan Agreement.

 

“Residual Ownership Interest”: Any record or beneficial interest in the Class R Certificates.

 

“Responsible Officer”: With respect to (i) the Trustee, any officer in the Corporate Trust department of the Trustee having direct responsibility for the administration of this Agreement and (ii) the Certificate Administrator, any officer assigned to the Corporate Trust Services group, with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other officer to whom a particular matter is referred by the Certificate Administrator. With respect to the Depositor, any director, vice president, assistant vice president, assistant secretary, treasurer, assistant treasurer, trust officer or any other officer of the Depositor, customarily performing functions similar to those performed by any of the above-designated officers with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, and, in the case of any certification or other document required to be signed by a Responsible Officer, an authorized signatory whose name and specimen signature appears on a list furnished to the Servicer or the Special Servicer, as applicable, by the Depositor, as such list may from time to time be amended.

 

“Restricted Holder”: Any Certificateholder, Beneficial Owner of a Certificate or prospective purchaser of a Certificate (whether legally, beneficially or otherwise) or any other Person that is also a holder of a related mezzanine loan (or any Affiliate or agent thereof) or an owner in any interest in any related mezzanine loan (whether legally, beneficially or otherwise, including as a holder of a note evidencing a related mezzanine loan, a holder of a participation interest in a related mezzanine loan or a Beneficial Owner of any securities collateralized by a related mezzanine loan) (a) as to which an event of default has occurred under such mezzanine loan giving rise to an automatic acceleration of such mezzanine loan or the right of the lender

 

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thereunder to accelerate such mezzanine loan or (b) as to which foreclosure proceedings against the related collateral have been initiated (and in respect of which, the Special Servicer has received notice thereof).

 

“Restricted Party”: As defined in the definition of “Privileged Information Exception”.

 

“Restricted Period”: As defined in Section 5.2(a).

 

“Retaining Sponsor”: The Sponsor.

 

“Risk Retention Affiliate” or “Risk Retention Affiliated”: As “affiliate” or “affiliated” are defined in Section 244.2 of the Credit Risk Retention Rules.

 

“Rule 144A”: As defined in Section 5.2(b).

 

“Rule 144A Global Certificate”: As defined in Section 5.2(b).

 

“Sarbanes Oxley Act”: The Sarbanes Oxley 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”: With respect to an Other Securitization Trust, the certification required to be filed together with such Other Securitization Trust’s Exchange Act report on Form 10-K pursuant to Rule 13a-14 and Rule 15d-14 of the Exchange Act.

 

“Securities Act”: The Securities Act of 1933, as it may be amended from time to time.

 

“Sequential Pay Certificates”: The Class A, Class B, Class C, Class D, Class E and Class HRR Certificates.

 

“Servicer”: KeyBank, in its capacity as servicer, and its successors-in-interest, or if any successor servicer is appointed as herein provided, such successor servicer.

 

“Servicer Customary Expense”: As defined in Section 3.17.

 

“Servicer Servicing Personnel”: The divisions and individuals of the Servicer who are involved in the performance of the duties of the Servicer under this Agreement.

 

“Servicer Termination Event”: As defined in Section 7.1(a).

 

“Service(s)” or “Servicing”: In accordance with Regulation AB, the act of servicing and administering the Whole Loan 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 industry.

 

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“Servicing Criteria”: The criteria set forth in paragraph (d) of Item 1122 of Regulation AB as such may be amended from time to time and which as of the Closing Date are listed on Exhibit L hereto.

 

“Servicing Fee”: With respect to the Whole Loan, a fee payable monthly to the Servicer pursuant to Section 3.17 (which includes the Excess Servicing Fee) that will accrue at the Servicing Fee Rate, computed on the basis of the same principal amount, in the same manner, and for the same Loan Interest Accrual Period respecting which any related interest payment on each Note is computed. For the avoidance of doubt, the Servicing Fee shall be deemed payable from the Lower-Tier REMIC.

 

“Servicing Fee Rate”: With respect to the Whole Loan, a primary servicing fee rate of 0.00125% per annum, plus, in the case of the Trust Loan, a master servicing fee rate of 0.00125% per annum.

 

“Servicing Function Participant”: Any Additional Servicer, Sub-Servicer, Subcontractor or any other Person, other than the Certificate Administrator, the Trustee, the Operating Advisor, the Servicer and the Special Servicer, that is performing activities that address the Applicable Servicing Criteria as of any date of determination.

 

“Servicing Officer”: Any officer of the Servicer or the Special Servicer involved in, or responsible for, the administration and servicing of the Whole Loan whose name and specimen signature appear on a list of servicing officers furnished to the Trustee and the Certificate Administrator on the Closing Date by the Servicer or the Special Servicer, as applicable, in the form of an Officer’s Certificate, as such list may from time to time be amended.

 

“Servicing Party”: As defined in Section 7.2(b).

 

“Servicing-Released Bid”: As defined in Section 7.2(b).

 

“Servicing-Retained Bid”: As defined in Section 7.2(b).

 

“Significant Obligor NOI Quarterly Filing Deadline”: With respect to each calendar quarter (other than the fourth calendar quarter of any calendar year), the date that is fifteen (15) days after the distribution date under the Other Pooling and Servicing Agreement occurring on or immediately following the 45th day after the end of such calendar quarter.

 

“Significant Obligor NOI Yearly Filing Deadline”: With respect to each calendar year, the date that is the 120th day after the end of such calendar year.

 

“Special Notice”: As defined in Section 5.6.

 

“Special Servicer”: AEGON USA Realty Advisors, LLC, in its capacity as special servicer, and its successors in interest, or if any successor special servicer is appointed as herein provided, such successor special servicer.

 

“Special Servicer Customary Expense”: As defined in Section 3.17.

 

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“Special Servicer Servicing Personnel”: The divisions and individuals of the Special Servicer who are involved in the performance of the duties of the Special Servicer under this Agreement.

 

“Special Servicer Termination Event”: As defined in Section 7.1(a).

 

“Special Servicing Fee”: With respect to the Specially Serviced Loan, a fee payable monthly to the Special Servicer equal to an amount computed on the basis of the same principal amount and for the same period respecting which any related interest payment on each Note is computed, at a rate of 0.25% per annum until the Special Servicing Loan Event with respect to such Specially Serviced Loan no longer exists. Such fee shall be in addition to, and not in lieu of, any other fee or other sum payable to the Special Servicer under this Agreement. For the avoidance of doubt, the Special Servicing Fee shall be deemed payable from the Lower-Tier REMIC.

 

“Special Servicing Loan Event”: With respect to the Whole Loan, (i) the Loan Borrower has not made two (2) consecutive Monthly Payments (and has not cured at least one such delinquency by the next Loan Payment Date under the Loan Documents) in respect of the Whole Loan; (ii) the Servicer and/or the Trustee or any servicer and/or trustee under any Other Pooling and Servicing Agreement has made three (3) consecutive Monthly Payment Advances with respect to the Trust Loan or three (3) consecutive Companion Loan Advances with respect to any Companion Loan (regardless of whether such Monthly Payment Advances have been reimbursed); (iii) the Loan Borrower fails to make the Balloon Payment when due, and the Loan Borrower has not delivered to the Servicer, on or before the Loan Payment Date of such Balloon Payment, a written refinancing commitment from an acceptable lender and reasonably satisfactory in form and substance to the Servicer that provides that such refinancing will occur within one hundred twenty (120) days after the date on which such Balloon Payment will become due (provided that a Special Servicing Loan Event will occur if either (x) such refinancing does not occur before the expiration of the time period for refinancing specified in such binding commitment or (y) the Servicer is required to make a Monthly Payment Advance at any time prior to such refinancing); (iv) the Servicer has received notice that the Loan Borrower has become the subject as debtor of any bankruptcy, insolvency or similar proceeding, admitted in writing the inability to pay its debts as they come due or made an assignment for the benefit of creditors; (v) the Servicer has received notice of a foreclosure or threatened foreclosure of a lien on any of the Property securing the Whole Loan; (vi) the Loan Borrower has expressed in writing to the Servicer an inability to pay the amounts owed under the Whole Loan in a timely manner, (vii) in the judgment of the Servicer (consistent with Accepted Servicing Practices), a default in the payment of principal or interest under the Whole Loan is reasonably foreseeable unless (a) such reasonably foreseeable default is solely related to a reasonably foreseeable default in the payment of the Balloon Payment on the Stated Maturity Date, (b) the Loan Borrower request the extension of the Stated Maturity Date, (c) the Servicer (with the consent of the Special Servicer), grants an extension of the Stated Maturity Date pursuant to Section 3.4 hereof and (d) such extension occurs prior to the Stated Maturity Date; or (viii) a default under the Whole Loan of which the Servicer has notice (other than a failure by the Loan Borrower to pay principal or interest) and that materially and adversely affects the interests of the Certificateholders has occurred and remains unremedied for the applicable grace period specified in the Loan Documents (or, if no grace period is specified, sixty (60) days); provided, that a

 

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Special Servicing Loan Event will cease (a) with respect to the circumstances described in any of clauses (i), (ii) and (iii) above, when the Loan Borrower have brought the Whole Loan current (including pursuant to the workout of the Whole Loan) and with respect to clauses (i) and (ii) above, after the occurrence of such event when the Loan Borrower make three (3) consecutive full and timely Monthly Payments on the Whole Loan, or (b) with respect to the circumstances described in clauses (iv), (v), (vi), (vii) and (viii) above, when such circumstances cease to exist in the judgment of the Special Servicer (consistent with Accepted Servicing Practices); provided, in any case, that at that time no other circumstance exists (as described above) that would constitute a Special Servicing Loan Event.

 

“Specially Serviced Loan”: The Whole Loan after the occurrence and during the continuance of a Special Servicing Loan Event.

 

“Sponsor”: As defined in the Introductory Statement.

 

“Startup Day”: As defined in Section 12.1(c).

 

“Stated Maturity Date”: The Loan Payment Date in July 2022, or such earlier date as may result from acceleration of the Whole Loan in accordance with the terms of the Loan Agreement.

 

“Subcontractor”: Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities industry) of the Whole Loan but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to the Whole Loan under the direction or authority of the Servicer (or a Sub-Servicer of the Servicer), the Special Servicer (or a Sub-Servicer of the Special Servicer) or an Additional Servicer (or a Sub-Servicer of an Additional Servicer).

 

“Sub-Servicer”: Any Person that (i) Services the Whole Loan on behalf of the Servicer, Special Servicer or any Sub-Servicer and (ii) is responsible for the performance (whether directly or through Sub-Servicers or Subcontractors) of a substantial portion of the servicing functions required to be performed by the Servicer, Special Servicer, Servicing Function Participant or an Additional Servicer, under this Agreement, with respect to the Whole Loan, that are identified in Item 1122(d) of Regulation AB.

 

“Successful Bidder”: As defined in Section 7.2(b).

 

“Successor Manager”: Any Independent Contractor as selected or retained by the Special Servicer, on behalf of the Trustee, to serve as manager of a Foreclosed Property, which designation, as evidenced by a Rating Agency Confirmation from each Rating Agency, will not result in the downgrade, withdrawal or qualification of the ratings assigned to the Certificates by such Rating Agency.

 

“Tax Matters Person”: The Person designated as the “tax matters person” of the Upper-Tier REMIC and the Lower-Tier REMIC, pursuant to Treasury Regulations Section 1.860F-4(d).

 

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“Temporary Regulation S Global Certificate”: As defined in Section 5.2(a).

 

“Terminated Party”: As defined in Section 7.1(e).

 

“Terminating Party”: As defined in Section 7.1(e).

 

“Third Party Purchaser”: PCSD PR Cap IV NR Reten Private Limited, a Singapore private limited company, or any Person that purchases the Certificates comprising the Required Third Party Purchaser Retention Amount in accordance with this Agreement and applicable laws and regulations.

 

“Third Party Purchaser Custodial Account”: An account maintained by the Certificate Administrator, which account shall be established at the direction of the Depositor on behalf of the Retaining Sponsor for the benefit of the Holders of the Class HRR Certificates.

 

“Transaction Parties”: As defined in Section 5.3(p).

 

“Transferee Affidavit”: As defined in Section 5.3(n)(ii).

 

“Transferor Letter”: As defined in Section 5.3(n)(ii).

 

“Treasury”: The United States Department of the Treasury.

 

“Treasury Constant Yield”: As defined in the Loan Agreement.

 

“Treasury Rate”: As defined in the Loan Agreement.

 

“Trust”: The trust formed pursuant to this Agreement.

 

“Trust Fund”: The corpus of the Trust created by this Agreement, consisting of (i) the Trust Loan, including the Trust Loan Notes together with the Mortgage File relating thereto; (ii) all scheduled and unscheduled payments on or collections in respect of the Trust Loan (including all interest that accrues on the Trust Loan on or after the Cut-off Date and all scheduled principal received on or with respect to the Trust Loan on the Cut-off Date); (iii) the Foreclosed Property (but only to the extent of the Trust’s interest in such Foreclosed Property) and Foreclosed Property Account; (iv) all revenues received in respect of the Foreclosed Property (but only to the extent of the Trust’s interest in such Foreclosed Property); (v) the Servicer’s, Special Servicer’s, the Certificate Administrator’s and the Trustee’s rights under the insurance policies with respect to the Property required to be maintained pursuant to this Agreement and any proceeds thereof (but only to the extent of the Trust’s interest therein); (vi) any Collateral Security Documents; (vii) any indemnities or guaranties given as additional security for the Notes (including the Environmental Indemnity relating to the Property); (viii) all funds deposited in the Collection Account, the Interest Reserve Account and the Distribution Account, including reinvestment income thereon (except as otherwise provided herein); (ix) the rights and remedies of the Depositor under the Loan Purchase Agreement; (x) the security interest in the Reserve Accounts granted pursuant to Section 2.1 (but only to the extent of the Trust’s interest therein); (xi) all other assets included or to be included in the Lower-Tier REMIC

 

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for the benefit of the Upper-Tier REMIC; (xii) the Uncertificated Lower-Tier Interests; and (xiii) the proceeds of any of the foregoing.

 

“Trust Fund Expenses”: Any unanticipated and certain other default related expenses incurred by the Trust Fund (including, without limitation, all interest on Advances and all Loan Borrower Reimbursable Trust Fund Expenses, to the extent not reimbursed by the Loan Borrower) and all other amounts (such as indemnification payments to any party to this Agreement) permitted to be retained, reimbursed or withdrawn and remitted by the Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator or the Trustee, as applicable, from the Collection Account or the Distribution Account pursuant to this Agreement.

 

“Trust Loan”: As defined in the Introductory Statement.

 

“Trust Loan Notes”: As defined in the Introductory Statement.

 

“Trust REMIC”: The Upper-Tier REMIC or the Lower-Tier REMIC, individually or collectively, as the context may require.

 

“Trustee”: Xxxxx Fargo Bank, National Association in its capacity as trustee, and its successors in interest, or any successor trustee appointed as herein provided.

 

“Trustee Fee”: The portion of the Certificate Administrator Fee payable monthly by the Certificate Administrator to the Trustee pursuant to Section 8.5.

 

“Trustee Personnel”: The divisions and individuals of the Trustee who are involved in the performance of the duties of the Trustee under this Agreement.

 

“Uncertificated Lower-Tier Interests”: Any of the Class LA, Class LB, Class LC, Class LD, Class LE and Class LHRR Uncertificated Interests.

 

“Uninsured Cause”: Any cause of damage to property of the Loan Borrower subject to the Mortgage such that the complete restoration of such property is not fully reimbursable (but without regard to any applicable deductible provisions) by any insurance policy required to be maintained with respect thereto pursuant to the terms of the Loan Documents or this Agreement.

 

“Unscheduled Payments”: With respect to any Distribution Date, all payments and collections received by the Servicer, the Special Servicer, the Certificate Administrator or the Trustee, as applicable, with respect to the Whole Loan or upon foreclosure or liquidation of the Property (net of related foreclosure expenses and Liquidation Expenses) during the related Collection Period including, but not limited to, prepayments due to acceleration of the Whole Loan, Net Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds, Net Foreclosure Proceeds, voluntary prepayments and other payments and collections on the Whole Loan not scheduled to be received, other than Monthly Payments or the Balloon Payment.

 

“Upper-Tier Distribution Account”: A subaccount of the Distribution Account, which shall be an asset of the Trust and the Upper-Tier REMIC.

 

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“Upper-Tier REMIC”: One of the two separate Trust REMICs comprising the Trust, the assets of which consist of the Uncertificated Lower-Tier Interests and such amounts as shall from time to time be held in the Upper-Tier Distribution Account.

 

“U.S. Person”: A Person that is a citizen or resident of the United States, a corporation or partnership (except as provided in applicable Treasury regulations) created or organized in or under the laws of the United States, any State or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes, an estate whose income is subject to United States federal income tax regardless of its source, or 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 such U.S. Persons have the authority to control all substantial decisions of such trust (or, to the extent provided as applicable Treasury regulations, certain trusts in existence on August 20, 1996 that have elected to be treated as a U.S. Person).

 

“U.S. REIT Sponsor”: Two Independence Hana, LLC, a Delaware limited liability company.

 

“Voting Rights”: The portion of the voting rights of all of the Certificates that is allocated to any Certificate or Class of Certificates. At any time that any Certificates are outstanding, the Voting Rights shall be allocated to each Class of Certificateholders as follows: (1) 4% in the aggregate to the Class X Certificates (for so long as the Notional Amount of each such Class has not been reduced to zero) and (2) in the case of any other Class of Certificates, a percentage equal to the product of (x) 96% and (y) a percentage equal to the aggregate Certificate Balance (and in connection with certain votes under this Agreement, taking into account any notional reduction in the Certificate Balance for Appraisal Reduction Amounts allocated to the Sequential Pay Certificates) of the Class, in each case, determined as of the prior Distribution Date, divided by the aggregate Certificate Balance (and in connection with certain votes under this Agreement, taking into account any notional reduction in the Certificate Balance, for Appraisal Reduction Amounts allocated to the Sequential Pay Certificates) of all Classes of Certificates, each determined as of the prior Distribution Date. The Class R Certificates shall not be entitled to any Voting Rights.

 

“Weighted Average Note Rate”: With respect to any Distribution Date and the Whole Loan, the weighted average of the Note Rates (weighted based on the outstanding principal balance of the related Note as of such date).

 

“Whole Loan”: As defined in the Introductory Statement.

 

“Whole Loan Rate” means the rate at which interest (other than Default Interest) will be payable on each Note of the Whole Loan, which is a fixed per annum rate equal to 3.23000%

 

“Withheld Amounts”: As defined in Section 3.4(d).

 

“Work-out Fee”: A fee payable to the Special Servicer pursuant to Section 3.17 equal to 0.50% of each payment of principal and interest (other than Default Interest) made on the Whole Loan following resolution of a Special Servicing Loan Event by a written agreement with the Loan Borrower negotiated by the Special Servicer for so long as another Special

 

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Servicing Loan Event does not occur. For the avoidance of doubt, the intent of Section 9.6 of the Loan Agreement requires the Loan Borrower to be responsible for the payment of Work-out Fees and the Special Servicer will be entitled to, and may collect, any Work-out Fees payable to it from the Loan Borrower pursuant to such Section 9.6 of the Loan Agreement as would be calculated hereunder. Notwithstanding the foregoing, the Work-out Fee with respect to the Specially Serviced Loan shall be reduced by any Modification Fees paid by or on behalf of the Loan Borrower and received by the Special Servicer as compensation, but only to the extent those fees have not previously been deducted from a Work-out Fee or Liquidation Fee.

 

“Yield Maintenance Default Premium”: As defined in the Loan Agreement.

 

“Yield Maintenance Premium”: As defined in the Loan Agreement.

 

Section 1.2.     Interpretation. (a)  Whenever this Agreement refers to a Distribution Date and a “related” Collection Period, Loan Interest Accrual Period or Loan Payment Date, such reference shall be to the Collection Period, Loan Interest Accrual Period or Loan Payment Date, as applicable, immediately preceding such Distribution Date.

 

(b)          Whenever this Agreement refers to a Distribution Date and an “applicable” Pass-Through Rate, such reference shall be to the Pass-Through Rate for the applicable Class for the related Certificate Interest Accrual Period.

 

(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 Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified.

 

(d)          Interest on the Certificates shall be computed (including interest at any Pass-Through Rate) on the basis of a 360 day year consisting of twelve 30-day months.

 

Section 1.3.     Certain Calculations in Respect of the Trust Loan or the Whole Loan. (a)  All amounts collected by or on behalf of the Trust in respect of the Whole Loan or the Trust Loan, as applicable, in the form of payments from the Loan Borrower, Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds shall be applied to amounts due and owing under the Loan Documents (including for principal and accrued and unpaid interest) in accordance with the express provisions of the Loan Documents and the Co-Lender Agreement; provided, however, in the absence of such express provisions in the Loan Documents or if and to the extent that such terms authorize the Loan Lender to use its discretion and in any event for purposes of calculating distributions hereunder after a Loan Event of Default, all such amounts collected will be applied in the following order of priority: first, as a recovery of any related and unreimbursed Property Protection Advances and Administrative Advances plus interest accrued thereon and, without duplication, unreimbursed Loan Borrower Reimbursable Trust Fund Expenses; second, as a recovery of Property Protection Advances that were determined to be Nonrecoverable Advances or interest on Property Protection Advances that were determined to be Nonrecoverable Advances to the extent previously reimbursed from principal collections with respect to the Whole Loan or the Trust Loan, as applicable (which amount in respect of the Trust

 

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Loan is required to be treated as a collection on the Trust Loan in respect of principal in calculating the Regular Principal Distribution Amount); third, as a recovery of accrued and unpaid interest on each Note to the extent of the excess of (i) accrued and unpaid interest on such Note at the Note Interest Rate of such Note (without giving effect to any increase in such Note Interest Rate required under the Loan Agreement as a result of a default under the Loan Documents) through and including the end of the related Loan Interest Accrual Period in which such collections are received by or on behalf of the Trust (or, in the case of a full Monthly Payment from the Loan Borrower, through the related Distribution Date), over (ii) the cumulative amount of the reductions (if any) in the amount of the interest portion of the related Monthly Payment Advances for such Trust Loan Note or related Companion Advances for such Companion Loan Note, as applicable, that have occurred in connection with Appraisal Reduction Amounts (to the extent that collections have not been applied as a recovery of accrued and unpaid interest pursuant to clause fifth below on earlier dates) (such accrued and unpaid interest to be applied pursuant to the Co-Lender Agreement); fourth, as a recovery of principal of the Whole Loan then due and owing, including by reason of acceleration of the Whole Loan following a Loan Event of Default (or, if the Whole Loan has been liquidated, as a recovery of principal to the extent of its entire remaining unpaid principal balance) (such principal to be applied pursuant to the Co-Lender Agreement); fifth, as a recovery of accrued and unpaid interest on each Note to the extent of the cumulative amounts of reductions (if any) in the amount of the interest portion of the related Monthly Payment Advances or related Companion Advances for such Note that have occurred in connection with related Appraisal Reduction Amounts (to the extent collections have not been applied as recovery of accrued and unpaid interest pursuant to this clause fifth on earlier dates); sixth, as a recovery of amounts to be currently applied to the payment of, or escrowed for the future payment of, real estate taxes, assessments and insurance premiums and similar items; seventh, as a recovery of any other reserves to the extent then required to be held in escrow; eighth, as a recovery of any Prepayment Charge then due and owing under the Loan Documents (any such Prepayment Charge to be applied pursuant to the Co-Lender Agreement); ninth, as a recovery of any Default Interest or late charges then due and owing under the Loan Documents (such Default Interest and late charges to be applied pursuant to the Co-Lender Agreement); tenth, as a recovery of any assumption fees, assumption application fees, consent fees, release fees, substitution fees, Modification Fees and similar fees then due and owing under the Loan Documents; and eleventh, as a recovery of any other amounts then due and owing under the Loan Documents, provided that, to the extent required under the REMIC Provisions, payments or proceeds received with respect to the release of any Property or portion of any Property (including following a condemnation) from the lien of the Mortgage and Loan Documents must be allocated to reduce the principal balance of the Trust Loan in the manner permitted by such REMIC Provisions if, immediately following such release, the loan-to value ratio of the Whole Loan exceeds 125% (based solely on real property and excluding any personal property and going concern value).

 

(b)          Collections by or on behalf of the Trust in respect of the Foreclosed Property (exclusive of amounts to be applied to the payment of the costs of operating, managing, leasing, maintaining and disposing of such Foreclosed Property) shall be applied in the following order of priority: first, as a recovery of any related and unreimbursed Property Protection Advances and Administrative Advances plus interest accrued on such advances with respect to the Whole Loan or the Trust Loan, as applicable, and, without duplication, unreimbursed Loan Borrower Reimbursable Trust Fund Expenses; second, as a recovery of Property Protection

 

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Advances that were determined to be Nonrecoverable Advances or interest on Property Protection Advances that were determined to be Nonrecoverable Advances to the extent previously reimbursed from principal collections with respect to the Whole Loan or the Trust Loan, as applicable (which amount in respect of the Trust Loan is required to be treated as a collection on the Trust Loan in respect of principal in calculating the Regular Principal Distribution Amount); third, as a recovery of accrued and unpaid interest on each Note, to the extent of the excess of (i) accrued and unpaid interest on such Note at the Note Interest Rate of such Note (without giving effect to any increase in such Note Interest Rate required under the Loan Agreement as a result of a default under the Loan Documents) through and including the end of the related Loan Interest Accrual Period in which such collections are received by or on behalf of the Trust, over (ii) the cumulative amount of the reductions (if any) in the amount of the interest portion of the related Monthly Payment Advances for the Trust Loan or related Companion Advances for such Companion Loan Note that have occurred in connection with Appraisal Reduction Amounts (to the extent that collections have not been applied as a recovery of accrued and unpaid interest pursuant to clause fifth below on earlier dates) (such accrued and unpaid interest to be applied pursuant to the Co-Lender Agreement); fourth, as a recovery of principal of the Whole Loan, to the extent of its entire unpaid principal balance (such principal to be applied pursuant to the Co-Lender Agreement); fifth, as a recovery of accrued and unpaid interest on each Note to the extent of the cumulative amount of the reductions (if any) in the amount of the interest portion of the related Monthly Payment Advances or related Companion Advances for such Note that have occurred in connection with related Appraisal Reduction Amounts (to the extent that collections have not been applied as a recovery of accrued and unpaid interest pursuant to this clause fifth on earlier dates) (such accrued and unpaid interest to be applied pursuant to the Co-Lender Agreement); sixth, as a recovery of any Prepayment Charge then due and owing under the Loan Documents (such Prepayment Charge to be applied pursuant to the Co-Lender Agreement); seventh, as a recovery of any Default Interest or late charges then deemed to be due and owing under the Loan Documents; eighth, as a recovery of any assumption fees, assumption application fees, consent fees, release fees, substitution fees, Modification Fees and similar fees then due and owing under the Loan Documents; and ninth, as a recovery of any other amounts deemed to be due and owing in respect of the Loan Documents.

 

(c)          Notwithstanding anything to the contrary in the Co-Lender Agreement, but without changing any allocations under the Co-Lender Agreement between the Trust Loan and the Companion Loans, upon liquidation of the Trust Loan, a Note related to the Trust Loan or a Foreclosed Property, all Net Liquidation Proceeds received with respect to the Trust Loan or Note will be applied so that amounts allocated as a recovery of accrued and unpaid interest on the Trust Loan or such Note, as applicable, will not, for purposes of making distributions on the Certificates, include accrued and unpaid interest on the Trust Loan that has not been advanced by the Servicer as a result of Appraisal Reductions Amounts with respect to the Trust Loan or such Note, as applicable (“Appraisal Reduced Interest”). After the adjusted interest amount is so allocated, any remaining Net Liquidation Proceeds received with respect to the Trust Loan or such Note, as applicable, will be allocated to pay principal on the Trust Loan or such Note, as applicable, until the unpaid principal amount thereof has been reduced to zero. Any remaining Net Liquidation Proceeds received with respect to the Trust Loan or such Note, as applicable, would then be allocated to pay Appraisal Reduced Interest.

 

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(d)          All net present value calculations and determinations made under this Agreement with respect to the Whole Loan, the Trust Loan, the Companion Loans or the Property or the Foreclosed Property (including for purposes of the definition of “Accepted Servicing Practices”) shall be made using a discount rate appropriate for the type of cash flows being discounted; namely (i) for principal and interest payments on the Whole Loan, the Trust Loan or such Companion Loan or sale of the Whole Loan or any portion thereof if it is a Defaulted Whole Loan, the highest of (1) the rate determined by the Servicer or Special Servicer, as applicable, that approximates the market rate that would be obtainable by the Loan Borrower on similar debt of the Loan Borrower as of such date of determination, (2) the Weighted Average Note Rate on the Whole Loan, Trust Loan or such Companion Loan, as the case may be based on their respective outstanding principal balances and (3) the yield on the most recently issued 10-year U.S. treasuries and (ii) for all other cash flows, including property cash flow, the “discount rate” set forth in the most recent Appraisal (or update of such Appraisal).

 

Article 2

DECLARATION OF TRUST; ORIGINAL ISSUANCE OF CERTIFICATES

 

Section 2.1.      Creation and Declaration of Trust; Conveyance of the Trust Loan. (a)  The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, delivers, sets over, and otherwise conveys or causes to be conveyed in trust to the Trustee for the benefit of Certificateholders, without recourse (except to the extent otherwise provided herein and in the Loan Documents), the Depositor’s right, title and interest, whether now owned or hereafter acquired, now existing or hereafter arising, wherever located, in and to all of the items referred to in the definition of “Trust Fund”, including without limitation (i) all rights and remedies of the Depositor under the Loan Purchase Agreement, (ii) all right, title and interest of the Depositor in, to and under the Reserve Accounts, (iii) all right, title and interest of the Depositor in and to the Trust Loan as of the Closing Date and (iv) all other assets included or to be included in the Lower-Tier REMIC for the benefit of the Upper-Tier REMIC. Such sale, transfer and assignment include any related escrow accounts and any security interest under the Trust Loan (whether in real or personal property and whether tangible or intangible) and all related rights to payments made or required to be made to the Depositor by the Loan Borrower or any other party under the Loan Documents relating to the Trust Loan. Such sale, transfer and assignment further include all Loan Documents relating to the Trust Loan.

 

(b)          In connection with such sale, transfer and assignment, the Depositor does hereby deliver to, and deposit with the Certificate Administrator in its capacity as custodian (the “Custodian”) (with copies to the Servicer) (i) the original Trust Loan Notes (or if a Trust Loan Note has been lost, a lost note affidavit), endorsed without recourse to the order of the Trustee in the following form: “Pay to the order of Xxxxx Fargo Bank, National Association, solely in its capacity as Trustee for the benefit of the Holders of CSMC 2017-MOON, Commercial Mortgage Pass Through Certificates, Series 2017-MOON, without recourse or warranty except as set forth in the Trust and Servicing Agreement dated as of July 6, 2017, among Credit Suisse Commercial Mortgage Securities Corp., as Depositor, KeyBank National Association, as Servicer, AEGON USA Realty Advisors, LLC, as Special Servicer, Xxxxx Fargo Bank, National Association, as Certificate Administrator and Xxxxx Fargo Bank, National Association, as Trustee, and Park

 

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Bridge Lender Services LLC, as Operating Advisor”, which Trust Loan Notes and all endorsements thereon shall show a complete chain of endorsement from the original payee(s) to the Trustee and (ii) on or before the date occurring fifteen (15) days after the Closing Date (the “Delivery Date”), the following documents or instruments with respect to the Whole Loan (collectively with the original Notes required under clause (i) above, the “Mortgage File”), in each case executed by the parties thereto:

 

(A)          the original Loan Agreement, including all amendments thereto;

 

(B)           the original recorded counterpart of the Mortgage or certified copies of the recorded counterparts of the Mortgage;

 

(C)           the original recorded Assignment of Mortgage, in favor of the Trustee, and in a form that is complete and suitable for recording in the applicable jurisdiction in which the Property is located to Xxxxx Fargo Bank, National Association, solely in its capacity as Trustee for the benefit of the Holders of the CSMC 2017-MOON, Commercial Mortgage Pass Through Certificates, Series 2017-MOON”, without recourse;

 

(D)          an original of the Environmental Indemnity;

 

(E)           an original of the Lockbox Agreement;

 

(F)           an original of the Cash Management Agreement;

 

(G)           where applicable, a copy of each UCC-1 financing statement (and an original thereof shall have been sent for filing), together with a fully executed UCC-3 financing statement, in a form that is complete and suitable for filing, disclosing the assignment from the secured party named in such UCC-1 financing statement to the Trustee of the security interest in the personal property and other UCC collateral constituting security for repayment of the Whole Loan;

 

(H)          the Loan Lender’s title insurance policies obtained in connection with the origination of the Whole Loan (or marked, signed commitments to insure or pro forma title insurance policies), together with any endorsements thereto (which may be in the form of an electronically issued policy);

 

(I)            a copy of the Co-Lender Agreement;

 

(J)            any other material written agreements related to the Whole Loan or any other documents and/or certifications executed and/or delivered by the Loan Lender, the Loan Borrower, the Borrower Sponsor or any other person or entity in connection with the closing of the Whole Loan or with respect to the Whole Loan or any amendment thereof and any legal opinions delivered in connection with the closing of the Whole Loan;

 

(K)          a copy of the management agreement related to the Property;

 

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(L)           all other instruments, if any, constituting additional security for the repayment of the Whole Loan;

 

(M)         [Reserved];

 

(N)          a copy of any consent and subordination of management agreement; and

 

(O)          any and all amendments, modifications and supplements to, and waivers related to, any of the foregoing.

 

If the Depositor cannot deliver, or cause to be delivered, any of the documents and/or instruments referred to in clauses (ii)(B), (C) and (G) of this Section 2.1(b) with evidence of filing or recording thereon (if intended to be recorded or filed), solely because of a delay caused by the public filing or recording office where such document or instrument has been delivered for filing or recordation, the delivery requirements of Section 2.1 shall be deemed to have been satisfied on a provisional basis as of the Delivery Date as to such non-delivered document or instrument, and such non-delivered document or instrument shall be deemed to have been included in the Mortgage File, if a duplicate original or a photocopy of such non-delivered document or instrument (certified by the applicable public filing or recording office, the applicable title insurance company or the Sponsor to be a true and complete copy of the original thereof submitted for filing or recording) is delivered to the Custodian on or before the Delivery Date, and either the original of such non-delivered document or instrument, or a photocopy thereof (certified by the appropriate county recorder’s office, in the case of the documents and/or instruments referred to in clause (ii)(B), (C) and (G) of this Section 2.1(b) to be a true and complete copy of the original thereof submitted for recording), with evidence of filing or recording thereon, is delivered to the Custodian within 180 days of the Closing Date (or within such longer period, not to exceed eighteen (18) months, after the Closing Date as the Custodian shall consent to, so long as the Depositor is, as certified in writing to the Custodian no less often than every ninety (90) days, attempting in good faith to obtain from the appropriate public filing office or county recorder’s office such original or photocopy).

 

The Depositor shall cause the Sponsor to provide the Servicer a copy of the Mortgage File on or prior to the Closing Date and promptly following the Closing Date, at its own expense, with copies of all such other documents in its possession constituting part of the Mortgage File.

 

In addition, the Depositor shall deliver or cause to be delivered to the Servicer for its review, all required insurance policies or certificates issued by the insurers showing such insurance to be in effect on the Closing Date, together with proof of payment of premiums relating thereto (which may consist of such policies or certificates).

 

The Assignment of the Mortgage, assignment of a Collateral Security Document (to the extent such documents are required to be recorded or filed) and UCC-3 financing statements to be filed in the appropriate public recording office for real property records or UCC financing statements shall be filed or recorded, as applicable, by the Sponsor or their designees, with instructions to return all such recorded documents, or other evidences of filing issued by the

 

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applicable governmental offices, to the Certificate Administrator at its custody office at 0000 00xx Xxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, 00000, with a copy to the Servicer. In the event that any such document is determined to be defective or not to be in compliance with the requirements of the applicable filing office or recording depository, or if any such document is lost or returned unrecorded because of a defect therein, the Sponsor or its designee shall, upon receipt of the Custodian’s exception report, prepare a substitute document. The Sponsor or its designee shall file or record (or cause to be filed or recorded) such substitute document upon its receipt thereof in the appropriate filing offices or record depositories. Notwithstanding anything to the contrary contained in this Section 2.1(b), in those instances where the public recording office retains the original Mortgages, Assignment of Mortgages or assignment of a Collateral Security Document, if applicable, after any has been recorded, the obligations of the Depositor hereunder and the obligations of the Sponsor under the Loan Purchase Agreement shall be deemed to have been satisfied upon delivery to the Custodian of a copy of such Mortgage, Assignment of Mortgage or assignment of a Collateral Security Document, if applicable, certified by the public recording office to be a true and complete copy of the recorded original thereof.

 

The ownership of the Trust Loan Notes, the Mortgage, the Collateral Security Documents and all other contents of the Mortgage File shall be vested in the Trust or the Trustee in trust for the benefit of the Certificateholders and, other than the Trust Loan Notes, the Companion Loan Holders. The Depositor, the Certificate Administrator, the Servicer and the Special Servicer agree to take no action inconsistent with the Trustee’s ownership of the Trust Loan and to promptly indicate to all inquiring parties that the Trust Loan has been sold and to claim no ownership interest in the Trust Loan. All original documents relating to the Whole Loan that are not delivered to the Custodian are and shall be held by the Depositor, the Servicer or the Special Servicer, as the case may be, in trust for the benefit of the Certificateholders and the Companion Loan Holders. In the event that any such original document is required pursuant to the terms of this Section 2.1(b) to be a part of a Mortgage File, such document shall be delivered promptly to the Custodian.

 

The conveyance of the Trust Loan and the related rights and property accomplished hereby is absolute and is intended by the Depositor to constitute an absolute sale and transfer of the Trust Loan and such other related rights and property by the Depositor to the Trustee in trust for the benefit of the Certificateholders, in exchange for the Certificates being sold by the Depositor. Furthermore, it is not intended that such conveyance be a pledge of security for the Trust Loan. If such conveyance is determined to be a pledge of security for the Trust Loan, however, the Depositor and the Trustee intend that the rights and obligations of the parties to the Trust Loan shall be established pursuant to the terms of this Agreement. The Depositor and the Trustee also intend and agree that, in such event, (i) this Agreement shall constitute a security agreement under applicable law, (ii) the Depositor shall be deemed to have granted to the Trustee (in such capacity) a first priority security interest in all of the Depositor’s right, title and interest in and to the assets constituting the Trust Fund, including the Trust Loan subject hereto from time to time, all amounts received on or with respect to the Trust Loan after the Closing Date, all amounts held from time to time in the Collection Account, the Distribution Account, and, if established, the Foreclosed Property Account, and all of the Depositor’s right, title and interest under the Loan Purchase Agreement, (iii) the possession by the Custodian or its agent of the Notes with respect to the Trust Loan subject hereto from time to time and such other

 

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items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” or possession by a purchaser or person designated by such secured party for the purpose of perfecting such security interest under applicable law, and (iv) notifications to, and acknowledgments, receipts or confirmations from, Persons holding such property, shall be deemed to be notifications to, or acknowledgments, receipts or confirmations from, securities intermediaries, bailees or agents (as applicable) of the Trustee for the purpose of perfecting such security interest under applicable law.

 

Section 2.2.      Acceptance by the Trustee and the Certificate Administrator. (a)  By its execution and delivery of this Agreement, the Trustee acknowledges the assignment to it of the Trust Loan in good faith without notice of adverse claims and the Certificate Administrator declares that, in its capacity as Custodian, it holds and will hold or will cause to be held such documents as are delivered to it constituting the Mortgage File (to the extent the documents constituting the Mortgage File are actually delivered to it) in trust, upon the conditions herein set forth, for the use and benefit of all present and future Certificateholders and the Companion Loan Holders.

 

(b)          The execution and delivery of this Agreement by the Certificate Administrator shall constitute certification by the Certificate Administrator, in its capacity as Custodian, that (i) the original Trust Loan Notes specified in clause (b)(i) of the definition of “Mortgage File” and all allonges thereto, if any, have been received by the Custodian; and (ii) such original Notes have been reviewed by the Custodian and (A) appear regular on their face (handwritten additions, changes or corrections shall not constitute irregularities if initialed by the applicable Loan Borrower), (B) appear to have been executed and (C) purport to relate to the Trust Loan. The Custodian agrees to review or cause to be reviewed the Mortgage File within 30 days after the Closing Date, and to deliver to the Depositor, the Sponsor, the Trustee, the Servicer and the Special Servicer a report (substantially in the form of Exhibit CC) certifying, subject to any exceptions found by it in such review, that (A) all documents referred to in Section 2.1(b) have been received, and (B) all documents have been executed, appear on their face to be what they purport to be, purport to be recorded or filed (as applicable) and have not been torn, mutilated or otherwise defaced, and appear on their faces to relate to the Trust Loan. The Custodian shall have no responsibility for reviewing the Mortgage File except as expressly set forth in this Section 2.2(b). The Custodian shall be under no duty or obligation to inspect, review, or examine any such documents, instruments or certificates to independently determine that they are valid, genuine, enforceable, legally sufficient, duly authorized, or appropriate for the represented purpose, whether the text of any assignment or endorsement is in proper or recordable form (except to determine if the endorsement conforms to the requirements of Section 2.1(b)), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, to independently determine that any document has actually been filed or recorded in the appropriate office, that any document is other than what it purports to be on its face, or whether the title insurance policies relate to the Property.

 

(c)          Upon the first anniversary of the Closing Date, the Custodian shall (i) deliver to the Depositor, the Trustee, the Sponsor, the Loan Borrower, the Servicer and the Special Servicer a final exception report as to any remaining documents that are not in the Mortgage File and (ii) request that the Sponsor cause such document deficiency to be cured.

 

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Section 2.3.     Representations and Warranties of the Trustee. (a)  The Trustee hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

(i)           the Trustee is a national banking association, duly organized, validly existing, and is in good standing under the laws of the United States of America; the Trustee possesses and shall continue to possess all requisite authority, power, licenses, permits, franchise and approvals to conduct its business and to execute, deliver and comply with its obligations under this Agreement;

 

(ii)          the execution and delivery of this Agreement by the Trustee and its performance and compliance with the terms of this Agreement will not violate the Trustee’s articles of association or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material contract, agreement or other instrument to which the Trustee is a party or which may be applicable to the Trustee or any of its assets, which default or breach of such material contract, agreement or other instrument would have a material adverse effect on the Trustee’s performance of its obligations hereunder;

 

(iii)         except to the extent that the laws of any jurisdiction in which a part of the Trust Fund may be located require that a co-trustee or separate trustee be appointed to act with respect to such property as contemplated by Section 8.10, the Trustee has the full power and authority to enter into and consummate the transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement;

 

(iv)         this Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid and binding obligation of the Trustee, enforceable against it in accordance with the terms of this Agreement, except as such enforcement may be limited by bankruptcy, insolvency, conservatorship, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

 

(v)          the Trustee, to its actual knowledge, is not in violation of, and the execution and delivery of this Agreement by the Trustee and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order, law or regulation of any federal, state, municipal or governmental agency of or in the United States of America having jurisdiction, which violation would have consequences that would materially and adversely affect the condition (financial or other) or operations of the Trustee or that would materially affect the performance of its duties hereunder or thereunder;

 

(vi)         no consent, approval, authorization or order of, or registration of filing with, or notice to any court, governmental or regulatory agency or body, is required for the execution, delivery and performance by the Trustee of this Agreement or if required, such approval has been obtained prior to the Closing Date;

 

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(vii)        to the best of the Trustee’s knowledge, no litigation is pending or threatened against the Trustee which would prohibit its entering into or materially and adversely affect its ability to perform its obligations under this Agreement; and

 

(viii)       the Trustee is covered by errors and omissions insurance coverage which is in full force and effect or otherwise complies with the requirements of Section 8.6(b); and

 

(ix)          to its actual knowledge, the Trustee is not Risk Retention Affiliated with the Third Party Purchaser.

 

(b)          The respective representations and warranties of the Trustee set forth in this Section 2.3 shall survive until the termination of this Agreement, and shall inure to the benefit of the other parties hereto.

 

Section 2.4.     Representations and Warranties of the Servicer. (a)  KeyBank, as the Servicer, hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

(i)           it is a national banking association duly organized, validly existing, and in good standing under the laws of the United States of America; it is, and throughout the term of this Agreement shall remain, duly authorized and qualified to transact business in the jurisdiction where any Property is located to the extent required by applicable law and necessary to ensure the enforceability of the Trust Loan and the Companion Loans in accordance with the terms thereof and hereof; it possesses and shall continue to possess all requisite authority, power, licenses, permits, franchise, and approvals to conduct its business and to execute, deliver, and comply with its obligations under this Agreement;

 

(ii)          the execution and delivery of this Agreement and its performance of and compliance with the terms hereof in the manner contemplated by this Agreement will not violate its articles of association or by-laws, or any other material instrument governing its operations, or any laws, regulations, orders or decrees of any governmental authority applicable to it and will not constitute a default (or any event which, with notice or lapse of time or both, would constitute a default) under any material contract, agreement, or other instrument to which it is a party or which may be applicable to any of its assets, which violation or default would have consequences that would materially and adversely affect its financial condition or its ability to perform its obligations hereunder;

 

(iii)         this Agreement constitutes its valid, legal, and binding obligation enforceable against it in accordance with its terms, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance;

 

(iv)         it has the full power and authority to enter into and consummate the transactions contemplated by this Agreement; this Agreement has been duly executed and delivered by it;

 

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(v)          all consents, approvals, authorizations, orders or filings of or with any court or governmental agency or body, if any, required for the execution, delivery and performance of this Agreement by it have been obtained or made;

 

(vi)         there is no pending action, suit or proceeding, arbitration or governmental investigation against it, the outcome of which, in its reasonable judgment, could reasonably be expected to prohibit it from entering into this Agreement or materially and adversely affect its ability to perform its obligations under this Agreement; and

 

(vii)        it has errors and omissions insurance and fidelity bond coverage which is in full force and effect and complies with the requirements of Section 3.11(d); and

 

(viii)       the Servicer is not Risk Retention Affiliated with the Third Party Purchaser.

 

(b)          The representations and warranties of the Servicer set forth in this Section 2.4 shall survive until termination of this Agreement, and shall inure to the benefit of the parties hereto.

 

Section 2.5.     Representations and Warranties of the Special Servicer. (a)  AEGON USA Realty Advisors, LLC, as the Special Servicer, hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

(i)           it is a limited liability company, duly organized, validly existing, and in good standing under the laws of the State of Iowa; it is, and throughout the term of this Agreement shall remain, duly authorized and qualified to transact business in the jurisdiction where any Property is located to the extent required by applicable law and necessary to ensure the enforceability of the Trust Loan and the Companion Loans in accordance with the terms thereof and hereof; it possesses and shall continue to possess all requisite authority, power, licenses, permits, franchise, and approvals to conduct its business and to execute, deliver, and comply with its obligations under this Agreement;

 

(ii)          the execution and delivery of this Agreement and its performance of and compliance with the terms hereof in the manner contemplated by this Agreement will not violate its articles of association or by-laws, or any other material instrument governing its operations, or any laws, regulations, orders or decrees of any governmental authority applicable to it and will not constitute a default (or any event which, with notice or lapse of time or both, would constitute a default) under any material contract, agreement, or other instrument to which it is a party or which may be applicable to any of its assets, which violation or default would have consequences that would materially and adversely affect its financial condition or its ability to perform its obligations hereunder;

 

(iii)         this Agreement constitutes its valid, legal, and binding obligation enforceable against it in accordance with its terms, subject to bankruptcy laws and other similar laws of general application affecting rights of creditors and subject to the application of the rules of equity, including those respecting the availability of specific performance;

 

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(iv)         it has the full power and authority to enter into and consummate the transactions contemplated by this Agreement; this Agreement has been duly executed and delivered by it;

 

(v)         all consents, approvals, authorizations, orders or filings of or with any court or governmental agency or body, if any, required for the execution, delivery and performance of this Agreement by it have been obtained or made;

 

(vi)         there is no pending action, suit or proceeding, arbitration or governmental investigation against it, the outcome of which, in its reasonable judgment, could reasonably be expected to prohibit it from entering into this Agreement or materially and adversely affect its ability to perform its obligations under this Agreement; and

 

(vii)        it has errors and omissions insurance and fidelity bond coverage which is in full force and effect and complies with the requirements of Section 3.11(d).

 

(b)          The representations and warranties of the Special Servicer set forth in this Section 2.5 shall survive until termination of this Agreement, and shall inure to the benefit of the parties hereto.

 

Section 2.6.     Representations and Warranties of the Depositor. (a)  The Depositor hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

(i)           the Depositor is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware, with full 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;

 

(ii)           the execution, delivery and performance of this Agreement by the Depositor have been duly authorized by all necessary corporate action on the part of the Depositor; neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions herein contemplated, nor the compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under (A) any of the provisions of any law, rule, regulation, judgment, decree or order binding on the Depositor, (B) the organizational documents of the Depositor, or (C) the terms of any indenture or other agreement or instrument to which the Depositor is a party or by which it is bound or any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it;

 

(iii)         the execution, delivery and performance by the Depositor of this Agreement and the consummation of the transactions contemplated hereby and thereby 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;

 

(iv)         this Agreement has been duly executed and delivered by the Depositor and, assuming due authorization, execution and delivery by the other parties hereto,

 

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constitutes a valid and binding obligation of the Depositor enforceable against it in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law);

 

(v)          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 its ability to perform its obligations under this Agreement;

 

(vi)         the Depositor 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 governmental agency, which default would materially and adversely affect the ability of the Depositor to perform its obligations hereunder;

 

(vii)        other than the actions taken pursuant to this Agreement, the Depositor has taken no action to impair or encumber the title to the Trust Loan or to subject it to any offsets, defenses or counterclaims during the Depositor’s ownership thereof;

 

(viii)       the Depositor is accounting for the transfer of the Trust Loan as a sale under generally accepted accounting principles and, for federal income tax purposes;

 

(ix)          the Depositor is not, and, after giving effect to the transfers contemplated under this Agreement, will not be, insolvent; and

 

(x)           the Depositor has not transferred the Trust Loan with an intent to hinder, delay or defraud its creditors.

 

(b)          The representations and warranties of the Depositor set forth in Section 2.5 shall survive until termination of this Agreement, and shall inure to the benefit of the Certificateholders, the Certificate Administrator, the Trustee, the Servicer and the Special Servicer.

 

(c)          Neither the Depositor nor any of its Affiliates shall insure or guarantee distributions on the Certificates. Subject to Section 2.6(a) and (b), neither the Certificateholders nor the Trustee or the Certificate Administrator on their behalf shall have any rights or remedies against the Depositor for any losses or other claims in connection with the Certificates or the Trust Loan except as expressly set forth herein.

 

Section 2.7.     Representations and Warranties of the Certificate Administrator. (a)  The Certificate Administrator hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

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(i)           it is a national banking association duly organized, validly existing, and in good standing under the laws of the United States of America; the Certificate Administrator possesses and shall continue to possess all requisite authority, power, licenses, permits, franchise and approvals to conduct its business and to execute, deliver and comply with its obligations under this Agreement;

 

(ii)          the execution and delivery of this Agreement by the Certificate Administrator and its performance and compliance with the terms of this Agreement will not violate the Certificate Administrator’s articles of association or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material contract, agreement or other instrument to which it is a party or which may be applicable to the Certificate Administrator or any of its assets, which default or breach of such material contract, agreement or other instrument would have a material adverse effect on the Certificate Administrator’s performance of its obligations hereunder;

 

(iii)         the Certificate Administrator has the full power and authority to enter into and consummate the transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement;

 

(iv)         this Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid and binding obligation of the Certificate Administrator, enforceable against it in accordance with the terms of this Agreement, except as such enforcement may be limited by bankruptcy, insolvency, conservatorship, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

 

(v)          the Certificate Administrator, to its actual knowledge, is not in violation of, and the execution and delivery of this Agreement by the Certificate Administrator and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order, law or regulation of any federal, state, municipal or governmental agency of or in the United States of America having jurisdiction, which violation would have consequences that would materially and adversely affect the condition (financial or other) or operations of the Certificate Administrator or that would materially affect the performance of its duties hereunder or thereunder;

 

(vi)         no consent, approval, authorization or order of, or registration of filing with, or notice to any court, governmental or regulatory agency or body, is required for the execution, delivery and performance by the Certificate Administrator of this Agreement or if required, such approval has been obtained prior to the Closing Date;

 

(vii)        to the best of the Certificate Administrator’s knowledge, no litigation is pending or threatened against the Certificate Administrator which would prohibit its

 

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entering into or materially and adversely affect its ability to perform its obligations under this Agreement; and

 

(viii)       the Certificate Administrator is covered by errors and omissions insurance coverage which is in full force and effect or otherwise complies with the requirements of Section 8.6(b); and

 

(ix)          to its actual knowledge, the Certificate Administrator is not Risk Retention Affiliated with the Third Party Purchaser.

 

(b)          The respective representations and warranties of the Certificate Administrator set forth in this Section 2.7 shall survive until the termination of this Agreement, and shall inure to the benefit of the other parties hereto.

 

Section 2.8.     Representations and Warranties of the Operating Advisor.

 

(a)          The Operating Advisor hereby represents and warrants to the other parties hereto that as of the Closing Date:

 

(i)           it is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of New York, and the Operating Advisor is in compliance with the laws of the State in which the Property is located to the extent necessary to perform its obligations under this Agreement;

 

(ii)          the execution and delivery of this Agreement by the Operating Advisor, and the performance and compliance with the terms of this Agreement by the Operating Advisor, do not (A) violate the Operating Advisor’s organizational documents, (B) constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other material instrument to which it is a party or which is applicable to it or any of its assets, or (C) violate any law, rule, regulation, order, judgment or decree to which the Operating Advisor or its property is subject, which, in the case of either (B) or (C), is likely to materially and adversely affect either the ability of the Operating Advisor to perform its obligations under this Agreement or its financial condition;

 

(iii)         the Operating Advisor has the full power and authority to enter into and consummate all transactions to be performed by it contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement;

 

(iv)         the Operating Advisor possesses sufficient financial strength to fulfill its duties and responsibilities pursuant to this Agreement over the life of the Trust Fund;

 

(v)          this Agreement, assuming due authorization, execution and delivery by the other parties hereto, constitutes a valid, legal and binding obligation of the Operating Advisor, enforceable against the Operating Advisor in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, receivership, moratorium and other laws affecting the enforcement of creditors’ rights generally, and

 

 

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(B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law;

 

(vi)         the Operating Advisor is not in violation of, and its execution and delivery of this Agreement and its performance and compliance with the terms of this Agreement will not constitute a violation of, any law, order or decree of any court or arbiter, or any order regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Operating Advisor’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Operating Advisor to perform its obligations under this Agreement or the financial condition of the Operating Advisor;

 

(vii)        the Operating Advisor has errors and omissions insurance coverage that is in full force and effect or is self-insuring with respect to such risks, which in either case complies with the requirements of Section 3.11 hereof;

 

(viii)       no litigation is pending or, to the best of the Operating Advisor’s knowledge, threatened against the Operating Advisor, which would prohibit the Operating Advisor from entering into this Agreement or, in the Operating Advisor’s good faith and reasonable judgment, is likely to materially and adversely affect the ability of the Operating Advisor to perform its obligations under this Agreement;

 

(ix)          no consent, approval, authorization or order of any court or governmental agency or body is required under federal or state law for the execution, delivery and performance by the Operating Advisor of, or compliance by the Operating Advisor with, this Agreement or the consummation of the transactions of the Operating Advisor contemplated by this Agreement, except for any consent, approval, authorization or order which has been obtained or can be obtained prior to the actual performance by the Operating Advisor of its obligations under this Agreement, or which, if not obtained would not have a materially adverse effect on the ability of the Operating Advisor to perform its obligations hereunder; and

 

(x)           the Operating Advisor is an Eligible Operating Advisor.

 

Section 2.9.     Representations and Warranties Contained in the Loan Purchase Agreement. (a) If (i) any party hereto (A) discovers or receives notice alleging that any document required to be delivered to the Certificate Administrator pursuant to Section 2.1 is not delivered as and when required, is not properly executed or is defective (each, a “Defect”) or (B) discovers or receives notice alleging a breach of any representation or warranty made by the Sponsor relating to the Trust Loan as set forth in Exhibit A to the Loan Purchase Agreement (a “Breach”) or (ii) the Special Servicer or the Depositor receives a Repurchase Communication of a request or demand for repurchase of the Trust Loan alleging a Defect or Breach (any such request or demand, a “Repurchase Request”), then such party shall give prompt written notice of such Defect, Breach or Repurchase Request to the Sponsor, the Companion Loan Holders, the Controlling Class Representative (so long as no Control Termination Event is continuing), the other parties hereto and, subject to Section 10.17, each of the Rating Agencies (to the extent notice has not previously been delivered to such Persons pursuant to this sentence). The Special

 

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Servicer shall determine if any such Defect or Breach materially and adversely affects the value of the Trust Loan or the interests of the Certificateholders therein or causes the Trust Loan to fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but without regard to the rule in Treasury Regulations Section 1.860G-2(f)(2) that treats a defective obligation as a qualified mortgage, or any substantially similar successor provision) (any such Defect or Breach, a “Material Document Defect” and a “Material Breach,” respectively). If such Defect or Breach has been determined to be a Material Document Defect or Material Breach, then the Special Servicer shall give prompt written notice thereof to the Sponsor, the other parties hereto and subject to Section 10.17, to the Rating Agencies. If such determination is that the Defect or the Breach is a Material Document Defect or a Material Breach, the Special Servicer shall (A) request that the Sponsor (i) repurchase the Trust Loan at an amount equal to the Repurchase Price, (ii) promptly cure such Material Document Defect or Material Breach, as the case may be, in each case in accordance with the terms of the Loan Purchase Agreement or (iii) indemnify the Trust for the losses directly related to such Material Breach or Material Document Defect, subject to receipt of a Rating Agency Confirmation from each Rating Agency with respect to such action and (B) give prompt written notice thereof to the Controlling Class Representative (prior to the occurrence and continuance of a Control Termination Event); provided that with respect to any Material Breach or Material Document Defect that would cause the Trust Loan not to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the Sponsor will be required to cure such Material Document Defect or Material Breach or to repurchase the Trust Loan at the Repurchase Price within ninety (90) days of the date of discovery of such Material Document Defect or Material Breach. If a Responsible Officer of the Certificate Administrator or a Servicing Officer of the Servicer or the Special Servicer, has actual knowledge that the Sponsor has defaulted on its obligation to repurchase the Trust Loan under the Loan Purchase Agreement, such entity shall promptly notify the Trustee, the Certificate Administrator, the Servicer and the Special Servicer, as applicable, and the Certificate Administrator shall notify the Certificateholders of such default. The Special Servicer shall enforce the obligations of the Sponsor under Section 8 of the Loan Purchase Agreement. Such enforcement, including, without limitation, the legal prosecution of claims, shall be carried out in such form, to such extent and at such time as if it were, in its individual capacity, the owner of the Trust Loan. The Special Servicer shall be reimbursed for the reasonable costs of such enforcement (it being understood that a Liquidation Fee shall be payable to the Special Servicer as and only to the extent provided herein): first, from a specific recovery of costs, expenses or attorneys’ fees against the Sponsor; second, out of the Repurchase Price, to the extent that such expenses are a specific component thereof; and third, if at the conclusion of such enforcement action it is determined that the amounts described in clauses first and second are insufficient, then pursuant to clause (viii) of Section 3.4(c) out of collections on the Trust Loan on deposit in the Collection Account.

 

If the Special Servicer or the Depositor receives a Repurchase Communication of a withdrawal of a Repurchase Request of which notice has been previously received or given and which withdrawal is by the Person making such Repurchase Request (a “Repurchase Request Withdrawal”), such party shall give written notice of such Repurchase Request Withdrawal to the Sponsor, the Controlling Class Representative (prior to the occurrence and continuance of a Control Termination Event), the other parties hereto and, subject to Section 10.17 of this Agreement, each of the Rating Agencies (to the extent notice has not previously been delivered to such Persons pursuant to this sentence).

 

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Each notice of a Repurchase Request or Repurchase Request Withdrawal required to be given by a party pursuant to this Section 2.9(a) (each, a “15Ga-1 Notice”) shall be given no later than the tenth (10th) Business Day after receipt of a Repurchase Communication of such Repurchase Request or receipt of a Repurchase Communication of such Repurchase Request Withdrawal, and shall include (i) the identity of the portion of the Trust Loan, (ii) the date such Repurchase Request was received or the date such Repurchase Request Withdrawal was received, as applicable, (iii) if known, the basis for the Repurchase Request (as asserted in the Repurchase Request) and (iv) in the case of 15Ga-1 Notices provided by the Special Servicer, a statement as to whether the Special Servicer currently plans to pursue such Repurchase Request.

 

In the event that the Certificate Administrator, the Trustee or the Servicer receives a Repurchase Communication of a Repurchase Request or Repurchase Request Withdrawal, such party shall promptly forward such Repurchase Request or Repurchase Request Withdrawal to the Special Servicer and, prior to the occurrence and continuance of a Consultation Termination Event, the Controlling Class Representative, and include the following statement in the related correspondence: “This is a “Repurchase Request” or a “Repurchase Request Withdrawal” under Section 2.9(a) of the Trust and Servicing Agreement relating to the CSMC 2017-MOON, Commercial Mortgage Pass-Through Certificates, Series 2017-MOON, requiring action by you as the recipient of such Repurchase Request or Repurchase Request Withdrawal thereunder”. Upon receipt of such Repurchase Request or Repurchase Request Withdrawal by the Special Servicer, the Special Servicer shall be deemed to be the recipient of such Repurchase Request or Repurchase Request Withdrawal, and the Special Servicer shall comply with the notice procedures set forth in this Section 2.9(a) with respect to such Repurchase Request or Repurchase Request Withdrawal.

 

No Person that is required to provide a 15Ga-1 Notice pursuant to this Section 2.9(a) (a “15Ga-1 Notice Provider”) shall be required to provide any information in a 15Ga-1 Notice that is protected by the attorney-client privilege or the attorney work product doctrine. The Loan Purchase Agreement will provide that (i) any 15Ga-1 Notice provided pursuant to this Section 2.9(a) is so provided only to assist the Sponsor, the Depositor and their respective Affiliates to comply with Rule 15Ga-1 under the Exchange Act, Items 1104 and 1121 of Regulation AB and any other requirement of law or regulation and (ii)(A) no action taken by, or inaction of, a 15Ga-1 Notice Provider and (B) no information provided pursuant to this Section 2.9(a) by a 15Ga-1 Notice Provider in a 15Ga-1 Notice shall be deemed to constitute a waiver or defense to the exercise of any legal right that such 15Ga-1 Notice Provider may have with respect to the Loan Purchase Agreement, including with respect to any Repurchase Request that is the subject of a 15Ga-1 Notice.

 

(b)          Upon receipt by the Servicer from the Sponsor of the Repurchase Price for the Trust Loan (including any indemnification payment to the Trust by the Sponsor), the Servicer, as applicable, shall deposit such amount in the Collection Account, and the Certificate Administrator shall, upon receipt of a certificate of a Servicing Officer certifying as to the receipt by the Servicer of the Repurchase Price and the deposit of the Repurchase Price into the Collection Account pursuant to this Section 2.9(b), (i) release or cause to be released to the designee of the Sponsor the Repurchase Mortgage File and the Trustee and the Certificate Administrator shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranty (except that the Trust Loan is owned by the Trust

 

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and is being sold free and clear of liens and encumbrances), as shall be prepared by such designee to vest in such designee the Trust Loan (or allocable portion thereof) released pursuant hereto and the Certificate Administrator, the Trustee, the Servicer and the Special Servicer shall have no further responsibility with regard such Repurchase Mortgage File and (ii) release or cause to be released to the Sponsor any escrow payments and reserve funds held by the Trustee, or on the Trustee’s behalf, in respect of the Trust Loan. Upon receipt by the Servicer from the Sponsor of an indemnification payment in respect of the Trust Loan, the Servicer or Special Servicer, as applicable, shall deposit (or if received by the Special Servicer, remit owed amounts to the Servicer for deposit) such amount in the Collection Account.

 

(c)           Notwithstanding anything to the contrary herein, no Defect (except for a Defect with respect to the document described in clause (i) of Section 2.1(b) and the documents described in clauses (ii)(B), (C) and (G) of Section 2.1(b)) shall be considered to be a Material Document Defect unless the document with respect to which a Defect exists is required in connection with (A) an imminent enforcement of the Loan Lender’s rights or remedies under the Trust Loan; (B) defending any claim asserted by the Loan Borrower or third party with respect to the Trust Loan; (C) establishing the validity or priority of any lien on any collateral securing the Trust Loan; or (D) any immediate significant servicing obligations, including without limitation, making a claim under a title policy. The Trust’s sole remedy against the Sponsor in connection with a Material Document Defect shall be to enforce the repurchase claim in accordance with the provisions of the Loan Purchase Agreement.

 

Section 2.10.     Execution and Delivery of Certificates; Issuance of Uncertificated Lower-Tier Interests. The Trustee acknowledges the assignment in trust by the Depositor to the Trustee of the Trust Loan Notes and other assets comprising the Trust Fund. Concurrently with such assignment and delivery and in exchange therefor, (i) the Certificate Administrator acknowledges the issuance of (x) the Uncertificated Lower-Tier Interests to the Depositor and (y) the Class LT-R Interest, in exchange for the Trust Loan, receipt of which is hereby acknowledged, (ii) immediately thereafter, the Certificate Administrator acknowledges (x) the assignment by the Depositor to the Trustee of the Uncertificated Lower-Tier Interests, and in exchange therefor that it (y) has executed and has authenticated and delivered to or upon the order of the Depositor, the Regular Certificates and has issued the Class UT-R Interest, and (z) has executed and has authenticated and delivered to or upon the order of the Depositor, the Class R Certificates, representing the Class LT-R and Class UT-R Interests, and (iii) the Depositor hereby acknowledges the receipt by it or its designees, of the Regular Certificates in authorized denominations and the Class UT-R Interest evidencing the entire beneficial ownership of the Upper-Tier REMIC.

 

Section 2.11.     Miscellaneous REMIC Provisions. (a)  The Class A, Class X, Class B, Class C, Class D, Class E and Class HRR Certificates are hereby designated as the “regular interests” in the Upper-Tier REMIC within the meaning of Section 860G(a)(1) of the Code. The Class UT-R Interest, represented by the Class R Certificates, is hereby designated as the sole class of “residual interests” in the Upper-Tier REMIC within the meaning of Section 860G(a)(2) of the Code.

 

(b)          The Class LA, Class LB, Class LC, Class LD, Class LE and Class LHRR Uncertificated Interests are hereby designated as the “regular interests” in the Lower-Tier

 

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REMIC within the meaning of Section 860G(a)(1) of the Code, and the Class LT-R Interest, represented by the Class R Certificates, is hereby designated as the sole class of “residual interests” in the Lower-Tier REMIC within the meaning of Section 860G(a)(2) of the Code.

 

Section 2.12.    Resignation Upon Prohibited Risk Retention Affiliation. Upon the occurrence of (i) a Servicing Officer of the Servicer or a Responsible Officer of the Certificate Administrator or the Trustee, as applicable, obtaining actual knowledge that the Servicer, the Certificate Administrator or the Trustee, as applicable, is or has become a Risk Retention Affiliate of the Third Party Purchaser (an “Impermissible TPP Affiliate”), (ii) the Servicer, the Certificate Administrator or the Trustee receiving written notice by any other party to this Agreement, the Third Party Purchaser, any Sponsor or any Initial Purchaser that the Servicer, the Certificate Administrator or the Trustee, as applicable, is or has become an Impermissible TPP Affiliate, or (iii) the Operating Advisor obtaining actual knowledge that it is or has become a Risk Retention Affiliate of the Third Party Purchaser or any other party to this Agreement (an “Impermissible Operating Advisor Affiliate”; and either of an Impermissible TPP Affiliate and an Impermissible Operating Advisor Affiliate being an “Impermissible Risk Retention Affiliate”), then in each such case the Impermissible Risk Retention Affiliate shall be required to promptly notify the Retaining Sponsor and the other parties to this Agreement and resign in accordance with Section 3.29(m), Section 6.6 or Section 8.7. The resigning Impermissible Risk Retention Affiliate will be required to bear all reasonable out-of-pocket costs and expenses of each other party to this Agreement, the Issuing Entity and the Rating Agencies in connection with such resignation as and to the extent required under this Agreement; provided, however, if the affiliation causing an Impermissible Risk Retention Affiliate is the result of the Third-Party Purchaser acquiring an interest in such Impermissible Risk Retention Affiliate or an affiliate of such Impermissible Risk Retention Affiliate, then such costs and expenses will be an expense of the Issuing Entity.

 

Article 3

ADMINISTRATION AND SERVICING OF THE WHOLE LOAN

 

Section 3.1.       Servicer to Act as the Servicer; Special Servicer to Act as the Special Servicer. The Servicer (other than during the continuance of a Special Servicing Loan Event) and the Special Servicer (during the continuance of a Special Servicing Loan Event), each as an independent contractor, shall service and administer the Whole Loan and administer Foreclosed Property solely on behalf of the Trust Fund, in the best interest of, and for the benefit of, the Certificateholders and the Companion Loan Holders as a collective whole as if such Certificateholders and the Companion Loan Holders constituted one lender (taking into account the subordinate nature of the B-Note) (as determined by the Servicer or the Special Servicer, as applicable, in the exercise of its good faith and reasonable judgment), in accordance with applicable law (including the REMIC Provisions), the terms of this Agreement, the Co-Lender Agreement and the Loan Documents and, to the extent consistent with the foregoing, the following standards: (i) the higher of (a) the same manner in which and with the same care, skill, prudence and diligence with which the Servicer or the Special Servicer, as applicable, services and administers similar loans and administers foreclosed properties for other third-party portfolios, giving due consideration to customary and usual standards of practice of prudent

 

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institutional commercial mortgage lenders in servicing their own loans and administering their own foreclosed properties, or (b) with the care, skill, prudence and diligence the Servicer or the Special Servicer, as applicable, uses for loans which it owns or for foreclosed properties it owns and administers; (ii) with a view to the timely collection of (a) all scheduled payments of principal and interest under the Whole Loan or, with respect to the Special Servicer, if the Whole Loan comes into and continues in default and if no satisfactory arrangements can be made for the collection of the delinquent payments, the maximization of the recovery on the Whole Loan to the Certificateholders and the Companion Loan Holders (as a collective whole as if the Certificateholders and the Companion Loan Holders constituted a single lender) (taking into account the subordinate nature of the B-Note) on a net present value basis and (b) the Loan Borrower Reimbursable Trust Fund Expenses and other amounts due under the Whole Loan and (iii) without regard to:

 

(A)     any relationship that the Servicer or the Special Servicer or any affiliate thereof may have with the Loan Borrower, the Sponsor, the Depositor, any Companion Loan Holders or any of their respective affiliates;

 

(B)     the ownership of any Certificate (or Companion Loan) or any interest in Companion Loan by the Servicer or Special Servicer or by any affiliate of the Servicer or the Special Servicer;

 

(C)      in the case of the Servicer, its obligation to make Advances;

 

(D)     the right of the Servicer or the Special Servicer or any affiliate thereof to receive reimbursement of costs, compensation or other fees (other than Advances), or the sufficiency of any compensation payable to it under this Agreement or with respect to any particular transaction; or

 

(E)      the ownership, servicing or management for others of any other loans or property by the Servicer or the Special Servicer.

 

Subject to the above-described servicing standards (hereinafter referred to as “Accepted Servicing Practices”) and the terms of this Agreement and of the Loan Documents, the Servicer and the Special Servicer each shall have full power and authority, acting alone and/or through one or more sub-servicers as provided in Section 3.2, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. The Servicer and the Special Servicer shall service and administer the Trust Loan and the Companion Loan in accordance with applicable state and federal law. At the written request of the Servicer or the Special Servicer, as applicable, accompanied by the form of power of attorney or other documents being requested, the Trustee shall furnish to the Servicer or the Special Servicer any powers of attorney (substantially in the form of Exhibit N hereto or such other form that is reasonably acceptable to the Servicer or the Special Servicer, as applicable, and to the Trustee) and other documents necessary or appropriate to enable such Servicer or the Special Servicer to carry out its servicing and administrative duties hereunder, and the Trustee shall not be held responsible (and shall be indemnified by the Servicer or the Special Servicer) for any negligence or misuse by the Servicer or the Special Servicer in its uses of any such powers of attorney or other document. Notwithstanding anything contained herein to the

 

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contrary, the Servicer and the Special Servicer shall not without the Trustee’s prior written consent: (i) initiate any action, suit or proceeding solely under the Trustee’s name without indicating the representative capacity of the Servicer or the Special Servicer, as applicable, or (ii) take any action with the intent to, and which actually does cause, the Trustee to be registered to do business in any state.

 

The liability of each of the Servicer and the Special Servicer, as applicable, for actions and omissions in its capacity as Servicer and the Special Servicer, respectively, hereunder is limited as provided herein (including, without limitation, pursuant to Section 6.3). Nothing contained in this Agreement shall be construed as an express or implied guarantee by the Servicer or the Special Servicer of the collectibility of the Trust Loan and the Companion Loans.

 

Section 3.2.       Sub-Servicing Agreements. (a)  The Special Servicer shall not engage any sub-servicer or enter into any sub-servicing agreement. The Servicer, at its own expense without a right of reimbursement under this Agreement or otherwise, may enter into sub-servicing agreements with sub-servicers for the servicing and administration of the Trust Loan and the Companion Loans, provided that (i) any such sub-servicing agreement shall be upon such terms and conditions as are not inconsistent with this Agreement and as the Servicer and the sub-servicer have agreed, and (ii) no sub-servicer retained by the Servicer shall grant any modification, waiver, or amendment to the Loan Documents without the approval of the Servicer. References in this Agreement to actions taken or to be taken, and limitations on actions permitted to be taken, by the Servicer in servicing the Whole Loan include actions taken or to be taken by a sub-servicer on behalf of the Servicer. Each sub-servicer shall be (i) authorized to transact business and licensed in the applicable state(s), if, and to the extent, required by applicable law to enable the sub-servicer to perform its obligations under the applicable sub-servicing agreement, and (ii) qualified to perform its obligations under the applicable sub-servicing agreement. For purposes of this Agreement, the Servicer shall be deemed to have received any amount when the sub-servicer receives such amount, irrespective of whether such amount is remitted to the Servicer for deposit in the Collection Account, any Cash Management Account, any Reserve Account or the Distribution Account, and actions taken by the sub-servicer shall be deemed to be actions of the Servicer. The Servicer shall notify the Operating Advisor, the Certificate Administrator, the Trustee, the Loan Borrower and the Depositor in writing promptly upon the appointment of any sub-servicer and promptly furnish the Trustee and the Certificate Administrator, upon its request, with a copy of the sub-servicing agreement. No sub-servicer shall be permitted to enter into any sub-servicing agreement with other sub-servicers without the prior written consent of the Servicer.

 

(b)         Notwithstanding any sub-servicing agreement, the Servicer shall remain obligated and liable to the Trustee and the Certificateholders for the servicing and administering of the Trust Loan and the Companion Loans in accordance with the provisions of Section 3.1 without diminution of such obligation or liability by virtue of such sub-servicing agreement, or by virtue of indemnification from a sub-servicer, and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Whole Loan.

 

(c)          Any sub-servicing agreement entered into by the Servicer shall provide that it may be assumed or terminated by (i) the Trustee if the Trustee has assumed the duties of

 

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the Servicer or if the Servicer is otherwise terminated pursuant to the terms of this Agreement, or (ii) a successor Servicer if such successor Servicer has assumed the duties of the Servicer, without cost or obligation to the Trustee, the Certificate Administrator, the successor Servicer, the Trust or the Trust Fund.

 

(d)           Any sub-servicing agreement, and any other transactions or services relating to the Whole Loan involving a sub-servicer, shall be deemed to be between the Servicer and such sub-servicer alone, and the Certificate Administrator, the Trustee, the Depositor, the Trust and the Certificateholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the sub-servicer, and no provision herein shall be construed so as to require the Trust, the Trustee, the Certificate Administrator or the Depositor to indemnify any such sub-servicer. The Servicer is permitted, at its own expense, or to the extent that a particular expense is provided herein to be an Advance or an expense of the Trust, at the expense of the Trust, to utilize other agents or attorneys typically used by servicers of mortgage loans underlying commercial mortgage backed securities in performing its obligations under this Agreement.

 

(e)            Notwithstanding anything herein, each of the initial Servicer and the initial Special Servicer may delegate certain of its duties and obligations hereunder to an Affiliate of the Servicer or Special Servicer, as applicable. Such delegation shall not be considered a sub-servicing agreement hereunder, and the requirements and obligations set forth herein applicable to sub-servicing agreements, sub-servicers or Servicing Function Participants shall not be applicable to such arrangement. Notwithstanding any such delegation, the Servicer and the Special Servicer shall remain obligated and liable for the performance of their respective obligations and duties under this Agreement in accordance with the provisions hereof to the same extent and under the same terms and conditions as if each alone were servicing and administering the Whole Loan as required hereby.

 

(f)           The parties hereto acknowledge that the Whole Loan is subject to the terms and conditions of the Co-Lender Agreement and recognize the respective rights and obligations of the Trust, as holder of the Trust Loan, and of the Companion Loan Holders under the Co-Lender Agreement, including: (i) with respect to the allocation of collections on or in respect of the Whole Loan, and the making of remittances, to the Trust, as holder of the Trust Loan, and to the Companion Loan Holders; (ii) with respect to the allocation of expenses and losses relating to the Whole Loan to the Trust, as holder of the Trust Loan, and to the Companion Loan Holders and (iii) to the extent provided for under the Co-Lender Agreement, the consultation rights of the Companion Loan Holders. With respect to the Whole Loan, the Servicer (if the Whole Loan is not a Specially Serviced Loan) or the Special Servicer (if the Whole Loan has become a Specially Serviced Loan or any Property has been converted to a Foreclosed Property) shall prepare and provide to each Companion Loan Holder all notices, reports, statements and communications to be delivered by the holder of the Trust Loan under the Co-Lender Agreement, and shall perform all duties and obligations to be performed by a servicer and perform all servicing related duties and obligations to be performed by the holder of the Trust Loan pursuant to the Co-Lender Agreement. In the event of any conflict between this Agreement and the Co-Lender Agreement, the terms of the Co-Lender Agreement shall control with respect to the Whole Loan.

 

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(g)          Notwithstanding anything to the contrary herein, at no time shall the Servicer or the Trustee be required to make any advance of delinquent scheduled monthly payments of principal or interest with respect to any Companion Loan.

 

(h)          To the extent required under the Loan Documents or the Co-Lender Agreement, the Servicer shall, on behalf of the Loan Lender, maintain a note register for the Whole Loan in accordance with the Loan Documents or the Co-Lender Agreement. The Sponsor is the initial and sole holders of the Companion Loans as of the Closing Date, and notices regarding such ownership shall be addressed to the Sponsor at the address set forth in Section 10.4.

 

Section 3.3.      Cash Management Account. A Lockbox Account and a Cash Management Account have been or shall be established pursuant to the terms of the Loan Agreement, the Cash Management Agreement and the Lockbox Account Agreement. The Servicer shall exercise and enforce the rights of the Trust Fund with respect to the Cash Management Account and the Lockbox Account under the Loan Agreement, the Cash Management Agreement and the Lockbox Account Agreement in accordance with Accepted Servicing Practices and the other terms of this Agreement and the other Loan Documents.

 

Section 3.4.      Collection Account. (a)  The Servicer shall establish and maintain in the name of “KeyBank National Association, as Servicer on behalf of Xxxxx Fargo Bank, National Association, as Trustee for the benefit of the Certificateholders of CSMC 2017-MOON, Commercial Mortgage Pass-Through Certificates, Series 2017-MOON” and the Companion Loan Holders one or more deposit accounts (the “Collection Account”). The Collection Account must be an Eligible Account. The Servicer shall deposit into the Collection Account within two Business Days of receipt of properly identified and available funds the following amounts representing payments and collections received or made during each Collection Period on or with respect to the Whole Loan:

 

(i)           all payments on account of principal on the Whole Loan;

 

(ii)          all payments on account of interest on the Whole Loan, including Default Interest;

 

(iii)        any amount representing reimbursements by the Loan Borrower of Advances, interest thereon, and any other expenses of the Depositor, the Certificate Administrator, the Trustee, the Servicer or the Special Servicer, as applicable, as required by the Loan Documents or hereunder;

 

(iv)         any other amounts payable for the benefit of the Servicer, the Special Servicer, the Certificate Administrator, the Trustee or the Certificateholders under the Trust Loan;

 

(v)          any amounts required to be deposited pursuant to Section 3.8(b) in connection with net losses realized on Permitted Investments with respect to funds held in the Collection Account;

 

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(vi)         all Net Foreclosure Proceeds received from the Special Servicer pursuant to Section 3.14 and all Net Liquidation Proceeds, Insurance Proceeds and Condemnation Proceeds (to the extent not needed for the repair or restoration of the Property); and

 

(vii)       any other amounts required by the provisions of this Agreement to be deposited into the Collection Account by the Servicer, including, without limitation, any (1) proceeds of any repurchase of the Trust Loan pursuant to Section 2.9(b) and the Loan Purchase Agreement and any indemnification amounts paid by the Sponsor pursuant to the Loan Purchase Agreement, (2) proceeds of the sale of the Whole Loan by the Special Servicer pursuant to Section 3.16, or (3) amounts payable under the Loan Documents by any Person to the extent not specifically excluded.

 

The foregoing requirements for deposits in the Collection Account by the Servicer shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments (if any) in the nature of additional compensation (other than Default Interest and late payment charges) to which the Servicer or Special Servicer, as applicable are entitled pursuant to Section 3.17 and any reimbursement made by the Loan Borrower of expenses of the Servicer or the Special Servicer need not be deposited in the Collection Account by the Servicer or Special Servicer and, to the extent permitted by applicable law, the Servicer or the Special Servicer, as applicable, shall be entitled to retain any such fees and expense reimbursements received with respect to the Whole Loan.

 

(b)          Funds in the Collection Account may be invested in Permitted Investments in accordance with the provisions of Section 3.8. The Servicer shall on the Closing Date give written notice to the Certificate Administrator of the location and account number of the Collection Account and shall notify the Certificate Administrator in writing prior to any subsequent change thereof.

 

(c)          On or prior to each Remittance Date, (or following the securitization of any Companion Loan, in the case of clause (viii) below, on or prior to the day which is the earlier of (A) the Remittance Date and (B) the Business Day following the “determination date” (or any term substantially similar thereto), as such term is defined in the related Other Pooling and Servicing Agreement as long as such determination date is no earlier than the 6th day of the calendar month), prior to the remittance of funds to the Certificate Administrator for deposit in the Distribution Account pursuant to Section 3.5, the Servicer shall make withdrawals from the Collection Account (which withdrawals shall be the only permitted withdrawals from the Collection Account by the Servicer) as described below (the order set forth below not constituting an order of priority for such withdrawals) (subject to the terms and payment priorities in the Co-Lender Agreement):

 

(i)           to withdraw funds deposited in the Collection Account in error;

 

(ii)         concurrently, to pay the Servicing Fee to the Servicer (or with respect to any Excess Servicing Fee Rights, to pay any Excess Servicing Fees to the holder of such Excess Servicing Fee Rights), the Certificate Administrator Fee (including the portion that is the Trustee Fee) to the Certificate Administrator, the Operating Advisor Fee to the

 

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Operating Advisor and the CREFC® Intellectual Property Royalty License Fees to CREFC®, as applicable;

 

(iii)          to pay to the Operating Advisor the Operating Advisor Consulting Fee (but only to the extent actually received from the Loan Borrower);

 

(iv)         to pay (a) to the Servicer, as additional compensation, any income earned (net of losses (subject to Section 3.8(b)) on the investment of funds deposited in the Collection Account and any Reserve Account (to the extent not payable to the Loan Borrower); and (b) the Special Servicing Fee, if any, the Work-out Fee, if any, and the Liquidation Fee, if any, to the Special Servicer (with respect to clauses (a) and (b), in that order);

 

(v)          to reimburse the Trustee and the Servicer, in that order, for (a) Advances made by each and not previously reimbursed from late payments received during the applicable period on the Whole Loan, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds (to the extent not needed for the repair or restoration of the Property) and other collections on the Whole Loan; provided that any Advance that has been determined to be a Nonrecoverable Advance shall be reimbursed pursuant to clause (vi) below and (b) unpaid interest on such Advances at the Advance Rate; provided, however, that prior to (x) final liquidation of the Property or (y) the final payment and release of the Mortgages, interest on Advances shall be paid first out of Default Interest or late payment charges collected in the related Collection Period before such interest on Advances is paid out of other amounts on deposit in the Collection Account;

 

(vi)         to reimburse the Trustee and the Servicer, in that order, for any Nonrecoverable Advances made by each and not previously reimbursed that are not covered by clause (v)(a) above together with unpaid interest thereon at the Advance Rate;

 

(vii)        (a) to reimburse the Trustee and the Servicer, in that order, for interest on Monthly Payment Advances and (b) if all or a portion of the Companion Loans is part of an Other Securitization Trust, to the extent required by the Co-Lender Agreement, to pay the applicable party to the related Other Pooling and Servicing Agreement for any interest accrued on Companion Loan Advances made thereby; provided, however, that prior to (x) final liquidation of the Property or (y) the final payment and release of the Mortgages, interest on Advances shall be paid first out of Default Interest or late payment charges collected in the related Collection Period before such interest on Advances is paid out of other amounts on deposit in the Collection Account;

 

(viii)       to remit to the Companion Loan Holders all remaining amounts on deposit in the Collection Account payable to the Companion Loan Holders pursuant to the Co-Lender Agreement with respect to the Companion Loans;

 

(ix)         to make any other required payments (other than payments under clause (vii) above and normal monthly remittances and reimbursements pursuant to clause (viii) above) due under the Co-Lender Agreement to the holders of the Companion Loans;

 

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(x)           to reimburse the Trustee, the Certificate Administrator, the Servicer and the Special Servicer, in that order, for expenses incurred by them in connection with the liquidation of the Property and not otherwise covered and paid by an insurance policy or deducted from the proceeds of liquidation;

 

(xi)          to pay to the Servicer or the Special Servicer, as applicable, as additional compensation, to the extent actually received from the Loan Borrower (and permitted by, or not prohibited by, and allocated as such pursuant to the terms of the Loan Documents and this Agreement) and deposited into the Collection Account by the Servicer, any payments in the nature of late payment fees and Default Interest (to the extent remaining after payments pursuant to clause (iv) above), assumption fees, assumption application fees, substitution fees, release fees, Modification Fees, consent fees, amounts collected for checks returned for insufficient funds, charges for beneficiary statements or demands, defeasance fees (if applicable), loan service transaction and processing fees and similar fees and expenses; provided that such amounts received during each Collection Period shall not be required to be deposited into the Collection Account and shall be deemed to have been deposited in the Collection Account and withdrawn pursuant to this clause (x) solely for the purpose of determining the Available Funds Reduction Amount in connection with the calculation of Available Funds for the related Distribution Date;

 

(xii)         to pay or reimburse the Trustee, the Certificate Administrator, the Depositor, the Servicer, the Special Servicer and the Operating Advisor, in that order, for indemnities, expenses and any other amounts then due and payable or reimbursable (including any Trust Fund Expenses) to each pursuant to the terms of this Agreement and not previously paid or reimbursed pursuant to the preceding clauses; and

 

(xiii)        to the extent not previously paid or advanced, to pay to the Certificate Administrator (or set aside for eventual payment) any and all taxes imposed on the Trust or the Trust Fund by federal or state governmental authorities; provided, that, if such taxes are the result of the Depositor’s, Servicer’s, Special Servicer’s, the Operating Advisor’s, the Certificate Administrator’s or Trustee’s, as applicable, negligence, bad faith or willful misconduct in performing its obligations hereunder, such amounts may not be withdrawn from the Collection Account, but will be paid by such party that was negligent, acted in bad faith or engaged in willful misconduct pursuant to Sections 6.7 and 8.12, as applicable.

 

The remittance set forth in clauses (vii)(b), (viii) and (ix) above shall be made by the Servicer as a single remittance.

 

For the avoidance of doubt, in furtherance of the terms of the Co-Lender Agreement, payment of the portion of the Servicing Fee not constituting the Primary Servicing Fee on the Whole Loan, the Certificate Administrator Fee (including the portion that is the Trustee Fee), the Operating Advisor Fee, the CREFC® Intellectual Property Royalty License Fee, Trust Fund Expenses, reimbursement of Monthly Payment Advances and all other amounts withdrawn from the Collection Account that relate to the Trust or the inclusion of the Trust Loan in the Trust and are not expenses related to the servicing or administration of the Whole Loan shall be payable out of amounts allocated to the Trust Loan under the Co-Lender Agreement and

 

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are not intended to reduce amounts allocated to the Companion Loans under the Co-Lender Agreement.

 

Notwithstanding the foregoing, with respect to any Remittance Date, in no event will the Servicer be permitted to make a withdrawal pursuant to clauses (ii), (iv)(b), (v), (x) or (xii) to the extent that, as a result of such withdrawal, the amount on deposit in the Collection Account after giving effect to the withdrawal would be less than the amount of the Required Advance Amount; provided that the foregoing withdrawal limitations shall not apply (and accrued amounts previously eligible for withdrawal pursuant to clauses (ii), (iv)(b), (v), (x) or (xii) but which remain unpaid due to the operation of this paragraph may then be withdrawn and paid) upon (1) the final liquidation of the Trust Loan or the Property, (2) the final payment of the Trust Loan and release of the Mortgages or (3) the determination that any Advance that would increase the currently unreimbursed Advances in the aggregate would be a Nonrecoverable Advance. The Servicer shall advance, to the extent it determines that such amounts are recoverable, all amounts owed to itself (other than Servicing Fees), CREFC®, the Special Servicer, the Operating Advisor, the Certificate Administrator and Trustee pursuant to such clauses (ii), (iv)(b), (v) (to the extent reimbursements of such amounts are owed to the Trustee or the Certificate Administrator), (x) or (xii) (other than unreimbursed Property Protection Advances and Monthly Payment Advances made by the Servicer, which shall continue to remain outstanding) (such advances, “Administrative Advances”). All Administrative Advances shall accrue interest in accordance with Section 3.23. Notwithstanding any provision herein, the Servicer shall not be obligated to make any Administrative Advance that it determines, together with interest thereon, will constitute a Nonrecoverable Advance if made.

 

The Servicer shall pay to the Certificate Administrator (on behalf of itself and the Trustee) and advance or pay to the Special Servicer, if applicable, from the Collection Account as provided above amounts permitted to be paid to the Special Servicer, the Certificate Administrator and the Trustee, as applicable, therefrom, promptly upon receipt of certificates of a Servicing Officer of the Special Servicer and a Responsible Officer of the Certificate Administrator and the Trustee, as applicable, describing the item and amount to which the Special Servicer and the Trustee, respectively, are entitled; provided, however, the Servicer shall pay the Certificate Administrator Fee to the Certificate Administrator without requiring the delivery of such certificate. The Servicer may rely conclusively on any such certificate, shall have no duty to recalculate the amounts stated therein and shall have no liability if the amount paid in reliance thereon is an amount to which the Special Servicer, the Certificate Administrator or the Trustee, as applicable, is not entitled.

 

(d)          The Certificate Administrator shall establish and maintain in the name of the Certificate Administrator on behalf of the Trustee and for the benefit of the Certificateholders, a segregated non-interest bearing reserve account (which may be a subaccount of the Distribution Account) (the “Interest Reserve Account”). The Interest Reserve Account must be an Eligible Account or a subaccount of an Eligible Account. Funds on deposit in the Interest Reserve Account shall be uninvested. On each Distribution Date occurring in any February and on any Distribution Date occurring in any January that occurs in a year that is not a leap year (unless, in either case, such Distribution Date is the final Distribution Date), the Certificate Administrator shall deposit into the Interest Reserve Account an amount equal to one day’s net interest collected on the principal balance of each Trust Loan Note as of the Loan

 

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Payment Date occurring in the calendar month preceding the calendar month in which such Distribution Date occurs at the applicable Net Trust Loan Rate (net of the Servicing Fee, the CREFC® Intellectual Property Royalty License Fee, the Operating Advisor Fee and the Certificate Administrator Fee payable therefrom and exclusive of Default Interest) to the extent a full Monthly Payment or Monthly Payment Advance is made in respect thereof (all amounts so deposited in any consecutive January and February, “Withheld Amounts”). On each Remittance Date occurring in March (or February, if the related Distribution Date is the final Distribution Date), the Certificate Administrator shall withdraw from the Interest Reserve Account an amount equal to the Withheld Amounts from the preceding January and February, if any, and transfer such amounts into the Distribution Account.

 

Section 3.5.     Distribution Account. (a)  The Certificate Administrator shall establish and maintain on behalf of the Trustee and for the benefit of the Certificateholders a segregated non-interest bearing trust account (the “Distribution Account”), which shall be deemed to include the Lower-Tier Distribution Account and the Upper-Tier Distribution Account, which shall be subaccounts of the Distribution Account for the benefit of the Certificateholders and the Trustee, as holder of the Uncertificated Lower-Tier Interests. The Distribution Account must be an Eligible Account. On each Remittance Date, the Servicer shall transfer from the Collection Account to the Certificate Administrator for deposit into the Distribution Account all Available Funds remaining on deposit therein, after giving effect to the withdrawals made pursuant to Section 3.4(c). The Certificate Administrator shall credit the funds remitted by the Servicer from the Collection Account to the Distribution Account. Amounts held in the Distribution Account shall be uninvested.

 

The Certificate Administrator shall make withdrawals from the Distribution Account to make distributions to the Holders of the Certificates pursuant to Section 4.1.

 

(b)          The Certificate Administrator shall make or be deemed to have made withdrawals from the Lower-Tier Distribution Account in the following order of priority and only for the following purposes:

 

(i)          to make deposits of the Lower-Tier Distribution Amount pursuant to Section 4.1(b) and Section 4.3(b) into the Upper-Tier Distribution Account and to make distributions to the Holder of the Class R Certificates (in respect of the Class LT-R Interest) pursuant to Section 4.1(b);

 

(ii)          to withdraw amounts deposited into the Lower-Tier Distribution Account in error and pay such amounts to the Persons entitled thereto; and

 

(iii)         to clear and terminate the Lower-Tier Distribution Account pursuant to Section 10.1.

 

(c)          The Certificate Administrator shall make withdrawals from the Upper-Tier Distribution Account in the following order of priority and only for the following purposes:

 

(i)           to withdraw amounts deposited in error and to withdraw amounts due to it under Section 3.4(c), to the extent such amounts were not withdrawn and paid to it by the Servicer under Section 3.4(c);

 

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(ii)          to make distributions to Holders of the Regular Certificates and the Class R Certificates (in respect of the Class UT-R Interest) on each Distribution Date pursuant to Section 4.1 or Section 9.1 as applicable; and

 

(iii)         to clear and terminate the Upper-Tier Distribution Account at the termination of this Agreement pursuant to Section 9.1.

 

Section 3.6.      Foreclosed Property Account. The Special Servicer shall establish and maintain one or more deposit accounts (the “Foreclosed Property Account”) in the name of either (a) “AEGON USA Realty Advisors, LLC, as Special Servicer on behalf of Xxxxx Fargo Bank, National Association, as Trustee for the benefit of the Certificateholders of CSMC 2017-MOON, Commercial Mortgage Pass-Through Certificates, Series 2017-MOON” related to the Foreclosed Property, if any, held in the name of the Special Servicer for the benefit of the Trustee on behalf of the Certificateholders and the Companion Loan Holders or (b) in the name of the limited liability company formed under Section 3.14. The Foreclosed Property Account must be an Eligible Account. The Special Servicer shall deposit into the Foreclosed Property Account within two Business Days of receipt all funds collected and received in connection with the operation or ownership of such Foreclosed Property. On or before the last day of each Collection Period, the Special Servicer shall withdraw the funds in the Foreclosed Property Account, net of certain expenses and/or reserves, and deposit them into the Collection Account in accordance with Section 3.4(a). The Special Servicer shall notify the Trustee and the Certificate Administrator in writing of the location and account number of the Foreclosed Property Account and shall notify the Trustee and the Certificate Administrator in writing prior to any subsequent change thereof.

 

Section 3.7.       Appraisal Reductions. (a)  Promptly upon the occurrence of an Appraisal Reduction Event, the Special Servicer shall notify the Servicer, the Operating Advisor, the Certificate Administrator and the Trustee (and so long as no Control Termination Event is continuing, the Controlling Class Representative) (i) of the occurrence of an Appraisal Reduction Event, (ii) (A) order and (B) use efforts consistent with Accepted Servicing Practices to obtain an independent Appraisal of the Property (unless an appraisal of the Property was performed within nine (9) months prior to the Appraisal Reduction Event and the Special Servicer is not aware of any material change in the market or condition or value of the Property since the date of such Appraisal (in which case, such appraisal shall be used by the Special Servicer)) and (iii) determine (no later than the first Distribution Date on or following the receipt of such appraisal or determination to use an existing Appraisal) (so long as such Appraisal was received at least three (3) Business Days prior to such Distribution Date (in which case it shall determine no later than the second Distribution Date following the receipt of such Appraisal)) on the basis of the applicable Appraisal, and receipt of information reasonably requested by the Special Servicer from the Servicer in the Servicer’s possession necessary to calculate the Appraisal Reduction Amount (which information shall be delivered within two (2) Business Days after receipt of any such request) whether there exists any Appraisal Reduction Amount and, if so, give reasonably prompt notice thereof to the Servicer, the Trustee, the Companion Loan Holders (or, in the case of a Companion Loan that is part of an Other Securitization Trust, the master servicer, special servicer and trustee with respect to such Other Securitization Trust) and the Certificate Administrator. The cost of obtaining such appraisal shall be paid by the Servicer as a Property Protection Advance or an Administrative Advance unless it would constitute a

 

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Nonrecoverable Advance and in such case, as an expense of the Trust. Updates of appraisals shall be obtained by the Special Servicer and paid for by the Servicer as a Property Protection Advance or an Administrative Advance (or paid for by the Trust if the Servicer determines that such Advance would constitute a Nonrecoverable Advance) every nine (9) months for so long as an Appraisal Reduction Event exists, and the Appraisal Reduction Amount shall be adjusted accordingly, and, if required in accordance with any such adjustment, each Class of Certificates that has been notionally reduced as a result of Appraisal Reduction Amounts shall have its related Certificate Balance notionally restored (or reduced if applicable) to the extent required by such adjustment of the Appraisal Reduction Amount, and there shall be a redetermination of whether a Control Termination Event or a Consultation Termination Event is then in effect. Any such appraisal obtained shall be delivered by the Special Servicer to the Certificate Administrator, the Trustee, the Operating Advisor, the Servicer and, so long as no Control Termination Event is continuing, the Controlling Class Representative, in electronic format (which format is reasonably acceptable to the Certificate Administrator), and the Certificate Administrator shall make such Appraisal available to Privileged Persons pursuant to Section 8.14(b).

 

The Holders of Certificates representing the majority of the Certificate Balance of any Class of Certificates that is or would be determined to no longer be the Controlling Class (such Class, an “Appraised Out Class”) as a result of an allocation of an Appraisal Reduction Amount in respect of such Class shall have the right to challenge the Special Servicer’s Appraisal Reduction Amount determination and, at their sole expense, obtain a second Appraisal of any Property an Appraisal Reduction Event has occurred (such Holders, the “Requesting Holders”). The Requesting Holders shall cause the Appraisal to be prepared on an “as is” basis by an Appraiser in accordance with MAI standards, and the Appraisal shall be reasonably acceptable to the Special Servicer in accordance with Accepted Servicing Practices. The Requesting Holders shall provide the Special Servicer with notice of their intent to challenge the Special Servicer’s Appraisal Reduction Amount determination within 10 days of the Requesting Holders’ receipt of written notice of the determination of such Appraisal Reduction Amount.

 

An Appraised Out Class shall be entitled to continue to exercise the rights of the Controlling Class until 10 days following its receipt of written notice of the Appraisal Reduction Amount, unless the Requesting Holders provide written notice of their intent to challenge such Appraisal Reduction Amount to the Special Servicer and the Certificate Administrator within such 10 day period pursuant to the immediately preceding paragraph. If the Requesting Holders provide such notice, then the Appraised Out Class shall be entitled to continue to exercise the rights of the Controlling Class until the earliest of (i) 120 days following the related Appraisal Reduction Event, unless the Requesting Holders provide the second appraisal within such 120 day period, (ii) the determination by the Special Servicer (described below) that a recalculation of the Appraisal Reduction Amount is not warranted or that such recalculation does not result in the Appraised Out Class remaining the Controlling Class and (iii) the occurrence of a Consultation Termination Event. After the Appraised Out Class is no longer entitled to exercise the rights of the Controlling Class, the rights of the Controlling Class shall be exercised by the Class of Control Eligible Certificates immediately senior to such Appraised Out Class as the Controlling Class.

 

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In addition to the foregoing, the Holders of Certificates representing the majority of the Certificate Balance of any Appraised Out Class shall have the right, at their sole expense, to require the Special Servicer to order an additional Appraisal of the Property if an Appraisal Reduction Event has occurred if an event has occurred at or with regard to the Property that would have a material effect on its Appraised Value, and the Special Servicer shall use its reasonable best efforts to ensure that such Appraisal is delivered within 30 days from receipt of such Holders’ written request and shall ensure that such Appraisal is prepared on an “as is” basis by an Appraiser in accordance with MAI standards; provided that the Special Servicer shall not be required to obtain such Appraisal if the Special Servicer determines in accordance with Accepted Servicing Practices that no events at or with regard to the related Property have occurred that would have a material effect on such Appraised Value of the related Property.

 

Upon receipt of an Appraisal provided by, or requested by, Holders of an Appraised Out Class pursuant to this Section and any other information reasonably requested by the Special Servicer from the Servicer reasonably required to calculate or recalculate the Appraisal Reduction Amount, the Special Servicer shall determine, in accordance with Accepted Servicing Practices, whether, based on its assessment of such additional Appraisal, any recalculation of the Appraisal Reduction Amount is warranted and, if so warranted, shall recalculate such Appraisal Reduction Amount based upon such additional Appraisal. If required by any such recalculation, the Appraised Out Class shall be reinstated as the Controlling Class. The Special Servicer shall promptly deliver notice to the Certificate Administrator of any such determination and recalculation, and the Certificate Administrator shall promptly post such notice to the Certificate Administrator’s Website.

 

Appraisals that are permitted to be presented by, or obtained by the Special Servicer at the request of, Holders of an Appraised Out Class shall be in addition to any Appraisals that the Special Servicer may otherwise be required to obtain in accordance with Accepted Servicing Practices or this Agreement without regard to any appraisal requests made by any Holder of an Appraised Out Class.

 

(b)          While an Appraisal Reduction Amount exists, (i) the amount of any Monthly Payment Advances shall be reduced as provided in Section 3.23(a), and (ii) the existence thereof will be taken into account for purposes of determining (a) the Voting Rights of certain Classes of Certificates as provided in Section 3.7(c) or (b) if a Control Termination Event is continuing.

 

(c)          The Certificate Balance of each class of the Sequential Pay Certificates shall be notionally reduced (solely for purposes of determining (x) the Voting Rights of the related Classes and the Controlling Class and (y) whether a Control Termination Event is continuing on any Distribution Date) on any Distribution Date, to the extent of the Appraisal Reduction Amount allocated to such Class on such Distribution Date. The Whole Loan shall be treated as a single loan for purposes of calculating the Appraisal Reduction Amount. Appraisal Reduction Amounts with respect to the Whole Loan shall be allocated, first, to Note B, up to its respective outstanding principal balance, and then to Note A-1 and the Companion Loans on a pro rata and pari passu basis (based on their relative outstanding principal balances). The Appraisal Reduction Amount allocated to the Trust Loan Notes for any Distribution Date shall be applied to notionally reduce the Certificate Balances of the Sequential Pay Certificates in the

 

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following order of priority: first, to the Class HRR Certificates; second, to the Class E Certificates; third, to the Class D Certificates; fourth, to the Class C Certificates; and fifth, to the Class B Certificates; (provided in each case that no Certificate Balance in respect of any such Class may be notionally reduced below zero). Appraisal Reduction Amounts shall not be applied to notionally reduce the Certificate Balance of any Class A Certificate.

 

(d)          In the event that a portion(s) of one or more Monthly Payment Advances with respect to the Trust Loan was reduced as a result of an Appraisal Reduction Event, the amount of the Net Liquidation Proceeds to be applied to interest shall be reduced by the aggregate amount of such reductions and the portion of such Net Liquidation Proceeds to be applied to principal shall be increased by such amount, and if the amounts of the Net Liquidation Proceeds to be applied to principal have been applied to pay the principal of the Trust Loan in full, any remaining Net Liquidation Proceeds shall then be applied to pay any remaining accrued and unpaid interest on the Trust Loan in accordance with Section 1.3.

 

(e)          If (i) an Appraisal Reduction Event has occurred, (ii) with respect to the Property, either (A) no Appraisal or update of the Appraisal has been obtained or conducted with respect to the Property or Foreclosed Property, as the case may be, during the nine (9) month period prior to the date of such Appraisal Reduction Event or (B) a material change in the circumstances surrounding the Property or Foreclosed Property, as the case may be, has occurred since the date of the most recent Appraisal that would materially adversely affect the value of the Property or Foreclosed Property, as the case may be, and (iii) no new Appraisal has been obtained or conducted for the Property or Foreclosed Property, as the case may be, within 60 days after the Appraisal Reduction Event has occurred, then (x) until the new Appraisal is obtained for the Property, the appraised value of the Property for purposes of determining the Appraisal Reduction Amount shall be equal to 75% of the appraised value set forth in the most recent Appraisal for the Property or Foreclosed Property, as the case may be (the “Assumed Appraised Value”), and (y) upon receipt or performance of the new Appraisal by the Special Servicer, the appraised value of the Property or Foreclosed Property, as the case may be, shall be based on such new Appraisal and the Appraisal Reduction Amount will be recalculated in accordance with the definition of Appraisal Reduction Amount.

 

Section 3.8.       Investment of Funds in the Collection Account and the Foreclosed Property Account. (a)  The Servicer (and, with respect to the Foreclosed Property Account, the Special Servicer) may direct any depository institution maintaining the Collection Accounts or the Foreclosed Property Account, respectively (each, for purposes of this Section 3.8, an “Investment Account”), to invest the funds in such Investment Account in one or more Permitted Investments that bear interest or are sold at a discount, and that mature, unless payable on demand, no later than the Business Day preceding the date on which such funds are required to be withdrawn from such Investment Account pursuant to this Agreement. Any direction by the Servicer or the Special Servicer, as applicable, to invest funds on deposit in an Investment Account shall be in writing and shall certify that the requested investment is a Permitted Investment which matures at or prior to the time required hereby or is payable on demand. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an Investment Account shall be made in the name of the Trustee for the benefit of the Certificateholders (in its capacity as such) or in the name of a nominee of the Trustee. The Trustee shall have sole control (except with respect to investment direction, which

 

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shall be in the control of the Servicer (or the Special Servicer, with respect to the Foreclosed Property Account) as an independent contractor to the Trust Fund) over each such investment and any certificate or other instrument evidencing any such investment shall be delivered directly to the Trustee or its agent (which shall initially be the Servicer or the Special Servicer, as applicable), together with any document of transfer, if any, necessary to transfer title to such investment to the Trustee for the benefit of the Certificateholders or its nominee. The Trustee and the Certificate Administrator shall have no responsibility or liability with respect to the investment directions of the Servicer or the Special Servicer, as applicable, or any losses resulting therefrom, whether from Permitted Investments or otherwise. In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Servicer and the Special Servicer, as applicable, shall:

 

(i)           consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and

 

(ii)          demand payment of all amounts due thereunder promptly upon determination by the Servicer or Special Servicer, as applicable, that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the related Investment Account.

 

(b)          All net income and gain realized from investment of funds deposited in the Collection Account and any Reserve Account, but only to the extent that the Loan Documents do not require such funds to be remitted to the Loan Borrower, shall be for the benefit of the Servicer in accordance with the terms and priorities of this Agreement. All net income and gain realized from investment of funds deposited in the Foreclosed Property Account shall be for the benefit of the Special Servicer. Any net losses on funds in the Collection Account, any Reserve Account or the Foreclosed Property Account shall be reimbursed by the Servicer or the Special Servicer, as applicable, from its own funds promptly, but in any event on or prior to the Remittance Date following the realization of such loss.

 

(c)          Except as otherwise expressly provided in this Agreement, if any default occurs in the making of a payment due under any Permitted Investment, or if a default occurs in any other performance required under any Permitted Investment, the Servicer shall take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings. In the event the Servicer takes any such action, the Trust Fund shall pay or reimburse the Servicer, pursuant to Section 3.4(c), for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Servicer in connection therewith.

 

(d)          For the avoidance of doubt, the Collection Account, the Foreclosed Property Account, the Interest Reserve Account and the Lower-Tier Distribution Account (including interest, if any, earned on the investment of funds in such accounts) will be owned by the Lower-Tier REMIC, and the Upper-Tier Distribution Account (including interest, if any, earned on the investment of funds in such account) will be owned by the Upper-Tier REMIC, each for federal income tax purposes.

 

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(e)          Notwithstanding the foregoing, neither the Servicer, nor the Special Servicer shall cover any losses from the bankruptcy or insolvency of a depository institution holding an account described in this Section 3.8, so long as (i) such depositary institution or trust company satisfied the qualifications set forth in the definition of Eligible Institution at the time such deposit was made and such institution was not an Affiliate of the Servicer or the Special Servicer, as applicable and (ii) such loss was incurred within 30 days after the earlier of (a) the date of such bankruptcy or insolvency or (b) the date on which the depositary institution or trust company failed to satisfy the qualifications set forth in the definition of Eligible Institution.

 

Section 3.9.      Payment of Taxes, Assessments, etc. The Servicer (other than with respect to the Foreclosed Property) and the Special Servicer (with respect to the Foreclosed Property) shall maintain accurate records with respect to the Property (or the Foreclosed Property, as the case may be) reflecting the status of taxes, assessments, charges and other similar items that are or may become a lien on the Property (or the Foreclosed Property, as the case may be) and the status of insurance premiums payable in respect of insurance policies required to be maintained pursuant to Section 3.11 hereof. The Servicer shall obtain, from time to time, all bills for the payment of such items (including renewal premiums). The Servicer shall pay (or cause to be paid) real estate taxes, insurance premiums and other similar items from funds in the applicable Reserve Account in accordance with the Loan Agreement at such time as may be required by the Loan Documents. If the Loan Borrower does not make the necessary payments and/or a Loan Event of Default has occurred and amounts in the applicable Reserve Account are insufficient to make such payments, the Servicer shall make a Property Protection Advance, subject to the determination of non-recoverability provided in Section 3.23, from its own funds for amounts payable with respect to all such items related to a Property when and as the same shall become due and payable. The Servicer shall ensure that the amount of funds in the applicable Reserve Account is increased when and if applicable taxes, assessments, charges and other similar items, ground rents or insurance premiums are increased, in accordance with the terms of the Loan Agreement.

 

Section 3.10.    Appointment of Special Servicer. (a)  AEGON USA Realty Advisors, LLC is hereby appointed as the initial Special Servicer to service the Whole Loan while a Special Servicing Loan Event has occurred and is continuing and perform the other obligations of the Special Servicer hereunder.

 

(b)          If there is a Special Servicer Termination Event with respect to any Special Servicer, such Special Servicer may be removed and replaced pursuant to Section 7.1. The Trustee shall, promptly after receiving notice of any such removal, so notify the Servicer, the Companion Loan Holders and, subject to Section 10.17, the 17g-5 Information Provider (who shall promptly post it to the 17g-5 Information Provider’s Website, pursuant to Section 10.16). The appointment of any such successor Special Servicer shall not relieve the Servicer or the Trustee of their respective obligations to make Advances as set forth herein; provided, however, the initial Special Servicer specified above shall not be liable for any actions or any inaction of such successor Special Servicer. No termination fee shall be payable to the terminated Special Servicer. No termination of the Special Servicer and appointment of a successor Special Servicer shall be effective until the successor Special Servicer has assumed all of its responsibilities, duties and liabilities hereunder in writing, a Companion Loan Rating Agency Confirmation with respect to such appointment has been delivered to the Trustee and Rating

 

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Agency Confirmation with respect to such appointment has been delivered to the Trustee. Any successor Special Servicer shall be deemed to make the representations and warranties provided for in Section 2.5(a) mutatis mutandis as of the date of its succession. The terminated Special Servicer shall retain all rights accruing to it under this Agreement, including the right to receive fees accrued prior to its termination and other amounts payable to it (including indemnification payments).

 

(c)          Upon determining that a Special Servicing Loan Event has occurred and is continuing, the Servicer shall immediately give notice thereof to the Special Servicer, the Operating Advisor, the Certificate Administrator and the Trustee, and the Servicer shall use its reasonable efforts to provide the Special Servicer with all information, documents (but excluding the original documents constituting the Mortgage File) and records (including records stored electronically on computer tapes, magnetic discs and the like) relating to the Whole Loan and reasonably requested by the Special Servicer to enable it to assume its duties hereunder with respect thereto (and concurrently provide a copy of such Mortgage File, exclusive of all Privileged Information, to the Operating Advisor). The Servicer shall use its reasonable efforts to comply with the preceding sentence within five Business Days of the date that a Special Servicing Loan Event has occurred. The Servicer in any event shall continue to act as Servicer and administrator of the Whole Loan until the Special Servicer has commenced the servicing of the Whole Loan, upon the occurrence and during the continuation of a Special Servicing Loan Event, which shall occur, in the case of a Special Servicing Loan Event, upon the receipt by the Special Servicer of the information, documents and records referred to in the preceding sentence. The Special Servicer shall instruct the Loan Borrower to continue to remit all payments in respect of the Whole Loan to the Servicer. The Servicer shall forward any notices it would otherwise send to the Loan Borrower under the Whole Loan to the Special Servicer who shall send such notice to the Loan Borrower while a Special Servicing Loan Event has occurred and is continuing.

 

(d)          Upon determining that a Special Servicing Loan Event is no longer continuing, the Special Servicer shall immediately give notice thereof to the Servicer, the Operating Advisor, the Certificate Administrator, the Trustee and the Companion Loan Holders, and upon giving such notice such Special Servicing Loan Event shall cease, the Special Servicer’s obligation to service the Whole Loan shall terminate and the obligations of the Servicer to service and administer the Whole Loan shall resume and the Special Servicer shall return all of the information and materials furnished to the Special Servicer pursuant to Section 3.10(c) to the Servicer.

 

(e)          In making a Major Decision or in servicing the Whole Loan during the continuance of a Special Servicing Loan Event, the Servicer or the Special Servicer, as applicable, shall provide to the Certificate Administrator originals of documents entered into in connection therewith that are required to be included within the definition of “Mortgage File” for inclusion in the Mortgage File (to the extent such documents are in the possession of the Servicer or the Special Servicer, as applicable) and copies of any additional related Whole Loan information, including correspondence with the Loan Borrower, and the Special Servicer shall promptly provide copies of all of the foregoing to the Servicer as well as copies of any related analysis or internal review prepared by or for the benefit of the Special Servicer.

 

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(f)           During any period in which a Special Servicing Loan Event is continuing, no later than the Business Day preceding each date on which the Servicer is required to furnish a report under Section 3.18(a) to the Certificate Administrator, the Special Servicer shall deliver to the Servicer a written statement describing (i) the amount of all payments on account of interest received on each Note, the amount of all payments on account of principal received on each Note, the amount of Insurance Proceeds and Net Liquidation Proceeds received, the amount of any Foreclosure Proceeds received with respect to the Property, and the amount of net income or net loss, as determined from management of a trade or business on, the furnishing or rendering of a non-customary service to the tenants of, or the receipt of any rental income that does not constitute rents from real property with respect to, the Foreclosed Property, in each case in accordance with Section 3.15 and (ii) such additional information relating to the Whole Loan as the Servicer or the Certificate Administrator reasonably requests to enable it to perform its duties under this Agreement.

 

(g)          Notwithstanding the provisions of the preceding subsection (c), the Servicer shall maintain ongoing payment records with respect to the Whole Loan and shall provide the Special Servicer with any information reasonably required by the Special Servicer to perform its duties under this Agreement.

 

(h)          The Special Servicer, at the earlier of (x) within 60 days after the occurrence of a Special Servicing Loan Event and (y) prior to taking action with respect to any Major Decision (or making a determination not to take action with respect to a Major Decision) if a Special Servicing Loan Event occurs, shall prepare a report (the “Asset Status Report”) for the Whole Loan. Each Asset Status Report will be delivered in electronic format to the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect), the Depositor, the Operating Advisor, the Certificate Administrator, the Trustee, the Servicer, the Companion Loan Holders (as and to the extent required under Section 5(d) of the Co-Lender Agreement) and, subject to Section 10.17, the Rating Agencies; provided, however, that (1) the Special Servicer shall not be required to deliver an Asset Status Report to the Controlling Class Representative if they are the same entity or affiliates of each other and (2) the Special Servicer shall not deliver any Asset Status Report to the Controlling Class Representative or a Controlling Class Certificateholder that is a Borrower Related Party. Such Asset Status Report shall be consistent with Accepted Servicing Practices and set forth the following information to the extent reasonably determinable:

 

(i)           summary of the status of the Whole Loan and any negotiations with the Loan Borrower;

 

(ii)          a discussion of the legal and environmental considerations reasonably known at such time to the Special Servicer, consistent with Accepted Servicing Practices, that are applicable to the exercise of remedies as aforesaid and to the enforcement of any related guaranties or other collateral for the Whole Loan and whether outside legal counsel has been retained;

 

(iii)         the most current rent roll and income or operating statement available for the Property;

 

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(iv)         the Special Servicer’s recommendations on how the Whole Loan might be returned to performing status or otherwise realized upon;

 

(v)          the appraised value of the Property together with the appraisal or the assumptions used in the calculation thereof;

 

(vi)         the status of any foreclosure actions or other proceedings undertaken with respect thereto, any proposed workouts with respect thereto and the status of any negotiations with respect to such workouts, and an assessment of the likelihood of additional Loan Events of Default;

 

(vii)        a description of any proposed actions;

 

(viii)       a description of any proposed amendment, modification or waiver of a material term of a ground lease;

 

(ix)          the alternative courses of action considered by the Special Servicer in connection with the proposed actions;

 

(x)           the decision that the Special Servicer made or intends or proposes to make, including a narrative analysis setting forth the Special Servicer’s rationale for its proposed decision, including its rejection of the alternatives; and an analysis of whether or not taking such action is reasonably likely to produce a greater recovery on a present value basis than not taking such action, setting forth (x) the basis on which the Special Servicer made such determination and (y) the net present value calculation (including the applicable discount rate used) and all related assumptions. In connection with the foregoing analysis, if the Loan Borrower has indicated its refusal to pay any Work-out Fees, Special Servicing Fees or Liquidation Fees due to the Special Servicer, the Special Servicer must consider the costs to the Trust and analyze as an alternative a sale of the Whole Loan or of the related Foreclosed Property or other exercise of remedies;

 

(xi)          a summary of the status of any action that was described in the most recent prior Asset Status Report and subsequently effected by the Special Servicer; and

 

(xii)         such other information as the Special Servicer deems relevant in light of the proposed action and Accepted Servicing Practices.

 

For so long as a Control Termination Event has not occurred and is not continuing, the Controlling Class Representative will have the right to disapprove the Asset Status Report prepared by the Special Servicer within 10 Business Days after receipt of the Asset Status Report. For so long as a Control Termination Event has not occurred and is not continuing, if within 10 Business Days of receiving an Asset Status Report, the Controlling Class Representative does not disapprove such Asset Status Report in writing or if the Special Servicer makes a determination, in accordance with Accepted Servicing Practices, that the disapproval by the Controlling Class Representative (communicated to the Special Servicer within 10 Business Days) is not in the best interest of all the Certificateholders, then the Controlling Class Representative shall be deemed to have approved such Asset Status Report and the Special Servicer shall implement the recommended action as outlined in such Asset Status Report;

 

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provided, however, that the Special Servicer may not take any action that is contrary to applicable law, Accepted Servicing Practices or the terms of the applicable Loan Documents. In addition, so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative may object to any asset status report within 10 business days of receipt; provided, however, that if the Special Servicer determines that action recommended in an Asset Status Report is necessary to protect the Property or the interests of the Certificateholders from potential harm if such action is not taken, or if a failure to take any such action at such time would be inconsistent with Accepted Servicing Practices, the Special Servicer may take actions with respect to the Property before the expiration of the 10 Business Day period if the Special Servicer reasonably determines in accordance with Accepted Servicing Practices that failure to take such actions before the expiration of the 10 Business Day period would materially adversely affect the interest of the Certificateholders, and (so long as no Control Termination Event has occurred and is continuing) the Special Servicer has made a reasonable effort to contact the Controlling Class Representative. If, so long as no Control Termination Event has occurred and is continuing, the Controlling Class Representative disapproves such Asset Status Report within 10 Business Days of receipt and the Special Servicer has not made an affirmative determination pursuant to the proviso in the preceding sentence, the Special Servicer will revise such Asset Status Report and deliver to the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect), the Operating Advisor, the Certificate Administrator, the related Companion Loan Holders and, subject to Section 10.17 of this Agreement, each Rating Agency a new Asset Status Report as soon as practicable, but in no event later than 30 days after such disapproval. So long as no Control Termination Event is continuing, the Special Servicer shall revise such Asset Status Report as described above until the Controlling Class Representative shall fail to disapprove such revised Asset Status Report in writing within 10 Business Days of receiving such revised Asset Status Report or until the Special Servicer makes a determination, consistent with Accepted Servicing Practices, that such objection is not in the best interests of all the Certificateholders and, if applicable, the related Companion Loan Holders (as a collective whole as if such Certificateholders constitute a single lender) provided that, if the Controlling Class Representative has not approved the Asset Status Report for a period of 60 Business Days following the first submission of an Asset Status Report, the Special Servicer may act upon the most recently submitted form of Asset Status Report, if consistent with Accepted Servicing Practices.

 

The Special Servicer shall promptly deliver each Asset Status Report prepared in connection with the Specially Serviced Loan to (i) the Operating Advisor and (ii) the Controlling Class Representative (for so long as no Consultation Termination Event has occurred). After the occurrence and during the continuance of an Operating Advisor Consultation Event, the Operating Advisor shall be entitled to consult with, and provide comments to the Special Servicer in respect of each Asset Status Report, if any, within ten (10) Business Days following the later of (i) receipt of such Asset Status Report or (ii) receipt of such additional information reasonably requested by the Operating Advisor related thereto, and propose possible alternative courses of action to the extent it determines such alternatives to be in the best interest of the Certificateholders (including any Certificateholders that are holders of the Controlling Class Certificates), as a collective whole. The Special Servicer shall consider such alternative courses of action, if any, and any other feedback provided by the Operating Advisor (and if no Consultation Termination Event has occurred and is continuing, the Controlling Class

 

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Representative) in connection with the Special Servicer’s preparation of any Asset Status Report that is provided while an Operating Advisor Consultation Event has occurred and is continuing. The Special Servicer shall revise the Asset Status Report as it deems necessary to take into account any input and/or comments from the Operating Advisor (and for so long as no Consultation Termination Event is continuing, the Controlling Class Representative), to the extent the Special Servicer determines that the Operating Advisor’s and/or Controlling Class Representative’s input and/or recommendations are consistent with Accepted Servicing Practices, the Co-Lender Agreement or the terms of the applicable Loan Documents and in the best interest of the Certificateholders as a collective whole.

 

In connection with the approval or consultation rights of the Controlling Class Representative and/or Operating Advisor with respect to any Asset Status Report, if the Special Servicer determines that action recommended in an Asset Status Report is necessary to protect the Property or the interests of the Certificateholders from potential harm if such action is not taken, or if a failure to take any such action at such time would be inconsistent with Accepted Servicing Practices, the Special Servicer may take actions with respect to the Property before the expiration of the 10 Business Day period if the Special Servicer reasonably determines in accordance with Accepted Servicing Practices that failure to take such actions before the expiration of the 10 Business Day period would materially adversely affect the interest of the Certificateholders, and the Special Servicer has made a reasonable effort to contact the Controlling Class Representative or the Operating Advisor, as applicable.

 

After the occurrence and during the continuance of a Control Termination Event, the Controlling Class Representative shall have no right to consent to any Asset Status Report under this Section 3.10(h). After the occurrence and during the continuance of a Control Termination Event but prior to the occurrence of a Consultation Termination Event, the Controlling Class Representative, and after the occurrence and during the continuance of an Operating Advisor Consultation Event, the Operating Advisor, shall consult with the Special Servicer (telephonically or electronically) and propose alternative courses of action and provide other feedback in respect of any Asset Status Report. After the occurrence of a Consultation Termination Event, the Controlling Class Representative (other than in its capacity as a Certificateholder) shall have no right to receive any Asset Status Report or otherwise consult with the Special Servicer with respect to Asset Status Reports and the Special Servicer shall only be obligated to consult with the Operating Advisor with respect to any Asset Status Report as described above. The Special Servicer may choose to revise the Asset Status Report as it deems reasonably necessary in accordance with Accepted Servicing Practices to take into account any input and/or recommendations of the Operating Advisor or the Controlling Class Representative during the applicable periods described above, but is under no obligation to follow any particular recommendation of the Operating Advisor or the Controlling Class Representative.

 

The Special Servicer may, from time to time, modify any Asset Status Report it has previously delivered and implement such report, provided such report shall have been prepared, reviewed and not rejected pursuant to the terms of this Section 3.10(h). In any event, for so long as a Control Termination Event has not occurred and is not continuing, if the Controlling Class Representative does not approve an Asset Status Report within 60 Business Days from the first submission thereof, the Special Servicer shall take such action as directed by

 

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the Controlling Class Representative, provided such action does not violate Accepted Servicing Practices.

 

Notwithstanding anything to the contrary herein, after the occurrence and during the continuance of a Consultation Termination Event, the Controlling Class Representative shall have no right to receive any Asset Status Report or otherwise consult with the Special Servicer with respect to any matter set forth therein. After the occurrence and during the continuance of a Control Termination Event, the Controlling Class Representative shall have no right to consent to any Asset Status Report under this Section 3.10(h). The Special Servicer will be required to (x) deliver to the Certificate Administrator a proposed notice to the Certificateholders that will include a summary of the Final Asset Status Report in an electronic format which format is reasonably acceptable to the Certificate Administrator (which must be a brief summary of the current status of the Property and current strategy with respect to the Trust Loan), and the Certificate Administrator will be required to post such notice and summary (but not such Final Asset Status Report) on the Certificate Administrator’s Website and (y) implement the Asset Status Report in the form delivered to the Depositor. The Special Servicer may, from time to time, modify any Asset Status Report it has previously delivered and, following delivery of such modified Asset Status Report to the 17 g-5 Information Provider and a summary of the same to the Certificate Administrator, which the 17 g-5 Information Provider and the Certificate Administrator, respectively shall post on their respective Websites pursuant to Section 8.14(c) or Section 10.17, as applicable.

 

(i)            During the continuance of a Special Servicing Loan Event, the Special Servicer shall have the authority to meet with the Loan Borrower and take any actions consistent with Section 3.24, Accepted Servicing Practices and the most recent Asset Status Report.

 

(j)            In addition, during the continuance of a Special Servicing Loan Event, on the last day of each Collection Period the Special Servicer shall prepare and deliver to the Servicer the CREFC® Special Servicer Loan File with respect to the Whole Loan.

 

(k)           Beginning in 2018, the Special Servicer shall prepare and file on a timely basis the reports of foreclosure and abandonment of the Property required by Section 6050J of the Code and the reports of discharges of indebtedness income in respect of the Trust Loan and each Companion Loan required by Section 6050P of the Code.

 

(l)            Notwithstanding the foregoing, neither the Servicer or the Special Servicer shall follow any advice, direction or consultation provided by the Controlling Class Representative or the Operating Advisor that would require or cause the Servicer or the Special Servicer to violate any applicable law or provisions of the Code resulting in an Adverse REMIC Event (other than the imposition of a tax on “net income from foreclosure property”), be inconsistent with Accepted Servicing Practices, require or cause the Special Servicer to violate provisions of this Agreement or the Co-Lender Agreement, require or cause the Special Servicer to violate the terms of the Whole Loan, expose any Certificateholder or any party to this Agreement or their Affiliates, officers, directors or agents to any claim, suit or liability or materially expand the scope of the responsibilities of the Special Servicer or Servicer, as applicable, under this Agreement.

 

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Section 3.11.     Maintenance of Insurance and Errors and Omissions and Fidelity Coverage. (a)  The Servicer, consistent with Accepted Servicing Practices and the Loan Documents, shall use efforts consistent with the Accepted Servicing Practices to cause to be maintained by the Loan Borrower (or if the Loan Borrower fail to maintain such insurance in accordance with the Loan Agreement, the Servicer shall cause to be maintained to the extent the Trustee, as mortgagee of record, has an insurable interest) insurance with respect to the Property of the types and in the amounts required to be maintained (to the extent such insurance is available at commercially reasonable rates, provided, that the commercially reasonably requirement shall not apply with respect to terrorism insurance which will be governed by the Loan Documents) by the Loan Borrower under the Loan Documents. The cost of any such insurance maintained by the Servicer shall be advanced by the Servicer, as a Property Protection Advance unless it would be a Nonrecoverable Advance in which case it shall be paid by the Trust, and as applicable, by the Companion Loan Holders pursuant to the Co-Lender Agreement. Neither the Servicer nor the Special Servicer shall be required to maintain, and shall not cause the Loan Borrower to be in default with respect to the failure of the Loan Borrower to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Special Servicer has determined, on an annual basis, that such failure is an Acceptable Insurance Default. In making any determination related to an Acceptable Insurance Default, the Special Servicer, to the extent consistent with Accepted Servicing Practices, is entitled to rely on the opinion of an insurance consultant. Neither the Servicer nor the Special Servicer shall be required to obtain terrorism insurance pursuant to this Agreement to the extent the Loan Borrower would not be obligated to maintain terrorism insurance under the Loan Documents as in effect on the date thereof.

 

(b)          The Special Servicer, consistent with Accepted Servicing Practices and the Loan Documents, shall cause to be maintained such insurance (including environmental insurance) with respect to the Foreclosed Property the Loan Borrower is required to maintain with respect to the Property referred to in subsection (a) of this Section 3.11 or, at the Special Servicer’s election, coverage satisfying insurance requirements consistent with Accepted Servicing Practices. The cost of any such insurance with respect to the Foreclosed Property shall be payable out of amounts on deposit in the Foreclosed Property Account or shall be advanced by the Servicer as a Property Protection Advance unless such advance would be a Nonrecoverable Advance. Any such insurance (other than terrorism insurance, which shall be maintained to the extent required under subsection (a) of this Section 3.11) that is required to be maintained with respect to the Foreclosed Property shall only be so required to the extent such insurance is available at commercially reasonable rates. If the Special Servicer requests the Servicer to make a Property Protection Advance in respect of the premiums due in respect of such insurance, the Servicer shall, as soon as practicable after receipt of such request, make such Property Protection Advance unless such Advance would be a Nonrecoverable Advance, and if the Servicer does not make such Advance, the Trustee (within five (5) Business Days of its receipt of notice of the Servicer’s failure to make such Advance) shall make an Advance of the premiums to maintain such insurance, provided that, in each such case, such obligations shall be subject to the provisions of this Agreement concerning Nonrecoverable Advances, the Trustee as mortgagee of record having an insurable interest and the availability of such insurance at commercially reasonable rates.

 

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(c)          The Servicer or the Special Servicer, as applicable, may satisfy its obligations to cause insurance policies to be maintained by maintaining a master force placed or blanket insurance policy insuring against losses on the Property or the Foreclosed Property, as the case may be for which coverage is otherwise required to be maintained as set forth in the preceding subsections of this Section 3.11. The incremental cost of such insurance allocable to the Property or the Foreclosed Property, if not borne by the Loan Borrower, shall be paid by the Servicer as a Property Protection Advance unless it would be a Nonrecoverable Advance. If such master force placed or blanket insurance policy contains a deductible clause, the Servicer or the Special Servicer, as applicable, shall be obligated to deposit in the Collection Account out of its own funds all sums that would have been deposited therein but for such clause to the extent any such deductible exceeds the deductible limitation that pertained to the Whole Loan, or in the absence of any such deductible limitation, the deductible limitation that is consistent with Accepted Servicing Practices.

 

(d)          Each of the Servicer and the Special Servicer shall obtain and maintain at its own expense, and keep in full force and effect throughout the term of this Agreement, a blanket fidelity bond and an errors and omissions insurance policy, the issuer of which is rated no lower than the applicable Qualified Insurer Ratings, covering its directors, officers and employees, as applicable, in connection with its activities under this Agreement. Each such insurance policy shall protect the Servicer or the Special Servicer, as applicable, against losses resulting directly from forgery, theft, embezzlement, fraud, errors and omissions of such covered persons. Coverage of the Servicer or the Special Servicer under a policy or bond obtained by an Affiliate thereof and providing the coverage required by this Section 3.11(d) shall satisfy the requirements of this Section 3.11(d). The amount of coverage shall be at least equal to the coverage that is required by applicable governmental authorities having regulatory power over the Servicer and the Special Servicer. If no such coverage amounts are imposed by such regulatory authorities, the amount of coverage shall be at least equal to the coverage that would be required by FNMA or FHLMC with respect to the Servicer and the Special Servicer if each were servicing and administering the Whole Loan for FNMA or FHLMC or as otherwise approved by FNMA or FHLMC. In the event that any such bond or policy ceases to be in effect, the Servicer or the Special Servicer, as applicable, shall obtain a comparable replacement bond or policy. Each shall use reasonable effort to cause each and every sub-servicer, if any, to maintain a blanket fidelity bond and an errors and omissions insurance policy meeting the requirements as described above. In lieu of the foregoing, but subject to this Section 3.11, the Servicer and the Special Servicer shall be entitled to self-insure with respect to such risks so long as its (or its immediate or ultimate parent’s) long term unsecured debt rating is rated no lower than “A-” by Standard & Poor’s Ratings Services, a Standard & Poor’s Ratings Services, “A-” by Fitch, “A3” by Moody’s, “A-VIII” by A.M. Best, “A(low)” by DBRS, Inc., or “A-“ or its equivalent by Xxxxx Bond Rating Agency, Inc. (if rated by Xxxxx Bond Rating Agency, Inc.) (or such other rating as to which a Rating Agency Confirmation has been obtained).

 

(e)          No provision of this Section 3.11 requiring such fidelity bond and errors and omissions insurance shall diminish or relieve the Servicer or the Special Servicer from its duties and obligations as set forth in this Agreement. The Certificate Administrator shall be entitled to request, upon receipt of a written request from any Certificateholder, and the Servicer and the Special Servicer shall each deliver or cause to be delivered to the Certificate Administrator, a certificate of insurance from the surety and insurer certifying that such

 

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insurance is in full force and effect. The Certificate Administrator will make any such certificate of insurance available to the requesting Certificateholder on a confidential basis.

 

(f)           The Operating Advisor shall obtain and maintain at its own expense and keep in full force and effect throughout the term of this Agreement an “errors and omissions” insurance policy, the issuer of which is rated no lower than the applicable Qualified Insurer Ratings, covering losses that may be sustained as a result of an officer’s or employee’s errors or omissions.

 

Section 3.12.     Procedures with Respect to the Whole Loan; Realization upon the Property. (a)  Upon the occurrence of a Loan Event of Default, the Special Servicer on behalf of the Trustee, subject to the terms of the Loan Documents and consistent with Accepted Servicing Practices, shall promptly pursue the remedies set forth therein, including foreclosure or other realization on the Property and the other collateral for the Whole Loan. In connection with any foreclosure, enforcement of the applicable Loan Documents or other realization on the Collateral, the Special Servicer shall direct the Servicer to, and the Servicer shall, pay the costs and expenses in any such proceedings as a Property Protection Advance unless the Servicer determines, in accordance with Accepted Servicing Practices, that such Advance would constitute a Nonrecoverable Advance.

 

(b)          Such proposed acceleration of the Whole Loan and/or foreclosure on a Property shall be taken unless the Special Servicer waives such Loan Event of Default (or modifies or amends the Whole Loan to cure the Loan Event of Default), which the Special Servicer may do if such modification, waiver or amendment is consistent with Accepted Servicing Practices and does not result in an Adverse REMIC Event (other than the imposition of a tax on “net income from foreclosure property” under Section 860G(c) of the Code).

 

(c)           In connection with such foreclosure as described in Section 3.12(a) or other realization on the Property, the Special Servicer shall follow Accepted Servicing Practices; provided, however, that the Special Servicer shall not be permitted to direct the Servicer, and neither the Special Servicer nor the Servicer shall be required, to expend its own funds to restore any Property damaged by an Uninsured Cause unless the Servicer or the Special Servicer, as applicable, permitted the related insurance policy to lapse in violation of its respective obligations hereunder. If the Servicer does expend its own funds to restore the Property damaged by an Uninsured Cause (which insurance policy did not lapse in violation of the Servicer’s obligations), such expense shall be a Property Protection Advance. In connection with any foreclosure, enforcement of the Loan Documents or other realization on the Collateral, the Special Servicer shall direct the Servicer to, and the Servicer shall, pay the costs and expenses in any such proceedings as a Property Protection Advance unless the Servicer determines, in accordance with Accepted Servicing Practices, that such Advance would constitute a Nonrecoverable Advance.

 

(d)          Notwithstanding the foregoing, the Special Servicer may not foreclose on the Property on behalf of the Trust and the Companion Loan Holders and thereby be the beneficial owner of the Property, or take any other action with respect to such item that would cause the Trustee, on behalf of the Trust and the Companion Loan Holders, to be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of a

 

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Property within the meaning of CERCLA or any comparable law, unless the Special Servicer has previously determined, based on a report prepared at the expense of the Trust Fund by an independent person who regularly conducts site assessments for purchasers of comparable properties (a copy of such report to be provided by the Special Servicer to the Companion Loan Holders, the Trustee, the Certificate Administrator and the 17g-5 Information Provider for posting on the 17g-5 Information Provider’s website), that (i) the Property are in compliance with applicable environmental laws or that taking the remedial actions necessary to comply with such laws is reasonably likely to produce a greater recovery on a present value basis than not taking such actions and (ii) there are no circumstances known to the Special Servicer relating to the use of hazardous substances or petroleum-based materials which require investigation or remediation, or that if such circumstances exist taking such remedial actions is reasonably likely to produce a greater recovery on a net present value basis than not taking such actions. The Special Servicer shall deliver a copy of any such report to the Rating Agencies, subject to Section 10.17.

 

If the Special Servicer has so determined based on satisfaction of the criteria in this Section 3.12(d) that it would be in the best economic interest of the Trust and the Companion Loan Holders (as a collective whole as if the Trust Fund and the Companion Loan Holders constituted a single lender) (as determined in accordance with Accepted Servicing Practices) to institute a foreclosure or take any other actions described in the immediately preceding paragraph, then subject to the rights of the Controlling Class Representative to consent to, and the Controlling Class Representative and the Operating Advisor to consult in respect of, such action, as applicable, the Special Servicer shall take such proposed action. The Special Servicer shall not foreclose upon or otherwise cause the Trust to acquire ownership of any Collateral other than the Property unless it receives an Opinion of Counsel (the cost of which shall be paid by the Servicer as a Property Protection Advance unless the Servicer determines that such Property Protection Advance would constitute a Nonrecoverable Advance) to the effect that such acquisition will not result in an Adverse REMIC Event (other than the imposition of a tax on “net income from foreclosure property” under Section 860G(c) of the Code).

 

The Special Servicer shall direct the Servicer to, and the Servicer shall, advance the cost of any such compliance, containment, clean up or remediation as a Property Protection Advance unless the Servicer determines, in accordance with Accepted Servicing Practices, that such Advance would constitute a Nonrecoverable Advance.

 

(e)          The environmental site assessments contemplated by Section 3.12(d) shall be prepared by any Independent Person who regularly conducts environmental site assessments for purchasers of comparable properties, as determined by the Servicer in a manner consistent with Accepted Servicing Practices. The cost of each such environmental site assessment shall qualify as a Property Protection Advance and shall be advanced by the Servicer unless the Servicer determines that such Advance would constitute a Nonrecoverable Advance.

 

(f)           Notwithstanding any acquisition of title to the Property following a Loan Event of Default under the Whole Loan and cancellation of the Whole Loan, the Trust Loan and the Companion Loans, the Trust Loan and each Companion Loan shall be deemed to remain outstanding and, in the case of the Trust Loan, held in the Trust Fund for purposes of the application of collections and shall be reduced only by collections net of expenses. For purposes

 

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of all calculations hereunder, so long as the Trust Loan and any Companion Loan shall be deemed to remain outstanding, (i) it shall be assumed that the unpaid principal balance of the Trust Loan and the Companion Loans immediately after any discharge is equal to the unpaid principal balance of the Trust Loan or the Companion Loans immediately prior to such discharge and (ii) Foreclosure Proceeds shall be applied as provided in Section 1.3(b) and the Co-Lender Agreement.

 

(g)           Notwithstanding any provision herein to the contrary, the Special Servicer shall not acquire and hold for the benefit of the Trust Fund any personal property (including any non-real property Collateral) pursuant to this Section 3.12 unless:

 

(i)            such personal property is incident to real property (within the meaning of Section 856(e)(1) of the Code) so acquired by the Special Servicer; or

 

(ii)           the Special Servicer shall have obtained an Opinion of Counsel (the cost of which shall be paid by the Servicer as a Property Protection Advance unless the Servicer determines that such Property Protection Advance would constitute a Nonrecoverable Advance in which case it shall be treated as a trust fund expense) to the effect that the holding of such personal property by the Trust Fund will not result in an Adverse REMIC Event at any time that any Uncertificated Lower-Tier Interest or Certificate is outstanding (and such Opinion of Counsel may be premised on the designation hereby of any such personal property as being deemed part of an “outside reserve fund” (within the meaning of Treasury Regulations Section 1.860G-2(h) with the owner of such personal property for federal income tax purposes to be designated at such time)).

 

Section 3.13.     Certificate Administrator to Cooperate; Release of Items in the Mortgage File. From time to time and as appropriate for the servicing of the Whole Loan or Foreclosure of or realization on any Property, the Certificate Administrator shall, upon receipt of written request of a Servicing Officer of the Servicer or the Special Servicer and delivery to the Certificate Administrator of a receipt for release in the form of Exhibit B hereto, release or cause to be released any items from the Mortgage File to the Servicer or the Special Servicer, as the case may be, within the lesser of (i) seven (7) calendar days and (ii) five (5) Business Days of its receipt of the related receipt for release. The Special Servicer shall institute all Foreclosures as an authorized delegate of the Trustee, on behalf of the Trust and the Companion Loan Holders. In the event the Special Servicer cannot institute a Foreclosure in its own name, the Special Servicer shall notify the Trustee and the Trustee shall reasonably cooperate with the Special Servicer in connection with any prosecution of any Foreclosure (including at the written request of a Servicing Officer of the Special Servicer, execute such documents furnished to it as shall be necessary to the prosecution of any such Foreclosure). Such receipt for release shall obligate the Servicer or the Special Servicer to (and the Servicer or Special Servicer, as applicable, shall) return such items to the Certificate Administrator when the need therefor by the Servicer or the Special Servicer no longer exists.

 

Section 3.14.    Title and Management of Foreclosed Property. (a)  In the event that title to any Property is acquired for the benefit of the Certificateholders and the Companion Loan Holders in foreclosure or by deed-in-lieu of foreclosure or otherwise, the deed, certificate

 

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of sale or other comparable document shall be taken in the name of the Trustee, or its nominee (which shall not include the Special Servicer), on behalf of the Trust and the Companion Loan Holders or as otherwise contemplated pursuant to Section 8.10. Title may be taken in the name of a limited liability company wholly-owned by the Trust and which is managed by the Special Servicer (the costs of which shall be advanced by the Servicer, provided that such Advance would not be a Nonrecoverable Advance). Promptly after such acquisition of title, the Special Servicer shall consult with counsel to determine when an Acquisition Date shall be deemed to occur under the REMIC Provisions with respect to such Property, the expense of such consultation being treated as a reimbursable expense of the Special Servicer related to the foreclosure. The Special Servicer, on behalf of the Trust and the Companion Loan Holders, shall dispose of the Foreclosed Property held by the Trust as expeditiously as appropriate in accordance with Accepted Servicing Practices, but in any event within the time period, and subject to the conditions, set forth in Section 3.15 and Section 12.2. Subject to Section 12.2 and Section 3.14(e), the Special Servicer shall hire on behalf of the Trust and the Companion Loan Holders a Successor Manager to manage, conserve, protect and operate such Foreclosed Property for the Certificateholders and the Companion Loan Holders solely for the purpose of its prompt disposition and sale in a manner that does not cause such Foreclosed Property to fail 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) and such that income from the operation or sale of such property does not result in receipt by the Trust of any income from non-permitted assets as described in Section 860F(a)(2)(B) of the Code with respect to such property. In connection with such management, the Successor Manager shall be entitled to the REO Management Fee solely from the Foreclosed Property Account or the Collection Account.

 

(b)          The Special Servicer shall segregate and hold all funds collected and received in connection with the operation of the Foreclosed Property separate and apart from its own funds and general assets and shall establish and maintain with respect to the Foreclosed Property a Foreclosed Property Account in (A) the name of the Special Servicer on behalf of the Trustee pursuant to Section 3.6 or (B) the name of a limited liability company wholly owned by the Trust.

 

(c)          The Special Servicer shall have full power and authority, subject to Accepted Servicing Practices and the specific requirements and prohibitions of this Agreement, to do any and all things in connection with the Foreclosed Property for the benefit of the Trust and the Companion Loan Holders (as a collective whole as if the Trust Fund and the Companion Loan Holders constituted a single lender) on such terms as are appropriate and necessary for the efficient operation or liquidation, as applicable, of the Foreclosed Property, so long as the Special Servicer deems such actions to be consistent with Accepted Servicing Practices. Without limiting the generality of the foregoing, the Special Servicer may retain an independent contractor to operate and manage the Foreclosed Property; provided, however, the retention of an independent contractor will not relieve the Special Servicer of its obligations hereunder with respect to the Foreclosed Property.

 

The Special Servicer shall deposit or cause to be deposited on a daily basis in the Foreclosed Property Account all revenues received with respect to the Foreclosed Property, and the Special Servicer shall cause to be withdrawn therefrom funds necessary for the proper

 

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operation, management and maintenance of the Foreclosed Property and for other expenses related to the preservation and protection of the Foreclosed Property, including, but not limited to:

 

(i)           all insurance premiums due and payable in respect of the Foreclosed Property;

 

(ii)          all taxes, assessments, charges or other similar items in respect of the Foreclosed Property that could result or have resulted in the imposition of a lien thereon; and

 

(iii)         all costs and expenses necessary to preserve the Foreclosed Property, including the payment of ground rent, if any.

 

To the extent that amounts on deposit in the Foreclosed Property Account are insufficient for the purposes set forth in clauses (i) through (iii) above, the Special Servicer shall direct the Servicer to, and the Servicer shall, make a Property Protection Advance unless the Servicer determines, in accordance with Accepted Servicing Practices, that such Advance would constitute a Nonrecoverable Advance.

 

(d)          On or before the last day of each Collection Period, the Special Servicer shall withdraw from the Foreclosed Property Account and deposit into the Collection Account the proceeds and collections received or collected since the preceding Remittance Date through the Business Day prior to the Remittance Date on or with respect to the Foreclosed Property (including any funds no longer needed in any reserves established as provided below), net of expenses paid therefrom and amounts reasonably expected to be needed to fund any reserves deemed necessary for the operation, preservation and protection of the Foreclosed Property, including without limitation, the creation of reasonable reserves for working capital, repairs, replacements and necessary capital improvements and other related expenses.

 

(e)          The Special Servicer, in the name of the Trust, shall (subject to Section 3.14(a)) contract with any Successor Manager for the operation and management of the Foreclosed Property; provided that no such contract shall impose individual liability on the Trustee or the Trust; provided, further, that:

 

(i)           the terms and conditions of any such contract shall not be inconsistent herewith;

 

(ii)          any such contract shall require, or shall be administered to require, that the Successor Manager (A) request that the Special Servicer pay from the Foreclosed Property Account all costs and expenses incurred in connection with the operation and management of such Foreclosed Property, and (B) remit all related revenues (net of such costs and expenses) to the Special Servicer, as soon as practicable but in no event later than the Business Day immediately following receipt, for deposit into the Foreclosed Property Account;

 

(iii)         none of the provisions of this Section 3.14 relating to any such contract or to actions taken through any such Successor Manager shall be deemed to relieve the

 

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Special Servicer of any of its ordinary and regularly recurring duties and obligations to the Trust on behalf of the Certificateholders and the Companion Loan Holders with respect to the operation and management of such Foreclosed Property; and

 

(iv)         the Successor Manager shall be permitted to perform construction (including renovations) on such Foreclosed Property only if the construction was more than 10% complete at the time default on the Trust Loan became imminent.

 

The Special Servicer shall be entitled, and to the extent required by the REMIC Provisions, shall be required, to enter into an agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Special Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. All REO Management Fees shall be Trust Fund Expenses payable from the Foreclosed Property Account or subject to reimbursement pursuant to Section 3.4(c)(xii). The Special Servicer agrees to monitor the performance of the Successor Manager and to enforce the obligations of the Successor Manager on behalf of the Trust and the Companion Loan Holders. Expenses incurred by the Special Servicer in connection herewith shall qualify as Property Protection Advances.

 

Section 3.15.     Sale of Foreclosed Property. (a)  The Special Servicer, on behalf of the Trust and the Companion Loan Holders, shall sell the Foreclosed Property on a servicing released basis as expeditiously as appropriate in accordance with Accepted Servicing Practices in a manner designed to preserve the capital of the Certificateholders and the Companion Loan Holders and not with a view to the maximization of profit, but in no event later than the Rated Final Distribution Date in a manner provided under this Section 3.15 and subject to Section 12.2.

 

(b)          Subject to the consent or consultation rights of the Controlling Class Representative set forth in Section 6.5 and the consultation rights of the Operating Advisor to the extent set forth in this Agreement, the Special Servicer shall accept the highest cash bid for the Foreclosed Property received from any person that is at least equal to the Repurchase Price attributable to the Foreclosed Property. Notwithstanding the foregoing, in the absence of any such bid, the Special Servicer shall accept the highest cash bid, if the highest offeror is a Person other than an Interested Person, that the Special Servicer (or the Trustee as provided in the next sentence) determines is a fair price based on Appraisals obtained within the last nine (9) months. If the highest bidder is an Interested Person, the Trustee shall determine the fairness of the highest bid based upon an Appraisal (which may be an Appraisal obtained in the last nine (9) months by the Special Servicer) obtained at the expense of the Trust Fund, and the Trustee may conclusively rely on the opinion of such Appraisal and such determination shall be binding upon all parties. The requirements of this Agreement may result in lower sales proceeds than would otherwise be the case. Notwithstanding the foregoing, and subject to the rights of the Controlling Class Representative and the Operating Advisor, the Special Servicer shall not be obligated to accept the higher cash offer if the Special Servicer determines, in accordance with Accepted Servicing Practices, that rejection of such offer would be in the best interests of the Certificateholders and the Companion Loan Holders (as a collective whole, as if such Certificateholders and the Companion Loan Holders constituted a single lender taking into account the subordinate nature of the B-Note), and the Special Servicer may accept a lower cash offer (from any person other than an Interested Person) if it determines, in accordance with

 

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Accepted Servicing Practices, that acceptance of such offer would be in the best interests of the Certificateholders and the Companion Loan Holders (as a collective whole, as if such Certificateholders and the Companion Loan Holders constituted a single lender taking into account the subordinate nature of the B-Note). Any Holder of a Controlling Class Certificate, the Controlling Class Representative or any affiliate of the foregoing shall be entitled to participate in, and submit a bid in connection with, any sale of Foreclosed Property, to the same extent as any other Certificateholder; provided that any such Holder of a Controlling Class Certificate and the Controlling Class Representative shall for all purposes be considered an Interested Person.

 

(c)           Subject to the provisions of Section 3.14, the Special Servicer shall act on behalf of the Trust and the Companion Loan Holders in negotiating and taking any other action necessary or appropriate in connection with the sale of the Foreclosed Property, including the collection of all amounts payable in connection therewith. Any sale of a Foreclosed Property shall be without recourse to the Certificate Administrator, the Trustee, the Depositor, the Servicer, the Special Servicer, the Trust, the Certificateholders or the Companion Loan Holders (except that any contract of sale and assignment and conveyance documents may contain customary warranties, so long as the only recourse for breach thereof is to the Trust Fund) and if consummated in accordance with the terms of this Agreement, none of the Certificate Administrator, the Trustee, the Depositor or the Special Servicer shall have any liability to any Certificateholder with respect to the purchase price thereof accepted by the Special Servicer or the Trustee.

 

(d)          The proceeds of any sale effected pursuant to this Section 3.15, after deduction of the expenses incurred in connection therewith, shall be deposited in the Collection Account in accordance with Section 3.4(a).

 

(e)          Within 30 days of the sale of a Foreclosed Property, the Special Servicer shall provide to the Trustee, the Companion Loan Holders and the Certificate Administrator a statement of accounting for the Foreclosed Property, including, without limitation, (i) the date the Foreclosed Property was acquired in foreclosure or by deed-in-lieu of foreclosure or otherwise, (ii) the date of disposition of such Foreclosed Property, (iii) the gross sale price and related selling and other expenses, (iv) accrued interest with respect to the Repurchase Price of the Foreclosed Property, calculated from the date of acquisition to the disposition date, and (v) such other information as the Trustee or the Certificate Administrator may reasonably request.

 

(f)           The Special Servicer shall be required to deliver to the Servicer such reports and other information as the Servicer needs in its sole discretion to perform its obligations under this Agreement.

 

Section 3.16.     Sale of the Whole Loan and the Trust Loan. (a)  (i)  Promptly upon the Whole Loan becoming a Defaulted Whole Loan, the Special Servicer shall order (but shall not be required to have received) Appraisals. The Servicer shall use reasonable efforts to promptly notify in writing the Special Servicer, the Certificate Administrator, the Operating Advisor, and the Companion Loan Holders, the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect) and the Trustee of the

 

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occurrence of such Special Servicing Loan Event. Upon delivery by the Servicer of the notice described in the preceding sentence, and subject to the rights of the Controlling Class Representative and the Operating Advisor, the Special Servicer may offer to sell to any Person, the Whole Loan or may offer to purchase the Whole Loan, if and when the Special Servicer determines, consistent with Accepted Servicing Practices, that no satisfactory arrangements can be made for collection of delinquent payments thereon and such a sale would be in the best economic interests of the Trust and the Companion Loan Holders (as a collective whole, as if such Certificateholders and the Companion Loan Holders constituted a single lender) on a net present value basis. The Special Servicer shall provide the Servicer, the Companion Loan Holders, the Certificate Administrator, the Operating Advisor, the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect) and the Trustee not less than five (5) Business Days’ prior written notice of its intention to sell the Whole Loan, in which case the Special Servicer shall be required to accept the highest offer received from any Person (other than any Interested Person) for the Whole Loan in an amount at least equal to the Par Price or, at its option, if it has received no offer at least equal to the Par Price therefor, the Special Servicer may purchase the Whole Loan at the Par Price. Any Companion Loan is to be sold together with the Trust Loan, subject to this Section 3.16 and any additional requirements set forth in the Co-Lender Agreement.

 

(ii)           In the absence of any offer at least equal to the Repurchase Price (or purchase by the Special Servicer for the Repurchase Price), the Special Servicer shall accept the highest offer received that is determined by the Special Servicer (or the Trustee as provided in the next sentence) to be a fair price for the Whole Loan, if the highest offeror is a Person other than an Interested Person. If the highest bidder is an Interested Person, the Trustee shall determine the fairness of the highest bid based upon an Appraisal (which may be an Appraisal obtained in the last nine (9) months by the Special Servicer) obtained at the expense of the Trust Fund, and the Trustee may conclusively rely on the opinion of such Appraisal and such determination shall be binding upon all parties. All reasonable costs and fees of the Trustee in making such determination will be reimbursable to it first, by the Servicer as an Advance, subject to the Servicer’s determination that such amounts are not Nonrecoverable Advances, and then as an expense of the Trust. The Trustee, in its individual capacity, may not make an offer for or purchase the Whole Loan. Notwithstanding anything contained in this Section 3.16 to the contrary, if the Trustee is required to determine whether a cash offer by an Interested Person constitutes a fair price, the Trustee may (at its option and at the expense of the Interested Person) designate an independent third party expert in real estate or commercial mortgage loan matters with at least 5 years’ experience in valuing or investing in loans similar to the Whole Loan that has been selected with reasonable care by the Trustee to determine if such cash offer constitutes a fair price for the Whole Loan. If the Trustee designates such a third party to make such determination, the Trustee will be entitled to rely conclusively upon such third party’s determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value incurred by any such third party pursuant to this paragraph will be covered by, and will be paid in advance by the Interested Person as a condition to the Trustee’s determination; provided that the Trustee will not engage a third party expert whose fees exceed a commercially reasonable amount as determined by the Trustee. Any Holder of a Controlling Class Certificate, the Controlling Class Representative or any Affiliate of the foregoing will be

 

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entitled to participate in, and submit a bid in connection with, any sale of the Whole Loan to the same extent as any other Certificateholder; provided that any such Holder of a Controlling Class Certificate and the Controlling Class Representative shall for all purposes be considered an Interested Person.

 

(iii)          The Special Servicer shall not be obligated to accept the highest offer if the Special Servicer determines, in accordance with Applicable Servicing Practices, that the rejection of such offer would be in the best interests of the Holders of the Certificates and the Companion Loan Holders (as a collective whole, as if such Certificateholders and the Companion Loan Holders constituted a single lender taking into account the subordinate nature of the B-Note). In addition, the Special Servicer may accept a lower offer if it determines, in accordance with Applicable Servicing Practices, that the acceptance of such offer would be in the best interests of the Holders of the Certificates and the Companion Loan Holders (as a collective whole, as if such Certificateholders and the Companion Loan Holders constituted a single lender taking into account the subordinate nature of the B-Note), provided that the offeror is not the Special Servicer or a Person that is an Affiliate of any of them. So long as no Consultation Termination Event is continuing, the foregoing rights of the Special Servicer shall be subject to the rights of the Controlling Class Representative. The Special Servicer shall use reasonable efforts to sell the Whole Loan prior to the Rated Final Distribution Date.

 

(iv)         Unless and until the Whole Loan is sold pursuant to this Section 3.16(a), the Special Servicer shall pursue such other resolution strategies with respect to the Whole Loan, including, without limitation, workout and foreclosure, as the Special Servicer may deem appropriate, consistent with the Asset Status Report and Applicable Servicing Practices and the REMIC Provisions.

 

(b)          The right of the Special Servicer to purchase or sell the Whole Loan after the occurrence of a Special Servicing Loan Event shall terminate, and shall not be exercisable as set forth in clause (a) above (or if exercised but the purchase of the Whole Loan has not yet occurred, the Special Servicer’s right shall terminate and such exercise shall be of no further force or effect) if the Whole Loan is no longer delinquent as a result of any of the following: (i) the Special Servicing Loan Event has ceased pursuant to the terms of this Agreement, (ii) the Defaulted Whole Loan has become subject to a fully executed agreement reflecting the terms of the workout arrangement or (iii) the Whole Loan has otherwise been resolved (including by a full or discounted pay-off).

 

(c)           Any sale of the Whole Loan shall be for cash only, and shall be in accordance with and subject to the provisions of the Co-Lender Agreement.

 

(d)          Notwithstanding anything to the contrary herein, the Special Servicer shall not sell the Whole Loan pursuant to Section 3.16(a) without the written consent of the Companion Loan Holders (provided that such consent is not required from a Companion Loan Holder if such Companion Loan Holder is the Loan Borrower or an Affiliate of the Loan Borrower) unless the Special Servicer has delivered to the Companion Loan Holders: (a) at least fifteen (15) Business Days prior written notice of any decision to attempt to sell the Whole Loan; (b) at least ten (10) days prior to the permitted sale date, a copy of each bid package (together

 

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with any material amendments to such bid packages) received by the Special Servicer in connection with any such proposed sale; (c) at least ten (10) days prior to the proposed sale date, a copy of the most recent appraisals for the Property, and any documents in the Loan File reasonably requested by such Companion Loan Holder that are material to the price of the Whole Loan; and (d) until the sale is completed, and a reasonable period of time (but no less time than is afforded to other offerors) prior to the proposed sale date, all information and other documents being provided to other offerors and all leases or other documents that are approved by the Servicer or the Special Servicer in connection with the proposed sale; provided, that such Companion Loan Holder may waive any of the delivery or timing requirements set forth in this sentence. Any Companion Loan Holder will be permitted to make offers to purchase, and either such party is permitted to be the purchaser at any sale of, the Whole Loan.

 

Section 3.17.     Servicing Compensation. The Servicer shall be entitled to receive the Servicing Fee with respect to the Whole Loan payable monthly from the Collection Account or otherwise in accordance with and subject to Section 3.4(c). The Servicer shall be entitled to retain as compensation any late payment charges and certain other customary charges and fees to the extent described below, as well as reimbursement for all other costs or expenses incurred by it in performing its duties hereunder, in each case, to the extent actually received from the Loan Borrower and permitted by, or not prohibited by, and to be allocated to such amounts by the terms of the Loan Documents and this Agreement, other than: (i) fees of any sub-servicer and the expenses of any sub-servicer that would not be reimbursable to Servicer if such expenses were incurred by the Servicer; (ii) the cost of any fidelity bond or errors and omissions policy required by Section 3.11(d); (iii) overhead expenses of the Servicer including but not limited to those which may properly be allocable under the Servicer’s accounting system or otherwise to the Servicer’s activities under this Agreement or the income derived by it hereunder including the costs to the Servicer associated with employees of the Servicer performing services in connection with the obligations of the Servicer hereunder; and (iv) costs and expenses arising from the negligence, bad faith or willful misconduct of the Servicer in performing its obligations hereunder (the “Servicer Customary Expenses”). So long as no Special Servicing Loan Event has occurred and is continuing, the Servicer shall also be entitled to retain as additional servicing compensation any late payment fees and Default Interest (including any late payment fees and Default Interest collected after the occurrence of a Special Servicing Loan Event but accrued prior to such Special Servicing Loan Event) (to the extent not applied pursuant to Section 3.4(c)), assumption fees, assumption application fees, substitution fees, release fees, Modification Fees (subject to the last paragraph of this Section 3.17), defeasance fees, consent fees, amounts collected for checks returned for insufficient funds, charges for beneficiary statements or demands, loan service transaction and processing fees and similar fees and expenses to the extent, with respect to any such amounts, collected and allocated to such amounts as permitted by (or not otherwise prohibited by) the terms of the Loan Documents and this Agreement; provided, however, that the Servicer shall not be entitled to apply or retain any Default Interest or any late payment charges, with respect to the Whole Loan, with respect to which a default thereunder or Loan Event of Default is continuing unless and until such default or Loan Event of Default has been cured and all delinquent amounts (including any Default Interest) due with respect to the Whole Loan have been paid in full and all interest on Advances has been paid in full. In addition, the Servicer shall be entitled to retain as additional servicing compensation release fees and any income earned (net of losses to the extent provided in this Agreement) on

 

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the investment of funds deposited in the Collection Account and any Reserve Account (to the extent not payable to the Loan Borrower).

 

If a Special Servicing Loan Event occurs and is continuing, the Special Servicer shall be entitled to receive a Special Servicing Fee with respect to the Whole Loan for so long as such Special Servicing Loan Event continues as well as reimbursement for all other costs or expenses incurred by it in performing its duties hereunder other than: (i) the cost of any fidelity bond or errors and omissions policy required by Section 3.11(d); (ii) overhead expenses of the Special Servicer including but not limited to those which may properly be allocable under the Special Servicer’s accounting system or otherwise to the Special Servicer’s activities under this Agreement or the income derived by it hereunder including the costs to the Special Servicer associated with employees of the Special Servicer performing services in connection with the obligations of the Special Servicer hereunder; and (iii) costs and expenses arising from the negligence, bad faith or willful misconduct of the Special Servicer in performing its obligations hereunder (the “Special Servicer Customary Expenses”). If a Special Servicing Loan Event is terminated following resolution of such Special Servicing Loan Event by a written agreement with the Loan Borrower negotiated by the Special Servicer, the Special Servicer shall be entitled to receive the Work-out Fee. If at any time the Whole Loan becomes a Specially Serviced Loan, the Special Servicer shall use reasonable efforts, consistent with Accepted Servicing Practices, to collect the amount of any Special Servicing Fee, Liquidation Fee and/or Work-out Fee from the Loan Borrower pursuant to Section 9.17(f) of the Loan Agreement, including exercising all remedies available under the Loan Agreement that would be in accordance with Accepted Servicing Practices, specifically taking into account the costs or likelihood of success of any such collection efforts and the Realized Loss that would be incurred by Certificateholders in connection therewith as opposed to the Realized Loss that would be incurred as a result of not collecting such amounts from the Loan Borrower. Notwithstanding anything herein to the contrary, with respect to any Collection Period, the Special Servicer shall only be entitled to receive a Work-out Fee or a Liquidation Fee, but not both.

 

If the Special Servicer is terminated (other than for cause) or resigns after such written agreement is entered into and before or after the Special Servicing Loan Event is terminated, it shall retain the right to receive any and all Work-out Fees on all payments of principal and interest made on the Whole Loan following such written agreement (negotiated by such Special Servicer prior to its termination or resignation) for so long as another Special Servicing Loan Event does not occur and the successor Special Servicer shall have no rights with respect to such Work-out Fee. In addition, the Special Servicer shall be entitled to receive a Liquidation Fee with respect to any Liquidated Property or the liquidation of the Whole Loan or any portion thereof or the Notes (whether through judicial foreclosure, sale, discounted payoff or other liquidation) as to which the Special Servicer receives Liquidation Proceeds. However, the Special Servicer shall not be entitled to receive a Liquidation Fee in connection with (i) a repurchase of the Trust Loan by the Sponsor pursuant to the Loan Purchase Agreement, (ii) a sale of the Whole Loan or any portion thereof by the Special Servicer to an Interested Person in accordance with Section 3.16 or (iii) a purchase of the Trust Loan or a Foreclosed Property by the Controlling Class Representative or any Affiliate thereof, if such purchase occurs within 90 days after the date on which the Special Servicer first delivers to the Controlling Class Representative notice of a Loan Event of Default. For the avoidance of doubt, the intent of Section 9.6 of the Loan Agreement requires the Loan Borrower to be responsible for the payment

 

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of Liquidation Fees and the Special Servicer will be entitled to, and may collect, any Liquidation Fees payable to it from the Loan Borrower pursuant to such Section 9.6 of the Loan Agreement as would be calculated hereunder. The Liquidation Fee with respect to the Specially Serviced Loan or Foreclosed Property shall be reduced by the amount of any Modification Fees paid by or on behalf of the Loan Borrower with respect to the Specially Serviced Loan or Foreclosed Property and received by the Special Servicer as compensation, but only to the extent those fees have not previously been deducted from a Work-out Fee or Liquidation Fee. Notwithstanding the foregoing, if the Whole Loan becomes subject to a Special Servicing Event solely due to an event described in clause (iii) of the definition of “Special Servicing Loan Event” and the related Liquidation Proceeds are received within 90 days following the Stated Maturity Date as a result of the Whole Loan being refinanced or receipt of other final payment (other than a discounted pay-off), the Special Servicer shall not be entitled to deduct a Liquidation Fee from amounts due to the Certificateholders but may collect and retain appropriate fees from the Loan Borrower in connection with such liquidation.

 

The Special Servicing Fee and any Liquidation Fee payable from Liquidation Proceeds (and not the Loan Borrower) shall be payable from funds on deposit in the Collection Account as provided in Section 3.4(c). The Special Servicer during the continuance of a Special Servicing Loan Event shall also be entitled to retain as additional servicing compensation any late payment fees (to the extent not applied pursuant to Section 3.4(c)), Default Interest (to the extent not applied pursuant to Section 3.4(c)), assumption fees, assumption application fees, Modification Fees (subject to the last paragraph of this Section 3.17), defeasance fees, consent fees, loan service transaction fees and similar fees and expenses and any income earned (net of losses to the extent provided in this Agreement) on the investment of funds deposited in the Foreclosed Property Account.

 

Notwithstanding any other provision in this Agreement, neither the Servicer nor the Special Servicer, as applicable, shall be entitled to reimbursement for an expense incurred under this Agreement or in connection with the performance of its duties hereunder unless (i) the amount of such payment to the Servicer or the Special Servicer, as the case may be, is reimbursed to the Trust Fund by the Loan Borrower (to the extent the Loan Borrower is required to do so under the Loan Agreement); (ii) failure of the Loan Borrower to reimburse for such payment constitutes a Loan Event of Default; (iii) such expense is an “unanticipated expense incurred by the REMIC” within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii) or is otherwise an unanticipated expense (it being understood that the Servicer Customary Expenses and the Special Servicer Customary Expenses are not unanticipated); or (iv) such reimbursement is expressly provided for herein or such expense is expressly described herein as an expense of the Trust Fund or as an Advance.

 

Except as otherwise expressly provided herein, no transfer, sale, pledge or other disposition of the Servicer’s right to receive all or any portion of the Servicing Fee (or the Special Servicer’s right to receive all or any portion of the Special Servicing Fee) or other servicing compensation provided for herein shall be made, and any such attempted transfer, sale, pledge or other disposition shall be void, unless such transfer is made to a successor Servicer or successor Special Servicer, as applicable, in connection with the assumption by such successor of the duties hereunder pursuant to Section 7.2.

 

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With respect to each Collection Period, the Special Servicer shall deliver or cause to be delivered to the Servicer on the Determination Date, and the Servicer shall deliver, to the extent it has received, or cause to be delivered to the Certificate Administrator, without charge on the Remittance Date, an electronic report that discloses and contains an itemized listing of any Disclosable Special Servicer Fees received by the Special Servicer or any of its Affiliates during the related Collection Period.

 

KeyBank and any successor holder of the Excess Servicing Fee Rights shall be entitled, at any time, at its own expense, to transfer, sell, pledge or otherwise assign such Excess Servicing Fee Rights in whole (but not in part), to any QIB or Institutional Accredited Investor (other than a Benefit Plan), provided that no such transfer, sale, pledge or other assignment shall be made unless (i) that transfer, sale, pledge or other assignment is exempt from the registration and/or qualification requirements of the Securities Act and any applicable state securities laws and is otherwise made in accordance with the Securities Act and such state securities laws, (ii) the prospective transferor shall have delivered to the Depositor a certificate substantially in the form attached as Exhibit R-1 hereto, and (iii) the prospective transferee shall have delivered to KeyBank and the Depositor a certificate substantially in the form attached as Exhibit R-2 hereto. None of the Depositor, the Trustee or the Certificate Registrar is obligated to register or qualify an Excess Servicing Fee Right under the Securities Act or any other securities law or to take any action not otherwise required under this Agreement to permit the transfer, sale, pledge or assignment of an Excess Servicing Fee Right without registration or qualification. KeyBank and each holder of an Excess Servicing Fee Right desiring to effect a transfer, sale, pledge or other assignment of such Excess Servicing Fee Right shall, and KeyBank hereby agrees, and each such holder of an Excess Servicing Fee Right by its acceptance of such Excess Servicing Fee Right shall be deemed to have agreed, in connection with any transfer of such Excess Servicing Fee Right effected by such Person, to indemnify the Certificateholders, the Trust, the Depositor, the Initial Purchaser, the Trustee, the Certificate Administrator, the Servicer, the Special Servicer and the Operating Advisor against any liability that may result if such transfer is not exempt from registration and/or qualification under the Securities Act or other applicable federal and state securities laws or is not made in accordance with such federal and state laws or in accordance with the foregoing provisions of this paragraph. By its acceptance of an Excess Servicing Fee Right, the holder thereof shall be deemed to have agreed not to use or disclose such information in any manner that could result in a violation of any provision of the Securities Act or other applicable securities laws or that would require registration of such Excess Servicing Fee Right or any Certificate pursuant to the Securities Act. Following any transfer, sale, pledge or assignment of an Excess Servicing Fee Right or the termination of KeyBank as the Servicer, the Person then acting as the Servicer, shall pay, out of each amount paid to such Servicer as Servicing Fees, the related Excess Servicing Fees to the holder of such Excess Servicing Fee Right within one (1) Business Day following the payment of such Servicing Fees to such Servicer, in each case in accordance with payment instructions provided by such holder in writing to such Servicer. The holder of an Excess Servicing Fee Right shall not have any rights under this Agreement except as set forth in the preceding sentences of this paragraph. None of the Depositor, the Special Servicer, the Certificate Administrator or the Trustee shall have any obligation whatsoever regarding payment of the Excess Servicing Fee or the assignment or transfer of the Excess Servicing Fee Right.

 

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The Special Servicer and its Affiliates shall be prohibited from receiving or retaining any compensation or any other remuneration (including, without limitation, in the form of commissions, brokerage fees, rebates and appraisal fees or as a result of any other fee-sharing arrangement) from any Person (including, without limitation, the Trust, the Loan Borrower, the Property Manager, any guarantor or indemnitor in respect of the Whole Loan and any purchaser of the Whole Loan or the Foreclosed Property) in connection with the disposition, workout or foreclosure of the Whole Loan, the management or disposition of the Foreclosed Property, or the performance of any other special servicing duties under this Agreement, other than as expressly provided in this Section 3.17; provided, however, that such prohibition shall not apply to Permitted Special Servicer/Affiliate Fees.

 

Notwithstanding anything herein to the contrary, (i) the Servicer and the Special Servicer shall each be entitled to 50% of any Modification Fees incurred in connection with the extension of the Stated Maturity Date of the Whole Loan to which Special Servicer’s consent is required pursuant to clause (vii)(c) of the definition of Special Servicing Loan Event and (ii) the Special Servicer shall be entitled to 50% of any Modification Fees, assumption fees (excluding assumption application fees) and consent fees incurred in connection with any Major Decision for which the Special Servicer’s consent is required pursuant to Section 6.5(a).

 

Section 3.18.    Reports to the Certificate Administrator; Account Statements. (a)  The Servicer shall prepare, or cause to be prepared, and deliver to the Certificate Administrator, and each Companion Loan Holder in an electronic format which format is reasonably acceptable to the Certificate Administrator, consistent with Accepted Servicing Practices, not later than (i) 2:00 p.m. (New York time) two Business Days prior to each Distribution Date, the CREFC® Loan Periodic Update File and (ii) 2:00 p.m. (New York time) on the Remittance Date immediately preceding each Distribution Date, the remaining CREFC® Reports (except the CREFC® Bond Level File, the CREFC® Collateral Summary File, the CREFC® Special Servicer Loan File, the CREFC® Operating Statement Analysis Report and the CREFC® NOI Adjustment Worksheet). The Certificate Administrator shall prepare the CREFC® Bond Level File.

 

In addition, the Servicer (with respect to non-Specially Serviced Loans) shall prepare and make available to any Privileged Person and any Borrower Related Party that certifies to the Certificate Administrator in the form of Exhibit BB-2 that it is a Certificateholder or Beneficial Owner of a Certificate, on the Servicer’s internet website (initially, xxx.xxxxxxx.xxx/xxx0xxx), and the Special Servicer (with respect to Specially Serviced Loans and REO Property) shall prepare and deliver to the Servicer (who shall promptly make available to any Privileged Person and any Borrower Related Party that certifies to the Certificate Administrator in the form of Exhibit BB-2 that it is a Certificateholder or Beneficial Owner of a Certificate, on the Servicer’s internet website (initially, xxx.xxxxxxx.xxx/xxx0xxx) with respect to the Property and REO Property, a CREFC® Operating Statement Analysis Report and a CREFC® NOI Adjustment Worksheet within 30 days after the Servicer’s or Special Servicer’s, as applicable, receipt of each of the Loan Borrower’s quarterly financials (commencing with the quarter ending September 30, 2017) and annually within 30 days after receipt of each of the Loan Borrower’s annual financials for the year ending December 31, 2017); provided, however, that any analysis or report with respect to the first calendar quarter of each year will not be required to the extent not required to be provided in the then-current applicable CREFC®

 

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guidelines. Additionally, the Servicer shall deliver the CREFC® Operating Statement Analysis Report and the CREFC® NOI Adjustment Worksheet on a monthly basis to the Certificate Administrator; provided, however, the Servicer shall have no obligation to update such reports except as set forth in the immediately preceding paragraphs, and no analysis shall be required to the extent such analysis or update is not required to be provided under the then-current applicable CREFC® Guidelines.

 

In addition, on a calendar quarterly basis within 30 days after the Servicer’s receipt of each of the Loan Borrower’s quarterly financial statements (commencing with the quarter ending September 30, 2017), the Servicer shall deliver, to the extent it has received, or cause to be delivered to the Certificate Administrator such financial statements.

 

(b)          The Servicer shall furnish to the Certificate Administrator, in electronic format which format is reasonably acceptable to the Certificate Administrator, the CREFC® Reports produced by it pursuant to this Agreement not later than the time period specified in Section 3.18(a), and thereafter furnish to the 17g-5 Information Provider the CREFC® Reports produced by it pursuant to this Agreement, who shall promptly post such reports to the 17g-5 Information Provider’s Website pursuant to Section 10.16.

 

(c)           The Servicer shall produce the reports described in this Section 3.18 solely from information provided to the Servicer by the Loan Borrower pursuant to the Loan Agreement (without modification, interpretation or analysis) or by the Special Servicer, Sponsor or Depositor pursuant to this Agreement. None of the Trustee, the Certificate Administrator, the Servicer or the Special Servicer shall be responsible for the completeness or accuracy of such information (except that the Servicer shall use efforts consistent with Accepted Servicing Practices to correct patent errors).

 

Section 3.19.     [Reserved].

 

Section 3.20.     [Reserved].

 

Section 3.21.     Access to Certain Documentation Regarding the Whole Loan and Other Information. (a)  The Servicer and the Special Servicer shall provide to the Certificate Administrator, the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect), the Trustee, the Initial Purchaser, the Depositor, any Certificateholders that are federally insured financial institutions, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency and the supervisory agents and examiners of such boards and such corporations, and any other governmental or regulatory body to the jurisdiction of which any Certificateholder is subject, access to the documentation regarding the Whole Loan required by applicable regulations of the Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency or any such governmental or regulatory body, such access being afforded without charge but only upon reasonable request and during normal business hours at the offices of the Servicer or Special Servicer.

 

(b)          The Depositor hereby authorizes the Certificate Administrator to, and the Certificate Administrator shall, make available to Bloomberg Financial Markets, L.P., Xxxxx,

 

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LLC, Intex Solutions, Inc., XXXX.xxx, Xxxxx’x Analytics, BlackRock Financial Management, Inc., Markit Group Limited or such other vendor chosen by the Depositor that submits to the Certificate Administrator a certification in the form of Exhibit Q to this Agreement, all the Distribution Date Statements, CREFC® Reports and supplemental notices delivered or made available pursuant to Section 8.14(c) to Privileged Persons and providing such information shall not constitute a breach of this Agreement by the Certificate Administrator.

 

(c)           If any of the parties to this Agreement receives a Form ABS Due Diligence-15E from any party in connection with any third-party due diligence services such party may have provided with respect to the Trust Loan (“Due Diligence Service Provider”), such receiving party shall promptly forward such Form ABS Due Diligence-15E to the 17g-5 Information Provider for posting on the 17g-5 Information Provider’s Website. The 17g-5 Information shall post on the 17g-5 Information Provider’s Website any Form ABS Due Diligence-15E it receives directly from a Due Diligence Service Provider or from another party to this Agreement, promptly upon receipt thereof.

 

(d)          The Special Servicer shall promptly notify the Certificate Administrator if the Special Servicer has actual knowledge that any Special Servicer Termination Event has occurred.

 

Section 3.22.     Inspections. The Servicer shall inspect or cause to be inspected the Property not less frequently than once each year commencing in 2018; provided, however, that the Servicer shall not be required to inspect the Property if it has been inspected by the Special Servicer in the preceding 12 months. The Special Servicer shall inspect or cause to be inspected the Property as applicable and as soon as practicable following the occurrence of a Special Servicing Loan Event and annually for so long as a Specially Serviced Loan Event is continuing. The Servicer or the Special Servicer, as applicable, shall further inspect, or cause to be inspected, the Property whenever it receives information that the Property has been damaged, left vacant, or abandoned, or if waste is being committed thereto. All such inspections shall be performed in such manner as shall be consistent with Accepted Servicing Practices. The cost of the annual inspections referred to in the first sentence of this paragraph shall be an expense of the Servicer; the cost of all additional inspections referred to in this paragraph shall be a Trust Fund Expense and if paid by the Servicer shall constitute a Property Protection Advance or an Administrative Advance. The Servicer or Special Servicer, as the case may be, shall prepare a written report of inspection and deliver it to the Certificate Administrator. The Certificate Administrator shall post such report on the Certificate Administrator’s Website pursuant to Section 8.14(b).

 

Section 3.23.     Advances. (a)  In the event that a Monthly Payment (or an Assumed Monthly Payment, as applicable) (other than the Balloon Payment) or any portion of a Monthly Payment (or an Assumed Monthly Payment, as applicable) (other than any Balloon Payment) on the Trust Loan has not been received by the close of the Business Day immediately prior to the Remittance Date, the Servicer, subject to its determination that such amounts are not Nonrecoverable Advances, shall make an advance on such Remittance Date to the Distribution Account, in an amount equal to the Monthly Payment (or an Assumed Monthly Payment, as applicable), or any such portion of the Monthly Payment (or an Assumed Monthly Payment, as applicable) on the Trust Loan that was delinquent as of the close of the Business Day immediately prior to such Remittance Date, in each case, net of the Servicing Fee (which will not

 

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be paid to the Servicer until the funds in the Collection Account are available for payment of such fee); provided that neither the Servicer nor any other party shall be entitled to interest accrued on the amount of any Monthly Payment Advance with respect to any the Trust Loan if the related Monthly Payment (or an Assumed Monthly Payment, as applicable) in respect of the Trust Loan is received by the Servicer or the Certificate Administrator, as applicable, by 2:00 p.m., New York time, on such Remittance Date. For the avoidance of doubt, in the event that the amount of interest on the Trust Loan is reduced as a result of any modification to the Trust Loan, any future Monthly Payment Advance made with respect to such modified Trust Loan shall be in such amounts as may be required as a result of such reduction. The Servicer shall maintain a record of each Monthly Payment Advance it has made pursuant to this Section 3.23(a) on the Trust Loan and the amount allocated to the related Note on a Note-by-Note Basis and shall notify the Certificate Administrator thereof in the appropriate CREFC® Reports in order to permit allocation thereof pursuant to Sections 3.4 and 3.5. In the event that the Servicer does not remit any amounts required to be remitted to the Certificate Administrator on each Remittance Date (including any amounts required to be remitted pursuant to Section 3.5 and any required Monthly Payment Advance) to the Certificate Administrator for deposit in the Distribution Account on the Remittance Date, the Servicer shall pay to the Certificate Administrator interest on such amounts at the federal funds rate for the period from and including the Remittance Date to but excluding the Distribution Date or, if earlier, the actual remittance date.

 

Notwithstanding anything herein to the contrary, Monthly Payment Advances with respect to the Trust Loan shall be reimbursed solely out of amounts allocated to the Trust Loan pursuant to the Co-Lender Agreement and will not be reimbursed out of amounts allocated to the Companion Loans, and Companion Loan Advances with respect to any Companion Loan shall be reimbursed solely out of amounts allocated to such Companion Loan pursuant to the Co-Lender Agreement and will not be reimbursed out of amounts allocated to the Trust Loan or the other Companion Loan.

 

At any time that an Appraisal Reduction Amount exists, the amount that would otherwise be required to be advanced by the Servicer in respect of delinquent payments of principal and interest on the Trust Loan shall be reduced by multiplying such amount by a fraction, the numerator of which is the then outstanding principal balance of the Trust Loan minus the applicable Appraisal Reduction Amount and the denominator of which is the then outstanding principal balance of the Trust Loan.

 

(b)          Subject to Section 3.23(e), the Servicer shall advance for the benefit of the Certificateholders and the Companion Loan Holders, to the extent it determines that such amount is recoverable, all customary and reasonable out-of-pocket costs and expenses incurred by the Servicer or the Special Servicer in the performance of its servicing obligations, including, but not limited, to the costs and expenses incurred in connection with (i) the preservation, restoration, operation and protection of the Property which, in the Servicer’s sole discretion, exercised in accordance with Accepted Servicing Practices, are necessary to prevent an immediate or material loss to the Trust Fund’s interest in the Property, (ii) the payment of (A) real estate taxes, assessments and governmental charges that may be levied or assessed against the Loan Borrower or any of its affiliates or the Property or revenues from the Property or which become liens on such Property, (B) insurance premiums, (C) ground lease rents or other amounts required to be

 

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paid under any Ground Leases and (D) the out-of-pocket costs and expenses of the Servicer or the Special Servicer, as applicable (including, without limitation, reasonable attorneys’ fees and expenses) to the extent not paid by the Loan Borrower that are incurred in connection with assumption of the Whole Loan or a release of the Property from the liens of the Mortgages, (iii) any enforcement or judicial proceedings, including foreclosures and including, but not limited to, court costs, attorneys’ fees and expenses and costs for third-party experts, including appraisers and environmental and engineering consultants, and (iv) the management, operation and liquidation of the Property if such Property is acquired by the Special Servicer or its affiliate in the name of the Trustee on behalf of the Trust (collectively, “Property Protection Advances”). During the continuation of a Special Servicing Loan Event, the Special Servicer shall give the Servicer and the Trustee not less than five Business Days’ written notice before the date on which the Servicer is requested to make any Property Protection Advance with respect to the Whole Loan or the Foreclosed Property; provided, however, that only three Business Days’ written notice shall be required in respect of Property Protection Advances required to be made on an urgent or emergency basis (which may include, without limitation, Property Protection Advances required to make tax or insurance payments). In addition, the Special Servicer shall provide the Servicer with such information in its possession as the Servicer may reasonably request to enable the Servicer to determine whether a requested Property Protection Advance would constitute a Nonrecoverable Advance. Notwithstanding anything herein to the contrary, if the Special Servicer requests that the Servicer make an Advance, the Servicer may conclusively rely on such request as evidence that such advance is not a Nonrecoverable Advance.

 

(c)           To the extent the Servicer fails to make an Advance that it is required to make under this Agreement, the Trustee shall be required to make such Advance pursuant to Section 7.6. It is understood that the obligation of the Servicer and the Trustee (pursuant to Section 7.6) to make such Advances is mandatory, subject to the limitations set forth in this Agreement, and shall continue to apply after any modification or amendment of the Whole Loan pursuant to Section 3.24 hereof, beyond the Stated Maturity Date of the Whole Loan if a payment default shall have occurred on such date and through any court appointed stay period or similar payment delay resulting from any insolvency of the Loan Borrower or related bankruptcy, notwithstanding any other provision of this Agreement, other than the requirement of recoverability, and shall continue, subject to the requirement of recoverability, until the earlier of (i) the payment in full of the Trust Loan and (ii) the date on which the Property become liquidated.

 

(d)          Interest on each Advance made by the Servicer or the Trustee shall accrue for each day that such Advance is outstanding at a rate of interest equal to the Prime Rate (the “Advance Rate”) for each such day (or the most recent day on which the Prime Rate was reported, if not reported on such day) on the basis of a year of 360 days and the actual number of days elapsed in a month. Interest on the Advances shall compound annually.

 

(e)           Notwithstanding any other provision in this Agreement, the Servicer or the Trustee, as applicable, shall be obligated to make an Advance only to the extent that the Servicer or the Trustee, as applicable, has determined that such Advance, together with any previous unreimbursed Advances and interest on all those Advances at the Advance Rate, would not constitute a Nonrecoverable Advance if made. The Trustee and the Servicer, in that order, shall

 

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be entitled to reimbursement for any such Advances from the Collection Account and shall obtain such reimbursement in accordance with Section 3.4(c). If the context requires, each reference to the reimbursement or payment of an Advance shall be deemed to include, whether or not specifically referred to, payment or reimbursement of interest thereon at the Advance Rate through the date of payment or reimbursement.

 

(f)           The determination by the Servicer or the Trustee that it has made a Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced by the delivery of an Officer’s Certificate to the Certificate Administrator, the Companion Loan Holders, the Operating Advisor, the Controlling Class Representative (so long as no Consultation Termination Event is continuing), and the Trustee in electronic format which format is reasonably acceptable to the Certificate Administrator and the Trustee (if such determination is made by the Servicer), detailing the reasons for such determination with supporting documents attached. Such Officer’s Certificate shall be made available to any Privileged Person by the Certificate Administrator posting such Officer’s Certificate to the Certificate Administrator’s Website pursuant to Section 8.14(b). The costs of any appraisals, reports or surveys and other information requested by the Servicer or the Trustee establishing an Advance as a Nonrecoverable Advance shall be treated as Trust Fund Expenses, payable from the Collection Account pursuant to Section 3.4(c), and shall constitute a Property Protection Advance or Administrative Advance, as applicable, if paid by the Servicer or the Trustee from its funds. The Servicer’s determination of nonrecoverability in accordance with the above provisions shall be conclusive and binding on the Trustee and the Trustee shall be entitled to rely conclusively thereupon. The Trustee, in determining whether or not a proposed Advance would be a Nonrecoverable Advance, shall make such determination in its reasonable business judgment.

 

(g)           The Servicer and the Trustee are not obligated to advance or pay (i) the delinquent scheduled payments with respect to any Companion Loan, (ii) the Balloon Payment with respect to the Trust Loan or any Companion Loan (but are required to advance the Assumed Monthly Payment with respect to the Trust Loan), (iii) any Default Interest, (iv) amounts required to cure any damages resulting from Uninsured Causes (except as required pursuant to Section 3.12(c)), any failure of the Property to comply with any applicable law, including any environmental law, or (except in connection with the foreclosure or other acquisition of the Property in accordance with Section 3.12 upon the occurrence of a Loan Event of Default) to investigate, test, monitor, contain, clean up, or remedy an environmental condition present at the Property, (iv) any losses arising with respect to defects in the title to the Property, (v) any costs of capital improvements to the Property other than those necessary to prevent an immediate or material loss to the Trust’s interest in the Property, (vi) subordinated obligations or (vii) any Prepayment Charges.

 

Section 3.24.    Modifications of Loan Documents. (a)  (i) The Servicer (if no Special Servicing Loan Event has occurred or is continuing) or the Special Servicer (if a Special Servicing Loan Event occurs and is continuing), subject to (x) the consent of the Controlling Class Representative prior to the occurrence and continuance of a Control Termination Event, (y) the consultation and review rights of the Controlling Class Representative after the occurrence and during the continuance of a Control Termination Event but prior to the occurrence of a Consultation Termination Event and (z) the consultation and review rights of the Operating

 

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Advisor provided for in this Agreement after the occurrence and during the continuance of an Operating Advisor Consultation Event, may modify, waive or amend any term of the Whole Loan if such modification, waiver or amendment (a) is consistent with the Accepted Servicing Practices and (b) does not result in an Adverse REMIC Event (and the Servicer or the Special Servicer, as applicable, may obtain and be entitled to rely upon an Opinion of Counsel in connection with such determination) or cause any REMIC related to any Other Securitization Trust securities to fail to qualify as a REMIC under the Code. Notwithstanding anything herein to the contrary, in no event may the Servicer or the Special Servicer permit an extension of the Stated Maturity Date beyond the date that is seven (7) years prior to the latest Rated Final Distribution Date. In connection with (i) the release of a Property or a portion of a Property from the lien of the Mortgage or (ii) the taking of a Property or portion of a Property by exercise of the power of eminent domain or condemnation, if the Loan Documents require the Servicer or the Special Servicer, as applicable, to calculate the loan-to-value ratio of the remaining portion of such Property, for purposes of REMIC qualification of the Trust Loan, then, unless then permitted by the REMIC Provisions, such calculation shall exclude the value of personal property and going concern value, if any.

 

(b)          All modifications, waivers or amendments of the Whole Loan shall be in writing and shall be effected in a manner consistent with Accepted Servicing Practices, the REMIC Provisions and the provisions of the Co-Lender Agreement. The Servicer or the Special Servicer, as applicable, shall notify the Certificate Administrator, the Trustee, the Operating Advisor, the Companion Loan Holders, the Controlling Class Representative (so long as no Consultation Termination Event is continuing) and the Depositor, in writing, of any modification, waiver or amendment of any term of the Whole Loan and the date thereof, and shall deliver to the Certificate Administrator (in its capacity as custodian), the Companion Loan Holders and the Controlling Class Representative (so long as no Control Termination Event or Consultation Termination Event is in effect) an original and, if applicable, recorded counterpart of the agreement relating to such modification, waiver or amendment within ten (10) Business Days following the execution and, if applicable, recordation thereof with a copy to the Operating Advisor and, and so long as no Control Termination Event or Consultation Termination Event is in effect, the Controlling Class Representative. In the event the Servicer or Special Servicer adversely modifies the interest rate applicable to any Note, any aggregate adverse economic effect of the modification shall be applied to the Certificates, in reverse order of seniority. If the Whole Loan is modified, the Note Interest Rate on each Note shall not change for purposes of distributions on the Certificates. Notwithstanding the foregoing, neither the Servicer nor the Special Servicer shall modify the Note Interest Rates unless the Trust Loan is in default or default is reasonably foreseeable.

 

(c)          Subject to Section 3.26, any modification of the Loan Documents that requires a Rating Agency Confirmation pursuant to the Loan Documents, or any modification that would eliminate, modify or alter the requirement of obtaining such Rating Agency Confirmation in the Loan Documents, shall not be made without the Servicer’s or the Special Servicer’s, as applicable, first receipt of such Rating Agency Confirmation. Such Rating Agency Confirmation shall be obtained at the Loan Borrower’s expense in accordance with the Loan Agreement or, if not so provided in the Loan Agreement or if the Loan Borrower does not pay, at the expense of the Trust Fund.

 

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(d)          Promptly after the occurrence and during the continuance of a Special Servicing Loan Event, the Special Servicer shall request from the Certificate Administrator the name of the current Controlling Class Representative. Upon receipt of the name of such current Controlling Class Representative from the Certificate Administrator, the Special Servicer shall notify the Controlling Class Representative that a Special Servicing Loan Event has occurred. The Certificate Administrator shall be responsible for providing the name of the current Controlling Class Representative only to the extent the Controlling Class Representative has identified itself as such to the Certificate Administrator; provided that if the Controlling Class Representative is determined pursuant to the proviso in the definition of “Controlling Class Representative”, then (i) the Certificate Administrator shall determine which Class is the Controlling Class and (ii) the Special Servicer shall request from the Certificate Administrator, and the Certificate Administrator shall request from the Depository at the expense of the Trust, the list of Beneficial Holders of the Controlling Class, and the Certificate Administrator shall provide (on a reasonably prompt basis) such list to the Special Servicer and the Servicer at the expense of the Trust Fund.

 

(e)           Subject to Section 3.26, prior to implementing any of the following actions, the Servicer or the Special Servicer shall obtain a Rating Agency Confirmation with respect to such action:

 

(i)           any transfer of the Property or any portion of the Property, or any transfer of any direct or indirect ownership interest in a Loan Borrower to the extent the Loan Lender’s consent is required under the Loan Documents, except in each case as expressly permitted by the Loan Documents without the Loan Lender’s consent or in connection with a pending or threatened condemnation;

 

(ii)          any consent to incurrence of additional debt by a Loan Borrower or mezzanine debt by a direct or indirect parent of a Loan Borrower, including modification of the terms of any document evidencing or securing any such additional debt and of any intercreditor or subordination agreement executed in connection therewith and any waiver of or amendment or modification to the terms of any such document or agreement, in each case to the extent the mortgagee’s approval is required by the Loan Documents;

 

(iii)         approval of the termination or replacement of the Property Manager, to the extent the Loan Lender’s approval is required by the Loan Documents; and

 

(iv)         any of the actions described in clauses (v), (vi) or (viii) of the definition of “Major Decision”.

 

Notwithstanding the foregoing, the Servicer and Special Servicer may, subject to certain conditions (but without any Rating Agency Confirmation) grant a Loan Borrower’s request for consent to subject the Property to an easement, right-of-way or similar agreement for utilities, access, parking, public improvements or another similar purpose and may consent to subordination of the Whole Loan to such easement, right-of-way or similar agreement.

 

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(f)           Notwithstanding the foregoing, the Servicer shall not permit the substitution of a Property pursuant to the defeasance provisions of the Loan Agreement unless such defeasance complies with Treasury Regulations Section 1.860G-2(a)(8)(ii) and the Servicer has received (i) replacement collateral consisting of government securities within the meaning of Treasury Regulations Section 1.860G-2(a)(8)(ii), which satisfies the requirements of the Loan Documents, in an amount sufficient to make all scheduled payments required under the terms of the Whole Loan when due, (ii) a certificate of an Independent certified public accountant to the effect that such substituted property will provide cash flows sufficient to meet all payments of interest and principal (including payments at maturity) on the Whole Loan in compliance with the requirements of the terms of the Loan Documents, (iii) one or more Opinions of Counsel (at the expense of the Loan Borrower) to the effect that the Trustee, on behalf of the Trust, will have a first priority perfected security interest in such substituted property; provided, however, that, to the extent consistent with the Loan Documents, the Loan Borrower shall pay the cost of any such opinion as a condition to granting such defeasance, (iv) to the extent consistent with the Loan Documents, the Loan Borrower shall establish a single purpose entity to act as a successor mortgagor, if so required by the Rating Agencies, (v) to the extent permissible under the Loan Documents, the Servicer shall use its reasonable efforts to require the Loan Borrower to pay all costs of such defeasance, including but not limited to the cost of maintaining any successor mortgagor, and (vi) to the extent permissible under the Loan Documents, the Servicer shall obtain, at the expense of the Loan Borrower, Rating Agency Confirmation from each Rating Agency.

 

(g)           The Servicer shall deposit all payments received by it from defeasance collateral substituted for a Property into the Collection Account and treat any such payments as payments made on the Whole Loan in advance of its Payment Date, and not as a prepayment of the Whole Loan. Notwithstanding anything herein to the contrary, in no event shall the Servicer permit such amounts to be maintained in the Collection Account for a period in excess of 365 days (or 366 days in the case of a leap year).

 

Section 3.25.     Servicer and Special Servicer May Own Certificates. The Servicer, the Special Servicer and any agent thereof 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 Servicer, the Special Servicer or such agent except as otherwise provided herein subject to the restrictions on voting set forth in the definition of Certificateholder.

 

Section 3.26.     Rating Agency Confirmations. (a)  Notwithstanding the terms of any Loan Documents, the Intercreditor Agreement or other provisions of this Agreement, if any action under any Loan Documents or this Agreement requires a Rating Agency Confirmation as a condition precedent to such action, if the party (the “Requesting Party”) attempting to obtain such Rating Agency Confirmation from each Rating Agency has made a request to any such Rating Agency for such Rating Agency Confirmation and, within 10 Business Days of the Rating Agency Confirmation request being posted to the 17g-5 Information Provider’s Website, such Rating Agency has not replied to such request or has responded in a manner that indicates that such Rating Agency is neither reviewing such request nor waiving the requirement for a Rating Agency Confirmation, then such Requesting Party shall be required (without providing notice to the 17g-5 Information Provider) to (i) confirm that the applicable Rating Agency has received the Rating Agency Confirmation request, and, if it has not, promptly request the related

 

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Rating Agency Confirmation again and (ii) if there is no response to either Rating Agency Confirmation request within 5 Business Days of such confirmation or such second request (after seeking to confirm that the applicable Rating Agency received such second Rating Agency Confirmation request), as applicable, then (x) with respect to any condition in the Loan Documents requiring a Rating Agency Confirmation or any other matter under this Agreement relating to the servicing of the Whole Loan (other than as set forth in clause (y) below), the Requesting Party (or, if the Requesting Party is a Loan Borrower, then the Servicer or the Special Servicer, as applicable) will be required to determine, in accordance with its duties under this Agreement and in accordance with Accepted Servicing Practices, whether or not such action would be in the best interest of Certificateholders, and if the Requesting Party (or, if the Requesting Party is a Loan Borrower, then the Servicer or the Special Servicer, as applicable) determines that such action would be in the best interest of the Certificateholders, then the requirement for a Rating Agency Confirmation will not apply (provided, however, with respect to the release or substitution of any collateral relating to the Trust Loan, any Rating Agency Confirmation requirement that the Servicer or Special Servicer would have been permitted to waive pursuant to this Agreement will not apply without any such determination by the Requesting Party (or the Servicer or the Special Servicer, as applicable) (it being understood that the Requesting Party (or the Servicer, or the Special Servicer, as applicable) will in any event review the conditions required under the Loan Documents with respect to such release and confirm to its satisfaction in accordance with the Accepted Servicing Practices that such conditions (other than the requirement for a Rating Agency Confirmation) have been satisfied)), and (y) with respect to a replacement of the Servicer or Special Servicer, such condition will not apply if such Servicer or Special Servicer is a Qualified Servicer. For all other matters or actions (a) not specifically discussed above in clauses (x) or (y) or (b) that are not the subject of a Rating Agency Declination, the applicable Requesting Party shall be required to obtain a Rating Agency Confirmation from each of the Rating Agencies.

 

(b)          Any Rating Agency Confirmation requests made by the Servicer, Special Servicer, the Certificate Administrator or Trustee, as applicable, pursuant to this Agreement, shall be made in writing (an email shall be sufficient as a writing), which writing shall contain a cover page indicating the nature of the Rating Agency Confirmation request, and shall contain all back-up material the Servicer, Special Servicer, the Certificate Administrator or Trustee, as applicable, reasonably deems necessary for the Rating Agencies (including those for Companion Loan Securities) to process such request. Subject to Section 10.17, the Servicer, the Special Servicer, Certificate Administrator or the Trustee, as applicable, shall furnish such written Rating Agency Confirmation request to the 17g-5 Information Provider, and the 17g-5 Information Provider shall post such request on the 17g-5 Information Provider’s Website in accordance with Section 10.16 in accordance with the delivery instructions set forth in Section 10.5.

 

(c)           Promptly following the Special Servicer’s determination to take any action described in Section 3.26(a) without receiving Rating Agency Confirmation, the Special Servicer shall, subject to Section 10.17, provide written notice of such determination to the 17g-5 Information Provider, and the 17g-5 Information Provider shall post such request on the 17g-5 Information Provider’s Website in accordance with Section 10.16.

 

(d)          Each Certificateholder, by its acceptance of the Certificates, acknowledges and agrees to the foregoing with respect to Rating Agency Confirmations.

 

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Section 3.27.     Miscellaneous Provisions. Notwithstanding the terms of the related Loan Documents, the other provisions of this Agreement or the Co-Lender Agreement, with respect to any Companion Loan as to which there exists Companion Loan Securities, if any action relating to the servicing and administration of the Whole Loan or a Foreclosed Property (the “Relevant Action”) requires delivery of a Rating Agency Confirmation as a condition precedent to such action pursuant to this Agreement, then, except as set forth below in this paragraph, such action will also require delivery of a Companion Loan Rating Agency Confirmation as a condition precedent to such action from each Companion Loan Rating Agency. Each Companion Loan Rating Agency Confirmation shall be sought by the Servicer or Special Servicer, as applicable, depending on whichever such party is seeking the corresponding Rating Agency Confirmation(s) in connection with the Relevant Action. The requirement to obtain a Companion Loan Rating Agency Confirmation with respect to any Companion Loan Securities will be subject to, will be permitted to be waived by the Servicer and the Special Servicer on, and will be deemed not to apply on, the same terms and conditions applicable to obtaining Rating Agency Confirmations, as set forth in this Agreement; provided, that the Servicer or Special Servicer, as applicable, depending on which is seeking the subject Companion Loan Rating Agency Confirmation, shall forward to one or more of its counterpart (i.e., the master servicer or special servicer, as applicable), the counterpart providing or posting Rule 17g-5 information, or such other party or parties (as are agreed to by the Servicer or the Special Servicer, as applicable, and the applicable parties for the related Other Securitization Trust), at the expense of the Other Securitization Trust to the extent not borne by the Loan Borrower, and in such format as the sender and recipient may reasonably agree, (i) the request for such Companion Loan Rating Agency Confirmation at least two (2) Business Days before it is sent to the applicable Companion Loan Rating Agency, (ii) all materials forwarded to the 17g-5 Information Provider under this Agreement in connection with seeking the Rating Agency Confirmation(s) for the applicable Relevant Action at approximately the same time that such materials are forwarded to the 17g-5 Information Provider, and (iii) any other materials that the applicable Companion Loan Rating Agency may reasonably request in connection with such Companion Loan Rating Agency Confirmation promptly following such request.

 

Section 3.28.     Companion Loan Intercreditor Matters. (a)  If, pursuant to Section 2.9, or Section 3.16 of this Agreement, the Trust Loan is, in its entirety, purchased or repurchased from the Trust, the subsequent holder thereof shall be bound by the terms of the Co-Lender Agreement and shall assume the rights and obligations of the holder of the Notes related to the Trust Loan under the Co-Lender Agreement. All portions of the Mortgage File and (to the extent provided under the Loan Purchase Agreement) other documents pertaining to the Trust Loan shall be endorsed or assigned to the extent necessary or appropriate to the purchaser of the Trust Loan in its capacity as the holder of the Notes related to the Trust Loan (as a result of such purchase, repurchase or substitution) and (except for the actual Notes) on behalf of the holders of the Notes that represent the Companion Loans. Thereafter, such Mortgage File shall be held by the holder of the Trust Loan or a custodian appointed thereby for the benefit thereof, on behalf of itself and the Companion Loan Holders as their interests appear under the Co-Lender Agreement. If the related servicing file is not already in the possession of such party, it shall be delivered to the master servicer or special servicer, as the case may be, under any separate servicing agreement for the Whole Loan.

 

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(b)          Notwithstanding anything in this Agreement to the contrary, the Servicer or Special Servicer, as applicable, shall deliver reports and notices to each Companion Loan Holder to the extent required under the Co-Lender Agreement.

 

(c)           With respect to the Whole Loan, the Servicer shall prepare, or cause to be prepared, on an ongoing basis, a statement setting forth, to the extent applicable to the Whole Loan:

 

(i)           (A) the amount of the distribution from the Collection Account allocable to principal and (B) separately identifying the amount of scheduled principal payments, Balloon Payments, principal prepayments made at the option of the Loan Borrower or other principal prepayments (specifying the reason therefor), net liquidation proceeds and foreclosure proceeds included therein and information on distributions made with respect to the Whole Loan;

 

(ii)           the amount of the distribution from the Collection Account allocable to interest and the amount of Default Interest allocable to the Whole Loan;

 

(iii)          the amount of the distribution to the Companion Loan Holders, separately identifying the non-default interest, principal and other amounts included therein, and if the distribution to the Companion Loan Holders is less than the full amount that would be distributable to such Companion Loan Holders if there were sufficient amounts available therefor, the amount of the shortfall and the allocation thereof between interest and principal and the amount of the shortfall, if any, under the Whole Loan;

 

(iv)         the principal balance of each of the Whole Loan and the Companion Loans after giving effect to the distribution of principal as of the end of the related Collection Period; and

 

(v)          the amount of the servicing compensation paid to the Servicer and the Special Servicer with respect to the most recent Distribution Date, showing separately the Servicing Fee, the Special Servicing Fee, the Work-out Fee and the Liquidation Fee.

 

Not later than each Remittance Date, the Servicer shall make the foregoing statement available to the Companion Loan Holder by electronic means.

 

(d)          At any time after a Companion Loan has become part of an Other Securitization Trust and provided that the applicable parties hereto have received written notice (which may be by email) thereof including contact information for the master servicer and special servicer with respect to such Other Securitization Trust, all notices, reports, information or other deliverables required to be delivered to the related Companion Loan Holders pursuant to this Agreement or the Co-Lender Agreement shall be delivered to the master servicer and special servicer with respect to such Other Securitization Trust (who then may forward such items to the party entitled to receive such items as and to the extent provided in the related Other Pooling and Servicing Agreement) and, when so delivered to such master servicer and special servicer, the party hereto that is obligated under this Agreement or the Co-Lender Agreement to deliver such notices, reports, information or other deliverables shall be deemed to have satisfied its delivery obligations with respect to such items hereunder or under the Co-Lender Agreement.

 

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Section 3.29.      The Operating Advisor. (a) The Operating Advisor shall promptly review (i) the actions of the Special Servicer with respect to the Whole Loan when it is a Specially Serviced Loan (as provided in Section 3.10(h), this Section 3.29 and Section 6.5) and the actions of the Special Servicer with respect to Major Decisions relating to the Whole Loan when it is not a Specially Serviced Loan (as provided in Section 6.5) with respect to which a Major Decision Reporting Package has been delivered to the Operating Advisor, (ii) all reports by the Special Servicer made available to Privileged Persons that are posted on the Certificate Administrator’s Website and (iii) each Asset Status Report and Final Asset Status Report delivered to the Operating Advisor by the Special Servicer.

 

(b)          Subject to the Privileged Information Exception, the Operating Advisor and its Affiliates will be obligated to keep confidential any information appropriately labeled as “Privileged Information” received from the Special Servicer or Controlling Class Representative in connection with the Controlling Class Representative’s exercise of its rights under this Agreement (including, without limitation, in connection with any Asset Status Report) or otherwise in connection with this transaction, except under the circumstances described in Section 3.29(f) and subject to any law, rule, regulation, order, judgment or decree requiring the disclosure of such Privileged Information. Subject to the terms and conditions in this Agreement related to Privileged Information, the Operating Advisor agrees that it shall use information received from the Special Servicer pursuant to the terms of this Agreement solely for purposes of complying with its duties and obligations hereunder.

 

With respect to the determination of whether a Control Termination Event, Operating Advisor Consultation Event or Consultation Termination Event has occurred and is continuing, or has terminated, the Servicer, Special Servicer and Operating Advisor are each entitled to rely solely on its receipt from the Certificate Administrator of notice thereof or any notice posted to the Certificate Administrator’s Website pursuant to this Agreement, and, with respect to any obligations of the Operating Advisor, Servicer or Special Servicer that are performed only after the occurrence and continuance of a Control Termination Event, Operating Advisor Consultation Event and/or Consultation Termination Event, the Operating Advisor, Servicer or Special Servicer shall have no obligation to perform any such duties until the receipt of such notice or actual knowledge of the occurrence of a Control Termination Event, Operating Advisor Consultation Event or Consultation Termination Event, as applicable.

 

(c)           (i)  Based on the Operating Advisor’s review of any assessment of compliance, attestation report, Major Decision Reporting Package, Asset Status Report, Final Asset Status Report and other reports by the Special Servicer made available to Privileged Persons that are posted on the Certificate Administrator’s Website during the prior calendar year, the Operating Advisor shall (if, at any time during the prior calendar year, (i) the Whole Loan was a Specially Serviced Loan or (ii) there existed an Operating Advisor Consultation Event) prepare an annual report (the “Operating Advisor Annual Report”), substantially in the form of Exhibit S (which form may be modified or altered as to either its organization or content by the Operating Advisor, subject to compliance of such form with the terms and provisions of this Agreement including, without limitation, provisions herein relating to Privileged Information; provided, however, that in no event shall the information or any other content included in the Operating Advisor Annual Report contravene any provision of this Agreement), setting forth whether the Operating Advisor believes, in its sole discretion exercised in good faith, that the

 

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Special Servicer is operating in compliance with Accepted Servicing Practices with respect to its performance of its duties under this Agreement during the prior calendar year and identifying which, if any, standards the Operating Advisor believes, in its sole discretion exercised in good faith, the Special Servicer has failed to comply; provided, however, that in the event the Special Servicer is replaced, the Operating Advisor Annual Report shall only relate to such Special Servicer that was acting as Special Servicer as of December 31 in the prior calendar year and is continuing in such capacity through the date of such Operating Advisor Annual Report. Subject to the restrictions in this Agreement, including, without limitation, Section 3.29(d) hereof, each such Operating Advisor Annual Report shall (A) identify any material deviations from (i) Accepted Servicing Practices and (ii) the Special Servicer’s obligations under this Agreement with respect to the resolution or liquidation of the Whole Loan when it is a Specially Serviced Loan or Foreclosed Property and (B) comply with all of the confidentiality requirements described in this Agreement regarding Privileged Information (subject to a Privileged Information Exception). Such Operating Advisor Annual Report shall be delivered to the Certificate Administrator (which shall promptly post such Operating Advisor Annual Report on the Certificate Administrator’s Website in accordance with Section 8.14(b)), the 17g-5 Information Provider (who shall post it to the 17g-5 Information Provider’s Website in accordance with Section 10.17) and the Depositor; provided, however, that the Special Servicer shall be given an opportunity to review the Operating Advisor Annual Report at least five (5) Business Days prior to its delivery to the Certificate Administrator. The Operating Advisor shall have no obligation to adopt any comments to the Operating Advisor Annual Report that are provided by the Special Servicer.

 

(ii)          In the event the Operating Advisor’s ability to perform its obligations in respect of the Operating Advisor Annual Report is limited or prohibited due to the failure of a party hereto to timely deliver notice of action and information required to be delivered to the Operating Advisor or because such information is inaccurate or incomplete, the Operating Advisor shall set forth such limitations or prohibitions in the related Operating Advisor Annual Report, and the Operating Advisor shall not be subject to any liability arising from such limitations or prohibitions. The Operating Advisor shall be entitled to conclusively rely on the accuracy and completeness of any information it is provided without liability for any such reliance hereunder.

 

(d)          (i)  After the calculation but prior to the utilization by the Special Servicer of any of the calculations related to (i) Appraisal Reduction Amounts or (ii) net present value in accordance with Section 1.3(d) used in the Special Servicer’s determination of the course of action to take in connection with the workout or liquidation of the Whole Loan when it is a Specially Serviced Loan, the Special Servicer shall forward such calculations, together with any supporting material or additional information necessary in support thereof (including such additional information reasonably requested by the Operating Advisor to confirm the mathematical accuracy of such calculations, but not including any Privileged Information), to the Operating Advisor promptly, but in any event no later than two (2) Business Days after preparing such calculations, and the Operating Advisor shall promptly, but no later than three (3) Business Days after receipt of such calculations and any supporting or additional materials, recalculate and verify the accuracy of the mathematical calculations and the corresponding application of the non-discretionary portion of the applicable formulas required to be utilized in connection with any such calculation.

 

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(ii)          In connection with this Section 3.29(d) in the event the Operating Advisor does not agree with the mathematical calculations of the Appraisal Reduction Amount (as calculated by the Special Servicer) or net present value or the application of the applicable non-discretionary portions of the formula required to be utilized for such calculation, the Operating Advisor and Special Servicer shall consult with each other in order to resolve any inaccuracy in the mathematical calculations or the application of the non-discretionary portions of the related formula in arriving at those mathematical calculations or any disagreement within five (5) Business Days of delivery of such calculations. The Servicer shall cooperate with the Special Servicer and provide any information reasonably requested by such Special Servicer necessary for the calculation of the Appraisal Reduction Amount that is in the Servicer’s possession or reasonably obtainable by the Servicer. In the event the Operating Advisor and the Special Servicer are not able to resolve such inaccuracies or disagreement prior to the end of such five (5) Business Day period, the Operating Advisor shall promptly notify the Certificate Administrator of such disagreement and the Certificate Administrator shall examine the calculations and supporting materials provided by the Operating Advisor and the Special Servicer and determine which calculation is to apply (and shall provide prompt written notice of such determination to the Operating Advisor and the Special Servicer).

 

(e)           Notwithstanding the foregoing, prior to the occurrence and continuance of an Operating Advisor Consultation Event, the Operating Advisor shall have no specific involvement with respect to collateral substitutions, assignments, workouts, modifications, consents, waivers, insurance policies, borrower substitutions, lease changes, additional borrower debt, defeasances, property management changes, releases from escrow, assumptions and other similar actions that the Special Servicer may perform under this Agreement.

 

(f)           The Operating Advisor and its Affiliates shall keep all information appropriately labeled as “Privileged Information” confidential and shall not, without the prior written consent of the Special Servicer and (for so long as no Consultation Termination Event is continuing) the Controlling Class Representative, disclose such information to any other Person (including any Certificateholders other than the Controlling Class Representative), other than (i) to the extent expressly set forth herein, to the other parties to this Agreement with a notice indicating that such information is Privileged Information, (ii) pursuant to a Privileged Information Exception or (iii) where necessary to support specific findings or conclusions concerning allegations of deviations from Accepted Servicing Practices (A) in the Operating Advisor Annual Report or (B) in connection with a recommendation by the Operating Advisor to replace the Special Servicer. Each party to this Agreement that receives information that is appropriately labeled as “Privileged Information” from the Operating Advisor with a notice stating that such information is Privileged Information shall not disclose such Privileged Information to any Person other than pursuant to a Privileged Information Exception. Notwithstanding the foregoing, the Operating Advisor shall be permitted to share Privileged Information with its Affiliates and any subcontractors of the Operating Advisor that agree in writing to be bound by the same confidentiality provisions applicable to the Operating Advisor.

 

(g)           Subject to the requirements of confidentiality imposed on the Operating Advisor herein (including without limitation in respect of Privileged Information), the Operating

 

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Advisor shall respond to Inquiries proposed by Privileged Persons from time to time in accordance with the terms of Section 4.5.

 

(h)          As compensation for its activities hereunder, the Operating Advisor shall be entitled to receive the Operating Advisor Fee on each Distribution Date with respect to the Trust Loan. As to the Trust Loan, the Operating Advisor Fee shall accrue from time to time at the Operating Advisor Fee Rate and shall be computed on the basis of the same principal amount, in the same manner and for the same period respecting which any related interest payment on the Trust Loan is computed.

 

The Operating Advisor shall be entitled to reimbursement of any Operating Advisor Expenses, such amounts to be reimbursed from amounts on deposit in the Collection Account as provided by Section 3.4. Each successor Operating Advisor shall be required to acknowledge and agree to the terms of the preceding sentence.

 

In addition, the Operating Advisor Consulting Fee shall be payable to the Operating Advisor with respect to each Asset Status Report or Major Decision for which the Operating Advisor has consultation obligations hereunder. The Operating Advisor Consulting Fee shall be payable from funds on deposit in the Collection Account as provided in Section 3.4 of this Agreement, but only to the extent such Operating Advisor Consulting Fee is actually received from the Loan Borrower. When the Operating Advisor has consultation obligations with respect to an Asset Status Report or Major Decision under this Agreement, the Servicer or the Special Servicer, as the case may be, shall use efforts to collect the applicable Operating Advisor Consulting Fee from the Loan Borrower in connection with such Asset Status Report or Major Decision that are consistent with the efforts that the Servicer or the Special Servicer, as applicable, would use to collect the Loan Borrower-paid fees not specified in the Loan Agreement owed to it in accordance with Accepted Servicing Practices, but only to the extent not prohibited by the related Loan Documents. The Servicer or Special Servicer, as the case may be, may waive or reduce the amount of any Operating Advisor Consulting Fee payable by the related Loan Borrower if it determines that such full or partial waiver is in accordance with the Servicing Standard, but in no event shall the Servicer or such Special Servicer take any enforcement action with respect to the collection of such Operating Advisor Consulting Fee other than requests for collection; provided that the Servicer or Special Servicer, as applicable, shall consult, on a non-binding basis, with the Operating Advisor prior to any such waiver or reduction.

 

(i)            Upon (i) the written direction of Holders of Non-Reduced Certificates evidencing not less than 15% of the Voting Rights of the Non-Reduced Certificates requesting a vote to terminate and replace the Operating Advisor with a proposed successor Operating Advisor provided that the proposed successor Operating Advisor is an Eligible Operating Advisor) and (ii) payment by such Holders to the Certificate Administrator of the reasonable fees and expenses to be incurred by the Certificate Administrator in connection with administering such vote, the Certificate Administrator shall promptly provide written notice to all Certificateholders and the Operating Advisor of such request by posting such notice on the Certificate Administrator’s Website in accordance with Section 8.14(b), and concurrently by mail at their addresses appearing on the Certificate Register. Upon the written direction of holders of more than 50% of the Voting Rights of the Non-Reduced Certificates that exercise

 

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their right to vote (provided that holders of at least 50% of the Voting Rights of the Non-Reduced Certificates exercise their right to vote), the Trustee will terminate all of the rights and obligations of the Operating Advisor under this Agreement (other than any rights or obligations that accrued prior to the date of such termination (including accrued and unpaid compensation) and other than indemnification rights (arising out of events occurring prior to such termination)) by written notice to the Operating Advisor, and the proposed successor operating advisor will be appointed.

 

The Certificate Administrator shall include on each Distribution Date Statement a statement that each Certificateholder and Beneficial Owner of Certificates may access notices under the “special notices” tab and the “Risk Retention Special Notices” tab of a request of a vote to terminate and replace the Operating Advisor on the Certificate Administrator’s Website, and each Certificateholder and Beneficial Owner of Certificates may register to receive email notifications when such notices are posted on the Certificate Administrator’s Website. The Certificate Administrator will be entitled to reimbursement from the requesting Certificateholders for the reasonable expenses of posting notices of such requests.

 

(j)            After the occurrence of an Operating Advisor Termination Event, the Trustee may, and upon the written direction of Certificateholders representing at least 25% of the Voting Rights (taking into account the application of any Appraisal Reduction Amounts to notionally reduce the Certificate Balance of the Classes of Certificates) the Trustee shall, promptly terminate the Operating Advisor for cause and appoint a replacement Operating Advisor that is an Eligible Operating Advisor; provided, that no such termination shall be effective until a successor Operating Advisor has been appointed and has assumed all of the obligations of the Operating Advisor under this Agreement. The Trustee may rely on a certification by the replacement Operating Advisor that it is an Eligible Operating Advisor. If the Trustee is unable to find a replacement Operating Advisor that is an Eligible Operating Advisor within 30 days of the termination of the Operating Advisor, the Depositor shall be permitted to find a replacement. Upon any termination of the Operating Advisor and appointment of a successor to the Operating Advisor, the Trustee shall, as soon as possible, give written notice of the termination and appointment to the Special Servicer, the Servicer, the Certificate Administrator, the Depositor, the Controlling Class Representative (only if no Consultation Termination Event is continuing), the Certificateholders and the 17g-5 Information Provider.

 

(k)           The Holders of Certificates representing at least 25% of the Voting Rights hereunder may waive such Operating Advisor Termination Event within twenty (20) days of the receipt of notice from the certificate administrator of the occurrence of such Operating Advisor Termination Event. Upon any such waiver of an Operating Advisor Termination Event, such Operating Advisor Termination Event shall cease to exist and shall be deemed to have been remedied for every purpose hereunder. Upon any such waiver of an Operating Advisor Termination Event by Certificateholders, the Trustee and the Certificate Administrator shall be entitled to recover all costs and expenses incurred by it in connection with enforcement action taken with respect to such Operating Advisor Termination Event prior to such waiver from the Trust.

 

(l)            [Reserved].

 

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(m)          The Operating Advisor may resign from its obligations and duties hereby imposed on it (a) upon thirty (30) days prior written notice to the Depositor, the Servicer, the Special Servicer, the Trustee, the Certificate Administrator and the Controlling Class Representative, if applicable, if the Operating Advisor has secured a replacement that is an Eligible Operating Advisor and (b) upon the appointment of, and the acceptance of such appointment by, a successor Operating Advisor that is an Eligible Operating Advisor and receipt by the Trustee of Rating Agency Confirmation from each Rating Agency. No such resignation by the Operating Advisor shall become effective until the replacement Operating Advisor shall have assumed the resigning Operating Advisor’s responsibilities and obligations. If no successor Operating Advisor has been so appointed and accepted the appointment within 30 days after the notice of resignation, the resigning Operating Advisor may petition any court of competent jurisdiction for the appointment of a successor Operating Advisor that is an Eligible Operating Advisor. The resigning Operating Advisor shall pay all costs and expenses (including costs and expenses incurred by the Trustee and the Certificate Administrator) associated with a transfer of its duties pursuant to this Section 3.29.

 

(n)          In the event the Operating Advisor resigns or is otherwise terminated for any reason it shall remain entitled to any accrued and unpaid Operating Advisor Fees and Operating Advisor Consulting Fees and reimbursement of accrued and unpaid Operating Advisor Expenses pursuant to Section 3.29(h) and shall also remain entitled to any rights of indemnification provided hereunder.

 

(o)          The parties hereto agree, and the Certificateholders by their acceptance of their Certificates shall be deemed to have agreed, that (i) subject to Section 6.3, the Operating Advisor shall have no liability to any Certificateholder for any actions taken or for refraining from taking any actions under this Agreement, (ii) the Operating Advisor shall act solely as a contracting party to the extent set forth in this Agreement, (iii) the Operating Advisor shall have no (A) fiduciary duty, or (B) other duty except with respect to its specific obligations under this Agreement, and shall have no duty to any particular Class of Certificates or particular Certificateholders, and (iv) the Operating Advisor does not constitute an “investment adviser” within the meaning of the Investment Advisers Act of 1940, as amended.

 

(p)          The Operating Advisor shall not make any investment in any Class of Certificates.

 

(q)          The Operating Advisor may delegate its duties to agents or subcontractors to the extent such agents or subcontractors satisfy clauses (c), (d) and (f) of the definition of “Eligible Operating Advisor” and so long as the related agreements or arrangements with such agents or subcontractors are consistent with the provisions of this Section 3.29. However, the Operating Advisor shall remain obligated and primarily liable for any actions required to be performed by it hereunder without diminution of any such obligation or liability by virtue of such delegation or arrangements or by virtue of indemnification from any Person acting as its agents or subcontractor to the same extent and under the same terms and conditions as if the Operating Advisor alone were performing its obligations hereunder.

 

(r)           For the avoidance of doubt, while the Operating Advisor may serve in a similar capacity with respect to other securitizations that involve the same parties or Loan

 

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Borrower involved in this securitization, any experience or knowledge gained by the Operating Advisor from such other engagements may not be imputed to the Operating Advisor for this transaction; provided, however, the Operating Advisor may consider such experience or knowledge as pertinent information for discussion with the Special Servicer during its periodic meetings.

 

Section 3.30.     Credit Risk Retention. (a)  The Third Party Purchaser, prior to its acquisition of Certificates that constitute the Required Third Party Purchaser Retention Amount, will be required to enter into an agreement with the Retaining Sponsor (the “Credit Risk Retention Compliance Agreement”). Such agreement shall be deemed to refer initially to that certain Risk Retention Agreement, dated July 14, 2017, by and among the Depositor, the Retaining Sponsor and the Third Party Purchaser.

 

(b)          None of the Trustee, the Certificate Administrator or the Custodian shall be obligated to monitor, supervise or enforce the performance of any party under the Credit Risk Retention Compliance Agreement.

 

(c)           The Operating Advisor, on behalf of the Retaining Sponsor, shall monitor the timely delivery of the quarterly certification required to be provided by the Third Party Purchaser pursuant to Section 3(g) of the Credit Risk Retention Compliance Agreement and notify the Retaining Sponsor of any noncompliance by the Third Party Purchaser with such delivery requirement of which the Operating Advisor has actual knowledge. In connection with the foregoing, the Depositor shall cause the Retaining Sponsor to provide the Operating Advisor via email on the Closing Date with a fully executed version of the Credit Risk Retention Compliance Agreement referred to in Section 3.30(a) above.

 

Article 4

PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS

 

Section 4.1.       Distributions. (a)  On each Distribution Date, to the extent of Available Funds, amounts held in the Lower-Tier Distribution Account shall be withdrawn and distributed to the Upper-Tier REMIC in respect of the Uncertificated Lower-Tier Interests, for deposit into the Upper-Tier Distribution Account, and to the Class R Certificates in respect of the Class LT-R Interest in accordance with Section 4.1(c) and immediately thereafter, amounts so distributed to the Upper-Tier REMIC shall be withdrawn from the Upper-Tier Distribution Account and distributed by the Certificate Administrator in the following amounts:

 

first, to the Class A and Class X Certificates, on a pro rata basis (based on their respective Interest Distribution Amount), in respect of interest, up to the Interest Distribution Amount for each such Class and such Distribution Date;

 

second, to the Class A Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date until the Certificate Balance of such Class is reduced to zero;

 

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third, to the Class A Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates;

 

fourth, to the Class B Certificates, in respect of interest, up to the Interest Distribution Amount for such Class and such Distribution Date;

 

fifth, to the Class B Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date to the extent of the Principal Distribution Amount remaining after distributions pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;

 

sixth, to the Class B Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates;

 

seventh, to the Class C Certificates, in respect of interest, up to the Interest Distribution Amount for such Class and such Distribution Date;

 

eighth, to the Class C Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date to the extent of the Principal Distribution Amount remaining after distributions pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;

 

ninth, to the Class C Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates;

 

tenth, to the Class D Certificates, in respect of interest, up to the Interest Distribution Amount for such Class and such Distribution Date;

 

eleventh, to the Class D Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date to the extent of the Principal Distribution Amount remaining after distributions pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;

 

twelfth, to the Class D Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates;

 

thirteenth, to the Class E Certificates, in respect of interest, up to the Interest Distribution Amount for such Class and such Distribution Date;

 

fourteenth, to the Class E Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date to the extent of the Principal Distribution Amount remaining after distributions pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;

 

fifteenth, to the Class E Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates;

 

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sixteenth, to the Class HRR Certificates, in respect of interest, up to the Interest Distribution Amount for such Class and such Distribution Date;

 

seventeenth, to the Class HRR Certificates, in reduction of the Certificate Balance of such Class, up to the Principal Distribution Amount for such Class and such Distribution Date to the extent of the Principal Distribution Amount remaining after distributions pursuant to all prior clauses, until the Certificate Balance of such Class is reduced to zero;

 

eighteenth, to the Class HRR Certificates, up to the amount of all Applied Realized Loss Amounts previously allocated to such Class and not reimbursed on prior Distribution Dates; and

 

nineteenth, when the Certificate Balances of all Classes of Sequential Pay Certificates have been reduced to zero and after payment in full of all unpaid expenses of the Trust, to the Class R Certificates (in respect of the Class UT-R Interest), any remaining amounts.

 

In no event will any Class of Certificates receive distributions in reduction of its Certificate Balance that in the aggregate exceed the original Certificate Balance of such Class.

 

(b)          On each Distribution Date, each Class of Uncertificated Lower-Tier Interests shall be deemed to receive (A) distributions in respect of principal in an amount equal to the amount of principal actually distributable to its respective Related Certificates as provided in Section 4.1(a), and (B) distributions with respect of reimbursement of Realized Losses in an amount equal to the reimbursement of Realized Losses actually distributable to its respective Related Certificates as provided in Section 4.1(g). On each Distribution Date, each Class of Uncertificated Lower-Tier Interests shall be deemed to receive distributions in respect of interest in an amount equal to the sum of the Interest Distribution Amount and Interest Shortfall in respect of its Related Certificates and, in the case of the Class LA and Class LB Uncertificated Interests, the Interest Distribution Amount and Interest Shortfall in respect of the Class X Certificates (in each case computed based on an interest rate equal to the Class X Strip Rate for the related Regular Certificate and a Notional Amount equal to its related Lower-Tier Principal Amount), in each case to the extent actually distributable thereon as provided in Section 4.1(a). Amounts distributable pursuant to this paragraph are referred to herein collectively as the “Lower-Tier Distribution Amount”, and shall be made by the Certificate Administrator by deeming such Lower-Tier Distribution Amount to be withdrawn from the Lower-Tier REMIC Distribution Account to be deposited in the Upper-Tier REMIC Distribution Account.

 

As of any date, the principal balance of each Uncertificated Lower-Tier Interest shall equal its Lower-Tier Principal Amount. The Pass-Through Rate with respect to each Uncertificated Lower-Tier Interest shall be the rate per annum set forth in the Introductory Statement hereto.

 

Any amount that remains in the Lower-Tier Distribution Account on each Distribution Date after both the distribution of the Lower-Tier Distribution Amount and any Prepayment Charge distributed pursuant to Section 4.3 shall be distributed to the Holders of the Class R Certificates (in respect of the Class LT-R Interest, but only to the extent of the amount remaining in the Lower-Tier Distribution Account, if any).

 

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Distributions to the Class R Certificateholders (in respect of the Class LT-R Interest) from the Lower-Tier Distribution Account and to the Class R Certificate holders (in respect of the Class UT-R Interest) and to other Certificateholders from the Upper-Tier Distribution Account on each Distribution Date shall be made by the Certificate Administrator (after withdrawing any amounts deposited in the Distribution Account in error to the extent funds are available for such purpose) to each Certificateholder of record on the related Record Date (other than as provided in Section 9.1 in respect of the final distribution), by wire transfer in immediately available funds to the account of such Certificateholder at a bank or other entity located in the United States and having appropriate facilities therefor; provided that the Certificate Administrator has received appropriate wire transfer instructions therefrom, or by check by first class mail to the address set forth therefor in the Certificate Register if wiring instructions have not been received at least five (5) Business Days prior to the Distribution Date.

 

(c)           All amounts distributable to a Class of Certificates pursuant to Section 4.1(a) on each Distribution Date shall be allocated pro rata among the outstanding Certificates in each such Class based on their respective Percentage Interests. Such distributions shall be made on each Distribution Date to each Certificateholder of record on the related Record Date by wire transfer of immediately available funds to the account of such Certificateholder at a bank or other entity located in the United States and having appropriate facilities therefor provided that the Certificate Administrator has received appropriate wire transfer instructions therefrom, or by check by first class mail to the address set forth therefor in the Certificate Register if wiring instructions have not been received at least five (5) Business Days prior to the Distribution Date. The final distribution on each Certificate shall be made in like manner, but only upon presentment and surrender of such Certificate at the location specified by the Certificate Administrator in the notice to Certificateholders of such final distribution.

 

(d)         The Certificate Administrator shall, as soon as reasonably possible after notice thereof by the Servicer to the Certificate Administrator that the final distribution with respect to any Class of Certificates is expected to be made, mail to each Holder of such Class of Certificates on such date a notice to the effect that:

 

(i)           the Certificate Administrator reasonably expects based upon information previously provided to it that the final distribution with respect to such Class of Certificates shall be made on such Distribution Date, but only upon presentation and surrender of such Certificates at the office of the Certificate Administrator therein specified; and

 

(ii)           if such final distribution is made on such Distribution Date, no interest shall accrue on such Certificate from and after the Certificate Interest Accrual Period related to such Distribution Date.

 

(e)           Any funds not distributed to any Holder or Holders of Certificates of such Class on such Distribution Date because of the failure of such Holder or Holders to tender their Certificates shall, on such date, be set aside and held in trust for the benefit of the appropriate non-tendering Holder or Holders. If any Certificates as to which notice has been given pursuant to this Section 4.1 shall not have been surrendered for cancellation within six months after the time specified in such notice, the Certificate Administrator shall mail a second notice to the

 

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remaining non-tendering Certificateholders to surrender their Certificates for cancellation to receive the final distribution with respect thereto. If within one year after the second notice not all of such Certificates shall have been surrendered for cancellation, the Certificate Administrator may, directly or through an agent, take appropriate steps to contact the remaining non-tendering Certificateholders concerning surrender of their Certificates. The costs and expenses of holding such funds in trust and of contacting such Certificateholders shall be paid out of such funds. All such amounts shall be held by the Certificate Administrator in trust in accordance herewith until the expiration of a two-year period following such second notice, notwithstanding any termination of the Trust Fund. If within two years after the second notice any such Certificates shall not have been surrendered for cancellation, the Certificate Administrator shall hold all amounts distributable to the Holders thereof for the benefit of such Holders until the earlier of (i) its termination as Certificate Administrator hereunder and the transfer of such amounts to a successor Certificate Administrator and (ii) the termination of the Trust Fund, at which time such amounts shall be distributed, subject to applicable law, to the Depositor. No interest shall accrue or be payable to any Certificateholder on any amount held in trust hereunder or by the Certificate Administrator as a result of such Certificateholder’s failure to surrender its Certificate(s) for final payment thereof in accordance with this Section 4.1(e). Any such amounts transferred to the Certificate Administrator will remain uninvested. In the event the Certificate Administrator is permitted or required to invest any amounts in Permitted Investments under this Agreement in the event of its assumption of the duties of, or becoming the successor to, the Servicer or the Special Servicer, as applicable, in accordance with the terms of this Agreement, it shall invest such amounts in Permitted Investments under clause (i) of the definition of Permitted Investments.

 

(f)           Subject to the following sentence, the Certificate Administrator shall be responsible for the calculations with respect to distributions from the Trust so long as the Trust Fund has not been terminated in accordance with this Agreement. The Certificate Administrator shall have no duty to recompile, recalculate or verify the accuracy of information provided to it by the Servicer pursuant to Section 3.18(a) and, in the absence of manifest error in such information, may conclusively rely upon it.

 

(g)          On each Distribution Date, Realized Losses with respect to the Trust Loan shall be allocated to and applied as a reduction of the Certificate Balance of each Class of Sequential Pay Certificates in the following order:

 

first, to the Class HRR Certificates;

 

second, to the Class E Certificates;

 

third, to the Class D Certificates;

 

fourth, to the Class C Certificates;

 

fifth, to the Class B Certificates; and

 

sixth, to the Class A Certificates.

 

in each case, until the Certificate Balance thereof has been reduced to zero.

 

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The Notional Amount of the Class X Certificates shall be reduced by the amount of Realized Losses allocated to the Class A and Class B Certificates.

 

Section 4.2.       Withholding Tax. (a)  Notwithstanding any other provision of this Agreement, the Certificate Administrator shall comply with all federal withholding requirements with respect to payments to Certificateholders or payees that the Certificate Administrator reasonably believes are applicable under the Code. The consent of Certificateholders or payees shall not be required for any such withholding and each Certificateholder or payee is hereby deemed to have agreed by virtue of its purchase of such Certificate (or beneficial ownership interest in such Certificate) to provide all information required by the Certificate Administrator. In the event the Certificate Administrator withholds any amount from interest payments or advances thereof to any Certificateholder or payee pursuant to federal withholding requirements, amounts so withheld shall be treated as having been entirely distributed to such Certificateholder or payee, and the Certificate Administrator shall indicate the amount withheld to such Certificateholder or payee through a report.

 

Section 4.3.       Allocation and Distribution of Prepayment Charges. On any Distribution Date, Prepayment Charges, if any, collected in respect of the Trust Loan during the related Collection Period shall be distributed to the Holders of the Class A, Class B, Class C, Class D, Class E and Class HRR Certificates, in the following manner: (A) the Holders of each Class of Sequential Pay Certificates shall be entitled to receive on each Distribution Date an amount of Prepayment Charges, if any, collected in respect of the Trust Loan, equal to the product of (i) a fraction whose numerator is the amount of principal distributed to such Class on such Distribution Date and whose denominator is the total amount of principal distributed to all of the Certificates representing principal payments in respect of the Trust Loan on such Distribution Date, (ii) the Base Interest Fraction for the related principal prepayment and such Class of Sequential Pay Certificates, and (iii) the Prepayment Charges, as applicable, collected in respect of the Trust Loan during the related Collection Period, and (B) any Prepayment Charges, as applicable, collected in respect of the Trust Loan during the related Collection Period remaining after such distributions to the Sequential Pay Certificates will be distributed to the Class X Certificates.

 

No Prepayment Charges will be distributed to holders of the Class R Certificates.

 

On each Distribution Date, the Certificate Administrator shall apply amounts related to Prepayment Charges then on deposit in the Lower-Tier Distribution Account and received during or prior to the related Collection Period to the Class LA Uncertificated Interest pursuant to this Section 4.3.

 

Section 4.4.       Statements to Certificateholders. (a)  On each Distribution Date, based on information provided by the Servicer or the Special Servicer, as applicable, the Certificate Administrator shall prepare and make available on the Certificate Administrator’s Website pursuant to Section 8.14(b) to any Privileged Person and any Borrower Related Party that certifies to the Certificate Administrator in the form of Exhibit BB-2 that it is a Certificateholder or Beneficial Owner of a Certificate, a statement, based upon the information provided to it by the Servicer and the Special Servicer, as applicable, in respect of the

 

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distributions made on such Distribution Date (a “Distribution Date Statement”) setting forth, among other things:

 

(i)           for each Class of Certificates (other than the Class R Certificates), (a) the amount of the distributions made on such Distribution Date allocable to interest at the Pass-Through Rate and/or the amount allocable to principal (separately identifying the amount of any principal payments (specifying the source of such payments)), (b) the amount of any Prepayment Charges collected on the Trust Loan and the amount thereof allocated to each Class of Certificates, and (c) the amount of interest paid on Advances from Default Interest and allocable to such Class of Certificates;

 

(ii)          if the amount of the distributions to the Holders of each Class of Certificates was less than the full amount that would have been distributable to such holders if there had been sufficient Available Funds, the amount of the shortfall allocable to such Class of Certificates, stating separately the amounts allocable to interest and principal;

 

(iii)         the amount of any Monthly Payment Advance for such Distribution Date;

 

(iv)         the Certificate Balance or Notional Amount, as applicable, of each Class of Certificates (other than the Class R Certificates) after giving effect to any distribution in reduction of the Certificate Balance or Notional Amount, as applicable, on such Distribution Date and the allocation of Realized Losses on such Distribution Date, and the amount of Realized Losses allocated to each Class on such Distribution Date;

 

(v)          the principal balance of the Trust Loan and each Companion Loan and the principal balance of each Note as of the end of the Collection Period for such Distribution Date;

 

(vi)         the aggregate amount of unscheduled payments (and the source of such payments) made during the related Collection Period;

 

(vii)        identification of any Loan Event of Default, any Special Servicing Loan Event, any Servicer Termination Event or any Special Servicer Termination Event or any Operating Advisor Termination Event that in any case has been declared as of the close of business on the second Business Day prior to the end of the immediately preceding calendar month;

 

(viii)       the amount of the servicing compensation (other than the Servicing Fee) paid to the Servicer and the Special Servicer with respect to such Distribution Date, separately listing any Liquidation Fees or Work-Out Fees and any other Loan Borrower charges retained by the Servicer or Special Servicer and the amount of compensation paid to the Servicer, the Special Servicer, the Operating Advisor, the Certificate Administrator, and the Trustee, separately listing the Certificate Administrator Fee, the Special Servicing Fee, the Trustee Fee, the Operating Advisor Fee and the CREFC® Intellectual Property Royalty License Fee paid to CREFC® with respect to such Distribution Date;

 

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(ix)         the number of days the Loan Borrower is delinquent in the event that the Loan Borrower is delinquent at least 30 days and the date upon which any foreclosure proceedings have been commenced;

 

(x)           if the Property had as of the close of business on the Loan Payment Date immediately preceding such Distribution Date become a Foreclosed Property;

 

(xi)           information with respect to any declared bankruptcy of the Loan Borrower;

 

(xii)         as to any item of Collateral released, liquidated or disposed of during the preceding Collection Period, the identity of such item and the amount of proceeds of any liquidation or other amounts, if any, received therefrom during the related Collection Period;

 

(xiii)        a list of conveyances or transfers of the Property by the Loan Borrower;

 

(xiv)        the aggregate amount of all Advances, if any, not yet reimbursed;

 

(xv)         the amount of any reimbursement of Nonrecoverable Advances paid to the Servicer;

 

(xvi)        a report identifying any Appraisal Reduction Amount;

 

(xvii)       an itemized listing of any Disclosable Special Servicer Fees received by the Special Servicer or any of its Affiliates during the related Collection Period;

 

(xviii)      the amount of Default Interest, if any, and late payment charges, if any, paid by the Loan Borrower during the related Collection Period;

 

(xix)         the original rating of each Class of Certificates and the current rating of each Class of Certificates;

 

(xx)          the aggregate amount of Loan Borrower Reimbursable Trust Fund Expenses;

 

(xxi)         the current Controlling Class; and

 

(xxii)        the identity of the current Controlling Class Representative.

 

The Depositor, the Trustee, the Certificate Administrator, the Operating Advisor, the Servicer and the Special Servicer may agree to enhance the reporting requirements of the Distribution Date Statement without Certificateholder approval. Assistance in using the Certificate Administrator’s Website can be obtained by calling the Certificate Administrator’s investor relations desk at (000) 000-0000. The Certificate Administrator has not obtained and shall not be deemed to have obtained actual knowledge of any information posted to the Certificate Administrator’s Website only by virtue of its receipt and posting such information to

 

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the Certificate Administrator’s Website or its filing of such information, to the extent such information was not produced by the Certificate Administrator.

 

Within a reasonable period of time after the end of each calendar year, the Certificate Administrator shall furnish to each Person who at any time during the calendar year was a Certificateholder, a statement containing the information set forth in clauses (i), (ii), (viii) and (xx) above as to the applicable Class, aggregated for such calendar year or applicable portion of such year during which such Person was a Certificateholder, together with such other information as the Certificate Administrator deems necessary or desirable, or that a Certificateholder or Beneficial Owner of a Certificate reasonably requests, to enable Certificateholders to prepare their tax returns for such calendar year. Such obligation of the Certificate Administrator shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Certificate Administrator pursuant to any requirements of the Code as from time to time are in force.

 

The Certificate Administrator will be entitled to rely on all information provided to it by the Servicer or the Special Servicer without independent verification. The Servicer, the Special Servicer, the Trustee and the Certificate Administrator will be entitled to rely on information supplied by the Loan Borrower without independent verification.

 

The Certificate Administrator shall include on each Distribution Date Statement a statement that each Certificateholder and Beneficial Owner of Certificates may access notice of a request of a vote to terminate and replace the Special Servicer on the Certificate Administrator’s Website, and each Certificateholder and Beneficial Owner of Certificates may register to receive email notifications when such notices are posted on the Certificate Administrator’s Website. The Certificate Administrator will be entitled to reimbursement from the requesting Certificateholders for the reasonable expenses of posting notices of such requests.

 

(b)           The Certificate Administrator shall, on each Distribution Date make the Distribution Date Statement available to Privileged Persons and any Borrower Related Party that certifies to the Certificate Administrator in the form of Exhibit BB-2 that it is a Certificateholder or Beneficial Owner of a Certificate, pursuant to Section 8.14(b). The Certificate Administrator’s obligation to provide such information to Certificateholders and others shall be contingent on the Certificate Administrator’s receipt of such information from the Servicer and the Special Servicer, as applicable. The Certificate Administrator shall be entitled to rely on such information provided to it by the Servicer or the Special Servicer without independent verification. To the extent that the information required to be furnished by the Servicer is based on information required to be provided by the Loan Borrower or the Special Servicer, the Servicer’s obligation to furnish such information to the Certificate Administrator shall be contingent on its receipt of such information from the Loan Borrower or the Special Servicer, as applicable. To the extent that information required to be furnished by the Special Servicer is based on information required to be provided by the Loan Borrower, the Special Servicer’s obligation to furnish such information shall be contingent upon its receipt of such information from the Loan Borrower. The Servicer, the Special Servicer, the Certificate Administrator and the Trustee shall be entitled to rely on information supplied by the Loan Borrower without independent verification.

 

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The Certificate Administrator shall, to the extent provided to it by the Servicer in electronic format, make available to Privileged Persons pursuant to Section 8.14(b) reports or analyses of net operating income from the Property. Such net operating income reports or analyses shall be prepared pursuant to Section 3.18 hereof by the Servicer in CREFC® format based on the quarterly, annual and periodic statements and rent rolls with respect to the Property obtained by the Servicer from the Loan Borrower.

 

If so authorized by the Depositor, the Certificate Administrator may make available on the Certificate Administrator’s Website to any Privileged Person certain other information with respect to the Whole Loan (subject to the limitations of Section 3.4(c)).

 

In addition, the Certificate Administrator shall make available on the Certificate Administrator’s Website such information as set forth in Section 8.14(b) herein.

 

Section 4.5.      Investor Q&A Forum and Investor Registry. (a)  The Certificate Administrator shall make available to Privileged Persons only, the Investor Q&A Forum. The “Investor Q&A Forum” shall be a service available on the Certificate Administrator’s Website, where (i) Certificateholders and Beneficial Owners of Certificates who are Privileged Persons may submit questions to (a) the Certificate Administrator relating to the Distribution Date Statement, (b) Servicer or Special Servicer, as applicable, relating to the reports being made available pursuant to Section 8.14(b)(ii)(B) and Section 8.14(b)(iii)(A), (B) and (C), the Whole Loan or the Property, and (c) the Operating Advisor relating to annual or other reports prepared by the Operating Advisor or actions by the Special Servicer referenced in such reports, (collectively, “Inquiries”), and (ii) Privileged Persons may view Inquiries that have been previously submitted and answered, together with the answers thereto. Upon receipt of an Inquiry for the Servicer, the Special Servicer or the Operating Advisor, the Certificate Administrator shall forward the Inquiry to the Servicer, the Special Servicer or the Operating Advisor, as applicable, in each case via email within a commercially reasonable period of time following receipt thereof. Following receipt of an Inquiry, the Certificate Administrator, the Servicer, the Special Servicer or the Operating Advisor, as applicable, unless it determines not to answer such Inquiry as provided below, shall reply to the Inquiry, which reply of the Servicer, the Special Servicer or Operating Advisor shall be by email to the Certificate Administrator. The Certificate Administrator shall post (within a commercially reasonable period of time following preparation or receipt of such answer, as the case may be) such Inquiry and the related answer to the Certificate Administrator’s Website. If the Certificate Administrator, Servicer, Special Servicer or Operating Advisor determines, in its respective sole discretion, that (i) any Inquiry is not of a type described above, (ii) answering any Inquiry would not be in the best interests of the Trust Fund and/or the Certificateholders, (iii) answering any Inquiry would be in violation of applicable law, the Loan Documents or this Agreement, (iv) answering any Inquiry would, or is, reasonably expected to result in a waiver of attorney client privilege or the disclosure of attorney client work-product; (v) answering any Inquiry would materially increase the duties of, or result in significant additional cost or expense to, the Certificate Administrator, Servicer, Special Servicer or Operating Advisor, as applicable, (vi) answering any Inquiry would violate the applicable confidentiality provisions or (vii) answering any Inquiry is otherwise, for any reason, not advisable to answer, it shall not be required to answer such Inquiry and, in the case of the Servicer, Special Servicer or Operating Advisor, shall promptly notify the Certificate Administrator. The Certificate Administrator shall notify the Person who submitted such Inquiry

 

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in the event that the Inquiry will not be answered. Any notice by the Certificate Administrator to the Person who submitted an Inquiry that will not be answered shall include the following statement: “Because the Trust and Servicing Agreement provides that the Certificate Administrator, Servicer, Special Servicer or Operating Advisor shall not answer an Inquiry if it determines, in its respective sole discretion, that (i) any Inquiry is not of a type described in the Trust and Servicing Agreement, (ii) answering any Inquiry would not be in the best interests of the Trust and/or the Certificateholders, (iii) answering any Inquiry would be in violation of applicable law or the Loan Documents, (iv) answering any Inquiry would, or is, reasonably expected to result in a waiver of attorney client privilege or the disclosure of attorney client work-product, (v) answering any Inquiry would materially increase the duties of, or result in significant additional cost or expense to, the Certificate Administrator, Servicer, Special Servicer or Operating Advisor, as applicable, (vi) answering any Inquiry would violate the applicable confidentiality provisions or (vii) answering any Inquiry is otherwise, for any reason, not advisable to answer, no inference should be drawn from the fact that the Certificate Administrator, Servicer, Special Servicer or Operating Advisor has declined to answer the Inquiry.” No party may post or otherwise disclose information known to such party to be Privileged Information; provided that the Certificate Administrator shall have no obligation to review any inquiry or answer received by it for posting to the Investor Q&A Forum to determine if such inquiry or answer contains any such direct communication with the Controlling Class Representative, or otherwise to consult with the party from whom such inquiry or answer is received to confirm the same, and the Certificate Administrator shall have no liability in connection with its posting to the Investor Q&A Forum of any inquiry or answer containing such direct communication. Answers posted on the Investor Q&A Forum will be attributable only to the respondent, and shall not be deemed to be answers from any of the Depositor, the Initial Purchaser or the Certificate Administrator (as applicable) or any of their respective affiliates. None of the Initial Purchaser, Depositor, or any of their respective affiliates will certify to any of the information posted in the Investor Q&A Forum and no such party shall have any responsibility or liability for the content of any such information. The Certificate Administrator shall not be required to post to the Certificate Administrator’s Website any Inquiry or answer thereto that the Certificate Administrator determines, in its sole discretion, is administrative or ministerial in nature. The Investor Q&A Forum will not reflect questions, answers and other communications that are not submitted via the Certificate Administrator’s Website. In addition to the Certificate Administrator’s receipt of the Investor Certification to confirm that such Person is a Privileged Person, the Certificate Administrator may require acceptance of an additional waiver and disclaimer for access to the Investor Q&A Forum. No party to this Agreement shall be permitted to disclose Privileged Information in the Investor Q&A Forum.

 

(b)           The Certificate Administrator shall make available to any Certificateholder and any Beneficial Owner, the Investor Registry. The “Investor Registry” shall be a voluntary service via the Certificate Administrator’s Website, where Certificateholders and Beneficial Owners can register and thereafter obtain information with respect to any other Certificateholder or Beneficial Owner that has so registered. Any person registering to use the Investor Registry shall certify that (a) it is a Certificateholder or a Beneficial Owner and (b) it grants authorization to the Certificate Administrator to make its name and contact information available on the Investor Registry for at least forty-five (45) days from the date of such certification to other registered Certificateholders and registered Beneficial Owners and such other certifications as the Certificate Administrator may require. Such Person shall then be

 

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asked to provide certain mandatory fields such as the individual’s name, the company name and email address, as well as certain optional fields such as address, phone, and Class(es) of Certificates owned. If any Certificateholder or Beneficial Owner notifies the Certificate Administrator in writing that it wishes to be removed from the Investor Registry (which notice may not be within forty-five (45) days of its registration), the Certificate Administrator shall promptly remove it from the Investor Registry. The Certificate Administrator will not be responsible for verifying or validating any information submitted on the Investor Registry, or for monitoring or otherwise maintaining the accuracy of any information thereon. In addition to the Certificate Administrator’s receipt of the Investor Certification to confirm that such Person is a Privileged Person, the Certificate Administrator may require acceptance of a waiver and disclaimer for access to the Investor Registry.

 

Article 5

THE CERTIFICATES

 

Section 5.1.       The Certificates. (a)  The following table sets forth the designation and aggregate Initial Certificate Balance and Pass-Through Rate for each Class of Certificates.

 

Class of Certificates

 

Initial Certificate
Balance or Initial
Notional Amount

 

Pass-Through Rate

Class A  $49,100,000  Class A Pass-Through Rate
Class X  $58,000,000  Class X Pass-Through Rate
Class B  $8,900,000  Class B Pass-Through Rate
Class C  $6,000,000  Class C Pass-Through Rate
Class D  $25,000,000  Class D Pass-Through Rate
Class E  $29,450,000  Class E Pass-Through Rate
Class HRR  $7,250,000  Class HRR Pass-Through Rate
Class R  N/A  N/A

 

The Certificates shall be issued in substantially the respective forms set forth as Exhibits A-1 through A-8 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 Certificate Registrar, 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 by law, or as may, consistently herewith, be determined by the officers executing such Certificates, as evidenced by their execution thereof.

 

(b)          The Certificates of each Class of Sequential Pay Certificates shall be issued in minimum denominations of $50,000 Initial Certificate Balance and integral multiples of $1 Initial Certificate Balance in excess of $50,000. The Class X Certificates shall be issued in minimum denominations of $1,000,000 Initial Notional Amount and in integral multiples of $1 Initial Notional Amount in excess of $1,000,000. The Class R Certificates shall be issued,

 

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maintained and transferred in minimum percentage interests of 10% of such Class R Certificates and in integral multiples of 1% in excess thereof.

 

(c)           One authorized signatory shall sign the Certificates for the Certificate Registrar by manual or facsimile signature. If an authorized signatory whose signature is on a Certificate no longer holds that office at the time the Certificate Registrar countersigns the Certificate, the Certificate shall be valid nevertheless. A Certificate shall not be valid until an authorized signatory of the Certificate Registrar (who may be the same officer who executed the Certificate) manually countersigns the Certificate. The signature shall be conclusive evidence that the Certificate has been executed and countersigned under this Agreement.

 

(d)           The Class HRR Certificates shall only be held as a Definitive Certificate in the Third Party Purchaser Custodial Account by the Certificate Administrator (and the Holder of the Class HRR Certificates shall be registered on the Certificate Register), unless otherwise consented to by the Retaining Sponsor. The Certificate Administrator shall hold the Class HRR Certificates in safekeeping and shall release the same only upon receipt of written instructions in accordance with this agreement from the Holder of the Class HRR Certificates and with the Retaining Sponsor’s consent (subject to Section 5.1(e)), and in accordance with any authentication procedures as may be utilized by the Certificate Administrator. There shall be, and hereby is, established by the Certificate Administrator an account which shall be designated the “Third Party Purchaser Custodial Account” and into which the Class HRR Certificates shall be held and which shall be governed by and subject to this Agreement and the Credit Risk Retention Compliance Agreement. In addition, on or after the date hereof, the Certificate Administrator may establish any number of subaccounts to the Third Party Purchaser Custodial Account for the Holder of the Class HRR Certificates. The Class HRR Certificates to be delivered in physical form to the Certificate Administrator shall be delivered as set forth herein. No amounts distributable to the Class HRR Certificates shall be remitted to the Third Party Purchaser Custodial Account, but shall be remitted directly to the Holder of the Class HRR Certificates in accordance with written instructions (which shall be in the form of Exhibit J-1 to this Agreement) provided separately by the Holder of the Class HRR Certificates to the Certificate Administrator. Under no circumstances by virtue of safekeeping the Class HRR Certificates shall the Certificate Administrator (i) be obligated to bring legal action or institute proceedings against any Person on behalf of the Holder of the Class HRR Certificates or the Retaining Sponsor or (ii) have any obligation to monitor, supervise or enforce the performance of any party under the Credit Risk Retention Compliance Agreement. The Certificate Administrator shall be entitled to conclusively rely with no obligation to verify, confirm or otherwise monitor the accuracy of any information included in any written instructions provided in connection with this Third Party Purchaser Custodial Account and shall have no liability in connection therewith, other than with respect to the Certificate Administrator’s obligation to obtain the Retaining Sponsor’s consent prior to any release of the Class HRR Certificates. The Certificate Administrator shall hold the Definitive Certificate representing the Class HRR Certificates at the below location, or any other location; provided the Certificate Administrator has given notice to the Holder of the Class HRR Certificates of such new location:

 

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Xxxxx Fargo Bank, National Association
Attn: Security Control and Transfer (SCAT)
MAC: N9345-010
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000

 

On the Closing Date, the Certificate Administrator shall deliver written confirmation to the Depositor, the Retaining Sponsor and the Third Party Purchaser substantially in the form of Exhibit X evidencing its receipt of the Class HRR Certificates.

 

The Certificate Administrator shall make available to the Holder of the Class HRR Certificates and the Retaining Sponsor a statement of Third Party Purchaser Custodial Account as mutually agreed upon by the Certificate Administrator and the Holder of the Class HRR Certificates, and in accordance with the Certificate Administrator’s policies and procedures. Any transfer of the Class HRR Certificates shall be subject to Article 5 of this Agreement.

 

(e)           In the event the Third Party Purchaser seeks to cause the release of the Class HRR Certificates from the Third Party Purchaser Custodial Account, the Third Party Purchaser shall deliver to the Certificate Administrator and the Retaining Sponsor (i) a written request for such release or transfer, as applicable, and (ii) a written request executed by the Third Party Purchaser for the Retaining Sponsor’s consent to such release, substantially in the form attached hereto as Exhibit J-6 (to be countersigned by the Retaining Sponsor with a medallion signature guarantee and delivered by the Retaining Sponsor to the Certificate Administrator). The Certificate Administrator may not consent to, or otherwise permit, any such release without obtaining the written consent of the Retaining Sponsor. The Certificate Administrator shall be indemnified and held harmless for any release in connection with this Section 5.1(e), in accordance with the terms set forth in Section 8.3. For the avoidance of doubt, the Certificate Administrator shall not permit any transfer of any Class HRR Certificates unless a release of such Certificates has been effected in accordance with this paragraph.

 

Section 5.2.       Form and Registration. (a)  Each Class of the Certificates (other than the Class HRR (unless otherwise consented to by the Retaining Sponsor pursuant to Section 5.1(d)) and Class R Certificates) sold to institutions that are non-“U.S. persons” in “offshore transactions”, as defined in, and in reliance on, Regulation S shall be initially be represented by a temporary global certificate in definitive, fully registered form without interest coupons, substantially in the applicable form set forth as an exhibit hereto (each a “Temporary Regulation S Global Certificate”), which shall be deposited on the Closing Date on behalf of the purchasers of the Certificates represented thereby with the Certificate Registrar, at its principal trust office, as custodian, for the Depository, and registered in the name of the Depository or the nominee of the Depository for the account of designated agents holding on behalf of the Euroclear System (“Euroclear”) and/or Clearstream Banking, société anonyme (“Clearstream”). Prior to the expiration of the 40-day period commencing on the later of the commencement of the offering and the Closing Date (the “Restricted Period”), beneficial interests in each Temporary Regulation S Global Certificate may be held only through Euroclear or Clearstream. After the expiration of the Restricted Period, a beneficial interest in a Temporary Regulation S Global Certificate may be exchanged for an interest in the related permanent global certificate of

 

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the same Class (a “Regulation S Global Certificate”) in the applicable form set forth as an exhibit hereto in accordance with the procedures set forth in Section 5.3(f). During the Restricted Period, distributions due in respect of a beneficial interest in a Temporary Regulation S Global Certificate shall only be made upon delivery to the Certificate Registrar by Euroclear or Clearstream, as applicable, of a Non-U.S. Beneficial Ownership Certification. After the expiration of the Restricted Period, distributions due in respect of any beneficial interests in a Temporary Regulation S Global Certificate shall not be made to the holders of such beneficial interests unless exchange for a beneficial interest in the Regulation S Global Certificate of the same Class is improperly withheld or refused. The aggregate Certificate Balance of a Temporary Regulation S Global Certificate or a Regulation S Global Certificate may from time to time be increased or decreased by adjustments made on the records of the Certificate Registrar, as custodian for the Depository, as hereinafter provided.

 

On the Closing Date, the Certificate Administrator shall execute, the Authenticating Agent shall authenticate, and the Certificate Administrator shall deliver to the Certificate Registrar the Regulation S Global Certificates, which shall be held by the Certificate Registrar for purposes of effecting the exchanges contemplated by the preceding paragraph.

 

(b)          Certificates of each Class (other than the Class HRR Certificates (unless otherwise consented to by the Retaining Sponsor pursuant to Section 5.1(d))) offered and sold to QIBs in reliance on Rule 144A under the Securities Act (“Rule 144A”) shall be represented by a single, global certificate in definitive, fully registered form without interest coupons, substantially in the applicable form set forth as an exhibit hereto (each, a “Rule 144A Global Certificate” and, together with the Temporary Regulation S Global Certificates and the Regulation S Global Certificates, the “Global Certificates”), which shall be deposited with the Certificate Registrar or an agent of the Certificate Registrar, as custodian for the Depository, and registered in the name of the Depository or a nominee of the Depository. The aggregate Certificate Balance of a Rule 144A Global Certificate may from time to time be increased or decreased by adjustments made on the records of the Certificate Registrar, as custodian for the Depository, as hereinafter provided.

 

(c)           Certificates of each Class that are offered and sold in the United States to investors that are Institutional Accredited Investors that are not QIBs, the Class HRR Certificates and the Class R Certificates (the “Non-Book Entry Certificates”) shall be in the form of Definitive Certificates, substantially in the applicable form set forth as an exhibit hereto, and shall be registered in the name of such investors or their nominees by the Certificate Registrar who shall deliver the certificates for such Non-Book Entry Certificates to the respective beneficial owners or owners.

 

(d)          Owners of beneficial interests in Global Certificates of any Class shall not be entitled to receive physical delivery of certificated Certificates unless: (i) the Depository advises the Certificate Registrar in writing that the Depository is no longer willing or able to discharge properly its responsibilities as depository with respect to the Global Certificates of such Class or ceases to be a Clearing Agency, and the Certificate Registrar and the Depository are unable to locate a qualified successor within 90 days of such notice or (ii) the Trustee has instituted or has been directed to institute any judicial proceeding to enforce the rights of the Holders of such Class and the Trustee has been advised by counsel that in connection with such

 

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proceeding it is necessary or appropriate for the Trustee to obtain possession of the Certificates of such Class; provided, however, that under no circumstances will certificated Certificates be issued to beneficial owners of a Temporary Regulation S Global Certificate. Upon notice of the occurrence of any of the events described in clause (i) or (ii) above with respect to any Certificates of a Class that are in the form of Global Certificates and upon surrender by the Depository of any Global Certificate of such Class and receipt from the Depository of instructions for reregistration, the Certificate Registrar shall issue Certificates of such Class in the form of Definitive Certificates (bearing, in the case of a Definitive Certificate issued for a Rule 144A Global Certificate, the same legends regarding transfer restrictions borne by such Global Certificate), and thereafter the Certificate Registrar shall recognize the holders of such Definitive Certificates as Certificateholders under this Agreement.

 

(e)           If any Beneficial Owner wishes to transfer its interest in a Rule 144A Global Certificate to an Institutional Accredited Investor that is not a QIB, or wishes to transfer its interest in a Regulation S Global Certificate to a “U.S. person” (as that term is defined in Rule 902(k) of Regulation S) that is an Institutional Accredited Investor but not a QIB, then the transferee shall take delivery in the form of a Non-Book Entry Certificate, subject to the restrictions on the transfer of such Non-Book Entry Certificate in Section 5.3(h) of this Agreement. No such transfer shall be made and the Certificate Registrar shall not register any such transfer unless such transfer complies with the provisions of Section 5.3(h) of this Agreement applicable to transfers of Non-Book Entry Certificates. Upon acceptance for exchange or transfer of a beneficial interest in a Global Certificate for a Non-Book Entry Certificate, as provided herein, the Certificate Registrar shall endorse on the schedule affixed to the related Global Certificate (or on a continuation of such schedule affixed to such Global Certificate and made a part thereof) an appropriate notation evidencing the date of such exchange or transfer and a decrease in the denomination of such Global Certificate equal to the denomination of such Non-Book Entry Certificate issued in exchange therefor or upon transfer thereof.

 

Section 5.3.       Registration of Transfer and Exchange of Certificates. (a)  The Certificate Administrator shall keep or cause to be kept at the Corporate Trust Office books (the “Certificate Register”) in which, subject to such reasonable regulations as it may prescribe, the Certificate Administrator shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided (the Certificate Administrator, in such capacity, being the “Certificate Registrar”). In such capacities, the Certificate Administrator shall be responsible for, among other things, (i) maintaining the Certificate Register and a record of the aggregate holdings of Certificates of each Class represented by a Temporary Regulation S Global Certificate, a Regulation S Global Certificate and a Rule 144A Global Certificate and accepting Certificates for exchange and registration of transfer and (ii) transmitting to the Depositor, the Servicer and the Special Servicer any notices from the Certificateholders.

 

(b)           Subject to the restrictions on transfer set forth in this Article 5, upon surrender for registration of transfer of any Certificate, the Certificate Registrar shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates in authorized denominations, in like aggregate interest and of the same Class.

 

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(c)           Rule 144A Global Certificate to Temporary Regulation S Global Certificate. If a holder of a beneficial interest in the Rule 144A Global Certificate deposited with the Certificate Registrar as custodian for the Depository wishes at any time to exchange its interest in such Rule 144A Global Certificate for an interest in the Temporary Regulation S Global Certificate of the same Class, or to transfer its interest in such Rule 144A Global Certificate to a Person who is required to take delivery thereof in the form of an interest in the Temporary Regulation S Global Certificate of the same Class, such holder may, subject to the rules and procedures of the Depository, exchange or cause the exchange of such interest for an equivalent beneficial interest in such Temporary Regulation S Global Certificate. Upon receipt by the Certificate Registrar, as registrar, at its office designated in Section 5.7 hereof, of (1) instructions given in accordance with the Depository’s procedures from a Depository Participant directing the Certificate Registrar to credit, or cause to be credited, a beneficial interest in the Temporary Regulation S Global Certificate in an amount equal to the beneficial interest in the Rule 144A Global Certificate to be exchanged, (2) a written order given in accordance with the Depository’s procedures containing information regarding the Euroclear or Clearstream account to be credited with such increase and the name of such account and (3) a certificate in the form of Exhibit C hereto given by the holder of such beneficial interest stating that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Certificates and pursuant to and in accordance with Regulation S, then the Certificate Registrar shall instruct the Depository to reduce, or cause to be reduced, the Certificate Balance of the Rule 144A Global Certificate and to increase, or cause to be increased, the Certificate Balance of the Temporary Regulation S Global Certificate by the aggregate Certificate Balance of the beneficial interest in the Rule 144A Global Certificate to be exchanged, to credit or cause to be credited to the account of the Person specified in such instructions (who shall be the agent member of Euroclear or Clearstream, or both) a beneficial interest in the Temporary Regulation S Global Certificate equal to the reduction in the Certificate Balance of the Rule 144A Global Certificate, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Rule 144A Global Certificate that is being exchanged or transferred.

 

(d)          Rule 144A Global Certificate to Regulation S Global Certificate. If a holder of a beneficial interest in the Rule 144A Global Certificate deposited with the Certificate Registrar as custodian for the Depository wishes at any time to exchange its interest in such Rule 144A Global Certificate for an interest in the Regulation S Global Certificate of the same Class, or to transfer its interest in such Rule 144A Global Certificate to a Person who is required to take delivery thereof in the form of an interest in a Regulation S Global Certificate, such holder may, subject to the rules and procedures of the Depository, exchange, or cause the exchange of, such interest for an equivalent beneficial interest in such Regulation S Global Certificate. Upon receipt by the Certificate Registrar, as registrar, at its office designated in Section 5.7 hereof, of (1) instructions given in accordance with the Depository’s procedures from a Depository Participant directing the Certificate Registrar to credit or cause to be credited a beneficial interest in the Regulation S Global Certificate in an amount equal to the beneficial interest in the Rule 144A Global Certificate to be exchanged, (2) a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with such increase and (3) a certificate in the form of Exhibit D hereto given by the holder of such beneficial interest stating (A) that the transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global

 

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Certificates and pursuant to and in accordance with Regulation S, or (B) that the transferee is otherwise entitled to hold its interest in the applicable Certificates in the form of an interest in the Regulation S Global Certificate, without any registration of such Certificates under the Securities Act (in which case such certificate shall enclose an Opinion of Counsel to such effect and such other documents as the Certificate Registrar may reasonably require), then the Certificate Registrar shall instruct the Depository to reduce, or cause to be reduced, the Certificate Balance of the Rule 144A Global Certificate and to increase, or cause to be increased, the Certificate Balance of the Regulation S Global Certificate by the aggregate Certificate Balance of the beneficial interest in the Rule 144A Global Certificate to be exchanged, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Certificate equal to the reduction in the Certificate Balance of the Rule 144A Global Certificate, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Rule 144A Global Certificate that is being exchanged or transferred.

 

(e)           Temporary Regulation S Global Certificate or Regulation S Global Certificate to Rule 144A Global Certificate. If a holder of a beneficial interest in a Temporary Regulation S Global Certificate or Regulation S Global Certificate deposited with the Certificate Registrar as custodian for the Depository wishes at any time to exchange its interest in such Temporary Regulation S Global Certificate or Regulation S Global Certificate for an interest in the Rule 144A Global Certificate of the same Class, or to transfer its interest in such Temporary Regulation S Global Certificate or Regulation S Global Certificate to a Person who is required to take delivery thereof in the form of an interest in the Rule 144A Global Certificate, such holder may, subject to the rules and procedures of Euroclear or Clearstream, as the case may be, and the Depository, exchange or cause the exchange of such interest for an equivalent beneficial interest in the Rule 144A Global Certificate of the same Class. Upon receipt by the Certificate Registrar, as registrar, at its office designated in Section 5.7 hereof, of (1) instructions from Euroclear or Clearstream, if applicable, and the Depository, directing the Certificate Registrar, as registrar, to credit or cause to be credited a beneficial interest in the Rule 144A Global Certificate equal to the beneficial interest in the Temporary Regulation S Global Certificate or Regulation S Global Certificate to be exchanged, such instructions to contain information regarding the participant account with the Depository to be credited with such increase, (2) with respect to a transfer of an interest in the Regulation S Global Certificate, information regarding the participant account of the Depository to be debited with such decrease and (3) with respect to a transfer of an interest in the Temporary Regulation S Global Certificate (but not the Regulation S Global Certificate) for an interest in the Rule 144A Global Certificate, a certificate in the form of Exhibit E hereto given by the holder of such beneficial interest and stating that the Person transferring such interest in the Temporary Regulation S Global Certificate reasonably believes that the Person acquiring such interest in the Rule 144A Global Certificate is a QIB and is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A, then the Certificate Registrar shall instruct the Depository to reduce, or cause to be reduced, the Certificate Balance of the Temporary Regulation S Global Certificate or Regulation S Global Certificate and to increase, or cause to be increased, the Certificate Balance of the Rule 144A Global Certificate by the aggregate Certificate Balance of the beneficial interest in the Temporary Regulation S Global Certificate or Regulation S Global Certificate to be exchanged, and the Certificate Registrar shall instruct the Depository, concurrently with such reduction, to credit, or cause to be credited, to the account of the Person specified in such instructions, a beneficial interest in the Rule 144A Global

 

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Certificate equal to the reduction in the Certificate Balance of the Temporary Regulation S Global Certificate or Regulation S Global Certificate and to debit, or cause to be debited, from the account of the Person making such transfer the beneficial interest in the Temporary Regulation S Global Certificate or Regulation S Global Certificate that is being transferred.

 

(f)           Temporary Regulation S Global Certificate to Regulation S Global Certificate. Interests in a Temporary Regulation S Global Certificate as to which the Certificate Registrar has received from Euroclear or Clearstream, as the case may be, a certificate (a “Non-U.S. Beneficial Ownership Certification”) to the effect that Euroclear or Clearstream, as applicable, has received a certificate substantially in the form of Exhibit F hereto from the holder of a beneficial interest in such Temporary Regulation S Global Certificate, shall be exchanged after the Restricted Period, for interests in the Regulation S Global Certificate of the same Class. The Certificate Registrar shall effect such exchange by delivering to the Depository for credit to the respective accounts of such holders, a duly executed and authenticated Regulation S Global Certificate, representing the aggregate Certificate Balance of interests in the Temporary Regulation S Global Certificate initially exchanged for interests in the Regulation S Global Certificate. The delivery to the Certificate Registrar by Euroclear or Clearstream of the certificate or certificates referred to above may be relied upon by the Depositor and the Certificate Registrar as conclusive evidence that the certificate or certificates referred to therein has or have been delivered to Euroclear or Clearstream pursuant to the terms of this Agreement and the Temporary Regulation S Global Certificate. Upon any exchange of interests in the Temporary Regulation S Global Certificate for interests in the Regulation S Global Certificate, the Certificate Registrar shall endorse the Temporary Regulation S Global Certificate to reflect the reduction in the Certificate Balance represented thereby by the amount so exchanged and shall endorse the Regulation S Global Certificate to reflect the corresponding increase in the amount represented thereby. Until so exchanged in full and except as provided therein, the Temporary Regulation S Global Certificate, and the Certificates evidenced thereby, shall in all respects be entitled to the same benefits under this Agreement as the Regulation S Global Certificate and Rule 144A Global Certificate authenticated and delivered hereunder.

 

(g)          Non-Book Entry Certificate to Global Certificate. If a Holder of a Non-Book Entry Certificate (other than a Class HRR Certificate (unless otherwise consented to by the Retaining Sponsor pursuant to Section 5.1(d)) or a Class R Certificate) wishes at any time to exchange its interest in such Non-Book Entry Certificate for an interest in a Global Certificate of the same Class, or to transfer all or part of such Non-Book Entry Certificate to a Person who is entitled to take delivery thereof in the form of an interest in a Global Certificate, such Holder may, subject to the rules and procedures of Euroclear or Clearstream, if applicable, and the Depository, cause the exchange of all or part of such Non-Book Entry Certificate for an equivalent beneficial interest in the appropriate Global Certificate of the same Class. Upon receipt by the Certificate Registrar, as registrar, at its office designated in Section 5.7 hereof, of (1) such Non-Book Entry Certificate, duly endorsed as provided herein, (2) instructions from such Holder directing the Certificate Registrar, as registrar, to credit, or cause to be credited, a beneficial interest in the applicable Global Certificate equal to the portion of the Certificate Balance of the Non-Book Entry Certificate to be exchanged, such instructions to contain information regarding the participant account with the Depository to be credited with such increase and (3) a certificate in the form of Exhibit G hereto (in the event that the applicable Global Certificate is the Temporary Regulation S Global Certificate), in the form of Exhibit H

 

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hereto (in the event that the applicable Global Certificate is the Regulation S Global Certificate) or in the form of Exhibit I hereto (in the event that the applicable Global Certificate is the Rule 144A Global Certificate), then the Certificate Registrar, as registrar, shall cancel, or cause to be canceled, all or part of such Non-Book Entry Certificate, shall, if applicable, execute, authenticate and deliver to the transferor a new Non-Book Entry Certificate equal to the aggregate Certificate Balance of the portion retained by such transferor and shall instruct the Depository to increase, or cause to be increased, such Global Certificate by the aggregate Certificate Balance of the portion of the Non-Book Entry Certificate to be exchanged and to credit, or cause to be credited, to the account of the Person specified in such instructions a beneficial interest in the applicable Global Certificate equal to the Certificate Balance of the portion of the Non-Book Entry Certificate so canceled.

 

(h)           Exchanges of Non-Book Entry Certificates. If a holder of a Rule 144A Global Certificate, Regulation S Global Certificate or Non-Book Entry Certificate wishes at any time to transfer its interest in such Rule 144A Global Certificate, Regulation S Global Certificate or Non-Book Entry Certificate to a Person who is required to take delivery thereof in the form of a Non-Book Entry Certificate, then the Certificate Registrar shall refuse to register such transfer unless it receives (and upon receipt, may conclusively rely upon): (i) an investment representation letter from the proposed transferee substantially in the form attached as Exhibit J-1 to this Agreement and (ii) if required by the Certificate Registrar, 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 the proposed 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 Servicer, the Special Servicer, the Certificate Administrator, the Trustee or the Certificate Registrar in their respective capacities as such).

 

(i)            Other Exchanges. In the event that a Global Certificate is exchanged for a Definitive Certificate, such Certificates may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of clauses (c) through (f) and (h) above (including the certification requirements intended to ensure that such transfers comply with Rule 144A or Regulation S under the Securities Act, at the case may be) and such other procedures as may from time to time be adopted by the Certificate Registrar.

 

(j)            Restricted Period. Prior to the termination of the Restricted Period with respect to the issuance of the Certificates, transfers of interests in the Temporary Regulation S Global Certificate to U.S. persons (as defined in Regulation S) shall be limited to transfers made pursuant to the provisions of clause (e) above.

 

(k)           If Certificates are issued upon the transfer, exchange or replacement of Certificates bearing a restrictive legend relating to compliance with the Securities Act, or if a request is made to remove such legend on Certificates, the Certificates so issued shall bear the restrictive legend, or such legend shall not be removed, as the case may be, unless there is delivered to the Certificate Registrar such satisfactory evidence, which may include an Opinion of Counsel that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or, with respect to Non-Book Entry Certificates, that such

 

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Certificates are not “restricted” within the meaning of Rule 144 under the Securities Act. Upon provision of such satisfactory evidence, the Certificate Registrar shall authenticate and deliver Certificates that do not bear such legend.

 

(l)            All Certificates surrendered for registration of transfer and exchange shall be canceled and subsequently destroyed by the Certificate Registrar in accordance with the Certificate Registrar’s customary procedures.

 

(m)          No Class E, Class HRR or Class R Certificates may be purchased by or transferred to any prospective purchaser or transferee that is or will be an “employee benefit plan” within the meaning of Section 3(3) of ERISA that is subject to the fiduciary responsibility provisions of ERISA, or any “plan” within the meaning of Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, or any other plan or arrangement subject to any federal, state or local law materially similar to the foregoing provisions of ERISA or the Code (“Similar Law”) or a Person whose assets include the assets of any such employee benefit plan or plan within the meaning of Department of Labor Regulation Section 2510.3-101, as modified by Section 3(42) of ERISA or otherwise (each, a “Benefit Plan”), or any person acting on behalf of any such Benefit Plan or using the assets of a Benefit Plan to purchase such Certificate other than, in the case of a Class E or Class HRR Certificate, an insurance company using assets of its general account under circumstances whereby such purchase and the subsequent holding of such Certificates by such insurance company would be exempt from the prohibited transaction provisions of Sections 406 and 407 of ERISA and Section 4975 of the Code under Sections I and III of Prohibited Transaction Class Exemption 95-60, or a plan subject to Similar Law whose acquisition and holding of such Certificate will not constitute or result in a non-exempt violation of Similar Law. Each prospective transferee of a Class E, Class HRR or Class R Certificate in definitive form (other than the Initial Purchaser) shall deliver to the transferor, the Certificate Registrar and the Certificate Administrator a representation letter, substantially in the form of Exhibit O, stating that the prospective transferee meets the requirements of the preceding sentence. Each transferee of an interest in a Class E, Class HRR or Class R Certificate in the form of a Global Certificate will be deemed to have represented that it meets the requirements of the second preceding sentence. No Class A, Class X, Class B, Class C or Class D Certificates may be purchased by or transferred to any prospective purchaser or transferee that is or will be a Benefit Plan, or any person acting on behalf of a Benefit Plan or using the assets of a Benefit Plan to purchase such Certificate, unless (A) the purchaser is an “accredited investor” as defined in Rule 501(a)(1) of the Securities Act and (B) the acquisition, holding and disposition of such Certificate by the purchaser will not constitute or otherwise result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code (or a similar non-exempt violation of Similar Law). Any purported transfer in violation of this Section 5.3(m) shall be null and void ab initio and shall vest no rights in any such purported purchaser or transferee.

 

(n)          Each Person who has or acquires any Residual Ownership Interest shall be deemed by the acceptance or acquisition of such Residual Ownership Interest to have agreed to be bound by the following provisions and the rights of each Person acquiring any Residual Ownership Interest are expressly subject to the following provisions:

 

(i)           Each Person acquiring or holding any Residual Ownership Interest shall be a Permitted Transferee and shall not acquire or hold such Residual Ownership Interest

 

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as agent (including a broker, nominee or other middleman) on behalf of any Person that is not a Permitted Transferee. Any such Person shall promptly notify the Certificate Registrar of any change or impending change in its status (or the status of the beneficial owner of such Residual Ownership Interest) as a Permitted Transferee. Any acquisition of a Residual Ownership Interest by a Person who is not a Permitted Transferee or by a Person who is acting as an agent of a Person who is not a Permitted Transferee shall be void ab initio and of no effect, and the immediately preceding owner who was a Permitted Transferee shall be restored to registered and beneficial ownership of the Residual Ownership Interest as soon and as fully as possible.

 

(ii)           No Residual Ownership Interest may be transferred, and no such transfer shall be registered in the Certificate Register, without the express written consent of the Certificate Registrar, and the Certificate Registrar shall not recognize the transfer, and such proposed transfer shall not be effective, without such consent with respect thereto. In connection with any proposed transfer of any Residual Ownership Interest, the Certificate Registrar shall, as a condition to such consent, (x) require the proposed transferee to deliver, and the proposed transferee shall deliver to the Certificate Registrar and to the proposed transferor, an affidavit in substantially the form attached as Exhibit J-2 (a “Transferee Affidavit”) of the proposed transferee (A) that such proposed transferee is a Permitted Transferee and (B) stating that (1) the proposed transferee historically has paid its debts as they have come due and intends to do so in the future, (2) the proposed transferee understands that, as the holder of a Residual Ownership Interest, it may incur liabilities in excess of cash flows generated by the residual interest, (3)