EXHIBIT 4.1
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
WACHOVIA BANK, NATIONAL ASSOCIATION,
Master Servicer
ARCAP SERVICING, INC.,
Special Servicer
and
XXXXX FARGO BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2006
$1,439,456,353
Commercial Mortgage Pass-Through Certificates
Series 2006-C2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES;
CERTAIN CALCULATIONS IN RESPECT OF THE MORTGAGE POOL
Section 1.01 Defined Terms................................................
Section 1.02 General Interpretive Principles..............................
Section 1.03 Certain Calculations in Respect of the Mortgage Loans........
Section 1.04 Crossed Trust Mortgage Loans.................................
Section 1.05 Certain Adjustments to the Principal Distributions on the
Certificates................................................
Section 1.06 Certain Matters with Respect to the Andover House
Apartments Total Loan.......................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Original Trust Mortgage Loans..................
Section 2.02 Acceptance by Trustee........................................
Section 2.03 Representations, Warranties and Covenants of the
Depositor; Repurchase and Substitution of Trust Mortgage
Loans by the Mortgage Loan Sellers for Defects in
Mortgage Files and Breaches of Representations and
Warranties..................................................
Section 2.04 Issuance of Uncertificated REMIC I Interests; Execution
of Certificates.............................................
Section 2.05 Acceptance of Grantor Trusts; Issuance of the Class V-1
Certificates................................................
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer; Administration of
the Mortgage Loans..........................................
Section 3.02 Collection of Mortgage Loan Payments.........................
Section 3.03 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts..........................................
Section 3.04 The Collection Account, Distribution Account, Excess
Interest Distribution Account, Excess Liquidation
Proceeds Account and Mortgage Loan Combination Custodial
Accounts....................................................
Section 3.05 Permitted Withdrawals from the Collection Account and the
Distribution Account........................................
Section 3.06 Investment of Funds in the Collection Account, Mortgage
Loan Combination Custodial Accounts, Servicing Accounts,
Cash Collateral Accounts, Lock-Box Accounts, the
Interest Reserve Account, Distribution Account, Excess
Liquidation Proceeds Account, Excess Interest
Distribution Account and the REO Account....................
Section 3.07 Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage.......................................
Section 3.08 Enforcement of Due-on-Sale and Due-on-Encumbrance
Clauses; Assumption Agreements; Defeasance Provisions;
Other Provisions............................................
Section 3.09 Realization Upon Defaulted Mortgage Loans....................
Section 3.10 Trustee to Cooperate; Release of Mortgage Files..............
Section 3.11 Servicing Compensation.......................................
Section 3.12 Reports to the Trustee.......................................
Section 3.13 Reserved.....................................................
Section 3.14 Reserved.....................................................
Section 3.15 Access to Certain Information................................
Section 3.16 Title to REO Property; REO Account...........................
Section 3.17 Management of REO Property...................................
Section 3.18 Fair Value Purchase Option; Sale of REO Properties...........
Section 3.19 Additional Obligations of the Master Servicer and Special
Servicer; Inspections; Appraisals...........................
Section 3.20 Modifications, Waivers, Amendments and Consents..............
Section 3.21 Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping; Series 2006-C2 Directing
Certificateholder...........................................
Section 3.22 Sub-Servicing Agreements.....................................
Section 3.23 Representations, Warranties and Covenants of the Master
Servicer....................................................
Section 3.24 Representations, Warranties and Covenants of the Special
Servicer....................................................
Section 3.25 Limitation on Liability of the Series 2006-C2 Directing
Certificateholder...........................................
Section 3.26 Reserved.....................................................
Section 3.27 Lock-Box Accounts, Cash Collateral Accounts and Servicing
Accounts....................................................
Section 3.28 Interest Reserve Account.....................................
Section 3.29 Limitations on and Authorizations of the Master Servicer
and Special Servicer with Respect to Certain Mortgage
Loans.......................................................
Section 3.30 Master Servicer and Special Servicer May Own Certificates....
Section 3.31 Authenticating Agent.........................................
Section 3.32 Series 2006-C2 Directing Certificateholder Contact with
Master Servicer.............................................
Section 3.33 Certain Matters with Respect to the Andover House
Apartments Total Loan.......................................
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Distributions................................................
Section 4.02 Trustee Report; Certain Other Reports........................
Section 4.03 P&I Advances.................................................
Section 4.04 Allocation of Realized Losses and Additional Trust Fund
Expenses....................................................
Section 4.05 Calculations.................................................
Section 4.06 Grantor Trust Reporting......................................
Section 4.07 Compliance with Withholding Requirements.....................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Registration of Transfer and Exchange of Certificates........
Section 5.03 Book-Entry Certificates......................................
Section 5.04 Mutilated, Destroyed, Lost or Stolen Certificates............
Section 5.05 Persons Deemed Owners........................................
Section 5.06 Certification by Certificateholders and Certificate Owners...
Section 5.07 Appointment of Paying Agent..................................
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
Section 6.01 Liability of the Depositor, the Master Servicer and the
Special Servicer............................................
Section 6.02 Merger, Consolidation or Conversion of the Depositor, the
Master Servicer or the Special Servicer.....................
Section 6.03 Limitation on Liability of the Trustee, the Depositor,
the Master Servicer, the Special Servicer and Others........
Section 6.04 Master Servicer and Special Servicer Not to Resign...........
Section 6.05 Rights of the Depositor in Respect of the Master Servicer
and the Special Servicer....................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default; Master Servicer and Special Servicer
Termination.................................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
Section 7.04 Waiver of Events of Default..................................
Section 7.05 Trustee Advances.............................................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee............................................
Section 8.02 Certain Matters Affecting the Trustee........................
Section 8.03 Trustee Not Liable for Validity or Sufficiency of
Certificates or Trust Mortgage Loans........................
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Fees and Expenses of Trustee; Indemnification of and by
Trustee.....................................................
Section 8.06 Eligibility Requirements for Trustee.........................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of Trustee...........................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Access to Certain Information................................
Section 8.12 Appointment of Custodians....................................
Section 8.13 Representations, Warranties and Covenants of the Trustee.....
ARTICLE IX
TERMINATION
Section 9.01 Termination Upon Repurchase or Liquidation of All Trust
Mortgage Loans..............................................
Section 9.02 Additional Termination Requirements..........................
ARTICLE X
ADDITIONAL TAX PROVISIONS
Section 10.01 Tax Administration...........................................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment....................................................
Section 11.02 Recordation of Agreement; Counterparts.......................
Section 11.03 Limitation on Rights of Certificateholders and B Loan
Holders.....................................................
Section 11.04 Governing Law................................................
Section 11.05 Notices......................................................
Section 11.06 Severability of Provisions...................................
Section 11.07 Grant of a Security Interest.................................
Section 11.08 Successors and Assigns; Beneficiaries........................
Section 11.09 Article and Section Headings.................................
Section 11.10 Notices to Rating Agencies...................................
ARTICLE XII
EXCHANGE ACT REPORTING AND REGULATION AB COMPLIANCE
Section 12.01 Intent of the Parties; Reasonableness........................
Section 12.02 Reserved.....................................................
Section 12.03 Information to be Provided by the Master Servicer, the
Special Servicer, the Trustee and each Servicing
Function Participant........................................
Section 12.04 Reserved.....................................................
Section 12.05 Filing Obligations...........................................
Section 12.06 Form 10-D Filings............................................
Section 12.07 Form 10-K Filings............................................
Section 12.08 Xxxxxxxx-Xxxxx Certification.................................
Section 12.09 Form 8-K Filings.............................................
Section 12.10 Form 15 Filing; Incomplete Exchange Act Filings;
Amendments to Exchange Act Reports..........................
Section 12.11 Annual Compliance Statements.................................
Section 12.12 Annual Reports on Assessment of Compliance with Servicing
Criteria....................................................
Section 12.13 Annual Independent Public Accountants' Attestation...........
Section 12.14 Exchange Act Reporting Indemnification.......................
Section 12.15 Amendments...................................................
Section 12.16 Exchange Act Report Signatures; Delivery of Notices;
Interpretation of Grace Periods.............................
Section 12.17 Termination of the Trustee...................................
EXHIBITS
A-1 Form of Class A-X Certificates
A-2 Form of Class X-0, Xxxxx X-0, Class A-3, Class A-1-A, Class A-M and
Class A-J Certificates
A-3 Form of Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class J, Class K, Class L, Class M, Class N, Class O and Class P
Certificates
A-4 Form of Class V-1 and Class V-2 Certificates
A-5 Form of Class R and Class LR Certificates
B Schedule of Trust Mortgage Loans
C-1 List of Additional Collateral Trust Mortgage Loans
C-2 List of Mezzanine Loans
D-1 Form of Master Servicer Request for Release
D-2 Form of Special Servicer Request for Release
E Form of Trustee Report
F-1A Form I of Transferor Certificate for Transfers of Non-Registered
Certificates
F-1B Form II of Transferor Certificate for Transfers of Non-Registered
Certificates
F-1C Form I of Transferor Certificate for Transfers of Interests in
Global Certificates for Classes of Non-Registered Certificates
F-1D Form II of Transferor Certificate for Transfers of Interests in
Global Certificates for Classes of Non-Registered Certificates
F-2A Form I of Transferee Certificate for Transfers of Non-Registered
Certificates Held in Physical Form
F-2B Form II of Transferee Certificate for Transfers of Non-Registered
Certificates Held in Physical Form
F-2C Form I of Transferee Certificate for Transfers of Interests in
Non-Registered Certificates Held in Book-Entry Form
F-2D Form II of Transferee Certificate for Transfers of Interests in
Non-Registered Certificates Held in Book-Entry Form
G-1 Form of Transferee Certificate in Connection with ERISA
(Non-Registered Certificates and Non-Investment Grade Certificates
Held in Fully-Registered, Certificated Form)
G-2 Form of Transferee Certificate in Connection with ERISA
(Non-Registered Certificates Held in Book-Entry Form)
H-1 Form of Residual Transfer Affidavit and Agreement for Transfers of
Class R and Class LR Certificates
H-2 Form of Transferor Certificate for Transfers of Class R and Class LR
Certificates
I Series 2006-C2 Directing Certificateholder's Reports Checklist
J Form of Affidavit of Lost Note
K Form of Notice Regarding Defeasance of Trust Mortgage Loan
L List of Loan Seller Sub-Servicers
M Form of Xxxxxxxx-Xxxxx Certification
N Schedule of Designated Sub-Servicers
O Form of Custodial Certification
P Trust Mortgage Loans Covered by Environmental Insurance Policy
Q Reserved
R-1 Form of Information Request from Certificateholder or Certificate
Owner
R-2 Form of Information Request from Prospective Investor
S Reserved
T Form of Acknowledgement of Proposed Special Servicer
U Relevant Servicing Criteria
V Additional Form 10-D Disclosure
W Additional Form 10-K Disclosure
X Form 8-K Disclosure
Y Additional Notification Disclosure
This Pooling and Servicing Agreement (this "Agreement"), is dated
and effective as of May 1, 2006, among CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., as Depositor, WACHOVIA BANK, NATIONAL ASSOCIATION, as Master
Servicer, ARCAP SERVICING, INC., as Special Servicer, and XXXXX FARGO BANK,
N.A., as Trustee.
PRELIMINARY STATEMENT:
Column Financial, Inc. (together with its successors in interest,
"Column") has sold to Credit Suisse First Boston Mortgage Securities Corp.
(together with its successors in interest, the "Depositor"), pursuant to the
Mortgage Loan Purchase Agreement dated as of May 1, 2006 (as such may from time
to time hereafter be amended, modified, supplemented and/or restated, the
"Mortgage Loan Purchase Agreement"), between Column as seller and the Depositor
as purchaser, those mortgage loans initially identified on the schedule attached
hereto as Exhibit B (such mortgage loans, the "Original Trust Mortgage Loans").
The Depositor desires, among other things, to: (i) establish a trust
fund, consisting primarily of the Original Trust Mortgage Loans and certain
related rights, funds and property; (ii) cause the issuance of a series of
mortgage pass-through certificates in multiple classes, which certificates will,
in the aggregate, evidence the entire beneficial ownership interest in such
trust fund; and (iii) provide for the servicing and administration of the
mortgage loans, including the Original Trust Mortgage Loans, and the other
assets that from time to time constitute part of such trust fund.
Xxxxx Fargo Bank, N.A. (together with its successors in interest,
"Xxxxx Fargo") desires to act as "Trustee" hereunder; Wachovia Bank, National
Association (together with its successors in interest, "Wachovia") desires to
act as "Master Servicer" hereunder; and ARCap Servicing, Inc. (together with its
successors in interest, "ARCap") desires to act as "Special Servicer" hereunder.
As provided herein, the Trustee shall elect or shall cause an
election to be made that each of REMIC I and REMIC II (each as defined herein)
be treated for federal income tax purposes as a "real estate mortgage investment
conduit" (a "REMIC"). The Excess Interest and the Excess Interest Distribution
Account shall not be assets of either REMIC but shall be treated as assets of a
grantor trust under subpart E, Part I of subchapter J of the Code. The Class V-1
Certificates will represent undivided beneficial interests in the portion of the
Trust Fund consisting of the Excess Interest and the Excess Interest
Distribution Account. Additionally, the Trust shall not include any B Loan, any
interest of any B Loan Holder or any interest of any B Loan Holder in any
Mortgage Loan Combination Custodial Account.
As provided herein, the Trustee shall elect or cause an election to
be made to treat the segregated pool of assets consisting of the Uncertificated
REMIC I Interests and the proceeds thereof as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC II."
The Class A-1, Class A-2, Class A-3, Class A-1-A, Class A-M, Class A-X, Class
A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O and Class P Certificates will
evidence "regular interests" in REMIC II created hereunder. The Class R
Certificates will evidence the sole Class of "residual interests" in REMIC II.
The following table sets forth the designation, the initial pass-through rate
(the "Pass-Through Rate"), the aggregate initial principal amount (the "Original
Certificate Balance") or notional balance ("Original Notional Balance"), as
applicable, and the initial ratings given each Class (as indicated below) by the
Rating Agencies (as defined herein) for each Class of certificates comprising
the interests in REMIC II created hereunder:
REMIC II
Original Certificate
Initial Balance (or, in the case of
Per Annum Pass- the Class A-X Certificates, Initial Ratings(1)
Class Designation Through Rate Original Notional Balance) S&P/Xxxxx'x
----------------- --------------- --------------------------- ------------------
Class A-1 5.2500% $58,000,000 AAA/Aaa
Class A-2 5.8477%(2) $66,000,000 AAA/Aaa
Class A-3 5.8477%(2) $364,878,000 AAA/Aaa
Class A-1-A 5.8477%(2) $518,741,000 AAA/Aaa
Class A-X 0.03050%(3) $1,439,456,352(4) AAA/Aaa
Class A-M 5.8477%(2) $143,946,000 AAA/Aaa
Class A-J 5.8477%(2) $100,762,000 AAA/Aaa
Class B 5.8477%(2) $30,588,000 AA/Aa2
Class C 5.8477%(2) $12,595,000 AA-/Aa3
Class D 5.8477%(2) $23,391,000 A/A2
Class E 5.8477%(2) $17,994,000 A-/A3
Class F 5.8477%(2) $16,193,000 BBB+/Baa1
Class G 5.8477%(2) $19,793,000 BBB/Baa2
Class H 5.8477%(2) $16,194,000 BBB-/Baa3
Class J 5.6650%(5) $5,398,000 BB+/Ba1
Class K 5.6650%(5) $5,398,000 BB/Ba2
Class L 5.6650%(5) $5,398,000 BB-/Ba3
Class M 5.6650%(5) $1,799,000 B+/B1
Class N 5.6650%(5) $7,197,000 B/B2
Class O 5.6650%(5) $5,398,000 B-/B3
Class P 5.6650%(5) $19,793,352 NR/NR
Class R None None(6 NR/NR
------------
(1) The Certificates marked "NR" have not been rated by the applicable Rating
Agency.
(2) The Weighted Average Net Mortgage Pass-Through Rate.
(3) The Class A-X Pass-Through Rate, as defined herein.
(4) Original Notional Balance. The Class A-X Certificates will not have a
Certificate Balance and will not be entitled to receive distributions of
principal.
(5) The lesser of 5.6650% and the Weighted Average Net Mortgage Pass-Through
Rate.
(6) The Class R Certificates will not have a Certificate Balance or Notional
Balance, will not bear interest and will not be entitled to distributions
of Yield Maintenance Charges. Any Available Distribution Amount remaining
in the REMIC II Distribution Account after all required distributions
under this Agreement have been made to each other Class of Certificates
will be distributed to the Holders of the Class R Certificates.
REMIC I
As provided herein, the Trustee shall elect or cause an election to
be made to treat the segregated pool of assets consisting of the Trust Mortgage
Loans (exclusive of Excess Interest and the Excess Interest Distribution
Account) and certain other related assets subject to this Agreement as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." The Class XX-0, Xxxxx XX-0, Class LA-3, Class LA-1-A,
Class LA-M, Class LA-J, Class LB, Class LC, Class LD, Class LE, Class LF, Class
LG, Class LH, Class LJ, Class LK, Class LL, Class LM, Class LN, Class LO and
Class LP Uncertificated Interests (collectively, the "Uncertificated REMIC I
Interests")and the Class V-2 Certificates will evidence "regular interests" in
REMIC I created hereunder. The Class LR Certificates will evidence the sole
Class of "residual interests" in REMIC I.
The following table sets forth, for each Class of Sequential Pay
Certificates (the "Corresponding Certificates"), the corresponding
Uncertificated REMIC I Interest or Interests (the "Corresponding Uncertificated
REMIC I Interests"), the corresponding Component or Components of the Class A-X
Certificates (the "Corresponding Components") and the Original REMIC I Principal
Amount for each Class of Uncertificated REMIC I Interests.
Corresponding Corresponding
Uncertificated Components of
Corresponding REMIC I Original REMIC I Class A-X
Certificates Interests(1)(2) Principal Amount Certificates(1)
-------------- ----------------------- ---------------------- --------------------
Class X-0 XX-0 $58,000,000 A-1
Class A-2 LA-2 $66,000,000 A-2
Class A-3 LA-3 $364,878,000 A-3
Class A-1-A LA-1-A $518,741,000 A-1-A
Class A-M LA-M $143,946,000 A-M
Class A-J LA-J $100,762,000 A-J
Class B LB $30,588,000 B
Class C LC $12,595,000 C
Class D LD $23,391,000 D
Class E LE $17,994,000 E
Class F LF $16,193,000 F
Class G LG $19,793,000 G
Class H LH $16,194,000 H
Class J LJ $5,398,000 J
Class K LK $5,398,000 K
Class L LL $5,398,000 L
Class M LM $1,799,000 M
Class N LN $7,197,000 N
Class O LO $5,398,000 O
Class P LP $19,793,352 P
------------
(1) The Uncertificated REMIC I Interests and the Components of the Class A-X
Certificates that correspond to any particular Class of Sequential Pay
Certificates also correspond to each other and, accordingly, constitute
the "Corresponding Uncertificated REMIC I Interests" and the
"Corresponding Components," respectively, with respect to each other.
(2) The interest rate of each of the indicated Classes of Uncertificated REMIC
I Interests is the Weighted Average Net Mortgage Pass-Through Rate.
The Class LR Certificates will not have a Certificate Balance or
Notional Balance, will not bear interest and will not be entitled to
distributions of Yield Maintenance Charges. Any Available Distribution Amount
remaining in the REMIC I Distribution Account after distributing the REMIC I
Distribution Amount on each Distribution Date shall be distributed to the
Holders of the Class LR Certificates.
The parties intend that the portion of the Trust Fund representing
the Excess Interest and the Excess Interest Distribution Account shall be
treated as a grantor trust under subpart E of Part I of subchapter J of Chapter
1 of Subtitle A of the Code, and that the Class V-1 Certificates shall represent
undivided beneficial interests in the portion of the Trust Fund consisting of
the Excess Interest and the Excess Interest Distribution Account.
As of the close of business on the Cut-off Date (as defined herein),
the Trust Mortgage Loans had an aggregate principal balance, after application
of all payments of principal due on or before such date, whether or not
received, equal to $1,439,456,353.
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES;
CERTAIN CALCULATIONS IN RESPECT OF THE MORTGAGE POOL
Section 1.01 Defined Terms
Whenever used in this Agreement the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Section 1.01, subject to modification in accordance with Section 1.04.
"30/360 Basis": The accrual of interest calculated on the basis of a
360-day year consisting of twelve 30-day months.
"30/360 Mortgage Loan": A Mortgage Loan that accrues interest on a
30/360 Basis.
"30/360 Trust Mortgage Loan": A Trust Mortgage Loan that is a 30/360
Mortgage Loan.
"A Loan": The Andover House Apartments Loan and each CBA A Loan,
each of which is senior in right of payment to the related B Loan in accordance
with the related Intercreditor Agreement.
"Acceptable Insurance Default": With respect to any Mortgage Loan,
any default under the related Mortgage Loan Documents resulting from (a) the
exclusion of acts of terrorism from coverage under the related all risk casualty
insurance policy maintained on the subject Mortgaged Property and (b) the
related Borrower's failure to obtain insurance that specifically covers acts of
terrorism, but only if the Special Servicer has determined, in its reasonable
judgment, that (i) such insurance is not available at commercially reasonable
rates and the subject hazards are not at the time commonly insured against for
real properties similar to the subject Mortgaged Property and located in and
around the region in which the subject Mortgaged Property is located or (ii)
such insurance is not available at any rate.
"Accrued Certificate Interest Amount": With respect to each
Distribution Date and each Class of Regular Certificates, an amount equal to
interest for the related Interest Accrual Period at the Pass-Through Rate
applicable to such Class of Certificates for such Distribution Date, accrued on
the related Certificate Balance of such Class (or, in the case of the Class A-X
Certificates, on the Notional Balance thereof) immediately prior to such
Distribution Date. The Accrued Certificate Interest Amount for each such Class
shall be calculated on the basis of a 360-day year composed of twelve 30-day
months.
"Accrued Component Interest": With respect to each Component of the
Class A-X Certificates for any Distribution Date, one month's interest at the
Class A-X Strip Rate applicable to such Component for such Distribution Date,
accrued on the Component Notional Amount of such Component outstanding
immediately prior to such Distribution Date. Accrued Component Interest shall be
calculated on the basis of a 360-day year composed of twelve 30-day months and,
with respect to any Component and any Distribution Date, shall be deemed to
accrue during the calendar month preceding the month in which such Distribution
Date occurs.
"Acquisition Date": With respect to any REO Property, the first day
on which such REO Property is considered to be acquired on behalf of the Trust
Fund and REMIC I and, if applicable, the related B Loan Holder within the
meaning of Treasury Regulations Section 1.856-6(b)(1), which is the first day on
which REMIC I is treated as the owner of the Trust Fund's interest in such REO
Property for federal income tax purposes.
"Actual/360 Basis": The accrual of interest calculated on the basis
of the actual number of days elapsed during any calendar month (or other
applicable recurring accrual period) in a year assumed to consist of 360 days.
"Actual/360 Mortgage Loan": A Mortgage Loan that accrues interest on
an Actual/360 Basis.
"Actual/360 Trust Mortgage Loan": A Trust Mortgage Loan that is an
Actual/360 Mortgage Loan.
"Additional Collateral": With respect to each Additional Collateral
Trust Mortgage Loan, the cash reserve or irrevocable letter of credit partially
securing such Additional Collateral Trust Mortgage Loan.
"Additional Collateral Trust Mortgage Loan": Any of the Trust
Mortgage Loans identified on Exhibit C-1 attached hereto.
"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 hereto as
Exhibit Y.
"Additional Form 10-D Disclosure:" As defined in Section 12.06.
"Additional Form 10-K Disclosure:" As defined in Section 12.07.
"Additional Servicer": Individually or collectively, (x) each
Affiliate of any party as described by Section 1108(a)(2)(ii) of Regulation AB
that Services any of the Trust Mortgage Loans and (y) each Person who is not an
Affiliate of any party as described by Section 1108(a)(2)(iii) of Regulation AB,
other than the Master Servicer, the Special Servicer and the Trustee, who
Services 10% or more of the Trust Mortgage Loans (calculated by Stated Principal
Balance).
"Additional Servicing Compensation": As defined in Section 3.11(a).
"Additional Trust Fund Expense": Any expense (other than Master
Servicing Fees, Primary Servicing Fees and Trustee Fees) incurred by the Trust
Fund and not otherwise included in the calculation of a Realized Loss that would
result in the Holders of any Class of Certificates receiving less than the total
of their Optimal Interest Distribution Amount and Remaining Principal
Distribution Amount for any Distribution Date.
"Administrative Fee Rate": With respect to each Mortgage Loan (and
any successor REO Mortgage Loan with respect thereto), the sum of the related
Master Servicing Fee Rate, if applicable, the Primary Servicing Fee Rate, if
applicable, and the Trustee Fee Rate.
"Advance": Any P&I Advance or Servicing Advance.
"Advance Interest": The interest accrued on any Advance at the
Reimbursement Rate, which is payable to the party hereto that made that Advance,
all in accordance with Section 3.03(d) or Section 4.03(d), as applicable.
"Adverse Grantor Trust Event": Any impairment of the status of
Grantor Trust V-1 as a Grantor Trust or the imposition of a tax upon either
Grantor Trust V-1 or any of its assets or transactions.
"Adverse Rating Event": With respect to any Class of Rated
Certificates and each Rating Agency that has assigned a rating thereto, as of
any date of determination, the qualification, downgrade or withdrawal of the
rating then assigned to such Class of Rated Certificates by such Rating Agency
(or the placing of such Class of Rated Certificates on "negative credit watch"
status in contemplation of any such action with respect thereto).
"Adverse REMIC Event": Either (i) any impairment of the status of
either REMIC Pool as a REMIC or (ii) except as permitted by Section 3.17(a), the
imposition of a tax upon either REMIC Pool or any of its assets or transactions
(including the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions set forth in Section 860G(d) of the
Code).
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement, as it may be
amended, modified, supplemented or restated following the Closing Date.
"A.M. Best": A.M. Best Company or its successor in interest.
"Andover House Apartments B Loan": The mortgage loan that is
secured, on a subordinate basis, by the same Mortgage on the Andover House
Apartments Property as the Andover House Apartments Loan, has a Cut-off Date
Principal Balance of $11,000,000 and is evidenced by the Note designated "Note
B." The Andover House Apartments B Loan is not a "Trust Mortgage Loan"
hereunder.
"Andover House Apartments B Loan Holder": The holder of the Andover
House Apartments B Loan or any successor REO Loan with respect thereto.
"Andover House Apartments Consultation Actions": Any of the actions
referred to in Section 20(b) of the Andover House Apartments Intercreditor
Agreement with respect to the Andover House Apartments Total Loan or any Andover
House Apartments REO Property.
"Andover House Apartments Directing Holder": As of any date of
determination, the then "Directing Holder" under the Andover House Apartments
Intercreditor Agreement.
"Andover House Apartments Cure Event": A "Cure Event" under the
Andover House Apartments Intercreditor Agreement.
"Andover House Apartments Cure Payment": A "Cure Payment" under the
Andover House Apartments Intercreditor Agreement.
"Andover House Apartments Intercreditor Agreement": The Agreement
Among Noteholders dated as of February 28, 2006, by and between Column
Financial, Inc., as Initial Note A Holder, and Metropolitan Life Insurance
Company, as Initial Note B Holder.
"Andover House Apartments Junior Loan(s)": The Andover House
Apartments B Loan.
"Andover House Apartments Junior Loan Holder": The Andover House
Apartments B Loan Holder.
"Andover House Apartments Loan": With respect to the Andover House
Apartments Total Loan, the mortgage loan, with a Cut-off Date Principal Balance
of $25,000,000, that is included in the Trust Fund and secured by a Mortgage on
the Andover House Apartments Property. The Andover House Apartments Loan is a
"Trust Mortgage Loan."
"Andover House Apartments Property": The Mortgaged Property
identified on the Mortgage Loan Schedule as "Andover House Apartments."
"Andover House Apartments Total Loan": The aggregate indebtedness,
with an original principal amount of $36,100,000 that is secured by the related
Mortgage on the Andover House Apartments Property. References herein to the
Andover House Apartments Total Loan shall be construed to refer to the aggregate
indebtedness under the Andover House Apartments Loan and the Andover House
Apartments Junior Loans.
"Andover House Apartments Triggering Event of Default": A
"Triggering Event of Default" under the Andover House Apartments Intercreditor
Agreement.
"Anticipated Repayment Date": With respect to any ARD Mortgage Loan,
the date specified in the related Note, as of which Excess Interest shall begin
to accrue on such Mortgage Loan, which date is prior to the Maturity Date for
such Mortgage Loan.
"Appraisal": An appraisal prepared in accordance with 12 C.F.R. ss.
225.64 by an Appraiser selected by the Master Servicer or Special Servicer, as
applicable.
"Appraisal Reduction Amount": For any Distribution Date and for any
Mortgage Loan (and for any A Loan, subject to the following paragraphs) as to
which an Appraisal Reduction Event has occurred, an amount calculated upon
receipt of an Appraisal or internal valuation, as applicable, and every 12
months thereafter by the Special Servicer as of (and reported to the Master
Servicer and the Trustee no later than) the related Determination Date equal to
the excess, if any, of (1) the Stated Principal Balance of the subject Mortgage
Loan over (2) the excess, if any, of (i) the sum of (A) 90% of the Appraised
Value of the related Mortgaged Property as determined (I) with respect to any
Mortgage Loan with an outstanding principal balance equal to or greater than
$2,000,000, by an Appraisal (or an update of a prior Appraisal) (the costs of
which shall be paid by the Master Servicer as a Servicing Advance) or (II) with
respect to any Mortgage Loan with an outstanding principal balance less than
$2,000,000, by an Appraisal (or an update of a prior Appraisal) (the costs of
which shall be paid by the Master Servicer as a Servicing Advance) or an
internal valuation performed by the Special Servicer, plus (B) any letter of
credit, reserve, escrow or similar amount held by the Master Servicer which may
be applied to payments on the subject Mortgage Loan, over (ii) the sum of (X) to
the extent not previously advanced by the Master Servicer or the Trustee, all
unpaid interest on the subject Mortgage Loan at a per annum rate equal to its
Mortgage Rate, (Y) all unreimbursed Advances in respect of the subject Mortgage
Loan, together with interest thereon at the Reimbursement Rate, and (Z) all
currently due and unpaid real estate taxes and assessments, Insurance Policy
premiums, ground rents and all other amounts due and unpaid with respect to the
subject Mortgage Loan (which taxes, assessments, premiums, ground rents and
other amounts have not been subject to an Advance by the Master Servicer or the
Trustee and/or for which funds have not been escrowed); provided that, if
neither a required Appraisal has been obtained nor an internal valuation is
completed within the period required under Section 3.19(c) with respect to the
subject Mortgage Loan, then until such Appraisal is obtained or such internal
valuation is completed, as the case may be, in accordance with Section 3.19(c),
the subject Appraisal Reduction Amount shall be equal to 25% of the Stated
Principal Balance of the subject Mortgage Loan as of the date of the related
Appraisal Reduction Event; and provided, further, that if the related Mortgaged
Property has become an REO Property, then the above references to "Mortgage
Loan" in this definition shall mean the related REO Mortgage Loan.
In the case of the Andover House Apartments Loan (or any successor
REO Mortgage Loan with respect thereto), any Appraisal Reduction Amount will be
calculated in respect of the Andover House Apartments Total Loan (or any
successor REO Mortgage Loans with respect thereto), as if it was a single
Mortgage Loan (or single REO Mortgage Loan), and any Appraisal Reduction Amount
shall be allocated first to the Andover House Apartments B Loan (or any
successor REO Mortgage Loan with respect thereto), up to the outstanding
principal balance of such B Loan (or REO Mortgage Loan), and then to the Andover
House Apartments Loan (or any successor REO Mortgage Loan with respect thereto).
In the case of any CBA A Loan (or any successor REO Mortgage Loan
with respect thereto), any Appraisal Reduction Amount will be calculated in
respect of the related CBA A/B Mortgage Loan Combination (or any successor REO
Mortgage Loans with respect thereto) as if it was a single Trust Mortgage Loan
(or a single REO Mortgage Loan), and any Appraisal Reduction Amount shall first
be allocated to the related CBA B Loan (or any successor REO Mortgage Loan with
respect thereto) up to the outstanding principal balance of such CBA B Loan (or
REO Mortgage Loan), and then any remaining portion of any such Appraisal
Reduction Amount shall be allocated to the related CBA A Loan (or any successor
REO Mortgage Loan with respect thereto).
Notwithstanding anything herein to the contrary, the aggregate
Appraisal Reduction Amount related to a Trust Mortgage Loan or the related REO
Property will be reduced to zero as of the date such Trust Mortgage Loan is paid
in full, liquidated, repurchased or otherwise removed from the Trust Fund.
"Appraisal Reduction Event": With respect to any Mortgage Loan, the
earliest of (i) 120 days after an uncured delinquency (without regard to the
application of any grace period) occurs in respect of such Mortgage Loan, (ii)
the date on which a reduction in the amount of Monthly Payments on such Mortgage
Loan, or a change in any other material economic term of such Mortgage Loan
(other than an extension of the Maturity Date for a period of six months or
less), becomes effective as a result of a modification of such Mortgage Loan by
the Special Servicer, (iii) 60 days after a receiver has been appointed for the
Borrower of the related Mortgaged Property, (iv) 30 days after a Borrower
declares bankruptcy, (v) 60 days after the Borrower has become the subject of a
decree or order for a bankruptcy proceeding that shall have remained in force
undischarged and unstayed, and (vi) immediately after the related Mortgaged
Property becomes an REO Property; provided, however, that an Appraisal Reduction
Event shall not be deemed to occur at any time on and after the dates when the
aggregate Certificate Balances of all Classes of Principal Balance Certificates
(other than the Class A-P&I Certificates) have been reduced to zero. The Special
Servicer shall notify the Master Servicer and, with respect to any Mortgage Loan
Combination, the related B Loan Holder, promptly upon the occurrence of any of
the foregoing events.
"Appraised Value": With respect to any Mortgaged Property, the
appraised value thereof as determined by an Appraisal.
"Appraiser": An Independent MAI, state certified organization with
five years of experience in properties of like kind and in the same geographic
area.
"ARCap": ARCap Servicing, Inc., and its successors in interest.
"ARD Mortgage Loan": Any Mortgage Loan that provides for the accrual
of Excess Interest thereon if such Mortgage Loan is not paid in full on or prior
to its Anticipated Repayment Date.
"ARD Trust Mortgage Loan": A Trust Mortgage Loan that is an ARD
Mortgage Loan.
"Assignable Primary Servicing Fee": Any Primary Servicing Fee that
is payable to Wachovia or its permitted assignee pursuant to Section 3.11(a) and
subject to reduction by the Trustee pursuant to Section 3.11(a).
"Assignment of Leases": With respect to any Mortgaged Property, any
assignment of leases, rents and profits or similar instrument, executed by the
related Borrower, assigning to the related mortgagee all of the income, rents
and profits derived from the ownership, operation, leasing or disposition of all
or a portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.
"Assumed Scheduled Payment": For any Collection Period and with
respect to any Mortgage Loan that is delinquent in respect of its Balloon
Payment (and any successor REO Mortgage Loan with respect thereto as to which
the Balloon Payment would have been past due), an amount equal to the sum of:
(a) the principal portion of the Monthly Payment that would have been due on
such Mortgage Loan on the related Due Date based on the constant payment
required by the related Note or the original amortization schedule thereof (as
calculated with interest at the related Mortgage Rate), if applicable, assuming
such Balloon Payment had not become due (and, if applicable, assuming the
related Mortgaged Property had not become an REO Property), after giving effect
to any modification of such Mortgage Loan; and (b) one month's interest on the
Stated Principal Balance of such Mortgage Loan (or REO Mortgage Loan)
immediately prior to the related Distribution Date (or, in the case of a B Loan
or any successor REO B Loan with respect thereto, the outstanding principal
balance thereof during the corresponding Mortgage Interest Accrual Period) at
the applicable Mortgage Rate. For any Collection Period and any REO Mortgage
Loan that is not delinquent in respect of its Balloon Payment, an amount equal
to the sum of: (a) the principal portion of the Monthly Payment that would have
been due on the related Mortgage Loan on the related Due Date based on the
original amortization schedule thereof (as calculated with interest at the
related Mortgage Rate, less any applicable Excess Rate), if applicable, assuming
the related Mortgaged Property had not become an REO Property, after giving
effect to any modification of the related Mortgage Loan; and (b) one month's
interest on the Stated Principal Balance of such REO Mortgage Loan immediately
prior to the related Distribution Date (or, in the case of an REO B Loan, the
outstanding principal balance thereof during the corresponding Mortgage Interest
Accrual Period) at the applicable Mortgage Rate (less any applicable Excess
Rate).
"ASTM": The American Society for Testing and Materials.
"Authenticating Agent": Any authenticating agent appointed by the
Trustee pursuant to Section 3.32.
"Available Distribution Amount": With respect to any Distribution
Date, an amount equal to the sum (without duplication) of:
(a) the aggregate amount received on or with respect to the Mortgage
Pool and on deposit in the Collection Account as of the close of business
on the related Determination Date, exclusive of the following amounts
(without duplication):
(i) all Monthly Payments collected but due on a Due Date after
the end of the related Collection Period;
(ii) all amounts in the Collection Account that are payable or
reimbursable to any Person from such account pursuant to clauses
(ii) through (xx), inclusive, of Section 3.05(a);
(iii) all amounts that are payable or reimbursable to any
Person pursuant to clauses (ii) through (ix), inclusive, of Section
3.05(b);
(iv) all Yield Maintenance Charges actually collected or
recovered pursuant to Section 1.03;
(v) all amounts deposited in the Collection Account in error;
(vi) any net interest or net investment income on funds on
deposit in the Collection Account or in Permitted Investments in
which such funds may be invested;
(vii) if such Distribution Date occurs in February of 2007 or
any year thereafter or in January of 2007 or any year thereafter
that is not a leap year, the Withheld Amounts in respect of the
Interest Reserve Loans that are to be deposited in the Interest
Reserve Account on such Distribution Date and held for future
distribution pursuant to Section 3.28;
(viii) amounts payable to any B Loan Holder pursuant to the
terms of the related Intercreditor Agreement;
(ix) Excess Interest; and
(x) Excess Liquidation Proceeds;
(b) if and to the extent not already included in clause (a) hereof,
the aggregate amount transferred with respect to the REO Trust Mortgage
Loans from the REO Account to the Collection Account for such Distribution
Date pursuant to Section 3.16(c);
(c) if and to the extent not already included in clause (a) hereof,
the aggregate amount transferred with respect to any A Loan (or any
successor REO Trust Mortgage Loan with respect thereto) from the related
Mortgage Loan Combination Custodial Account to the Collection Account, in
any event for such Distribution Date pursuant to Section 3.04;
(d) the aggregate amount of any P&I Advances made in respect of the
Trust Mortgage Loans by the Master Servicer or the Trustee, as applicable,
for such Distribution Date pursuant to Section 4.03 or 7.05 (which P&I
Advances shall not include any related Master Servicing Fees, Primary
Servicing Fees or Workout Fees);
(e) all funds released from the Interest Reserve Account for
distribution on such Distribution Date;
(f) any payments required to be made by the Master Servicer pursuant
to Section 3.02(c) in respect of such Distribution Date;
(g) if and to the extent not already included in clause (a) hereof,
the aggregate amount transferred (pursuant to Section 3.04(d)) from the
Excess Liquidation Proceeds Account to the Distribution Account in respect
of such Distribution Date; and
(h) if and to the extent not already included in clause (a) hereof,
any Cure Payment (except for any portion thereof payable or reimbursable
to the applicable Master Servicer or Special Servicer), made by any
Andover House Apartments B Loan Holder or any CBA B Loan Holder pursuant
to the terms of the related Intercreditor Agreement during the related Due
Period and allocable to principal or interest with respect to the related
Trust Mortgage Loan.
"B Loan": With respect to each A Loan, the other mortgage loan that
(i) is not included in the Trust Fund, (ii) is subordinate in right of payment
to such A Loan to the extent set forth in the related CBA A/B Intercreditor
Agreement or Andover House Apartments Intercreditor Agreement, as applicable,
and (iii) is secured by the same Mortgage on the same Mortgaged Property as such
A Loan.
"B Loan Holder": With respect to any CBA B Loan, CBA-Mezzanine
Capital Finance, LLC, or its successors and assigns, as the holder of such B
Loan, and with respect to the Andover House Apartments B Loan, the Andover House
Apartments B Loan Holder, who as of the date hereof is Metropolitan Life
Insurance Company.
"Balloon Mortgage Loan": Any Mortgage Loan that by its terms
provides for an amortization schedule extending materially beyond its Maturity
Date or for no amortization until its Maturity Date.
"Balloon Trust Mortgage Loan": A Trust Mortgage Loan that is a
Balloon Mortgage Loan.
"Balloon Payment": With respect to any Balloon Mortgage Loan and any
date of determination, the scheduled payment of principal due on the Maturity
Date of such Mortgage Loan (less principal included in the applicable
amortization schedule or scheduled Monthly Payment).
"Bankruptcy Code": The federal Bankruptcy Code, as amended from time
to time (Title 11 of the United States Code).
"Base Interest Fraction": With respect to any Principal Prepayment
on any Mortgage Loan and any of the Class X-0, Xxxxx X-0, Class A-3, Class
A-1-A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class
G and Class H Certificates, a fraction (not greater than 1) (a) whose numerator
is the amount, if any, by which (i) the Pass-Through Rate on such Class of
Certificates exceeds (ii) the Yield Rate used in calculating the Yield
Maintenance Charge with respect to such Principal Prepayment and (b) whose
denominator is the amount, if any, by which the (i) Mortgage Rate on such
Mortgage Loan exceeds (ii) the Yield Rate (as provided by the Master Servicer)
used in calculating the Yield Maintenance Charge with respect to such Principal
Prepayment; provided, however, that if such Yield Rate is greater than or equal
to the lesser of (x) the Mortgage Rate on such Mortgage Loan and (y) the
Pass-Through Rate described in clause (a)(i) above, then the Base Interest
Fraction shall be zero.
"Base Prospectus": That certain prospectus dated March 7, 2006,
relating to trust funds established by the Depositor and publicly offered
mortgage pass-through certificates evidencing interests therein.
"Book-Entry Certificate": Any Certificate registered in the name of
the Depository or its nominee.
"Book-Entry Non-Registered Certificate": Any Non-Registered
Certificate that constitutes a Book-Entry Certificate.
"Borrower": With respect to any Mortgage Loan, the obligor or
obligors on any related Note or Notes, including, without limitation, any Person
that has acquired the related Mortgaged Property and assumed the obligations of
the original obligor under the Note or Notes.
"Breach": With respect to any Trust Mortgage Loan, as defined in the
Mortgage Loan Purchase Agreement.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the states where the Collection Account,
Distribution Account, Trustee, Master Servicer or Special Servicer are located
and are authorized or obligated by law or executive order to remain closed.
"Cash Collateral Account": With respect to any Mortgage Loan that
has a Lock-Box Account, any account or accounts created pursuant to the related
Mortgage, Loan Agreement, Cash Collateral Account Agreement or other loan
document, into which account or accounts the Lock-Box Account monies are swept
on a regular basis for the benefit of the Trustee as successor to the Mortgage
Loan Seller's interest in such Mortgage Loan. Any Cash Collateral Account shall
be beneficially owned for federal income tax purposes by the Person who is
entitled to receive all reinvestment income or gain thereon in accordance with
the terms and provisions of the related Mortgage Loan and Section 3.06, which
Person shall, if required under the Code, be taxed on all reinvestment income or
gain thereon. The Master Servicer shall be permitted to make withdrawals
therefrom solely for deposit into the Collection Account or a Servicing Account,
or to remit to the Borrower as required by the related loan documents, as
applicable. To the extent not inconsistent with the terms of the related
Mortgage Loan Documents, each such Cash Collateral Account shall be an Eligible
Account.
"Cash Collateral Account Agreement": With respect to any Mortgage
Loan, the cash collateral account agreement, if any, between the related
Mortgage Loan Originator and the related Borrower, pursuant to which the related
Cash Collateral Account, if any, may have been established.
"CBA A/B Intercreditor Agreement": With respect to each CBA A/B
Mortgage Loan Combination, the related Intercreditor Agreement Among Note
Holders by and between Column, as the initial holder of the related A Loan, and
CBA-Mezzanine Capital Finance, LLC, as the initial holder of the related B Loan.
"CBA A/B Material Default": With respect to each CBA A/B Mortgage
Loan Combination, a "Material Default" under, and within the meaning of, the
related CBA A/B Intercreditor Agreement.
"CBA A/B Mortgage Loan Combination": Each of the CBA A Loans
together with the related CBA B Loan.
"CBA A Loan": The Mortgage Loans identified on Exhibit B hereto as
Lincoln Green Apartments, Cherry Creek Apartments, Northshore Medical Park,
Arbor Hills Apartments, Tarmigan at Wapato Creek and Upland Hills Shopping
Center, each of which is senior in right of payment to the related CBA B Loan,
to the extent set forth in the related CBA A/B Intercreditor Agreement.
"CBA B Loan": With respect to any CBA A Loan, the related B Loan not
included in the Trust.
"CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Certificate": Any one of the Depositor's Commercial Mortgage
Pass-Through Certificates, Series 2006-C2, as executed by the Certificate
Registrar and authenticated and delivered hereunder by the Authenticating Agent.
"Certificate Balance": With respect to any Class of Regular
Certificates (other than the Class A-X Certificates), (i) on or prior to the
first Distribution Date, an amount equal to the Original Certificate Balance of
such Class as specified in the Preliminary Statement hereto, and (ii) as of any
date of determination after the first Distribution Date, the Certificate Balance
of such Class on the Distribution Date immediately prior to such date of
determination (determined as adjusted pursuant to Section 1.03(h)).
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register; provided, however, that:
(i) neither a Disqualified Organization nor a Non-United States Tax Person shall
be a "Holder" of, or a "Certificateholder" with respect to, a Class R or Class
LR Certificate for any purpose hereof; and (ii) solely for purposes of giving
any consent, approval, direction or waiver pursuant to this Agreement that
specifically relates to the rights, duties and/or obligations hereunder of the
Depositor, the Master Servicer, the Special Servicer or the Trustee in its
respective capacity as such (other than any consent, approval or waiver
contemplated by any of Sections 3.21, 3.32 and 7.01(c) or by the Series 2006-C2
Directing Certificateholder in its capacity as such), any Certificate registered
in the name of such party or in the name of any Affiliate thereof shall be
deemed not to be outstanding, and the Voting Rights to which it is entitled
shall not be taken into account in determining whether the requisite percentage
of Voting Rights necessary to effect any such consent, approval or waiver that
specifically relates to such party has been obtained. The Certificate Registrar
shall be entitled to request and conclusively rely upon a certificate of the
Depositor, the Master Servicer or the Special Servicer in determining whether a
Certificate is registered in the name of an Affiliate of such Person. All
references herein to "Certificateholders" or "Holders" shall reflect the rights
of Certificate Owners only insofar as they may indirectly exercise such rights
through the Depository and the Depository Participants (except as otherwise
specified herein), it being herein acknowledged and agreed that the parties
hereto shall be required to recognize as a "Certificateholder" or "Holder" only
the Person in whose name a Certificate is registered in the Certificate
Register.
"Certificateholder Reports": Collectively, the Trustee Report and
the CMSA Investor Reporting Package.
"Certificate Notional Amount": With respect to any Class A-X, as of
any date of determination, the then notional amount of such Certificate equal to
the product of (a) the Percentage Interest evidenced by such Certificate,
multiplied by (b) the then Class A-X Notional Amount.
"Certificate Owner": With respect to any Book-Entry 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 Depository Participant or on the books of
an indirect participating brokerage firm for which a Depository Participant acts
as agent.
"Certificate Register": The register maintained pursuant to Section
5.02.
"Certificate Registrar": Xxxxx Fargo, in its capacity as certificate
registrar, or any successor certificate registrar appointed as herein provided.
"Certification Parties": As defined in Section 12.08.
"Certifying Person": As defined in Section 12.08.
"Certifying Servicer": As defined in Section 12.11.
"Class": Collectively, all of the Certificates bearing the same
alphabetic or alphanumeric class designation and having the same payment terms,
and each interest designated as an Uncertificated REMIC I Interest. The
respective Classes of Certificates are designated in Section 5.01(a).
"Class": With respect to any Certificates or Uncertificated REMIC I
Interests, all of the Certificates or Uncertificated REMIC I Interests bearing
the same alphabetical and, if applicable, numerical class designation.
"Class A-1 Certificate": A Certificate designated as "Class A-1" on
the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-1 Pass-Through Rate": 5.2500% per annum.
"Class A-1-A Certificate": A Certificate designated as "Class A-1-A"
on the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-1-A Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class A-2 Certificate": A Certificate designated as "Class A-2" on
the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-2 Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class A-3 Certificate": A Certificate designated as "Class A-3" on
the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-3 Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class A-M Certificate": A Certificate designated as "Class A-M" on
the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-M Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class A-J Certificate": A Certificate designated as "Class A-J" on
the face thereof, substantially in the form of Exhibit A-2 hereto.
"Class A-J Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class A-P&I Certificates": The Class A-1, Class A-2, Class A-3 and
Class A-1-A Certificates, collectively.
"Class A-X Certificate": A Certificate designated as "Class A-X" on
the face thereof, in the form of Exhibit A-1 hereto.
"Class A-X Component": Each of the Components.
"Class A-X Notional Amount": With respect to the Class A-X
Certificates and any date of determination, the sum of the then Component
Notional Amounts of all of the Components.
"Class A-X Pass-Through Rate": The per annum rate, expressed as a
percentage, equal to the weighted average of the Class A-X Strip Rates of the
Class A-X Components (weighted on the basis of their respective Component
Notional Amounts) for such Distribution Date.
"Class A-X Strip Rate": With respect to any Class A-X Component for
any Distribution Date, a rate per annum equal to (i) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date, minus (ii) the
Pass-Through Rate for the Corresponding Certificates, (provided that in no event
shall any Class A-X Strip Rate be less than zero).
"Class B Certificate": A Certificate designated as "Class B" on the
face thereof, in the form of Exhibit A-2 hereto.
"Class B Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class C Certificate": A Certificate designated as "Class C" on the
face thereof, in the form of Exhibit A-2 hereto.
"Class C Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class D Certificate": A Certificate designated as "Class D" on the
face thereof, in the form of Exhibit A-2 hereto.
"Class D Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class E Certificate": A Certificate designated as "Class E" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class E Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class F Certificate": A Certificate designated as "Class F" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class F Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class G Certificate": A Certificate designated as "Class G" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class G Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class H Certificate": A Certificate designated as "Class H" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class H Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the Weighted Average Net Mortgage Pass-Through Rate for such
Distribution Date.
"Class J Certificate": A Certificate designated as "Class J" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class J Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class K Certificate": A Certificate designated as "Class K" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class K Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class L Certificate": A Certificate designated as "Class L" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class L Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class LA-1 Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LA-2 Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LA-3 Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LA-1-A Uncertificated Interest": A regular interest in REMIC
I that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LA-J Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LA-M Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LB Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LC Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LD Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LE Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LF Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LG Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LH Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LJ Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LK Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LL Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LM Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LN Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LO Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LP Uncertificated Interest": A regular interest in REMIC I
that is held as an asset of REMIC II and having the Original REMIC I Principal
Amount and per annum rate of interest set forth in the Preliminary Statement
hereto.
"Class LR Certificate": A Certificate designated as "Class LR" on
the face thereof, in the form of Exhibit A-5 hereto.
"Class M Certificate": A Certificate designated as "Class M" on the
face thereof, in the form of Exhibit A-6 hereto.
"Class M Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class N Certificate": A Certificate designated as "Class N" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class N Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class O Certificate": A Certificate designated as "Class O" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class O Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class P Certificate": A Certificate designated as "Class P" on the
face thereof, in the form of Exhibit A-3 hereto.
"Class P Pass-Through Rate": As to any Distribution Date, a per
annum rate equal to the lesser of (i) 5.6650% and (ii) the Weighted Average Net
Mortgage Pass-Through Rate for such Distribution Date.
"Class R Certificate": A Certificate designated as "Class R" on the
face thereof, in the form of Exhibit A-8 hereto.
"Class V-1 Certificate": A Certificate designated as "Class V-1" on
the face thereof, in the form of Exhibit A-4 hereto. The Class V-1 Certificates
have no Pass-Through Rate, Certificate Balance or Notional Balance.
"Class V-2 Certificate": A Certificate designated as "Class V-2" on
the face thereof, in the form of Exhibit A-4 hereto. The Class V-2 Certificates
have no Pass-Through Rate or Notional Balance.
"Class Principal Balance": The aggregate principal balance
outstanding from time to time of any Class of Principal Balance Certificates.
"Clearstream": Clearstream Banking, societe anonyme or any
successor.
"Closing Date": May 30, 2006.
"Closing Date Deposit Amount": $100, representing the principal
balance of the Class V-2 Certificates.
"CMSA": The Commercial Mortgage Securities Association, or any
association or organization that is a successor thereto. If neither such
association nor any successor remains in existence, "CMSA" shall be deemed to
refer to such other association or organization as may exist whose principal
membership consists of servicers, trustees, issuers, placement agents and
underwriters generally involved in the commercial mortgage loan securitization
industry, which is the principal such association or organization in the
commercial mortgage loan securitization industry and one of whose principal
purposes is the establishment of industry standards for reporting
transaction-specific information relating to commercial mortgage pass-through
certificates and commercial mortgage-backed bonds and the commercial mortgage
loans and foreclosed properties underlying or backing them to investors holding
or owning such certificates or bonds, and any successor to such other
association or organization. If an organization or association described in one
of the preceding sentences of this definition does not exist, "CMSA" shall be
deemed to refer to such other association or organization as shall be selected
by the Master Servicer and reasonably acceptable to the Trustee, the Special
Servicer and the Series 2006-C2 Directing Certificateholder.
"CMSA Advance Recovery Report": A report substantially in the form
of, and containing the information called for in, the downloadable form of the
"Advance Recovery Report" available as of the Closing Date on the CMSA Website,
or such other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA Bond Level File": A data file substantially in the form of,
and containing the information called for in, the downloadable form of the "Bond
Level File" available as of the Closing Date on the CMSA Website, or such other
form for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally.
"CMSA Collateral Summary File": A data file substantially in the
form of, and containing the information called for in, the downloadable form of
the "Collateral Summary File" available as of the Closing Date on the CMSA
Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA 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 CMSA Website, or such other form for the presentation of such
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally.
"CMSA 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 CMSA
Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Financial File": A data file substantially in the form of, and
containing the information called for in, the downloadable form of the
"Financial File" available as of the Closing Date on the CMSA Website, or such
other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA Historical Liquidation Report": A report substantially in the
form of, and containing the information called for in, the downloadable form of
the "Historical Liquidation Report" available as of the Closing Date on the CMSA
Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Historical Loan Modification and Corrected Mortgage Loan
Report": A report substantially in the form of, and containing the information
called for in, the downloadable form of the "Historical Loan Modification and
Corrected Mortgage Loan Report" available as of the Closing Date on the CMSA
Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Investor Reporting Package": Collectively:
(a) the following seven electronic files: (i) CMSA Loan Setup File,
(ii) CMSA Loan Periodic Update File, (iii) CMSA Property File, (iv) CMSA
Bond Level File, (v) CMSA Financial File, (vi) CMSA Collateral Summary
File and (vii) CMSA Special Servicer Loan File;
(b) the following ten supplemental reports: (i) CMSA Delinquent Loan
Status Report, (ii) CMSA Historical Loan Modification and Corrected
Mortgage Loan Report, (iii) CMSA Historical Liquidation Report, (iv) CMSA
REO Status Report, (v) CMSA Operating Statement Analysis Report, (vi) CMSA
Comparative Financial Status Report, (vii) CMSA Servicer Watch List,
(viii) CMSA Loan Level Reserve/LOC Report, (ix) CMSA NOI Adjustment
Worksheet and (x) CMSA Reconciliation of Funds.
"CMSA Loan Level Reserve/LOC Report": A 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 CMSA
Website, or in such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Loan Periodic Update File": A monthly report substantially in
the form of, and containing the information called for in, the downloadable form
of the "Loan Periodic Update File" available as of the Closing Date on the CMSA
Website, or such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Loan Setup File": A report substantially in the form of, and
containing the information called for in, the downloadable form of the "Mortgage
Loan Setup File" available as of the Closing Date on the CMSA Website, or such
other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA 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 CMSA Website,
or such other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA Operating Statement Analysis Report": A report substantially
in the form of, and containing the information called for in, the downloadable
form of the "Operating Statement Analysis Report" available as of the Closing
Date on the CMSA Website or such other form for the presentation of such
information and containing such additional information as may from time to time
be recommended by the CMSA for commercial mortgage-backed securities
transactions generally.
"CMSA 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 CMSA Website, or such other form
for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally.
"CMSA Realized Loss Report": A report substantially in the form of,
and containing the information called for in, the downloadable form of the
"Realized Loss Report" available as of the Closing Date on the CMSA Website, or
such other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA Reconciliation of Funds": A report substantially in the form
of, and containing the information called for in, the downloadable form of the
"Reconciliation of Funds" available as of the Closing Date on the CMSA Website,
or in such other form for the presentation of such information and containing
such additional information as may from time to time be recommended by the CMSA
for commercial mortgage-backed securities transactions generally.
"CMSA 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 CMSA Website, or such
other form for the presentation of such information and containing such
additional information as may from time to time be recommended by the CMSA for
commercial mortgage-backed securities transactions generally.
"CMSA Servicer Watch List": A report substantially in the form of,
and containing the information called for in, the downloadable form of "Servicer
Watch List" available as of the Closing Date on the CMSA Website, or such other
form for the presentation of such information and containing such additional
information as may from time to time be recommended by the CMSA for commercial
mortgage-backed securities transactions generally.
"CMSA Special Servicer Loan File": A 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 CMSA
Website, or in such other form for the presentation of such information and
containing such additional information as may from time to time be recommended
by the CMSA for commercial mortgage-backed securities transactions generally.
"CMSA Website": The CMSA's Website located at "xxx.xxxx.xxx" or such
other primary website as the CMSA may establish for dissemination of its report
forms.
"Code": The Internal Revenue Code of 1986 and regulations
promulgated thereunder, including proposed regulations to the extent that, by
reason of their proposed effective date, could, as of the date of any
determination or opinion as to the tax consequences of any action or proposed
action or transaction, could be applied to the Trust or the Certificates.
"Collection Account": One or more separate custodial accounts or,
subject to Section 3.04(h), sub-accounts created and maintained by the Master
Servicer pursuant to Section 3.04(a) in the name of the Trustee on behalf of the
Certificateholders and the Andover House Apartments B Holder, into which the
amounts set forth in Section 3.04(a) shall be deposited directly, which, subject
to Section 3.04(h), shall be entitled substantially as follows: "Wachovia Bank,
National Association, as Master Servicer, in trust for Xxxxx Fargo Bank, N.A.,
as Trustee, on behalf of Holders of Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-C2,
Collection Account." The Collection Account shall be an Eligible Account (or,
subject to Section 3.04(h), a sub-account of an Eligible Account) and, except
for the Excess Interest held therein, shall be part of REMIC I.
"Collection Period": With respect to any Distribution Date, the
period commencing on the date immediately following the Determination Date in
the calendar month preceding the month in which such Distribution Date occurs
(or, in the case of the initial Distribution Date, commencing as of the Closing
Date) and ending on and including the Determination Date in the calendar month
in which such Distribution Date occurs.
"Column": As defined in the Preliminary Statement to this Agreement.
"Commission": The Securities and Exchange Commission.
"Component": Each of Component X-0, Xxxxxxxxx X-0, Component A-3,
Component A-1-A, Component A-M, Component A-J, Component B, Component C,
Component D, Component E, Component F, Component G, Component H, Component J,
Component K, Component L, Component M, Component N, Component O and Component P.
"Component A-1": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-1 Uncertificated Interest as of any date of
determination.
"Component A-1-A": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-1-A Uncertificated Interest as of any date of
determination.
"Component A-2": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-2 Uncertificated Interest as of any date of
determination.
"Component A-3": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-3 Uncertificated Interest as of any date of
determination.
"Component A-J": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-J Uncertificated Interest as of any date of
determination.
"Component A-M": One of twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LA-M Uncertificated Interest as of any date of
determination.
"Component B": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LB Uncertificated Interest as of any date of
determination.
"Component C": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LC Uncertificated Interest as of any date of
determination.
"Component D": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LD Uncertificated Interest as of any date of
determination.
"Component E": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LE Uncertificated Interest as of any date of
determination.
"Component F": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LF Uncertificated Interest as of any date of
determination.
"Component G": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LG Uncertificated Interest as of any date of
determination.
"Component H": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LH Uncertificated Interest as of any date of
determination.
"Component J": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LJ Uncertificated Interest as of any date of
determination.
"Component K": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LK Uncertificated Interest as of any date of
determination.
"Component L": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LL Uncertificated Interest as of any date of
determination.
"Component M": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LM Uncertificated Interest as of any date of
determination.
"Component N": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LN Uncertificated Interest as of any date of
determination.
"Component Notional Amount": With respect to each Component and any
date of determination, an amount equal to the then REMIC I Principal Amount of
its Corresponding Uncertificated REMIC I Interest.
"Component O": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LO Uncertificated Interest as of any date of
determination.
"Component P": One of the twenty components of the Class A-X
Certificates having a Component Notional Amount equal to the then current REMIC
I Principal Amount of the Class LP Uncertificated Interest as of any date of
determination.
"Confidential Offering Circular": The final Confidential Offering
Circular dated May 17, 2006, relating to certain Classes of the Non-Registered
Certificates delivered by the Depositor to Credit Suisse as of the Closing Date.
"Controlling Class": As of any date of determination, the Class of
Principal Balance Certificates with the lowest payment priority pursuant to
Sections 4.01(a) and 4.01(b), that has a then outstanding Class Principal
Balance that is not less than 25% of its initial Class Principal Balance;
provided that, if no Class of Principal Balance Certificates has a Class
Principal Balance that satisfies the foregoing requirement, then the Controlling
Class shall be the Class of Principal Balance Certificates with the lowest
payment priority pursuant to Sections 4.01(a) and 4.01(b), that has a then
outstanding Class Principal Balance greater than zero. For purposes of this
definition, the respective Classes of the Class A-P&I Certificates shall be
treated as a single Class and, if appropriate under the terms of this
definition, shall collectively constitute the Controlling Class. As of the
Closing Date, the Controlling Class shall be the Class P Certificates.
"Controlling Class Certificateholder": Each Holder (or Certificate
Owner, if applicable) of a Certificate of the Controlling Class as certified by
the Certificate Registrar to the Trustee from time to time.
"Corporate Trust Office": The corporate trust office of the Trustee
at which at any particular time its corporate trust business with respect to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000-0000, Attention: Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2006-C2.
"Corrected Mortgage Loan": Any Corrected Trust Mortgage Loan or any
B Loan as to which the related Trust Mortgage Loan is a Corrected Mortgage Loan
as described in the definition of "Servicing Transfer Event."
"Corrected Trust Mortgage Loan": Any Trust Mortgage Loan that had
been a Specially Serviced Trust Mortgage Loan but as to which all Servicing
Transfer Events have ceased to exist.
"Corresponding Certificates": As defined in the Preliminary
Statement hereto.
"Corresponding Components": As defined in the Preliminary Statement
hereto.
"Corresponding Uncertificated REMIC I Interests": As defined in the
Preliminary Statement hereto.
"Credit Suisse": Credit Suisse Securities (USA) LLC or its successor
in interest.
"Cross-Collateralized Group": Any group of Crossed Trust Mortgage
Loans.
"Crossed Trust Mortgage Loan": Any Trust Mortgage Loan which is
cross-defaulted and cross-collateralized with any other Trust Mortgage Loan. For
the avoidance of doubt, none of the Andover House Apartments Loan or any CBA A
Loan shall be deemed a Crossed Trust Mortgage Loan under this Agreement.
"Crossed Trust Mortgage Loan Repurchase Criteria": (i) The Debt
Service Coverage Ratio for all remaining related Crossed Trust Mortgage Loans
for the four calendar quarters immediately preceding the repurchase or
substitution is not less than the greater of (a) the Debt Service Coverage Ratio
for all such related Crossed Trust Mortgage Loans, including the affected
Crossed Trust Mortgage Loan, for the four calendar quarters immediately
preceding the repurchase or substitution and (b) 1.25x, (ii) the loan-to-value
ratio for any remaining related Crossed Trust Mortgage Loans determined at the
time of repurchase or substitution based upon an Appraisal obtained by the
Special Servicer at the expense of the Mortgage Loan Seller is not greater than
the lesser of (a) the loan-to-value ratio for all such related Crossed Trust
Mortgage Loans, including the affected Crossed Trust Mortgage Loan set forth in
the tables on Exhibit A-1 to the Prospectus Supplement, (b) the loan-to-value
ratio for all such related Crossed Trust Mortgage Loans, including the affected
Crossed Trust Mortgage Loan, determined at the time of repurchase or
substitution based upon an Appraisal obtained by the Special Servicer at the
expense of the Mortgage Loan Seller and (c) 75.0%, and (iii) the Trustee
receives an Opinion of Counsel (at the expense of the Mortgage Loan Seller) to
the effect that such repurchase or substitution will not result in the
imposition of a tax on the assets of the Trust Fund or cause either REMIC Pool
to fail to qualify as a REMIC for federal or applicable state tax purposes at
any time that any of the Certificates are outstanding.
"Cure Event": The exercise by the Andover House Apartments B Loan
Holder or any CBA B Loan Holder of the cure rights, if any, set forth in the
related Intercreditor Agreement, in each case in accordance with the applicable
Intercreditor Agreement.
"Cure Payments": With respect to any Mortgage Loan Combination, as
to which the related Intercreditor Agreement provides that a Junior Loan Holder
shall be entitled to cure a default under the related Mortgage Loan, the
payments that such Junior Loan Holder makes to the Master Servicer, Special
Servicer or Trustee, as applicable, which payments shall consist (without
duplication) of all actual costs, expenses, losses, obligations, damages,
penalties, and disbursements imposed on or incurred (whether or not yet paid) by
the Master Servicer, Special Servicer or Trustee, as applicable (including,
without limitation, all unreimbursed Advances (without regard to whether such
Advance would be a Nonrecoverable Advance), and any interest accrued thereon,
Default Interest and any servicing compensation incurred with respect to the
related Mortgage Loan) during the period of time from the expiration of the
grace period under such Mortgage Loan that gave rise to such Cure Event until
such Cure Payment is made or such other cure is otherwise effected.
"Custodian" shall mean a Person who is at any time appointed by the
Trustee pursuant to Section 8.12 as a document custodian for the Mortgage Files.
"Cut-off Date": Individually and collectively, the respective Due
Dates for the Trust Mortgage Loans in May 2006.
"Cut-off Date Principal Balance": With respect to any Original Trust
Mortgage Loan or B Loan, the outstanding principal balance of such Trust
Mortgage Loan or B Loan as of the Cut-off Date, after application of all
payments of principal due on or before such date, whether or not received.
"Debt Service Coverage Ratio": With respect to any Trust Mortgage
Loan for any twelve-month period covered by an annual operating statement for
the related Mortgaged Property, the ratio of (i) Net Operating Income produced
by the related Mortgaged Property during such period to (ii) the aggregate
amount of Monthly Payments (other than any Balloon Payment) due under such Trust
Mortgage Loan during such period.
"Default Interest": With respect to any Mortgage Loan (or any
successor REO Mortgage Loan with respect thereto), any amounts collected
thereon, other than late payment charges or Yield Maintenance Charges, that
represent interest in excess of interest accrued on the principal balance of
such Trust Mortgage Loan (or REO Mortgage Loan) at the related Mortgage Rate,
such excess interest arising out of a default under such Mortgage Loan.
"Defaulted Trust Mortgage Loan": A Trust Mortgage Loan that is at
least sixty days delinquent in respect of its Monthly Payments, or delinquent in
respect of its Balloon Payment, if any, in each case without giving effect to
any grace period permitted by the related Mortgage or Note, or if any
non-monetary event of default occurs that results in the Trust Mortgage Loan
becoming a Specially Serviced Trust Mortgage Loan; provided, however, that no
Monthly Payment (other than a Balloon Payment) shall be deemed delinquent if
less than ten dollars of all amounts due and payable on such Trust Mortgage Loan
has not been received.
"Defaulting Party": As defined in Section 7.01(b).
"Defeasance Collateral": As defined in Section 3.08(f).
"Defeasance Mortgage Loan": As defined in Section 3.08(f).
"Defect": With respect to any Trust Mortgage Loan, as defined in the
Mortgage Loan Purchase Agreement.
"Defective Trust Mortgage Loan": Any Trust Mortgage Loan as to which
there exists a Material Breach or a Material Defect that has not been cured in
all material respects.
"Definitive Certificate": A Certificate issued in registered,
definitive physical form.
"Deleted Trust Mortgage Loan": A Defective Trust Mortgage Loan that
is purchased or repurchased, as the case may be, from the Trust or replaced with
one or more Replacement Trust Mortgage Loans, in either case as contemplated by
Section 2.03.
"Depositor": As defined in the Preliminary Statement to this
Agreement.
"Depository": The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Certificates that are to be Book-Entry Certificates, is
Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
"Depository Participant": A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the
close of business on the 11th day of the month in which such Distribution Date
occurs, or if such 11th day is not a Business Day, the Business Day immediately
following such 11th day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof that are not (within the meaning
of Treasury Regulations Section 1.512(b)-1(c)(5)) customarily provided to
tenants in connection with the rental of space for occupancy, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers in the ordinary course of a trade or business, the performance
of any construction work thereon or any use of such REO Property in a trade or
business conducted by the Trust Fund, in each case other than through an
Independent Contractor; provided, however, that the Trustee (or the Master
Servicer or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Master Servicer 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 (of the type that
would be deductible under Section 162 of the Code) or capital expenditures with
respect to such REO Property.
"Discount Rate": As defined in Section 4.01(d).
"Disqualified Organization": Any of (i) the United States, any State
or political subdivision thereof, 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 FHLMC, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization or
any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
that is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code and (v) any other Person so designated by the Master Servicer or the
Trustee based upon an Opinion of Counsel provided to the Trustee (which shall
not be an expense of the Trustee) to the effect that the holding of an Ownership
Interest in a Residual Certificate by such Person may cause either REMIC Pool to
qualify as a REMIC or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Residual Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
"Distribution Account": The account, accounts or, subject to Section
3.04(h), sub-accounts created and maintained by the Trustee, pursuant to Section
3.04(b), in trust for the Certificateholders, which, subject to Section 3.04(h),
shall be entitled "Xxxxx Fargo Bank, N.A., as Trustee, for the benefit of
Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2006-C2, Distribution Account." The
Distribution Account shall be an Eligible Account or, subject to Section
3.04(h), a subaccount of an Eligible Account.
"Distribution Date": With respect to any calendar month, commencing
in June 2006, the fourth Business Day following the Determination Date in such
month.
"Do Not Hire List": The list, as may be updated at any time,
provided by the Depositor to the Master Servicer, Special Servicer and Trustee,
which lists certain parties identified by the Depositor as having materially
failed to comply with their respective obligations under Article XII of this
Agreement or as having materially failed to comply with any similar Regulation
AB reporting requirements under any pooling and servicing agreement relating to
any other series of certificates offered by the Depositor.
"Due Date": With respect to (i) any Mortgage Loan on or prior to its
Maturity Date, the day of the month set forth in the related Note on which each
Monthly Payment thereon is scheduled to be first due (without giving effect to
any grace period with respect to late Monthly Payments), (ii) any Mortgage Loan
after the Maturity Date therefor, the day of the month set forth in the related
Note on which each Monthly Payment on such Mortgage Loan had been scheduled to
be first due (without giving effect to any grace period) and (iii) any REO
Mortgage Loan, the day of the month set forth in the related Note on which each
Monthly Payment on the related Mortgage Loan had been scheduled to be first due
(without giving effect to any grace period).
"XXXXX": The Electronic Data Gathering, Analysis, and Retrieval
System of the Commission, which is the computer system for the receipt,
acceptance, review and dissemination of documents submitted to the Commission in
electronic format.
"Eligible Account": Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company
(including the Trustee) the long-term unsecured debt obligations of which are
rated at least "AA-" by S&P (or "A-" if the short-term debt obligations thereof
have a short-term rating of not less than "A-1" by S&P) and "Aa3" by Moody's, if
the deposits are to be held in such account for more than 30 days, or the
short-term debt obligations of which have a short-term rating of not less than
"A-1" by S&P and "P-1" by Moody's, if the deposits are to be held in such
account for 30 days or less, or such other account or accounts with respect to
which each of the Rating Agencies shall have confirmed in writing that the
then-current rating assigned to any of the Certificates that are currently being
rated by such Rating Agency will not be qualified (as applicable), downgraded or
withdrawn by reason thereof or (ii) a segregated trust account or accounts
maintained with the corporate trust department of a federal- or state-chartered
depository institution or trust company that has corporate trust powers, acting
in its fiduciary capacity; provided that any state-chartered depository
institution or trust company is subject to regulation regarding fiduciary funds
substantially similar to 12 C.F.R. ss. 9.10(b) and provided further that either
such depository institution or its parent has long-term unsecured debt
obligations which are rated at least "Baa3" by Moody's, or (iii) such other
account or accounts with respect to which each of the Rating Agencies shall have
confirmed in writing that the then-current rating assigned to any of the
Certificates that are currently being rated by such Rating Agency will not be
qualified (as applicable), downgraded or withdrawn by reason thereof. Eligible
Accounts may bear interest. No Eligible Account shall be evidenced by a
certificate of deposit, passbook or other similar instrument.
"Environmental Assessment": A "Phase I environmental assessment" as
described in and meeting the criteria of the American Society of Testing
Materials Standard E 1527-94 or any successor thereto published by the American
Society of Testing Materials.
"Environmental Insurance Policy": With respect to any Mortgage Loan,
any insurance policy covering Insured Environmental Events that is maintained
from time to time in respect of such Mortgage Loan or the related Mortgaged
Property.
"Environmental Insurer": The provider of insurance pursuant to any
Environmental Insurance Policy.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payment": Any payment received by the Master Servicer for
the account of any Borrower for application toward the payment of real estate
taxes, assessments, Insurance Policy premiums and similar items in respect of
the related Mortgaged Property, including amounts for deposit to any reserve
account.
"Euroclear": The Euroclear System.
"Event of Default": One or more of the events described in Section
7.01(a).
"Excess Interest": With respect to each of the ARD Mortgage Loans
(and each REO Trust Mortgage Loan that relates to an ARD Trust Mortgage Loan),
interest accrued on such Mortgage Loan (or REO Trust Mortgage Loan) and
allocable to the Excess Rate. Insofar as it accrues on an ARD Trust Mortgage
Loan (or any REO Trust Mortgage Loan with respect thereto), Excess Interest is
an asset of the Trust Fund, but shall not be an asset of either REMIC Pool.
"Excess Interest Distribution Account": The account, accounts or,
subject to Section 3.04(h), subaccount created and maintained by the Trustee,
which, subject to Section 3.04(h), shall be entitled "Xxxxx Fargo Bank, N.A., as
Trustee, in trust for Holders of Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-C2, Excess
Interest Distribution Account," and which shall be an Eligible Account or,
subject to Section 3.04(h), a subaccount of an Eligible Account. The Excess
Interest Distribution Account shall not be an asset of either REMIC Pool.
"Excess Liquidation Proceeds": The excess, if any, of (a) the Net
Liquidation Proceeds from the sale or liquidation of a Specially Serviced
Mortgage Loan or, insofar as they are allocable to the related REO Mortgage
Loan, from the sale or liquidation of an REO Property, over (b) the sum of (i)
interest on any related Advances, (ii) any Additional Trust Fund Expenses or
servicing compensation with respect to such Mortgage Loan, (iii) any related
Servicing Advances, and (iv) the amount needed to pay off in full the subject
Trust Mortgage Loan or related REO Trust Mortgage Loan (or if related to a
Mortgage Loan Combination, the amount needed to pay off in full such Mortgage
Loan Combination) and all amounts due with respect thereto.
"Excess Liquidation Proceeds Account": The account, accounts or,
subject to Section 3.04(h), sub-account created and maintained by the Trustee,
which, subject to Section 3.04(h), shall be entitled "Xxxxx Fargo Bank, N.A. [or
the name of any successor Trustee], as Trustee, in trust for the registered
holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2006-C2, Excess Liquidation Proceeds
Account," and which shall be an Eligible Account or, subject to Section 3.04(h),
a subaccount of an Eligible Account. The Excess Liquidation Proceeds Account
shall be an asset of REMIC I.
"Excess Parc at Duluth Earnout Yield Maintenance Charge": With
respect to the Parc at Duluth Mortgage Loan, the excess (if any) of (a) the
yield maintenance amount calculated pursuant to the loan documents to be due on
such earnout related prepayment, over (b) the yield maintenance amount which
would be due in connection with this earnout related prepayment assuming that
yield maintenance was equal to the present value, as of the earnout prepayment
date, of the remaining scheduled payments of principal and interest from the
earnout prepayment date through the maturity date, determined by discounting
such payments at the same discount rate used in (a), less the amount of
principal being prepaid. The Excess Parc at Duluth Earnout Yield Maintenance
Charge will be paid to the holders of the Class V-2 Certificates.
"Excess Rate": With respect to each ARD Mortgage Loan (and each REO
Trust Mortgage Loan that relates to an ARD Trust Mortgage Loan) after the
related Anticipated Repayment Date, the excess of (i) the applicable Revised
Rate over (ii) the applicable Mortgage Rate in effect immediately prior to the
related Anticipated Repayment Date.
"Excess Servicing Strip": The excess of the Master Servicing Fee
Rate over 0.005% (0.5 basis point) per annum, subject to reduction by the
Trustee pursuant to Section 3.11(a).
"Exchange Act": The Securities Exchange Act of 1934, as amended from
time to time.
"Exchange Act Reports": All Current Reports on Form 8-K and Annual
Reports on Form 10-K that are to be filed with the Commission with respect to
the Trust as contemplated by Sections 12.07 and Section 12.09.
"Exemption-Favored Party": Any of (i) Credit Suisse, (ii) any Person
directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with Credit Suisse, and (iii) any member
of any underwriting syndicate or selling group of which any Person described in
clauses (i) and (ii) is a manager or co-manager with respect to a Class of
Certificates (other than the Class R, Class LR and Class V Certificates) that is
investment grade rated by at least one Rating Agency.
"Fair Value": As defined in Section 3.18(b).
"FDIC": Federal Deposit Insurance Corporation or any successor.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor.
"Fidelity Bond": As defined in Section 3.07(c).
"Final Distribution Date": The final Distribution Date on which any
distributions are to be made hereunder on the Certificates in connection with
the termination of the Trust.
"Final Recovery Determination": A determination by the Special
Servicer with respect to any defaulted Mortgage Loan or REO Property that there
has been a recovery of all Insurance and Condemnation Proceeds, Liquidation
Proceeds and other payments or recoveries that, in the Special Servicer's
reasonable good faith judgment, exercised without regard to any obligation of
the Special Servicer to make payments from its own funds pursuant to Section
3.07(b), will ultimately be recoverable.
"FNMA": Federal National Mortgage Association or any successor
thereto.
"Form 8-K Disclosure Information": As defined in Section 12.09.
"GAAP": Generally accepted accounting principles in the United
States.
"Global Certificate": With respect to any Class of Non-Registered
Certificates, any related Regulation S Global Certificate or Rule 144A Global
Certificate.
"Grantor Trust": A grantor trust as defined under subpart E of Part
1 of subchapter J of the Code.
"Grantor Trust V-1": The Grantor Trust designated as such in Section
2.05.
"Ground Lease": The ground lease pursuant to which any Borrower
holds a leasehold interest in the related Mortgaged Property, together with any
estoppels or other agreements executed and delivered by the ground lessor in
favor of the lender under the related Mortgage Loan.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes or substances, including those so identified pursuant to
CERCLA or any other federal, state or local environmental related laws and
regulations, and specifically including asbestos and asbestos-containing
materials, polychlorinated biphenyls, radon gas, petroleum and petroleum
products, urea formaldehyde and any substances classified as being "in
inventory," "usable work in process" or similar classification which would, if
classified as unusable, be included in the foregoing definition.
"Independent": When used with respect to any specified Person, any
such Person that (i) is in fact independent of the Depositor, each Junior Loan
Holder, the Master Servicer, the Special Servicer, the Trustee and any and all
Affiliates thereof, (ii) does not have any material direct financial interest in
or any material indirect financial interest in any of the Depositor, any Junior
Loan Holder, the Master Servicer, the Special Servicer or any Affiliate thereof
and (iii) is not connected with the Depositor, any Junior Loan Holder, the
Master Servicer, the Special Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor, any Junior Loan Holder, the Master Servicer, the
Special Servicer, the Trustee or any Affiliate thereof merely because such
Person is the beneficial owner of 1% or less of any class of debt or equity
securities issued by the Depositor, any Junior Loan Holder, the Master Servicer,
the Special Servicer, the Trustee or any Affiliate thereof, as the case may be,
provided such ownership constitutes less than 1% of the total assets of such
Person.
"Independent Contractor": Either (i) any Person that would be an
"independent contractor" with respect to the Trust Fund within the meaning of
Section 856(d)(3) of the Code if the Trust Fund were a real estate investment
trust (except that the ownership test set forth in that Section shall be
considered to be met by any Person that owns, directly or indirectly, 35% or
more of any Class of Certificates, or such other interest in any Class of
Certificates as is set forth in an Opinion of Counsel, which shall be at no
expense to the Trustee, the Master Servicer or the Trust, delivered to the
Trustee and the Master Servicer), so long as the Trust Fund does not receive or
derive any income from such Person and provided that the relationship between
such Person and the Trust Fund is at arm's length, all within the meaning of
Treasury Regulations Section 1.856-4(b)(5) (except that the Master Servicer or
the Special Servicer shall not be considered to be an Independent Contractor
under the definition in this clause (i) unless an Opinion of Counsel (at the
expense of the party seeking to be deemed an Independent Contractor) has been
delivered to the Trustee to that effect), or (ii) any other Person (including
the Master Servicer and the Special Servicer) upon receipt by the Trustee and
the Master Servicer of an Opinion of Counsel (at the expense of the party
seeking to be deemed an Independent Contractor), to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or cause any income realized in respect of such REO Property to fail to
qualify as Rents from Real Property (provided that such income would otherwise
so qualify).
"Independent Director": A duly appointed member of the board of
directors of the relevant entity who shall not have been, at the time of such
appointment, at any time after appointment, or at any time in the preceding five
(5) years, (i) a direct or indirect legal or beneficial owner in such entity or
any of its affiliates, (ii) a creditor, supplier, employee, officer, director,
manager or contractor of such entity or any of its affiliates, (iii) a person
who controls such entity or any of its affiliates, or (iv) a member of the
immediate family of a person defined in (i), (ii) or (iii) above.
"Initial Pool Balance": The aggregate Cut-off Date Principal Balance
of all the Original Trust Mortgage Loans.
"Initial Purchaser": Credit Suisse, as initial purchaser of the
Non-Registered Certificates.
"Initial Resolution Period": As defined in Section 2.03(b).
"Institutional Accredited Investor" or "IAI": An "accredited
investor" as defined in any of paragraphs (1), (2), (3) and (7) of Rule 501(a)
under the Securities Act or any entity in which all of the equity owners come
within such paragraphs.
"Institutional Lender/Owner": One or more of the following: (i) a
bank, savings and loan association, investment bank, insurance company, real
estate investment trust, trust company, commercial credit corporation, pension
plan, pension fund or pension advisory firm, mutual fund, government entity or
plan, (ii) an investment company, money management firm or "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
which is regularly engaged in the business of making or owning mezzanine loans
of similar types to the mezzanine loan in the question, (iii) a trustee in
connection with a securitization of the mezzanine loan, so long as such trustee
or the servicer therefor is an entity that otherwise would be an Institutional
Lender/Owner, (iv) an institution substantially similar to any of the foregoing,
in each case of clauses (i), (ii), (iii) or (iv) of this definition, which (A)
has total assets (in name or under management) in excess of $600,000,000 and
(except with respect to a pension advisory firm or similar fiduciary)
capital/statutory surplus or shareholder's equity of $200,000,000 and (B) is
regularly engaged in the business of making or owning commercial loans or (v) an
entity Controlled (as defined below) by the Underwriters or any of the entities
described in clause (i) above. For purposes of this definition only, "Control"
means the ownership, directly or indirectly, in the aggregate of more than fifty
percent (50%) of the beneficial ownership interests of an entity and the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of an entity, whether through the
ability to exercise voting power, by contract or otherwise ("Controlled" has the
meaning correlative thereto). The Special Servicer shall obtain from the
proposed transferee, and shall be entitled to rely on, (i) an officer's
certificate of a proposed transferee that such transferee satisfies the
requirements of this definition and (ii) in the case of any proposed transferee
that is an entity described in and meeting the criteria in clauses (i)-(iv) of
the second preceding sentence, the most recent financial statements of such
transferee.
"Insurance and Condemnation Proceeds": All proceeds (net of expenses
of collection, including attorney's fees and expenses) paid under any Insurance
Policy or in connection with the full or partial condemnation (or threatened
condemnation) of a Mortgaged Property, in either case, to the extent such
proceeds are not applied to the restoration of the related Mortgaged Property or
released to the Borrower, in either case, in accordance with the Servicing
Standard.
"Insurance Policy": With respect to any Mortgage Loan or REO
Property, any hazard insurance policy, flood insurance policy, title insurance
policy, earthquake insurance policy, Environmental Insurance Policy, business
interruption insurance policy or other insurance policy that is maintained from
time to time in respect of such Mortgage Loan (or the related Mortgaged
Property) or such REO Property, as the case may be.
"Insured Environmental Event": As defined in Section 3.07(j).
"Intercreditor Agreement": The Andover House Apartments
Intercreditor Agreement or any CBA A/B Intercreditor Agreement, individually or
collectively, as the case may be.
"Interest Accrual Period": With respect to any Class of Regular
Certificates or Uncertificated REMIC I Interests and any Distribution Date, the
calendar month immediately preceding the month in which such Distribution Date
occurs. Each Interest Accrual Period shall be deemed for purposes of this
definition to consist of 30 days.
"Interest Only Certificates": The Class A-X Certificates.
"Interest Reserve Account": The account, accounts or, subject to
Section 3.04(h), sub-account created and maintained by the Trustee, pursuant to
Section 3.28, in trust for the Certificateholders, which, subject to Section
3.04(h), shall be entitled "Xxxxx Fargo Bank, N.A., as Trustee, in trust for the
registered holders of Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2006-C2, Interest Reserve
Account," and which shall be an Eligible Account or, subject to Section 3.04(h),
a sub-account of an Eligible Account.
"Interest Reserve Loan": Any Actual/360 Trust Mortgage Loan (or
successor REO Trust Mortgage Loan with respect thereto).
"Interest Shortfall Amount": As to any Distribution Date and any
Class of Regular Certificates, the amount, if any, by which the amount
distributed on such Class on such Distribution Date in respect of interest is
less than the amount due in respect of interest to such Class of Regular
Certificates.
"Interested Person": The Depositor, the Master Servicer, the Special
Servicer, any Independent Contractor engaged by the Special Servicer, any Holder
of a Certificate or any Affiliate of any such Person.
"Investment Account": As defined in Section 3.06(a).
"IRS": The Internal Revenue Service or any successor.
"Issue Price": With respect to each Class of Certificates, the
"issue price" as defined in the Code and Treasury regulations promulgated
thereunder.
"Junior Loan": The Andover House Apartments B Loan and the CBA B
Loans, each of which is subordinate in right of payment to the related A Loan.
"Junior Loan Holder": Any holder of the Junior Loan or any successor
REO Mortgage Loan with respect thereto.
"Late Collections": With respect to any Trust Mortgage Loan or any B
Loan, all amounts (except Penalty Charges) received thereon during any
Collection Period, whether as payments, Insurance and Condemnation Proceeds,
Liquidation Proceeds or otherwise, which represent late payments or collections
of principal or interest due in respect of such Mortgage Loan (without regard to
any acceleration of amounts due thereunder by reason of default) on a Due Date
in a previous Collection Period and not previously received. With respect to any
REO Mortgage Loan, all amounts (except Penalty Charges) received in connection
with the related REO Property during any Collection Period, whether as Insurance
and Condemnation Proceeds, Liquidation Proceeds, REO Revenues or otherwise,
which represent late collections of principal or interest due or deemed due in
respect of such REO Mortgage Loan or the predecessor Mortgage Loan (without
regard to any acceleration of amounts due under the predecessor Mortgage Loan by
reason of default) on a Due Date in a previous Collection Period and not
previously received.
"Letter of Credit": With respect to any Mortgage Loan, any
third-party letter of credit delivered by or at the direction of the Borrower
pursuant to the terms of such Mortgage Loan in lieu of the establishment of, or
deposit otherwise required to be made into, a reserve fund.
"Liquidation Event": With respect to any Mortgage Loan or REO
Property, any of the following events: (i) payment in full of such Mortgage
Loan; (ii) the making of a Final Recovery Determination with respect to such
Mortgage Loan or REO Property; (iii) in the case of a Trust Mortgage Loan, the
repurchase or replacement of such Trust Mortgage Loan by the Mortgage Loan
Seller pursuant to Section 7 of the Mortgage Loan Purchase Agreement or by the
Performance Guarantor pursuant to the Performance Guarantee; (iv) in the case of
a Defaulted Trust Mortgage Loan, the purchase of such Trust Mortgage Loan by the
Series 2006-C2 Directing Certificateholder or the Special Servicer or any
assignee or Affiliate of either of the foregoing pursuant to Section 3.18; (v)
in the case of the Andover House Apartments Total Loan, the purchase of the
related A Loan by the related B Loan Holder pursuant to the related
Intercreditor Agreement; (vi) in the case of any CBA A/B Mortgage Loan
Combination, the purchase of the related CBA A Loan by the related B Loan Holder
pursuant to the related CBA A/B Intercreditor Agreement; (vii) the purchase of
such Mortgage Loan by a related Mezzanine Loan Holder; (viii) the sale or other
liquidation of such REO Property hereunder; or (ix) the purchase of such
Mortgage Loan (if it is a Trust Mortgage Loan) or REO Property by the Holders of
more than 50% of the Percentage Interests in the Controlling Class, the Special
Servicer or the Master Servicer pursuant to Section 9.01.
"Liquidation Expenses": All customary, reasonable and necessary
"out-of-pocket" costs and expenses due and owing (but not otherwise covered by
Servicing Advances) in connection with the liquidation of any Specially Serviced
Mortgage Loan or REO Property (including legal fees and expenses, committee or
referee fees and, if applicable, brokerage commissions and conveyance taxes).
"Liquidation Fee": A fee payable to the Special Servicer with
respect to any Trust Mortgage Loan repurchased by the Mortgage Loan Seller (or
guarantor) after the Initial Resolution Period as described in Section 2.03 or
any Specially Serviced Trust Mortgage Loan or REO Trust Mortgage Loan as to
which the Special Servicer receives a full, partial or discounted payoff with
respect thereto from the related Borrower or Mortgage Loan Seller (or guarantor)
or any Liquidation Proceeds with respect thereto, all as provided in Section
3.11(b).
"Liquidation Fee Rate": 1.0% (except that such rate shall be 0.75%
with respect to the Andover House Apartments Loan).
"Liquidation Proceeds": Cash amounts (other than Insurance and
Condemnation Proceeds and REO Revenues) received by the Master Servicer or
Special Servicer, in connection with: (i) the liquidation of a Mortgaged
Property or other collateral constituting security for a defaulted Mortgage Loan
through trustee's sale, foreclosure sale, REO Disposition or otherwise,
exclusive of any portion thereof required to be released to the related
Borrower; (ii) the realization upon any deficiency judgment obtained against a
Borrower; (iii) the purchase of a Defaulted Trust Mortgage Loan by the Series
2006-C2 Directing Certificateholder or the Special Servicer or any assignee or
Affiliate of either of the foregoing pursuant to Section 3.18; (iv) the
repurchase or replacement of a Trust Mortgage Loan by the Mortgage Loan Seller
pursuant to Section 7 of the Mortgage Loan Purchase Agreement or, in the case of
a Trust Mortgage Loan, by the Performance Guarantor pursuant to the Performance
Guarantee; (v) the purchase of the Andover House Apartments A Loan by the
related B Loan Holder pursuant to the related Intercreditor Agreement, (vi) the
purchase of a CBA A Loan by the related B Loan Holder pursuant to the related
Intercreditor Agreement; (vii) the purchase of any Mortgage Loan by a related
Mezzanine Loan Holder; or (viii) the purchase of all Trust Mortgage Loans and
REO Properties by Holders of more than 50% of the Percentage Interests in the
Controlling Class, the Special Servicer or the Master Servicer pursuant to
Section 9.01.
"Loan Agreement": With respect to any Mortgage Loan, the loan
agreement, if any, between the related Mortgage Loan Originator and the
Borrower, pursuant to which such Mortgage Loan was made.
"Loan Group": Either of Loan Group No. 1 or Loan Group No. 2.
"Loan Group No. 1": Collectively, all of the Trust Mortgage Loans
that are identified on the Trust Mortgage Loan Schedule as belonging to Loan
Group No. 1 and any successor REO Trust Mortgage Loans with respect thereto.
"Loan Group No. 2": Collectively, all of the Trust Mortgage Loans
that are identified on the Trust Mortgage Loan Schedule as belonging to Loan
Group No. 2 and any successor REO Trust Mortgage Loans with respect thereto.
"Loan Seller Sub-Servicer": A Servicing Function Participant or
Sub-Servicer required to be retained by the Master Servicer or the Special
Servicer by the Mortgage Loan Seller, as listed on Exhibit L hereto.
"Loan-to-Value Ratio": With respect to any Trust Mortgage Loan, as
of any date of determination, the fraction, expressed as a percentage, the
numerator of which is the principal balance of such Trust Mortgage Loan (or, in
the case of the CBA A Loan or Andover House Apartments Loan, of the CBA A/B
Mortgage Loan Combination or Andover House Apartments Total Loan, respectively)
at the time of determination, and the denominator of which is the Appraised
Value of the related Mortgaged Property.
"Lock-Box Account": With respect to any Mortgaged Property, the
account, if any, created pursuant to any documents relating to a Mortgage Loan
to receive revenues therefrom. Any Lock-Box Account shall be beneficially owned
for federal income tax purposes by the Person who is entitled to receive the
reinvestment income or gain thereon in accordance with the terms and provisions
of the related Mortgage Loan and Section 3.06, which Person shall, if required
under the Code, be taxed on all reinvestment income or gain thereon. The Master
Servicer shall be permitted to make withdrawals therefrom for deposit into the
related Cash Collateral Accounts.
"Lock-Box Agreement": With respect to any Mortgage Loan, the
lock-box agreement, if any, between the applicable Mortgage Loan Originator or
the Mortgage Loan Seller and the related Borrower, pursuant to which the related
Lock-Box Account may have been established.
"MAI": Member of the Appraisal Institute.
"Management Agreement": With respect to any Mortgage Loan, the
Management Agreement, if any, by and between the Manager and the related
Borrower, or any successor Management Agreement between such parties.
"Manager": With respect to any Mortgage Loan, any property manager
for the related Mortgaged Property or Mortgaged Properties.
"Master Servicer": Wachovia Bank, National Association, in its
capacity as master servicer hereunder, or any successor master servicer
appointed as herein provided.
"Master Servicer Account": As defined in Section 3.06(a).
"Master Servicer Employees": As defined in Section 3.07(c).
"Master Servicer Remittance Date": With respect to any Distribution
Date, the Business Day preceding such Distribution Date.
"Master Servicing Fee": With respect to each Trust Mortgage Loan and
REO Trust Mortgage Loan, the fee payable to the Master Servicer pursuant to the
first paragraph of Section 3.11(a).
"Master Servicing Fee Rate": With respect to each Trust Mortgage
Loan and REO Trust Mortgage Loan, the rate per annum specified as such on the
Trust Mortgage Loan Schedule.
"Material Breach": As defined in Section 2.03(b).
"Material Defect": As defined in Section 2.03(b).
"Maturity Date": With respect to any Mortgage Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related Note, after taking into account all Principal
Prepayments received prior to such date of determination, but without giving
effect to (i) any acceleration of the principal of such Mortgage Loan by reason
of default thereunder, (ii) any grace period permitted by the related Note or
(iii) any modification, waiver or amendment of such Mortgage Loan granted or
agreed to by the Master Servicer or the Special Servicer pursuant to Section
3.20 occurring prior to such date of determination.
"Mezzanine Loan": Any loan constituting "Mezzanine Debt" or a
"Mezzanine Loan," as identified in Exhibit C-2 attached hereto.
"Mezzanine Loan Collateral": With respect to any Mezzanine Loan, any
stock, partnership interests, membership interests or other equity interest in
the related Borrower that has been pledged pursuant to such Mezzanine Loan.
"Mezzanine Loan Holder": With respect to any Mezzanine Loan, the
holder or obligee thereof.
"Monthly Interest Distribution Amount": As to any Distribution Date
and any Class of Regular Certificates, the Accrued Certificate Interest Amount
for such Class for such Distribution Date.
"Monthly Payment": With respect to any Mortgage Loan (other than any
REO Mortgage Loan) and any Due Date, the scheduled monthly payment of principal,
if any, and interest at the Mortgage Rate, excluding any Balloon Payment or
Excess Interest, which is payable by the related Borrower on such Due Date under
the related Note (as such terms may be changed or modified in connection with a
bankruptcy or similar proceeding involving the related Borrower or by reason of
a modification, waiver or amendment of such Mortgage Loan granted or agreed to
by the Master Servicer or Special Servicer pursuant to Section 3.20), without
regard to any acceleration of principal of such Mortgage Loan by reason of a
default thereunder. With respect to an REO Mortgage Loan, the monthly payment,
excluding any Balloon Payment or Excess Interest, that would otherwise have been
payable on the related Due Date had the related Note not been discharged,
determined as set forth in the preceding sentence and on the assumption that all
other amounts, if any, due thereunder are paid when due.
"Moody's": Xxxxx'x Investors Service, Inc. or its successor in
interest. If neither such rating agency nor any successor remains in existence,
"Moody's" shall be deemed to refer to such other nationally recognized
statistical rating agency or other comparable Person designated by the
Depositor, notice of which designation shall be given to the other parties
hereto, and specific ratings of Xxxxx'x Investors Service, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated; provided, however, that if such designated party has not then
assigned a rating to a depository institution, insurer or any other Person or
item, then any failure to satisfy a requirement under this Agreement to meet or
maintain such equivalent rating shall not be deemed an Event of Default or
breach of the Servicing Standard solely as a result of such failure. References
herein to "applicable rating category" (other than such references to "highest
applicable rating category") shall, in the case of Moody's, be deemed to refer
to such applicable rating category of Moody's, without regard to any plus or
minus or other comparable rating qualification.
"Mortgage": With respect to any Mortgage Loan, the mortgage, deed of
trust, deed to secure debt or other instrument securing a Note and creating a
lien on the related Mortgaged Property.
"Mortgage File": With respect to any Trust Mortgage Loan, the
following documents:
(i) the original Note (or a lost note affidavit and
indemnity), bearing, or accompanied by, all prior and intervening
endorsements or assignments showing a complete chain of endorsement,
assignment or allonge from the applicable Mortgage Loan Originator
either in blank or to the Mortgage Loan Seller, and further endorsed
(at the direction of the Depositor given pursuant to the Mortgage
Loan Purchase Agreement) by the Mortgage Loan Seller, on its face or
by allonge attached thereto, without recourse, in blank or to the
order of the Trustee in the following form: "Pay to the order of
Xxxxx Fargo Bank, N.A., as trustee for the registered Holders of
Credit Suisse First Boston Mortgage Securities Corp., Commercial
Mortgage Pass-Through Certificates, Series 2006-C2, without
recourse, representation or warranty, express or implied";
(ii) a duplicate original Mortgage or a counterpart thereof,
or if such Mortgage has been returned by the related recording
office, (A) an original, (B) a certified copy or (C) a copy thereof
from the applicable recording office, and originals or counterparts
(or originals or copies of certified copies from the applicable
recording office) of any intervening assignments thereof from the
related Mortgage Loan Originator to the Mortgage Loan Seller, in
each case in the form submitted for recording or, if recorded, with
evidence of recording indicated thereon;
(iii) an original assignment of the Mortgage, in recordable
form (except for any missing recording information and, if
applicable, completion of the name of the assignee), from the
Mortgage Loan Seller (or the Mortgage Loan Originator), either in
blank or to "Xxxxx Fargo Bank, N.A., as trustee for the registered
Holders of Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2006-C2";
(iv) an original, counterpart or copy of any related
Assignment of Leases (if such item is a document separate from the
Mortgage), and the originals, counterparts or copies of any
intervening assignments thereof from the applicable Mortgage Loan
Originator of the Trust Mortgage Loan to the Mortgage Loan Seller,
in each case in the form submitted for recording or, if recorded,
with evidence of recording thereon;
(v) an original assignment of any related Assignment of Leases
(if such item is a document separate from the Mortgage and to the
extent not already assigned pursuant to clause (iii) above), in
recordable form (except for any missing recording information and,
if applicable, completion of the name of the assignee), from the
Mortgage Loan Seller (or the Mortgage Loan Originator), either in
blank or to "Xxxxx Fargo Bank, N.A., as trustee for the registered
Holders of Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates, Series 2006-C2";
(vi) an original or copy of any related Security Agreement (if
such item is a document separate from the Mortgage) and the
originals or copies of any intervening assignments thereof from the
applicable Mortgage Loan Originator of the Trust Mortgage Loan to
the Mortgage Loan Seller;
(vii) an original assignment of any related Security Agreement
(if such item is a document separate from the Mortgage and to the
extent not already assigned pursuant to clause (iii) above), from
the Mortgage Loan Seller or the applicable Mortgage Loan Originator,
either in blank or to "Xxxxx Fargo Bank, N.A., as trustee for the
registered Holders of Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series
2006-C2," which assignment may be included as part of an omnibus
assignment covering other documents relating to the Trust Mortgage
Loan; provided that such omnibus assignment is effective under
applicable law;
(viii) originals or copies of all (A) assumption agreements,
(B) modifications, (C) written assurance agreements and (D)
substitution agreements, together with any evidence of recording
thereon or in the form submitted for recording, when appropriate, in
those instances where the terms or provisions of the Mortgage, Note
or any related security document have been modified or the Trust
Mortgage Loan has been assumed;
(ix) the original lender's title insurance policy or a copy
thereof (together with all endorsements or riders that were issued
with or subsequent to the issuance of such policy), or if the policy
has not yet been issued, the original or a copy of a binding written
commitment (which may be a pro forma or specimen title insurance
policy which has been accepted or approved in writing by the related
title insurance company, or escrow instructions binding on the title
insurer irrevocably obligating the title insurer to issue such title
insurance policy) or interim binder, relating to the Trust Mortgage
Loan;
(x) the original or a counterpart of any guaranty of the
obligations of the Borrower under the Trust Mortgage Loan;
(xi) certified or other copies of all UCC Financing Statements
and continuation statements which show the filing or recording
thereof or copies thereof in the form submitted for filing or
recording sufficient to perfect (and maintain the perfection of) the
security interest held by the Mortgage Loan Originator (and each
assignee of record prior to the Trustee) in and to the personalty of
the Borrower at the Mortgaged Property that is described in the
related Mortgage or a separate security agreement, and original UCC
Financing Statement assignments in a form suitable for filing or
recording, sufficient to transfer such to the Trustee;
(xii) the original or copy of the power of attorney (with
evidence of recording thereon) granted by the Borrower if the
Mortgage, Note or other document or instrument referred to above was
not signed by the Borrower;
(xiii) with respect to any debt of a Borrower permitted under
the Trust Mortgage Loan, an original or copy of the subordination
agreement, standstill agreement or other intercreditor, co-lender or
similar agreement relating to such other debt, if any, including (if
and as applicable) any Intercreditor Agreement, mezzanine loan
documents or preferred equity documents, together with, if the Trust
Mortgage Loan is an A Loan, a copy of the Note for each related B
Loan;
(xiv) with respect to any Cash Collateral Accounts and
Lock-Box Accounts, an original or copy of any related cash
collateral control agreement or lock-box control agreement, as
applicable, and a copy of the UCC Financing Statements, if any,
submitted for filing with respect to the Mortgage Loan Seller's
security interest in the Cash Collateral Accounts and Lock-Box
Accounts and all funds contained therein (together with UCC
Financing Statement assignments in a form suitable for filing or
recording, sufficient to transfer such to the Trustee on behalf of
the Certificateholders);
(xv) an original or copy of any related Loan Agreement (if
separate from the related Mortgage) and an original or copy of any
related Lock-Box Agreement or Cash Collateral Agreement (if separate
from the related Mortgage and Loan Agreement);
(xvi) the originals of Letters of Credit, if any, relating to
the Trust Mortgage Loan, provided that in connection with the
delivery of the Mortgage File to the Trust, such originals shall be
delivered to the Master Servicer and copies thereof shall be
delivered to the Trustee;
(xvii) any environmental insurance policies and any
environmental guaranty or indemnity agreements or copies thereof;
(xviii) the original Ground Lease, Ground Lease estoppels and
any amendments thereto, if any, or a copy thereof;
(xix) copies of franchise agreements and franchisor comfort
letters, if any, for hospitality properties and any applicable
transfer or assignment documents;
(xx) any additional documents required to be added to the
Mortgage File pursuant to this Agreement; and
(xxi) the checklist of the related Mortgage Loan Documents, if
any, that is included in the Mortgage File for the related Trust
Mortgage Loan.
Whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received. If any B Loan is being serviced and administered
hereunder, the Mortgage File for the related Trust Mortgage Loan shall also
constitute the Mortgage File for such B Loan.
"Mortgage Interest Accrual Period": With respect to any Mortgage
Loan, the period during which interest payable on any particular related Due
Date accrues pursuant to the related Note.
"Mortgage Loan": Any Trust Mortgage Loan or, to the extent being
serviced hereunder, any B Loan.
"Mortgage Loan Combination": The Andover House Apartments Total Loan
and any CBA A/B Mortgage Loan Combination.
"Mortgage Loan Combination Custodial Account": With respect to any
Mortgage Loan Combination, the segregated account or accounts (or, subject to
Section 3.04(h), the sub-account) created and maintained by the Master Servicer
pursuant to Section 3.04(e) in the name of the Trustee on behalf of the
Certificateholders and the related B Loan Holder, which, subject to Section
3.04(h), shall be entitled substantially as follows: "Wachovia Bank, National
Association, as Master Servicer, in trust for Xxxxx Fargo Bank, N.A., as
Trustee, on behalf of Holders of Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-C2 and [name
of the related B Loan Holder], as their interests may appear." Each Mortgage
Loan Combination Custodial Account shall be an Eligible Account (or, subject to
Section 3.04(h), a sub-account of an Eligible Account) and, only to the extent
of amounts therein relating to the subject A Loan, shall be part of REMIC I.
"Mortgage Loan Documents": With respect to each Mortgage Loan, to
the extent applicable, the Loan Agreement, the Mortgage, the Note, the
Assignment of Leases (if separate from the Mortgage), the Security Agreement,
any cash management agreement, any Ground Lease, any Letters of Credit, escrow
or reserve account information relating to the Additional Collateral Trust
Mortgage Loans, any UCC Financing Statements, the title insurance policy (or
escrow instructions binding on the title insurer irrevocably obligating the
title insurer to issue such title insurance policy), all surveys, all insurance
policies, any environmental liability agreements, any escrow agreements for
improvements or lease-up, any guaranties related to such Mortgage Loan, any
prior assignments of Mortgage in the event that the Mortgage Loan Seller is not
the originator of record, any collateral assignments of property management
agreements and other servicing agreements required by the applicable commitment
and other loan documents, any preferred equity and mezzanine loan documents and
all modification, consolidation and extension agreements, if any.
"Mortgage Loan Originator": Any institution that originated a
Mortgage Loan.
"Mortgage Loan Purchase Agreement": As defined in the Preliminary
Statement to this Agreement.
"Mortgage Loan Seller": Column.
"Mortgage Pool": All of the Trust Mortgage Loans and any successor
REO Trust Mortgage Loans, collectively, as of any particular date of
determination. The Mortgage Pool shall not include the Junior Loans.
"Mortgage Rate": With respect to: (i) any Mortgage Loan on or prior
to its Maturity Date, the annual rate at which interest is scheduled (in the
absence of a default and without giving effect to any Revised Rate) to accrue on
such Mortgage Loan from time to time in accordance with the related Note and
applicable law; (ii) any Mortgage Loan after its Maturity Date, the annualized
rate described in clause (i) above determined without regard to the passage of
such Maturity Date; and (iii) any REO Mortgage Loan, the annualized rate
described in clause (i) or (ii), as applicable, above, determined as if the
predecessor Mortgage Loan had remained outstanding.
"Mortgaged Property": The underlying real property (including any
REO Property) that secures a Mortgage Loan, in each case consisting of a parcel
or parcels of land improved by a commercial and/or multifamily building or
facility, together with any personal property (to the extent the same are owned
by the Borrower and necessary in connection with the operation of the related
property), fixtures, leases and other property or rights pertaining thereto.
"Mortgagee": The holder of legal title to any Mortgage Loan,
together with any third parties through which such holder takes actions with
respect to such Mortgage Loan.
"Net Investment Earnings": (i) With respect to any of the Collection
Account, any Mortgage Loan Combination Custodial Account, any Lock-Box Account,
any Cash Collateral Account, any Servicing Account or the REO Account, for any
Collection Period, and (ii) with respect to any of the Distribution Account, the
Excess Liquidation Proceeds Account, the Excess Interest Distribution Account
and the Interest Reserve Account, for any one-month period ending on a
Distribution Date, the amount, if any, by which the aggregate of all interest
and other income realized during such period on funds relating to the Trust Fund
held in such account (and which is not required to be paid to the related
Borrower) exceeds the aggregate of all losses, if any, incurred during such
period in connection with the investment of such funds in accordance with
Section 3.06.
"Net Investment Loss": (i) With respect to any of the Collection
Account, any Mortgage Loan Combination Custodial Account, any Lock-Box Account,
any Cash Collateral Account, any Servicing Account or the REO Account, for any
Collection Period and (ii) with respect to any of the Distribution Account, the
Excess Liquidation Proceeds Account, the Excess Interest Distribution Account
and the Interest Reserve Account, for any one-month period ending on a
Distribution Date, the amount, if any, by which the aggregate of all losses, if
any, incurred during such period in connection with the investment of funds
relating to the Trust Fund held in such account (and which investment is not
directed by the related Borrower) in accordance with Section 3.06 exceeds the
aggregate of all interest and other income realized during such period on such
funds.
"Net Liquidation Proceeds": The excess, if any, of (a) all
Liquidation Proceeds actually received by the Trust with respect to any
Specially Serviced Trust Mortgage Loan or REO Property, over (b) the amount of
all Liquidation Expenses incurred with respect thereto.
"Net Mortgage Pass-Through Rate":
(A) With respect to any Mortgage Loan (or any successor REO Mortgage
Loan with respect thereto) that accrues interest on a 30/360 Basis, for any
Distribution Date, an annual rate equal to the Original Net Mortgage Rate for
such Mortgage Loan; and
(B) With respect to any Mortgage Loan (or any successor REO Mortgage
Loan with respect thereto) that accrues interest on an Actual/360 Basis, for any
Distribution Date, an annual rate generally equal to twelve times a fraction,
expressed as a percentage:
(1) the numerator of which fraction is, subject to adjustment as
described below in this definition, an amount of interest
equal to the product of (a) the number of days in the related
Interest Accrual Period (disregarding the last sentence of the
definition of Interest Accrual Period), multiplied by (b) the
Stated Principal Balance of such Mortgage Loan (or such REO
Mortgage Loan) immediately preceding such Distribution Date,
multiplied by (c) 1/360, multiplied by (d) the Original Net
Mortgage Rate for such Mortgage Loan; and
(2) the denominator of which is the Stated Principal Balance of
such Mortgage Loan (or such REO Mortgage Loan) immediately
preceding that Distribution Date.
Notwithstanding the foregoing, if the subject Distribution Date
occurs during January, except during a leap year, or February of any year
subsequent to 2006 (unless the Final Distribution Date occurs in such month),
then the amount of interest referred to in the fractional numerator described in
clause (B)(1) above will be decreased to reflect any Withheld Amounts with
respect to the subject Mortgage Loan (or REO Mortgage Loan) transferred from the
Distribution Account to the Interest Reserve Account in such calendar month.
Furthermore, if the subject Distribution Date occurs during March of any year
subsequent to 2006 (or February, if the Final Distribution Date occurs in such
month), then the amount of interest referred to in the fractional numerator
described in clause (B)(1) above will be increased to reflect any Withheld
Amounts with respect to the subject Mortgage Loan (or REO Mortgage Loan)
transferred from the Interest Reserve Account to the Distribution Account for
distribution on such Distribution Date.
"Net Mortgage Rate": With respect to any Mortgage Loan or REO
Mortgage Loan, as of any date of determination, a per annum rate equal to the
related Mortgage Rate minus the related Administrative Fee Rate.
"Net Operating Income": With respect to any Mortgaged Property, for
any twelve-month period, the total operating revenues derived from such
Mortgaged Property during such period, minus the total operating expenses
incurred in respect of such Mortgaged Property during such period, other than
(i) non-cash items such as depreciation, (ii) amortization, (iii) actual capital
expenditures and (iv) debt service on the related Mortgage Loan.
"New Lease": Any lease of REO 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 Fund has the right to
renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance or any portion thereof.
"Nonrecoverable P&I Advance": The portion of any P&I Advance
previously made or proposed to be made in respect of a Trust Mortgage Loan or an
REO Trust Mortgage Loan (including any P&I Advance that constitutes a
Workout-Delayed Reimbursement Amount) which, in the judgment (in accordance with
the Servicing Standard in the case of judgment by the Master Servicer or the
Special Servicer) of the Master Servicer, the Special Servicer or the Trustee,
as applicable, will not be ultimately recoverable, together with any accrued and
unpaid interest thereon, from Late Collections or any other recovery on or in
respect of such Trust Mortgage Loan or REO Trust Mortgage Loan. The
determination by the Master Servicer, the Special Servicer or the Trustee, as
applicable, that it has made (or, in the case of a determination made by the
Special Servicer, that the Master Servicer or Trustee has made) a Nonrecoverable
P&I Advance or that any proposed P&I Advance, if made, would constitute a
Nonrecoverable P&I Advance, shall be evidenced by an Officer's Certificate
delivered (i) to the Trustee and the Special Servicer, in the case of the Master
Servicer, (ii) to the Master Servicer and the Trustee in the case of the Special
Servicer, (iii) to the Depositor, the Master Servicer and the Special Servicer,
in the case of the Trustee, and (iv) in each case, to the Series 2006-C2
Directing Certificateholder, each Junior Loan Holder or its designee (if the
Andover House Apartments Total Loan or any CBA A/B Mortgage Loan Combination, as
applicable, or any related REO Trust Mortgage Loan is involved) and to any
Requesting Subordinate Certificateholder (at the expense of such Requesting
Subordinate Certificateholder) setting forth such determination of
nonrecoverability and the considerations of the Master Servicer, the Special
Servicer or the Trustee, as applicable, forming the basis of such determination
(which shall include but shall not be limited to information, to the extent
available, such as related income and expense statements, rent rolls, occupancy
status, property inspections, and shall include an Appraisal (provided that if
an Appraisal has been obtained within the past 12 months, no new Appraisal is
required) of the related Mortgaged Property, the cost of which Appraisal shall,
subject to Section 3.03(c), be advanced by the Master Servicer as a Servicing
Advance). Such Officer's Certificate shall be accompanied by the Appraisal and
all other supporting documentation relevant to the subject parties'
nonrecoverability determination. The Trustee shall be entitled to conclusively
rely on the Master Servicer's determination that a P&I Advance is
nonrecoverable. The Master Servicer and the Trustee shall conclusively rely on
the Special Servicer's determination that a P&I Advance is nonrecoverable.
"Nonrecoverable Servicing Advance": The portion of any Servicing
Advance previously made or proposed to be made in respect of a Mortgage Loan or
REO Property (including any Servicing Advance that constitutes a Workout-Delayed
Reimbursement Amount) which, in the judgment (in accordance with the Servicing
Standard in the case of judgment by the Master Servicer or the Special Servicer)
of the Master Servicer, the Special Servicer or the Trustee, as the case may be,
will not be ultimately recoverable, together with any accrued and unpaid
interest thereon, from Late Collections or any other recovery on or in respect
of such Mortgage Loan or REO Property. The determination by the Master Servicer,
the Special Servicer or the Trustee, as the case may be, that it has made (or,
in the case of a determination made by the Special Servicer, that the Master
Servicer, the Special Servicer or the Trustee has made) a Nonrecoverable
Servicing Advance or that any proposed Servicing Advance, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officer's Certificate delivered (i) to the Trustee and the Special Servicer, in
the case of the Master Servicer, (ii) to the Master Servicer and the Trustee in
the case of the Special Servicer, (iii) to the Depositor, the Special Servicer
and the Master Servicer, in the case of the Trustee, and (iv) and in each case,
to the Series 2006-C2 Directing Certificateholder, to each Junior Loan Holder or
its designee (if the Andover House Apartments Total Loan or any CBA A/B Mortgage
Loan Combination or any related REO Property is involved) and to any Requesting
Subordinate Certificateholder (at the expense of such Requesting Subordinate
Certificateholder). The Officer's Certificate shall set forth such determination
of nonrecoverability and the considerations of the Master Servicer, the Special
Servicer or the Trustee, as applicable, forming the basis of such determination
(which shall include but shall not be limited to information, to the extent
available, such as related income and expense statements, rent rolls, occupancy
status and property inspections, and shall include an Appraisal (provided that
if an Appraisal has been obtained within the past 12 months, no new Appraisal is
required) of the related Mortgaged Property, the cost of which Appraisal shall,
subject to Section 3.03(c), be advanced by the Master Servicer as a Servicing
Advance). Such Officer's Certificate shall be accompanied by the Appraisal and
all other supporting documentation relevant to the subject parties'
nonrecoverability determination. The Trustee will be entitled to conclusively
rely on the Master Servicer's determination that a Servicing Advance is
nonrecoverable. The Master Servicer and the Trustee shall conclusively rely on
the Special Servicer's determination that a Servicing Advance is a
Nonrecoverable Servicing Advance.
"Non-Registered Certificate": Any Certificate that has not been
subject to registration under the Securities Act. As of the Closing Date, the
Class A-X, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class L, Class M, Class N, Class O, Class P, Class R, Class LR,
Class V-1 and Class V-2 Certificates will constitute Non-Registered
Certificates.
"Non-United States Tax Person": Any Person other than a United
States Tax Person.
"Note": The original executed note (or, if applicable, multiple
notes collectively) evidencing the indebtedness of a Borrower under a Mortgage
Loan, together with any rider, addendum or amendment thereto.
"Notional Balance": For any date of determination, the Class A-X
Notional Amount.
"NRSRO": Nationally recognized statistical rating organization as
the term is used in federal securities laws.
"Officer's Certificate": A certificate signed by a Servicing Officer
of the Master Servicer or the Special Servicer, or a Responsible Officer of the
Trustee, as the case may be.
"Opinion of Counsel": A written opinion of counsel, who may be
salaried counsel for the Depositor, the Master Servicer or the Special Servicer,
acceptable in form and delivered to the Trustee, except that any opinion of
counsel relating to (a) the qualification of either REMIC Pool as a REMIC, (b)
compliance with the REMIC Provisions or (c) the resignation of the Depositor,
the Master Servicer or the Special Servicer pursuant to Section 6.04 must be an
opinion of counsel that is Independent of the Depositor, the Master Servicer or
the Special Servicer, as applicable.
"Optimal Interest Distribution Amount": As to any Distribution Date
and any Class of Regular Certificates, the sum of the Monthly Interest
Distribution Amount and the Unpaid Interest Shortfall Amount for such Class for
such Distribution Date.
"Original Certificate Balance": With respect to any Class of Regular
Certificates (other than the Class A-X Certificates), the initial aggregate
principal amount thereof as of the Closing Date, in each case as specified in
the Preliminary Statement hereto.
"Original Net Mortgage Rate": With respect to any Mortgage Loan, the
Net Mortgage Rate in effect for such Mortgage Loan as of the Closing Date (or,
in the case of any Mortgage Loan substituted in replacement of another Mortgage
Loan pursuant to or as contemplated by the Mortgage Loan Purchase Agreement, as
of the date of substitution).
"Original REMIC I Principal Amount": With respect to any Class of
Uncertificated REMIC I Interests, the principal amount thereof as of the Closing
Date, in each case as specified in the Preliminary Statement hereto.
"Original Trust Mortgage Loans": As defined in the Preliminary
Statement hereto.
"Original Value": The Appraised Value of a Mortgaged Property based
upon the Appraisal conducted in connection with the origination of the related
Trust Mortgage Loan.
"Origination Required Insurance Amounts": As defined in Section
3.07(h).
"OTS": The Office of Thrift Supervision or any successor thereto.
"Ownership Interest": In the case of any Certificate, any ownership
or security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"Paying Agent": The Paying Agent appointed pursuant to Section 5.07.
"P&I Advance": As to any Trust Mortgage Loan or REO Trust Mortgage
Loan, any advance made by the Master Servicer or the Trustee, as applicable,
pursuant to Section 4.03 or Section 7.05.
"Pass-Through Rate": With respect to each Class of Certificates, the
respective per annum rate listed below:
Class A-1: Class A-1 Pass-Through Rate
Class A-2: Class A-2 Pass-Through Rate
Class A-3: Class A-3 Pass-Through Rate
Class A-1-A: Class A-1-A Pass-Through Rate
Class A-X: Class A-X Pass-Through Rate
Class A-M: Class A-M Pass-Through Rate
Class A-J: Class A-J Pass-Through Rate
Class B: Class B Pass-Through Rate
Class C: Class C Pass-Through Rate
Class D: Class D Pass-Through Rate
Class E: Class E Pass-Through Rate
Class F: Class F Pass-Through Rate
Class G: Class G Pass-Through Rate
Class H: Class H Pass-Through Rate
Class J: Class J Pass-Through Rate
Class K: Class K Pass-Through Rate
Class L: Class L Pass-Through Rate
Class M: Class M Pass-Through Rate
Class N: Class N Pass-Through Rate
Class O: Class O Pass-Through Rate
Class P: Class P Pass-Through Rate
"PCAOB": The Public Company Accounting Oversight Board.
"Penalty Charges": The Default Interest and/or late payment charges
that are paid or payable, as the context may require, in respect of any Mortgage
Loan or REO Mortgage Loan.
"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 any Regular Certificate, the percentage
interest equal to the denomination of such Certificate divided by the initial
Certificate Balance (or, in the case of the Class A-X Certificates, the Notional
Balance) of such Class of Certificates as of the Closing Date. With respect to a
Class V or Residual Certificate, the percentage interest as set forth on the
face thereof.
"Performance Certification": As defined in Section 12.08.
"Performance Guarantee": The Guarantee dated as of May 1, 2006, from
the Performance Guarantor in favor of the Trustee, relating to the obligations
of Column under Section 7 of the Mortgage Loan Purchase Agreement.
"Performance Guarantor": Credit Suisse USA Inc., its successor in
interest or any successor guarantor under the Performance Guarantee.
"Performing Mortgage Loan": Any Performing Trust Mortgage Loan or
any B Loan as to which the related Trust Mortgage Loan is a Performing Trust
Mortgage Loan.
"Performing Party": As defined in Section 12.14.
"Performing Trust Mortgage Loan": As of any date of determination,
any Trust Mortgage Loan as to which no Servicing Transfer Event then exists as
described in the definition of "Servicing Transfer Event."
"Permitted Investments": Any one or more of the following
obligations or securities, regardless whether issued by the Depositor, the
Master Servicer, the Special Servicer or the Trustee or any of their respective
Affiliates and having the required ratings, if any, provided for in this
definition:
(i) direct obligations of, and obligations fully guaranteed as
to timely payment of principal and interest by, the United States of
America, FNMA, FHLMC or any agency or instrumentality of the United
States of America; provided that such obligations have a remaining
term to maturity of one year or less from the date of acquisition
and which are backed by the full faith and credit of the United
States of America; provided, further, that any obligation of, or
guarantee by, FNMA or FHLMC, other than an unsecured senior debt
obligation of FNMA or FHLMC, 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 confirmed in writing;
(ii) time deposits, unsecured certificates of deposit or
bankers' acceptances that mature in one year or less after the date
of issuance and are issued or held by any depository institution or
trust company incorporated or organized under the laws of the United
States of America or any State thereof and subject to supervision
and examination by federal or state banking authorities, so long as
the commercial paper or other short-term debt obligations of such
depository institution or trust company are rated in the highest
short-term debt rating category of each Rating Agency or such other
ratings as will not result in the downgrading, withdrawal or
qualification of the then-current rating assigned by each Rating
Agency to any Certificate, as confirmed in writing by such Rating
Agency;
(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 maturing in one year or less from the
date of acquisition bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof, which securities have (A) ratings in
the highest long-term unsecured debt rating category of each Rating
Agency or (B) such other ratings (as confirmed by the applicable
Rating Agency in writing) as will not result in a downgrade,
qualification or withdrawal of the then-current rating of the
Certificates that are currently being rated by such Rating Agency;
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 is rated in the highest
short-term unsecured debt rating category of each Rating Agency;
(vi) units of investment funds that maintain a constant net
asset value and money market funds having the highest rating from
each Rating Agency for money market funds; and
(vii) any other demand, money market or time deposit,
obligation, security or investment, with respect to which each
Rating Agency shall have confirmed in writing that such investment
will not result in a downgrade, qualification or withdrawal of the
then-current rating of the Certificates that are currently being
rated by such Rating Agency;
provided that such instrument or security qualifies as a "cashflow investment"
pursuant to Section 860G(a)(6) of the Code; and provided, further, that in each
case, if the instrument or security is rated by S&P, (a) it shall not have an
"r" highlighter affixed to its rating from S&P, (b) it shall have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change and (c) any such investment that provides for a variable rate of interest
must have an interest rate that is tied to a single interest rate index plus a
fixed spread, if any, and move proportionately with such index.
"Permitted Mezzanine Loan Holder": With respect to any Mezzanine
Loan, the Mortgage Loan Seller, any Institutional Lender/Owner or any other
Mezzanine Loan Holder (i) permitted by the related Mortgage Loan Documents or
intercreditor agreement or (ii) with respect to which each Rating Agency has
confirmed in writing to the Special Servicer and the Trustee that the holding of
such Mezzanine Loan by such Person would not cause a qualification, downgrade or
withdrawal of any of such Rating Agency's then-current ratings on the
Certificates.
"Permitted Transferee": Any Transferee of a Class R or Class LR
Certificate other than a Disqualified Organization, a Non-United States Tax
Person or a foreign permanent establishment or fixed base (each within the
meaning of the applicable income tax treaty) of a United States Tax Person;
provided, however, that if a Transferee is classified as a partnership under the
Code, such Transferee shall only be a Permitted Transferee if all of its direct
or indirect (except through a U.S. corporation) beneficial owners are United
States Tax Persons and the governing documents of the Transferee prohibit a
transfer of any interest in the Transferee to any Non-United States Tax Person.
"Person": Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Phase I Environmental Assessment": A "Phase I assessment" as
described in and meeting the criteria of the American Society for Testing and
Materials, Designation E-1527.
"Plan": Any of those retirement plans and other employee benefit
plans, including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including insurance company general accounts, that
are subject to Title I of ERISA, Section 4975 of the Code or Similar Law.
"Plurality Residual Certificateholder": As to any taxable year of
REMIC I or REMIC II, the Holder of Certificates evidencing the largest
Percentage Interest in the Class LR Certificates or Class R Certificates,
respectively.
"Prepayment Assumption": With respect to all Trust Mortgage Loans
other than the ARD Trust Mortgage Loans, the assumption that all payments
required to be made on such Trust Mortgage Loans according to their contractual
terms (including repayment in full on their respective maturity dates) are so
made. With respect to all ARD Trust Mortgage Loans, the assumption that the ARD
Trust Mortgage Loans will be fully prepaid on their related Anticipated
Repayment Dates.
"Prepayment Date": With respect to any Principal Prepayment, the
date on which such Principal Prepayment is to be made.
"Prepayment Interest Excess": With respect to any Distribution Date,
for each Trust Mortgage Loan that was subject to Principal Prepayment in full or
in part, or as to which Insurance and Condemnation Proceeds were received by the
Master Servicer or Special Servicer for application to such Trust Mortgage Loan,
in each case after the Due Date in the month of such Distribution Date and on or
prior to the related Determination Date, the amount of interest accrued at the
related Net Mortgage Rate for such Trust Mortgage Loan, on the amount of such
Principal Prepayment or, insofar as they represent an early collection of
principal, such Insurance and Condemnation Proceeds (net of any portion of such
interest that represents Penalty Charges or Excess Interest) after the end of
the Mortgage Interest Accrual Period relating to such Due Date and accruing in
the manner set forth in the Mortgage Loan Documents relating to such Trust
Mortgage Loan, to the extent such interest is collected by the Master Servicer
or the Special Servicer.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Trust Mortgage Loan that was subject to a Principal Prepayment in
full or in part, or as to which Insurance and Condemnation Proceeds were
received by the Master Servicer or Special Servicer for application to such
Trust Mortgage Loan, in each case after the Determination Date in the calendar
month preceding such Distribution Date but prior to the Due Date in the related
Collection Period to the extent not collected from the borrower, the amount of
uncollected interest that would have accrued at the Net Mortgage Rate for such
Trust Mortgage Loan, plus the Trustee Fee Rate, on the amount of such Principal
Prepayment or, insofar as they represent an early collection of principal, such
Insurance and Condemnation Proceeds (net of any portion of such interest that
represents Penalty Charges or Excess Interest) during the period commencing on
the date as of which such Principal Prepayment or Insurance and Condemnation
Proceeds were applied to the unpaid principal balance of the Trust Mortgage Loan
and ending on (and including) the day immediately preceding such Due Date.
"Primary Servicer": Wachovia Bank, National Association or any other
subservicer specifically identified as a "Primary Servicer" hereunder or in a
Sub-Servicing Agreement dated as of May 1, 2006 between the Master Servicer and
such subservicer, in its capacity as a primary servicer, or any successors
thereto.
"Primary Servicing Agreement": Each of the Sub-Servicing Agreements
dated as of May 1, 2006, by and between the Master Servicer and any Primary
Servicer.
"Primary Servicing Fee": With respect to each Mortgage Loan, the fee
payable to the related Primary Servicer under the Primary Servicing Agreement or
to the Master Servicer pursuant to Section 3.11(a), based on the Primary
Servicing Fee Rate.
"Primary Servicing Fee Rate": With respect to each Mortgage Loan, a
rate as set forth in the Trust Mortgage Loan Schedule.
"Prime Rate": The "prime rate" published in the "Money Rates"
section of The Wall Street Journal, as such "prime rate" may change from time to
time. If The Wall Street Journal ceases to publish the "prime rate," then the
Trustee, in its sole discretion, shall select an equivalent publication that
publishes such "prime rate"; and if such "prime rate" is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then the Trustee shall select a comparable interest
rate index. In either case, such selection shall be made by the Trustee in its
sole discretion and the Trustee shall notify the Master Servicer and the Special
Servicer in writing of its selection.
"Principal Balance Certificate": Any of the Class A-1, Class A-2,
Class A-3, Class A-1-A, Class A-M, Class A-J, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class
O and Class P Certificates.
"Principal Prepayment": Any payment of principal made by the
Borrower on a Mortgage Loan that is received in advance of its scheduled Due
Date and that is not accompanied by an amount of interest (without regard to any
Yield Maintenance Charge and/or Excess Interest that may have been collected)
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment; provided that "Principal Prepayment"
shall not include any such payment of principal made out of Insurance and
Condemnation Proceeds or Liquidation Proceeds.
"Privileged Person": Any of the following: a party to this
Agreement, an Underwriter, the Mortgage Loan Seller, the Series 2006-C2
Directing Certificateholder, each B Loan Holder, a Rating Agency, a designee of
the Depositor, a Certificateholder, a Certificate Owner or, to the extent
identified as such by a Certificateholder or a Certificate Owner, a prospective
purchaser (or licensed or registered investment advisor acting on their behalf)
of a Certificate or any interest therein.
"Prohibited Party": Any party that (i) is listed on the Depositor's
Do Not Hire List or (ii) is a proposed Servicing Function Participant for which
the Master Servicer, Special Servicer or Trustee that seeks to retain such
Servicing Function Participant has actual knowledge that such party at any point
prior to such hiring, assignment or transfer failed to comply in all material
respects with the Servicing Function Participant's obligations under Regulation
AB with respect to any other securitization.
"Proposed Plan": As defined in Section 3.17(a).
"Prospectus": The Base Prospectus and the Prospectus Supplement,
together.
"Prospectus Supplement": That certain prospectus supplement dated
May 17, 2006, relating to the Registered Certificates, that is a supplement to
the Base Prospectus.
"PTCE": Prohibited Transaction Class Exemption.
"PTE": Prohibited Transaction Exemption.
"Purchase Price": With respect to any Trust Mortgage Loan to be
purchased by (a) the Mortgage Loan Seller pursuant to Section 7 of the Mortgage
Loan Purchase Agreement or, in the case of a Trust Mortgage Loan, by the
Performance Guarantor, (b) the Series 2006-C2 Directing Certificateholder
pursuant to Section 3.18(b), the Special Servicer pursuant to or as contemplated
by Section 3.18(c), or an assignee or Affiliate of either thereof, in any case,
pending determination of Fair Value, (c) the related B Loan Holder with respect
to any Mortgage Loan Combination pursuant to the related Intercreditor
Agreement, or (d) by the holders of more than 50% of the Percentage Interests in
the Controlling Class, the Special Servicer or the Master Servicer pursuant to
Section 9.01, a price equal to the sum of the following, without duplication:
(i) the outstanding principal balance of such Trust Mortgage
Loan as of the date of purchase;
(ii) all accrued and unpaid interest on such Trust Mortgage
Loan (exclusive of Default Interest and Excess Interest, if any) to
but not including the Due Date in the Collection Period of purchase
(which includes unpaid Master Servicing Fees and Primary Servicing
Fees) and all related Special Servicing Fees accrued with respect to
such Trust Mortgage Loan;
(iii) all related unreimbursed Servicing Advances (or such
Advances reimbursed by the Trust Fund) plus accrued and unpaid
interest on related Advances at the Reimbursement Rate;
(iv) if such Trust Mortgage Loan is being repurchased by the
Mortgage Loan Seller pursuant to Section 7 of the Mortgage Loan
Purchase Agreement or, in the case of a Trust Mortgage Loan, by the
Performance Guarantor, in either case, following the expiration of
the applicable cure period (as it may be extended), the amount of
the Liquidation Fee payable to the Special Servicer;
(v) if such Trust Mortgage Loan is being repurchased by the
related B Loan Holder pursuant to the related Intercreditor
Agreement, the amount of the Liquidation Fee payable to the Special
Servicer, if such purchase occurs after 90 days of the related Trust
Mortgage Loan becoming a Specially Serviced Trust Mortgage Loan; and
(vi) if such Trust Mortgage Loan is being purchased by the
Mortgage Loan Seller pursuant to Section 7 of the Mortgage Loan
Purchase Agreement or, in the case of a Trust Mortgage Loan, by the
Performance Guarantor, all reasonable out-of-pocket expenses
reasonably incurred or to be incurred by the Master Servicer, the
Special Servicer, the Depositor and the Trustee in respect of the
Breach or Defect giving rise to the repurchase obligation, including
any expenses arising out of the enforcement of the repurchase
obligation and any Trust Fund expenses incurred prior to such
purchase date with respect to such Trust Mortgage Loan.
With respect to any Defaulted Trust Mortgage Loan to be purchased by the Series
2006-C2 Directing Certificateholder (or any assignee thereof) or the Special
Servicer (or any Affiliate thereof) pursuant to Section 3.18(b) or 3.18(c)
following determination of Fair Value, the Purchase Price will equal the Fair
Value of such Defaulted Trust Mortgage Loan. With respect to any REO Property to
be sold pursuant to Section 3.18(e), the Purchase Price will equal the amount
calculated in accordance with the second preceding sentence in respect of the
related REO Trust Mortgage Loan (or, if such REO Property relates to any
Mortgage Loan Combination, in respect of all of the related REO Mortgage Loans
and treating the B Loans as if they were Trust Mortgage Loans).
"Qualified Appraiser": In connection with the appraisal of any
Mortgaged Property or REO Property, an Independent MAI-designated appraiser with
at least five years of experience in respect of the relevant geographic location
and property type.
"Qualified Institutional Buyer" or "QIB": A "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act.
"Qualified Insurer": (i) With respect to any Mortgage Loan,
Mortgaged Property or REO Property, an insurance company or security or bonding
company qualified to write the related Insurance Policy in the relevant
jurisdiction and that has a claims paying ability that is rated (or is
guaranteed or backed in writing by an entity with long-term unsecured debt that
is rated) at least "A" by S&P and "A2" by Xxxxx'x (if then rated by Xxxxx'x),
(ii) with respect to the fidelity bond and errors and omissions Insurance Policy
required to be maintained pursuant to Section 3.07(c), an insurance company that
has a claims paying ability that is rated (or is guaranteed or backed by an
entity with long-term unsecured debt that is rated) no lower than two ratings
below the rating assigned to the then highest rated outstanding Certificate, but
in no event lower than "A3" by Xxxxx'x (if then rated by Xxxxx'x) and "A-" by
S&P or, in the case of clauses (i) and (ii), such other rating as each Rating
Agency shall have confirmed in writing will not cause such Rating Agency to
downgrade, qualify or withdraw the then-current rating assigned to any of the
Certificates that are then currently being rated by such Rating Agency.
"Qualified Mortgage": A qualified mortgage within the meaning of
Section 860G(a)(3) of the Code.
"Qualified Substitute Trust Mortgage Loan": A mortgage loan which
must, on the date of substitution: (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Trust Mortgage Loan as of the Due Date in the calendar
month during which the substitution occurs; (ii) have a Mortgage Rate not less
than the Mortgage Rate of the Deleted Trust Mortgage Loan; (iii) have the same
Due Date as the Deleted Trust Mortgage Loan; (iv) accrue interest on the same
Interest Accrual Period as the Deleted Trust Mortgage Loan; (v) have a remaining
term to stated maturity not greater than, and not more than two years less than,
the remaining term to stated maturity of the Deleted Trust Mortgage Loan; (vi)
have an original Loan-to-Value Ratio not higher than that of the Deleted Trust
Mortgage Loan and a current Loan-to-Value Ratio not higher than the then current
Loan-to-Value Ratio of the Deleted Trust Mortgage Loan; (vii) materially comply
as of the date of substitution with all of the representations and warranties
set forth in the applicable Mortgage Loan Purchase Agreement; (viii) have an
Environmental Assessment that indicates no material adverse environmental
conditions with respect to the related Mortgaged Property and which will be
delivered as a part of the related Mortgage File; (ix) have an original Debt
Service Coverage Ratio of not less than the original Debt Service Coverage Ratio
of the Deleted Trust Mortgage Loan and a current Debt Service Coverage Ratio of
not less than the then-current Debt Service Coverage Ratio of the Deleted Trust
Mortgage Loan; (x) be determined by an Opinion of Counsel (at the Mortgage Loan
Seller's expense) to be a "qualified replacement mortgage" within the meaning of
Section 860G(a)(4) of the Code; (xi) not have a maturity date after the date two
years prior to the Rated Final Distribution Date; (xii) not be substituted for a
Deleted Trust Mortgage Loan unless the Trustee has received prior confirmation
in writing by each Rating Agency that such substitution will not result in the
withdrawal, downgrade, or qualification of the rating assigned by such Rating
Agency to any Class of Certificates then rated by such Rating Agency (the cost,
if any, of obtaining such confirmation to be paid by the Mortgage Loan Seller);
(xiii) have been approved by the Series 2006-C2 Directing Certificateholder in
its sole discretion; (xiv) prohibit defeasance within two years of the Closing
Date and (xv) not be substituted for a Deleted Trust Mortgage Loan if it would
result in the termination of the REMIC status of either REMIC Pool established
under this Agreement or the imposition of tax on any of such REMIC Pool other
than a tax on income expressly permitted or contemplated to be received by the
terms of this Agreement, as determined by an Opinion of Counsel. In the event
that one or more mortgage loans are substituted for one or more Deleted Trust
Mortgage Loans, then the amounts described in clause (i) shall be determined on
the basis of aggregate principal balances and the rates described in clause (ii)
above and the remaining term to stated maturity referred to in clause (v) above
shall be determined on a weighted average basis; provided that no interest rate
on any individual Qualified Substitute Trust Mortgage Loan, less the related
Master Servicing Fee Rate, Primary Servicing Fee Rate and the Trustee Fee Rate,
may be less than the lowest fixed Pass-Through Rate on any Class of Principal
Balance Certificates that is not subject to a cap equal to the Weighted Average
Net Mortgage Pass-Through Rate. When a Qualified Substitute Trust Mortgage Loan
is substituted for a Deleted Trust Mortgage Loan, the Mortgage Loan Seller shall
certify that the Trust Mortgage Loan meets all of the requirements of the above
definition and shall send such certification to the Trustee.
"Rated Certificate": Any of the Certificates to which a rating has
been assigned by either Rating Agency at the request of the Depositor.
"Rated Final Distribution Date": The Distribution Date in March
2039.
"Rating Agency": Each of S&P and Xxxxx'x.
"Realized Loss": With respect to:
(1) each defaulted Trust Mortgage Loan as to which a Final Recovery
Determination has been made, or with respect to any successor REO Trust
Mortgage Loan as to which a Final Recovery Determination has been made as
to the related REO Property, or with respect to a Corrected Mortgage Loan
upon payment in full, an amount (not less than zero) equal to (a) the
unpaid principal balance of such Trust Mortgage Loan or REO Trust Mortgage
Loan, as the case may be, as of the commencement of the Collection Period
in which the Final Recovery Determination was made, plus (b) without
taking into account the amount described in subclause (1)(c) of this
definition, all unpaid interest accrued at the Mortgage Rate in respect of
such Trust Mortgage Loan or REO Trust Mortgage Loan, as the case may be,
to but not including the related Due Date in the Collection Period in
which the Final Recovery Determination was made, exclusive, however, of
any portion of such unpaid interest that constitutes Default Interest or,
in the case of an ARD Trust Mortgage Loan after its Anticipated Repayment
Date, Excess Interest, plus (c) any expenses (including Additional Trust
Fund Expenses, unpaid Servicing Advances and Advance Interest), Special
Servicing Fees, Workout Fees, Liquidation Fees incurred in connection with
such Mortgage Loan that have been paid or are payable or reimbursable to
any person, minus (d) all payments and proceeds, if any, received in
respect of such Trust Mortgage Loan or REO Trust Mortgage Loan, as the
case may be, during the Collection Period in which such Final Recovery
Determination was made;
(2) each defaulted Trust Mortgage Loan as to which any portion of
the principal or past due interest payable thereunder was canceled in
connection with a bankruptcy, insolvency or similar proceeding involving
the related Borrower or a modification, waiver or amendment of such Trust
Mortgage Loan granted or agreed to by the Master Servicer or the Special
Servicer pursuant to Section 3.20, the amount of such principal or past
due interest (other than any Default Interest and, in the case of an ARD
Trust Mortgage Loan after its Anticipated Repayment Date, Excess Interest)
so canceled; and
(3) each defaulted Trust Mortgage Loan as to which the Mortgage Rate
thereon has been permanently reduced and not recaptured for any period in
connection with a bankruptcy, insolvency or similar proceeding involving
the related Borrower or a modification, waiver or amendment of such Trust
Mortgage Loan granted or agreed to by the Master Servicer or the Special
Servicer pursuant to Section 3.20, the amount of any consequent reduction
in the interest portion of each successive Monthly Payment due thereon
(each such Realized Loss to be deemed to have been incurred on the Due
Date for each affected Monthly Payment).
"Record Date": With respect to any Distribution Date, the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs.
"Registered Certificate": Any Certificate that has been subject to
registration under the Securities Act. As of the Closing Date, the Class A-1,
Class A-2, Class A-3, Class A-1-A, Class A-M and Class A-J Certificates
constitute Registered Certificates.
"Regular Certificate": Any Class of Certificates other than the
Residual Certificates and Class V Certificates.
"Regulation AB": Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
"Regulation S": Regulation S under the Securities Act.
"Regulation S Global Certificate": With respect to any Class of
Book-Entry Non-Registered Certificates offered and sold outside of the United
States in reliance on Regulation S, a single global Certificate, or multiple
global Certificates collectively, in definitive, fully registered form without
interest coupon, each of which Certificates bears a Regulation S Legend.
"Regulation S Legend": With respect to any Class of Book-Entry
Non-Registered Certificates offered and sold outside the United States in
reliance on Regulation S, a legend generally to the effect that such
Certificates may not be offered, sold, pledged or otherwise transferred in the
United States or to a United States Securities Person prior to the Release Date
except pursuant to an exemption from the registration requirements of the
Securities Act.
"Reimbursement Rate": The rate per annum applicable to the accrual
of interest on Servicing Advances in accordance with Section 3.03(d) and P&I
Advances in accordance with Section 4.03(d), which rate per annum shall equal
the Prime Rate.
"Release Date": With respect to any Class of Non-Registered
Certificates (other than the Class R, Class LR and Class V Certificates), the
date that is 40 days following the later of (i) the commencement of the offering
of such Non-Registered Certificates to Persons other than distributors in
reliance upon Regulation S under the Securities Act and (ii) the date of closing
of such offering.
"Relevant Servicing Criteria": The Servicing Criteria applicable to
each Reporting Servicer (as set forth, with respect to the Master Servicer, the
Special Servicer and the Trustee, on Exhibit U attached hereto). For
clarification purposes, multiple Reporting Servicers can have responsibility for
the same Relevant Servicing Criteria, and some of the Servicing Criteria will
not be applicable to certain Reporting Servicers. With respect to a Servicing
Function Participant engaged by the Trustee, the Master Servicer or the Special
Servicer, the term "Relevant Servicing Criteria" refers to the items of the
Relevant Servicing Criteria applicable to the Trustee, the Master Servicer or
the Special Servicer that engaged such Servicing Function Participant that are
applicable to such Servicing Function Participant based on the functions it has
been engaged to perform.
"Remaining Principal Distribution Amount": As to any Distribution
Date and any Class of Subordinate Certificates, the amount, if any, by which the
Total Principal Distribution Amount for such Distribution Date exceeds the
aggregate amount distributed in respect of Total Principal Distribution Amounts
on such Distribution Date to all Classes senior to such Class.
"REMIC": A "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC I": One of two separate REMICs comprising the Trust Fund, the
assets of which consist of the Trust Mortgage Loans (exclusive of any Excess
Interest) or any REO Property with respect thereto (exclusive of any interest
therein that a B Loan Holder may have), such amounts related thereto as shall
from time to time be held in the Collection Account, the Interest Reserve
Account, the REO Account (exclusive of any such amounts that are allocable to a
B Loan), if any, the Excess Liquidation Proceeds Account, if any, and the REMIC
I Distribution Account, and except as otherwise provided in this Agreement, all
other property included in the Trust Fund that is not in REMIC II or designated
as a grantor trust asset in the Preliminary Statement hereto.
"REMIC I Distribution Account": The account, accounts or
sub-accounts created and maintained by the Trustee in trust for the
Certificateholders. Any such account or accounts shall be an Eligible Account or
a sub-account of an Eligible Account.
"REMIC I Distribution Amount": As defined in Section 4.01(b).
"REMIC I Principal Amount": With respect to any Class of
Uncertificated REMIC I Interests, an amount equal to the Original REMIC I
Principal Amount of such Class as specified in the Preliminary Statement hereto,
as such principal amount may be permanently reduced (to not less than zero) on
each Distribution Date coinciding with or preceding such date of determination
by (i) any deemed distributions of principal with respect to such Uncertificated
REMIC I Interest on the subject Distribution Date pursuant to Section 4.01 and
(ii) any Realized Losses allocated to such Uncertificated REMIC I Interest on
the subject Distribution Date pursuant to Section 4.04.
"REMIC II": One of the two separate REMICs comprising the Trust
Fund, the assets of which consist of the Uncertificated REMIC I Interests and
such amounts as shall from time to time be held in the REMIC II Distribution
Account.
"REMIC II Distribution Account": The account, accounts or
sub-account created and maintained by the Trustee in trust for the
Certificateholders. Any such account or accounts shall be an Eligible Account or
a subaccount of an Eligible Account.
"REMIC Pool": Either REMIC I or REMIC II.
"REMIC Provisions": The provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of Subtitle A of the Code, and
related provisions, and proposed, temporary and final Treasury regulations and
any published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": A segregated custodial account or accounts created
and maintained by the Special Servicer pursuant to Section 3.16 on behalf of the
Trustee in trust for the Certificateholders and any related Junior Loan
Holder(s), which shall be entitled "[name of Special Servicer], as Special
Servicer, in trust for Xxxxx Fargo Bank, N.A., as Trustee, for Holders of Credit
Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through
Certificates and any related Junior Loan Holder(s), as their interests may
appear, Series 2006-C2 REO Account." Any such account or accounts shall be an
Eligible Account.
"REO Acquisition": With respect to any Mortgage Loan, the
acquisition of the related Mortgaged Property as REO Property by the Special
Servicer on behalf of the Trust Fund and/or any affected B Loan Holder.
"REO Acquisition Date": The date of the Trust Fund's acquisition for
federal income tax purposes of any REO Property pursuant to Section 3.09.
"REO B Loan": Any B note component of a Trust Mortgage Loan deemed
for purposes hereof to be outstanding (but outside the Mortgage Pool) with
respect to any REO Property in respect of a Mortgage Loan Combination. Any REO B
Loan shall be deemed to provide for monthly payments of principal and/or
interest equal to its Assumed Scheduled Payments and otherwise to have the same
terms and conditions as its predecessor B Loan (such terms and conditions to be
applied without regard to the default on such predecessor B Loan or the subject
REO Acquisition), as the case may be. Any REO B Loan shall be deemed to have an
initial unpaid principal balance equal to the unpaid principal balance of its
predecessor B Loan as of the related REO Acquisition Date. All Monthly Payments
and other amounts due and owing, or deemed to be due and owing, in respect of
any B Loan (including Nonrecoverable Advances and Workout-Delayed Reimbursement
Amounts) as of the related REO Acquisition Date, shall be deemed to continue to
be due and owing in respect of the related REO B Loan. In addition, all amounts
payable or reimbursable to the Master Servicer, the Special Servicer or the
Trustee, as applicable, in respect of any B Loan as of the related REO
Acquisition Date, including any unpaid or unreimbursed servicing compensation
and Servicing Advances (together with any related unpaid Advance Interest),
shall continue to be payable or reimbursable in the same priority and manner
pursuant to Section 3.04 and 3.11 and the related intercreditor, co-lender or
similar agreement to the Master Servicer, the Special Servicer or the Trustee,
as the case may be, in respect of the related REO B Loan.
"REO Disposition": The sale or other disposition of the REO Property
pursuant to Section 3.18(e).
"REO Extension": As defined in Section 3.16(a).
"REO Mortgage Loan": Any REO Trust Mortgage Loan or REO B Loan.
"REO Property": A Mortgaged Property acquired by the Special
Servicer on behalf of and in the name of the Trustee (or its nominee) for the
benefit of the Certificateholders and, if such property relates to a Mortgage
Loan Combination, each related B Loan Holder (as a collective whole), through
foreclosure, acceptance of a deed in lieu of foreclosure or otherwise in
accordance with applicable law in connection with the default or imminent
default of a Trust Mortgage Loan.
"REO Revenues": All income, rents and profits derived from the
ownership, operation or leasing of any REO Property.
"REO Tax": As defined in Section 3.17(a).
"REO Trust Mortgage Loan": The mortgage loan deemed to be
outstanding and part of the Mortgage Pool with respect to each REO Property.
Each REO Trust Mortgage Loan shall be deemed to be outstanding for so long as
the related REO Property remains part of the Trust Fund, and shall be deemed to
provide for Assumed Scheduled Payments on each Due Date therefor and otherwise
have the same terms and conditions as its predecessor Trust Mortgage Loan,
including, without limitation, with respect to the calculation of the Mortgage
Rate in effect from time to time (such terms and conditions to be applied
without regard to the default on such predecessor Trust Mortgage Loan). Each REO
Trust Mortgage Loan shall be deemed to have an initial outstanding principal
balance and Stated Principal Balance equal to the outstanding principal balance
and Stated Principal Balance, respectively, of its predecessor Trust Mortgage
Loan as of the related REO Acquisition Date. All amounts due and owing in
respect of the predecessor Trust Mortgage Loan (including Nonrecoverable
Advances and Workout-Delayed Reimbursement Amounts that were repaid from
principal collections on the Trust Mortgage Loans) as of the related REO
Acquisition Date, including accrued and unpaid interest, shall continue to be
due and owing in respect of an REO Trust Mortgage Loan. All amounts payable or
reimbursable to the Master Servicer, the Special Servicer or the Trustee, as
applicable, in respect of the predecessor Trust Mortgage Loan as of the related
REO Acquisition Date, including any unpaid Special Servicing Fees, Primary
Servicing Fees and Master Servicing Fees and any unreimbursed Advances, together
with any interest accrued and payable to the Master Servicer or the Trustee in
respect of such Advances in accordance with Section 3.03(d) or Section 4.03(d),
shall continue to be payable or reimbursable to the Master Servicer, the Special
Servicer or the Trustee in respect of an REO Trust Mortgage Loan.
"Replacement Trust Mortgage Loan": Any Qualified Substitute Trust
Mortgage Loan that is substituted by the Mortgage Loan Seller or, in the case of
a Trust Mortgage Loan, the Performance Guarantor for a Defective Trust Mortgage
Loan as contemplated by Section 2.03.
"Reportable Event": As defined in Section 12.09.
"Reporting Servicer": The Master Servicer, the Special Servicer, the
Trustee and any Servicing Function Participant, as the case may be.
"Request for Release": A request signed by a Servicing Officer of,
as applicable, the Master Servicer in the form of Exhibit D-1 attached hereto or
the Special Servicer in the form of Exhibit D-2 attached hereto.
"Requesting Subordinate Certificateholder": The Holder of any of the
Class L, Class M, Class N, Class O or Class P Certificates, that delivers notice
to the Trustee, the Master Servicer and the Special Servicer indicating that
such Holder is a "Requesting Subordinate Certificateholder."
"Residual Certificate": Any Class R Certificate or Class LR
Certificate issued, authenticated and delivered hereunder.
"Responsible Officer": (i) Any officer of the Global Securitization
Trust Services Group of the Trustee (and, in the event that the Trustee is the
Certificate Registrar or the Paying Agent, of the Certificate Registrar or the
Paying Agent, as applicable) and (ii) when used with respect to the initial
Trustee, any Vice President, Assistant Vice President, corporate trust officer
or assistant corporate trust officer of the Trustee having direct responsibility
for the administration of this Agreement, and with respect to any successor
Trustee, any officer or assistant officer in the corporate trust department of
the Trustee or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers to whom a
particular matter is referred by the Trustee because of such officer's knowledge
of and familiarity with the particular subject.
"Restricted Master Servicer Reports": Collectively, to the extent
not filed with the Commission, the CMSA Servicer Watch List, the CMSA Operating
Statement Analysis Report, the CMSA NOI Adjustment Worksheet, CMSA Financial
File and the CMSA Comparative Financial Status Report.
"Revised Rate": With respect to any ARD Mortgage Loan, the increased
interest rate after the related Anticipated Repayment Date (in the absence of a
default) for such ARD Mortgage Loan, as calculated and as set forth in the
related Mortgage Loan Documents.
"Rule 144A Global Certificate": With respect to any Class of
Book-Entry Non-Registered Certificates, a single global Certificate, or multiple
global Certificates collectively, registered in the name of the Depository or
its nominee, in definitive, fully registered form without interest coupons, each
of which Certificates bears a Qualified Institutional Buyer CUSIP number and
does not bear a Regulation S Legend.
"Xxxxxxxx-Xxxxx Act": The Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff).
"Xxxxxxxx-Xxxxx Certification": As defined in Section 12.08.
"Securities Act": The Securities Act of 1933, as amended and the
rules and regulations thereunder.
"Security Agreement": With respect to any Mortgage Loan, any
security agreement or equivalent instrument, whether contained in the related
Mortgage or executed separately, creating in favor of the holder of such
Mortgage a security interest in the personal property constituting security for
repayment of such Mortgage Loan.
"Security Position Listing": A listing prepared by the Depository of
the holdings of Depository Participants with respect to the Certificates.
"Senior Certificates": Collectively, the Class A-P&I Certificates
and the Interest Only Certificates.
"Senior Principal Distribution Cross-Over Date": The first
Distribution Date as of which the aggregate Certificate Balance of the Class
A-P&I Certificates outstanding immediately prior thereto equals or exceeds the
sum of (a) the aggregate Stated Principal Balance of the Mortgage Pool that will
be outstanding immediately following such Distribution Date, plus (b) the lesser
of (i) the Total Principal Distribution Amount for such Distribution Date and
(ii) the portion of the Available Distribution Amount for such Distribution Date
that will remain after all distributions of interest to be made on the Senior
Certificates on such Distribution Date pursuant to Section 4.01(a) have been so
made.
"Sequential Pay Certificates": Any of the Class A-1, Class A-2,
Class A-3, Class A-1-A, Class A-M, Class A-J, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class
O or Class P Certificates.
"Series 2006-C2 Directing Certificateholder": The particular Holder
(or, in the case of a Class of Book-Entry Certificates, the particular
Certificate Owner) of Certificates of the Controlling Class selected by the
Holders (or, in the case of a Class of Book-Entry Certificates, the Certificate
Owners) of Certificates representing more than 50% of the Percentage Interests
in the Controlling Class (which selection shall be evidenced by notice delivered
by the Series 2006-C2 Directing Certificateholder to the parties hereto and the
prior Series 2006-C2 Directing Certificateholder, if any); provided, however,
that until a Series 2006-C2 Directing Certificateholder is so selected or after
receipt of a notice from the Holders (or, in the case of a Class of Book-Entry
Certificates, the Certificate Owners) of Certificates representing more than 50%
of the Percentage Interests in the Controlling Class that a Series 2006-C2
Directing Certificateholder is no longer designated, the particular
Certificateholder (or, in the case of a Class of Book-Entry Certificates, the
particular Certificate Owner) that beneficially owns Certificates of the
Controlling Class that represents the largest aggregate Percentage Interest in
the Controlling Class shall be the Series 2006-C2 Directing Certificateholder.
The initial Series 2006-C2 Directing Certificateholder will be ARCap CMBS Fund
II REIT, Inc. No appointment of any Person as a Series 2006-C2 Directing
Certificateholder shall be effective until such Person provides the Trustee, the
Master Servicer and the Special Servicer with written confirmation of its
acceptance of such appointment, an address and telecopy number for the delivery
of notices and other correspondence and a list of officers or employees of such
Person with whom the parties to this Agreement may deal (including their names,
titles, work addresses and telecopy numbers). If no Person is appointed as
Series 2006-C2 Directing Certificateholder, the Master Servicer, the Special
Servicer and the Trustee shall not be required to recognize the particular
Certificateholder (or, in the case of a Class of Book-Entry Certificates, the
particular Certificate Owner) that beneficially owns Certificates of the
Controlling Class that represent the largest aggregate Percentage Interest in
the Controlling Class as the Series 2006-C2 Directing Certificateholder until
such Certificateholder or Certificate Owner, as the case may be, provides an
address and telecopy number for the delivery of notices and other correspondence
and a list of officers or employees of such Person with whom the parties to this
Agreement may deal (including their names, titles, work addresses and telecopy
numbers).
"Serviced Loan": Any Trust Mortgage Loan.
"Serviced Loan Combinations": The Andover House Apartments Total
Loan and, with respect to each CBA A/B Mortgage Loan Combination, upon a
"Material Default" under the related CBA A/B Intercreditor Agreement, such CBA
A/B Mortgage Loan Combination, collectively.
"Servicer": As defined in Section 12.03.
"Service(s)(ing)": In accordance with Regulation AB, the act of
servicing and administering the Trust Mortgage Loans or any other assets of the
Trust by an entity that meets the definition of "servicer' set forth in Item
1101 of Regulation AB and is subject to the disclosure requirements set forth in
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 securitization market.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.03.
"Servicing Advances": All customary, reasonable and necessary
"out-of-pocket" costs and expenses, including attorneys' fees and expenses and
fees of real estate brokers, paid or to be paid, as the context requires, out of
its own funds, by the Master Servicer or the Special Servicer (or, if
applicable, the Trustee) in connection with the servicing of a Mortgage Loan as
to which a default, delinquency or other unanticipated event has occurred or is
reasonably foreseeable, or in connection with the administration of any REO
Property, including (1) any such costs and expenses associated with (a)
compliance with the obligations of the Master Servicer and/or the Special
Servicer set forth in Sections 2.03, 3.03(c) and 3.09, (b) the preservation,
insurance, restoration, protection and management of a Mortgaged Property,
including the cost of any "force placed" insurance policy purchased by the
Master Servicer or the Special Servicer to the extent such cost is allocable to
a particular Mortgaged Property that the Master Servicer or the Special Servicer
is required to cause to be insured pursuant to Section 3.07, (c) obtaining any
Insurance and Condemnation Proceeds or Liquidation Proceeds in respect of any
such Mortgage Loan or any REO Property, (d) any enforcement or judicial
proceedings with respect to any such Mortgage Loan, including foreclosures and
similar proceedings, (e) the operation, leasing, management, maintenance and
liquidation of any REO Property, (f) obtaining any Appraisal required to be
obtained hereunder, and (g) UCC filings (to the extent that the costs thereof
are not reimbursed by the related Borrower), (2) the reasonable and direct
out-of-pocket travel expenses incurred by the Special Servicer in connection
with performing inspections pursuant to Section 3.19, and (3) any other
expenditure which is expressly designated as a Servicing Advance herein;
provided that, notwithstanding anything to the contrary, "Servicing Advances"
shall not include (A) allocable overhead of the Master Servicer or Special
Servicer, such as costs for office space, office equipment, supplies and related
expenses, employee salaries and related expenses and similar internal costs and
expenses, (B) costs incurred by either such party or any Affiliate thereof in
connection with its purchase of any Mortgage Loan or REO Property pursuant to or
as contemplated by any provision of this Agreement or (C) costs or expenses
expressly required under this Agreement to be borne by the Master Servicer or
Special Servicer.
"Servicing Criteria": The criteria set forth in paragraph (d) of
Item 1122 of Regulation AB as such may be amended from time to time.
"Servicing File": Any documents, certificates, opinions and reports
(other than documents required to be part of the related Mortgage File)
delivered by the related Borrower, or otherwise in the possession of the Master
Servicer in connection with, or relating to the origination and servicing of any
Mortgage Loan or which are reasonably required for the ongoing administration of
the Mortgage Loan, including appraisals, surveys, engineering reports,
environmental reports, financial statements, leases, rent rolls and tenant
estoppels, together with copies of documents required to be part of the related
Mortgage File.
"Servicing Function Participant": Any Person, other than the Master
Servicer, the Special Servicer and the Trustee, that is, within the meaning of
Item 1122 of Regulation AB, performing activities that address the Servicing
Criteria, unless such Person's activities relate only to 5% or less of the Trust
Mortgage Loans (calculated by Stated Principal Balance).
"Servicing Officer": Any officer and/or employee of the Master
Servicer or the Special Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans, whose name and specimen
signature appear on a list of servicing officers furnished by the Master
Servicer to the Trustee and the Depositor on the Closing Date as such list may
be amended from time to time thereafter.
"Servicing Standard": As defined in Section 3.01(a).
"Servicing Transfer Event": With respect to any Mortgage Loan, the
occurrence of any of the following events:
(i) in the case of a Balloon Mortgage Loan, a payment default shall
have occurred on such Mortgage Loan at its Maturity Date, or if the Master
Servicer has received evidence prior to its Maturity Date that the related
Borrower has obtained a firm commitment to refinance such Mortgage Loan
and continues to pay the Assumed Monthly Payment, such default continues
unremedied beyond the earlier of (A) 90 days after its Maturity Date or
(B) the expiration of such commitment; or
(ii) any Monthly Payment (other than a Balloon Payment) on such
Mortgage Loan is 60 days or more delinquent; or
(iii) the Master Servicer or the Special Servicer reasonably
determines that a payment default or material non-monetary default with
respect to such Mortgage Loan has occurred or, in each case, is imminent
and is not likely to be cured by the related Borrower within 60 days (or
in the case of a payment default or imminent payment default described in
(i) or (ii) above, for the time period described therein) (provided that
any such determination by the Special Servicer that a payment default or
other non-monetary default is imminent shall not be the basis for a
Servicing Transfer Event unless the Series 2006-C2 Directing
Certificateholder concurs); or
(iv) 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
or 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
is entered against the related Borrower; provided that if such decree or
order is discharged or stayed within 60 days of being entered, such
Mortgage Loan shall not be a Specially Serviced Mortgage Loan (and no
Special Servicing Fees, Workout Fees or Liquidation Fees will be payable
with respect thereto); or
(v) the related Borrower shall file for or consent to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to such Borrower or of or relating to all or
substantially all of its property; or
(vi) the related Borrower shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vii) the Master Servicer has received notice of the foreclosure or
proposed foreclosure of any lien on the related Mortgaged Property; or
(viii) any other default (exclusive of an Acceptable Insurance
Default) that, in the reasonable judgment of the Master Servicer or the
Special Servicer, has materially and adversely affected the value of such
Mortgage Loan has occurred and has continued unremedied for 60 days
(irrespective of any applicable grace period specified in the related
Mortgage Loan Documents).
A Servicing Transfer Event for any Mortgage Loan in a Mortgage Loan Combination
shall constitute a Servicing Transfer Event for all Mortgage Loans in such
Mortgage Loan Combination until all such Mortgage Loans become Corrected
Mortgage Loans.
A Servicing Transfer Event with respect to any Mortgage Loan shall cease to
exist:
(w) in the case of the circumstances described in clauses (i) and
(ii) above, if and when the related Borrower has made three consecutive full and
timely Monthly Payments under the terms of such Mortgage Loan (as such terms may
be changed or modified in connection with a bankruptcy or similar proceeding
involving the related Borrower or by reason of a modification, waiver or
amendment granted or agreed to by the Master Servicer or the Special Servicer
pursuant to Section 3.20);
(x) in the case of the circumstances described in clauses (iii),
(iv), (v) and (vi) above, if and when such circumstances cease to exist in the
reasonable judgment of the applicable Special Servicer;
(y) in the case of the circumstances described in clause (vii)
above, if any, when the proceedings are terminated; and
(z) in the case of the circumstances described in clause (viii)
above, if and when such default is cured in the reasonable judgment of the
applicable Special Servicer.
"Significant Trust Mortgage Loan": At any time, (a) any Trust
Mortgage Loan (i) whose principal balance is $20,000,000 or more at such time or
(ii) that is (x) a Trust Mortgage Loan, (y) part of a group of Crossed Trust
Mortgage Loans or (z) part of a group of Trust Mortgage Loans made to affiliated
Borrowers that, in each case, in the aggregate, represents 5% or more of the
aggregate outstanding principal balance of the Mortgage Pool at such time or (b)
any one of the ten largest Trust Mortgage Loans (which for the purposes of this
definition shall include groups of Crossed Trust Mortgage Loans and groups of
Trust Mortgage Loans made to affiliated Borrowers) by outstanding principal
balance at such time.
"Similar Law": Any federal, state or local law materially similar to
the provisions of Title I of ERISA or Section 4975 of the Code.
"Single-Purpose Entity" or "SPE": A person, other than an
individual, whose organizational documents provide (with such exceptions as may
be approved by the Master Servicer or Special Servicer in their respective
discretion, in each case in accordance with the Servicing Standard) that it is
formed solely for the purpose of owning and pledging Defeasance Collateral
relating to one or more Defeasance Mortgage Loans; shall not engage in any
business unrelated to such Defeasance Collateral; shall not have any assets
other than those related to its interest in the Defeasance Collateral and may
not incur any indebtedness other than as required to assume the defeased
obligations under the related Note or Notes that have been defeased; shall
maintain its own books, records and accounts, in each case which are separate
and apart from the books, records and accounts of any other Person; shall hold
regular meetings, as appropriate, to conduct its business, and shall observe all
entity level formalities and record-keeping; shall conduct business in its own
name and use separate stationery, invoices and checks; may not guarantee or
assume the debts or obligations of any other Person; shall not commingle its
assets or funds with those of any other Person; shall pay its obligations and
expenses and the salaries of its own employees from its own funds and allocate
and charge reasonably and fairly any common employees or overhead shared with
Affiliates; shall prepare separate tax returns and financial statements or, if
part of a consolidated group, shall be shown as a separate member of such group;
shall transact business with Affiliates on an arm's-length basis pursuant to
written agreements; shall hold itself out as being a legal entity, separate and
apart from any other Person; if such entity is a limited partnership, shall have
as its only general partners, general partners which are Single-Purpose Entities
which are corporations; if such entity is a corporation, at all relevant times,
has and will have at least one Independent Director; the board of directors of
such entity shall not take any action requiring the unanimous affirmative vote
of 100% of the members of the board of directors unless all of the directors,
including without limitation all Independent Directors, shall have participated
in such vote; shall not fail to correct any known misunderstanding regarding the
separate identity of such entity; if such entity is a limited liability company,
shall have at least one member that is a Single-Purpose Entity which is a
corporation, and such corporation shall be the managing member of such limited
liability company; shall hold its assets in its own name; except for the pledge
of such Defeasance Collateral, shall not pledge its assets for the benefit of
any other person or entity; shall not make loans or advances to any person or
entity; shall not identify its partners, members or shareholders, or any
affiliates of any of them as a division or part of it; if such entity is a
limited liability company, such entity shall dissolve only upon the bankruptcy
of the managing member, and such entity's articles of organization, certificate
of formation and/or operating agreement, as applicable, shall contain such
provision; if such entity is a limited liability company or limited partnership,
and such entity has one or more managing members or general partners, as
applicable, then such entity shall continue (and not dissolve) for so long as a
solvent managing member or general partner, as applicable, exists and such
entity's organizational documents shall contain such provision. The SPE's
organizational documents shall further prohibit any dissolution and winding up
and provide that any insolvency filing for such entity requires the unanimous
consent of all partners, directors (including without limitation all Independent
Directors) or members, as applicable, and that such documents may not be amended
with respect to the Single-Purpose Entity requirements so long as any
Certificates are outstanding.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors in interest. If neither such
rating agency nor any successor remains in existence, "S&P" shall be deemed to
refer to such other nationally recognized statistical rating agency or other
comparable Person designated by the Depositor, notice of which designation shall
be given to the other parties hereto, and specific ratings of Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. herein
referenced shall be deemed to refer to the equivalent ratings of the party so
designated; provided, however, that if such designated party has not then
assigned a rating to a depository institution, insurer or any other Person or
item, then any failure to satisfy a requirement under this Agreement to meet or
maintain such equivalent rating shall not be deemed an Event of Default or
breach of the Servicing Standard solely as a result of such failure. References
herein to "applicable rating category" (other than such references to "highest
applicable rating category") shall, in the case of S&P, be deemed to refer to
such applicable rating category of S&P, without regard to any plus or minus or
other comparable rating qualification.
"Special Servicer": ARCap Servicing, Inc., in its capacity as
special servicer hereunder, or any successor special servicer appointed as
herein provided.
"Special Servicer Employees": As defined in Section 3.07(c).
"Special Servicing Fee": With respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, the fee payable to the Special Servicer
pursuant to the first paragraph of Section 3.11(b).
"Special Servicing Fee Rate": With respect to each Specially
Serviced Mortgage Loan and each REO Mortgage Loan, 0.35% per annum (provided,
however, that, such fee shall at least equal $4,000 per month with respect to
each Specially Serviced Mortgage Loan, which minimum amount may be reduced by
the Series 2006-C2 Directing Certificateholder), except that with respect to the
Andover House Apartments Loan, such rate will be 0.25% per annum.
"Specially Designated Servicing Action": Any of the following
actions:
(i) any modification, waiver or amendment of a monetary term
of a Mortgage Loan (other than a waiver of Penalty Charges) or a
material non-monetary term (excluding any waiver of a "due-on-sale"
or "due-on-encumbrance" clause, which is addressed in clause (viii)
below) of any (a) Specially Serviced Mortgage Loan or (b) Performing
Trust Mortgage Loan with a Stated Principal Balance of $2,500,000 or
more (or any Performing Trust Mortgage Loan (without regard to
Stated Principal Balance) as to which the proposed modification is
an extension of maturity);
(ii) any proposed or actual foreclosure upon or comparable
conversion (which may include acquisition of an REO Property) of the
ownership of properties securing such of the Specially Serviced
Mortgage Loans as come into and continue in default;
(iii) any proposed or actual sale of an REO Property (other
than in connection with the termination of the Trust Fund);
(iv) any determination to bring a Mortgaged Property securing
a Specially Serviced Mortgaged Loan or an REO Property into
compliance with applicable environmental laws or to otherwise
address Hazardous Materials located at such Mortgaged Property or
REO Property;
(v) any release of material real property collateral for a
Specially Serviced Mortgage Loan or Performing Trust Mortgage Loan
with a Stated Principal Balance of $2,500,000 or more (other than in
each case in accordance with the terms of, or upon satisfaction in
full of, such Mortgage Loan or in connection with a defeasance or a
pending or threatened condemnation action);
(vi) any acceptance of substitute or additional real property
collateral for any Mortgage Loan (other than circumstances involving
a Performing Trust Mortgage Loan with a Stated Principal Balance of
less than $2,500,000 or where the acceptance of the substitute or
additional collateral is not conditioned on obtaining the consent of
the lender and is otherwise in accordance with the terms of the
Mortgage Loan, in which event notice to the Series 2006-C2 Directing
Certificateholder shall be required);
(vii) any releases of earn-out reserve funds or related
letters of credit with respect to a Mortgaged Property securing a
Mortgage Loan (other than in circumstances involving a Performing
Trust Mortgage Loan with a Stated Principal Balance of less than
$2,500,000 or such release is not conditioned on obtaining the
consent of the lender and is otherwise in accordance with the terms
of that Mortgage Loan, in which event notice to the Series 2006-C2
Directing Certificateholder shall be required);
(viii) any acceptance of a discounted payoff with respect to a
Specially Serviced Mortgage Loan;
(ix) any waiver of a "due-on-sale" or "due-on-encumbrance"
clause with respect to any Specially Serviced Mortgage Loan or
Performing Trust Mortgage Loan with a Stated Principal Balance of
$2,500,000 or more; and/or
(x) any acceptance of an assumption agreement releasing a
Borrower from liability under a Mortgage Loan.
"Specially Serviced Mortgage Loan": As defined in Section 3.01(a).
"Specially Serviced Trust Mortgage Loan": As defined in Section
3.01(a).
"Startup Day": The Closing Date.
"State Tax Laws": The state and local tax laws of the state in which
the office of the Trustee from which the Trust is administered or located, and
any other state, the applicability of which to the Trust Fund or either REMIC
Pool shall have been confirmed to the Trustee in writing either by the delivery
to the Trustee of an Opinion of Counsel to such effect (which Opinion of Counsel
shall not be at the expense of the Trustee), or by the delivery to the Trustee
of a written notification to such effect by the taxing authority of such state.
"Stated Principal Balance": With respect to any Mortgage Loan (and
any successor REO Mortgage Loan), a principal balance which (a) initially shall
equal the unpaid principal balance thereof as of the related Due Date in May
2006 or, in the case of any Replacement Trust Mortgage Loan, as of the related
date of substitution, in any event after application of all payments of
principal due thereon on or before such date, whether or not received, and (b)
shall be permanently reduced on each subsequent Distribution Date (to not less
than zero) by (i) that portion, if any, of the Total Principal Distribution
Amount for such Distribution Date attributable to such Mortgage Loan (or
successor REO Mortgage Loan), and (ii) any Realized Loss incurred in respect of
such Mortgage Loan (or successor REO Mortgage Loan) during the related
Collection Period; provided that, if a Liquidation Event occurs in respect of
any Mortgage Loan or REO Property, then the "Stated Principal Balance" of such
Mortgage Loan or of the related REO Mortgage Loan, as the case may be, shall be
zero commencing as of the Distribution Date in the Collection Period next
following the Collection Period in which such Liquidation Event occurred.
"Static Prepayment Premium": A form of prepayment consideration
payable in connection with any voluntary or involuntary principal prepayment
that is calculated solely as a specified percentage of the amount prepaid, which
percentage may change over time.
"Subordinate Certificate": Any of the Class A-M, Class A-J, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N, Class O, Class P, Class R, Class LR, Class V-1 and Class V-2
Certificates.
"Subordinate Principal Balance Certificate": Any of the Subordinate
Certificates that is also a Principal Balance Certificate.
"Sub-Servicer": Any Person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement, including any
Primary Servicer.
"Sub-Servicing Agreement": The subservicing agreements between the
Master Servicer or the Special Servicer, as the case may be, and any
Sub-Servicer relating to servicing and administration of Mortgage Loans by such
Sub-Servicer as provided in Section 3.22, including any Primary Servicing
Agreement.
"Substitution Shortfall Amount": With respect to a substitution
pursuant to Section 2.03(b) hereof, an amount equal to the excess, if any, of
the Purchase Price of the Trust Mortgage Loan being replaced calculated as of
the date of substitution over the Stated Principal Balance of the related
Qualified Substitute Trust Mortgage Loan as of the date of substitution. In the
event that one or more Qualified Substitute Trust Mortgage Loans are substituted
(at the same time) for one or more Deleted Trust Mortgage Loans, the
Substitution Shortfall Amount shall be determined as provided in the preceding
sentence on the basis of the aggregate Purchase Prices of the Trust Mortgage
Loan or Trust Mortgage Loans being replaced and the aggregate Stated Principal
Balances of the related Qualified Substitute Trust Mortgage Loan or Qualified
Substitute Trust Mortgage Loans.
"Successor Manager": As defined in Section 3.19(b).
"Tax Matters Person": With respect to either REMIC Pool, the Person
designated as the "tax matters person" of such REMIC Pool in the manner provided
under Treasury Regulations Section 1.860F-4(d) and temporary Treasury
Regulations Section 301.6231(a)(7)-1T, which Person shall, pursuant to Section
10.01(c), be the Plurality Residual Certificateholder.
"Tax Returns": The federal income tax return on IRS Form 1066, U.S.
Real Estate Mortgage Investment Conduit Income (REMIC) Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holder of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of each REMIC Pool due to its classification as a REMIC under the REMIC
Provisions, and the federal income tax return on IRS form 1041 or any successor
form, to be filed on behalf of Grantor Trust V-1, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the IRS under any applicable provisions of
federal tax law or any other governmental taxing authority under applicable
state or local tax laws.
"Termination Notice": As defined in Section 7.01(b).
"Termination Price": As defined in Section 9.01.
"Total Principal Distribution Adjustment Amount": As to any
Distribution Date, the sum of (i) the amount of any Nonrecoverable Advance that
was reimbursed to the Master Servicer, Special Servicer or Trustee and that was
deemed to have been reimbursed out of the Total Principal Distribution Amount,
in each case, with interest on such Advance, during the period since the
preceding Distribution Date, (ii) any Workout-Delayed Reimbursement Amount that
was reimbursed to the Master Servicer, Special Servicer or Trustee and that was
deemed to have been reimbursed out of the Total Principal Distribution Amount,
in each case, with interest on such Advance, during the period since the
preceding Distribution Date and (iii) if any Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds were received with respect to any Mortgage Loan
or REO Property, and/or any Mortgage Loan or REO Property is otherwise
liquidated (including by means of a Final Recovery Determination or the receipt
of full, partial, or discounted payoff), during the related Collection Period,
an amount equal to any Workout Fees and/or Liquidation Fees payable in
connection therewith.
"Total Principal Distribution Amount": An amount equal to:
(a) with respect to any Distribution Date prior to the Final
Distribution Date, the aggregate (without duplication) of the following--
(i) all payments of principal (including Principal
Prepayments) received by or on behalf of the Trust with respect to
the Trust Mortgage Loans during the related Collection Period, in
each case net of any portion of the particular payment that
represents a Late Collection of principal for which a P&I Advance
was previously made for a prior Distribution Date or that represents
the principal portion of a Monthly Payment due on or before the
related Due Date in May 2006 or on a Due Date subsequent to the end
of the related Collection Period,
(ii) all scheduled payments of principal due in respect of the
Trust Mortgage Loans for their respective Due Dates occurring during
the related Collection Period that were received by or on behalf of
the Trust (other than as part of a Principal Prepayment) prior to
the related Collection Period,
(iii) all Insurance and Condemnation Proceeds and Liquidation
Proceeds received by or on behalf of the Trust with respect to any
of the Trust Mortgage Loans during the related Collection Period
that were identified and applied as recoveries of principal of such
Trust Mortgage Loans in accordance with Section 1.03, in each case
net of any portion of such proceeds that represents a Late
Collection of principal due on or before the related Due Date in May
2006 or for which a P&I Advance was previously made for a prior
Distribution Date,
(iv) all Insurance and Condemnation Proceeds, Liquidation
Proceeds and REO Revenues received by or on behalf of the Trust in
respect of any REO Properties during the related Collection Period
that were identified and applied as recoveries of principal of the
related REO Trust Mortgage Loans in accordance with Section 1.03, in
each case net of any portion of such proceeds and/or revenues that
represents a Late Collection of principal due on or before the
related Due Date in May 2006 or for which a P&I Advance was
previously made for a prior Distribution Date,
(v) the respective principal portions of all P&I Advances made
in respect of the Trust Mortgage Loans and any REO Trust Mortgage
Loans with respect to such Distribution Date; and
(b) with respect to the Final Distribution Date, the aggregate
Stated Principal Balance of the entire Mortgage Pool outstanding
immediately prior to the Final Distribution Date.
Notwithstanding the foregoing, (i) the Total Principal Distribution
Amount will be reduced for any Loan Group as to which funds were used therefrom
to reimburse Nonrecoverable Advances or Workout-Delayed Reimbursement Amounts
(as described in Section 1.05) on any Distribution Date by an amount equal to
the Total Principal Distribution Adjustment Amount calculated with respect to
such Distribution Date and (ii) the Total Principal Distribution Amount will be
increased for any Loan Group as to which funds were used therefrom to reimburse
Nonrecoverable Advances or Workout-Delayed Reimbursement Amounts on any
Distribution Date by the amount of any recovery occurring during the related
Collection Period of an amount that was previously advanced with respect to a
Trust Mortgage Loan if such Nonrecoverable Advance or any Workout-Delayed
Reimbursement Amount was previously reimbursed from Total Principal Distribution
Amounts from such Loan Group in a manner that resulted in a Total Principal
Distribution Adjustment Amount for such Loan Group on a prior Distribution Date.
"Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"Transfer Affidavit and Agreement": As defined in Section 5.02(d).
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer any Ownership
Interest in a Certificate.
"Trust": The trust created hereby.
"Trust Assets": The assets comprising the Trust Fund.
"Trust Fund": All of the assets of all the REMIC Pools and Grantor
Trust V-1.
"Trust Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01, and from time to time held in
the Trust Fund, including any Replacement Trust Mortgage Loan. As used herein,
the term "Trust Mortgage Loan" includes the related Note, Mortgage and other
documents contained in the related Mortgage File and any related agreements.
Each mortgage loan identified on the Trust Mortgage Loan Schedule shall
constitute a single Trust Mortgage Loan, regardless of the number of promissory
notes that collectively evidence the same.
"Trust Mortgage Loan Schedule": The list of Trust Mortgage Loans
transferred on the Closing Date to the Trustee as part of the Trust Fund,
attached hereto as Exhibits B-1 and B-2, collectively, which list sets forth the
following information with respect to each Trust Mortgage Loan:
(i) the loan number (as specified in Exhibit A-1 to the
Prospectus Supplement);
(ii) the property name;
(iii) the street address (including city, state and zip code)
of the related Mortgaged Property;
(iv) the Mortgage Rate in effect at the Cut-off Date;
(v) the Net Mortgage Rate in effect at the Cut-off Date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the (a) remaining term to stated maturity, (b) Maturity
Date and (c) with respect to each ARD Trust Mortgage Loan, the
Anticipated Repayment Date;
(ix) the original and remaining amortization terms;
(x) the amount of the Monthly Payment due on the first Due
Date following the Cut-off Date;
(xi) the number of units, pads, rooms or square footage with
respect to the Mortgaged Property;
(xii) the Interest Accrual Period;
(xiii) the applicable Primary Servicing Fee Rate and the
Master Servicing Fee Rate;
(xiv) the Due Date;
(xv) whether such loan is an ARD Trust Mortgage Loan;
(xvi) whether the Trust Mortgage Loan is subject to
lockout/defeasance;
(xvii) whether the related Mortgaged Property was covered by
earthquake insurance at the time of origination, or if the loan
documents require such insurance;
(xviii) whether such Trust Mortgage Loan has the benefit of an
Environmental Insurance Policy;
(xix) whether such Trust Mortgage Loan is secured by the
related Borrower's interest in Ground Leases;
(xx) whether such Trust Mortgage Loan is secured by a Letter
of Credit; and
(xxi) which Loan Group includes such Trust Mortgage Loan.
Such Trust Mortgage Loan Schedule also shall set forth the aggregate
of the amounts described under clause (vii) above for all of the Trust Mortgage
Loans. Such list may be in the form of more than one list, collectively setting
forth all of the information required.
"Trustee": Xxxxx Fargo Bank, N.A., in its capacity as trustee and
its successors in interest, or any successor trustee appointed as herein
provided.
"Trustee Account": As defined in Section 3.06(a).
"Trustee Exception Report": As defined in Section 2.02(e).
"Trustee Fee": The fee to be paid to the Trustee as compensation for
the Trustee's activities under this Agreement.
"Trustee Fee Rate": 0.0017% per annum.
"Trustee Report": As defined in Section 4.02(a).
"UCC": The Uniform Commercial Code, as enacted in each applicable
state.
"UCC Financing Statement": A financing statement filed or to be
filed pursuant to the UCC, as in effect in the relevant jurisdiction.
"Uncertificated REMIC I Interests": Any of the Class XX-0, Xxxxx
XX-0, Class LA-3, Class LA-1-A, Class LA-M, Class LA-J, Class LB, Class LC,
Class LD, Class LE, Class LF, Class LG, Class LH, Class LJ, Class LK, Class LL,
Class LM, Class LN, Class LO and Class LP Uncertificated Interests.
"Uncovered Prepayment Interest Shortfall": As to any Distribution
Date and any Trust Mortgage Loan as to which a Principal Prepayment is made, the
excess, if any, of (i) the Prepayment Interest Shortfall relating to a Principal
Prepayment, if any, for such Trust Mortgage Loan as of such Distribution Date,
over (ii) the deposits made by the Master Servicer to the Trustee pursuant to
Section 3.02(c).
"Uncovered Prepayment Interest Shortfall Amount": As to any
Distribution Date, the amount, if any, by which (i) the sum of the Uncovered
Prepayment Interest Shortfalls, if any, for such Distribution Date exceeds (ii)
the aggregate amount of Prepayment Interest Excesses, if any, on all Trust
Mortgage Loans for such Distribution Date.
"Underwriters": Collectively, Credit Suisse, Wachovia Capital
Markets LLC and Greenwich Capital.
"Underwriter Exemption": PTE 89-90, as amended by XXX 00-00, XXX
0000-00 and PTE 2002-41, and as may be subsequently amended following the
Closing Date.
"United States Securities Person": Any "U.S. person" as defined in
Rule 902(k) of Regulation S.
"United States Tax Person": A citizen or resident of the United
States, a corporation, partnership (except to the extent provided in applicable
Treasury regulations), or other entity (including any entity treated as a
corporation or partnership for federal income tax purposes) created or organized
in, or under the laws of, the United States, any State or the District of
Columbia, or an estate whose income is includible in gross income for United
States federal income tax purposes regardless of its source, or a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States Tax Persons have the
authority to control all substantial decisions of the trust, all within the
meaning of Section 7701(a)(30) of the Code (including certain trusts in
existence on August 20, 1996 that are eligible to elect to be treated as United
States Tax Persons).
"Unpaid Interest Shortfall Amount": As to the first Distribution
Date and any Class of Regular Certificates, zero. As to any Distribution Date
after the first Distribution Date and any Class of Regular Certificates, the
amount, if any, by which the sum of the Interest Shortfall Amounts for such
Class for prior Distribution Dates exceeds the sum of the amounts distributed on
such Class on prior Distribution Dates in respect of such Interest Shortfall
Amounts.
"Unrestricted Master Servicer Reports": Collectively, the CMSA
Delinquent Loan Status Report, CMSA Historical Loan Modification and Corrected
Mortgage Loan Report, CMSA Historical Liquidation Report, CMSA REO Status Report
and, if and to the extent filed with the Commission, such reports and files as
would, but for such filing, constitute Restricted Master Servicer Reports.
"USPAP": The Uniform Standards of Professional Appraisal Practices.
"Voting Rights": The portion of the voting rights of all of the
Certificates, which is allocated to any Certificate. At all times during the
term of this Agreement and for any date of determination, the Voting Rights
shall be allocated among the various Classes of Certificateholders as follows:
(i) 1% in the case of the Class A-X Certificates, based on the respective Class
Notional Amount of each such Class relative to the aggregate Class Notional
Amount of both such Classes; (ii) in the case of any Class of Principal Balance
Certificates (so long as any such Class of Certificates has been transferred by
the Initial Purchaser or an Affiliate thereof as part of the initial offering of
the Certificates and therefore such Class of Certificates is not part of the
Initial Purchaser's unsold allotment), a percentage equal to the product of 99%
and a fraction, the numerator of which is equal to the then Class Principal
Balance of such Class, and the denominator of which is equal to the then
aggregate Certificate Balance of the Principal Balance Certificates and (iii) 0%
for any Class of Principal Balance Certificates for as long as any such Class of
Certificates has not been transferred by the Initial Purchaser or an Affiliate
thereof as part of the initial offering of the Certificates and therefore such
Class of Certificates is part of the Initial Purchaser's unsold allotment). The
Class R, Class LR and Class V Certificates will not be entitled to any Voting
Rights. Voting Rights allocated to a Class of Certificateholders shall be
allocated among such Certificateholders in proportion to the Percentage
Interests evidenced by their respective Certificates.
"Wachovia": As defined in the Preliminary Statement to this
Agreement.
"Website": Either the internet website maintained by the Trustee
(initially located at "xxx.xxxxxxx.xxx"), the website maintained by the Master
Servicer, the website maintained by the Special Servicer or the website
maintained by the CMSA, as applicable.
"Weighted Average Net Mortgage Pass-Through Rate": As to any
Distribution Date, the weighted average of the Net Mortgage Pass-Through Rates
of all the Trust Mortgage Loans and REO Mortgage Loans in the Mortgage Pool,
weighted based on their respective Stated Principal Balances immediately prior
to such Distribution Date.
"Xxxxx Fargo": As defined in the Preliminary Statement to this
Agreement.
"Withheld Amounts": As defined in Section 3.28(a).
"Workout-Delayed Reimbursement Amount": With respect to any Mortgage
Loan, the amount of any Advance made with respect to such Mortgage Loan on or
before the date such Mortgage Loan becomes a Corrected Mortgage Loan, together
with (to the extent accrued and unpaid) interest on such Advances, to the extent
that (i) such Advance is not reimbursed to the Person who made such Advance on
or before the date, if any, on which such Mortgage Loan becomes a Corrected
Mortgage Loan and (ii) the amount of such Advance becomes an obligation of the
Borrower to pay such amount under the terms of the modified Loan Documents. The
fact that any amount constitutes all or a portion of any Workout-Delayed
Reimbursement Amount shall not in any manner limit the right of any Person
hereunder to determine that such amount instead constitutes a Nonrecoverable
Advance.
"Workout Fee": The fee designated as such, and paid or payable, as
the context may require, to the Special Servicer with respect to each Corrected
Mortgage Loan pursuant to Section 3.11(b).
"Workout Fee Rate": 1.0% (except that such rate shall be 0.75% with
respect to the Andover House Apartments Loan).
"Yield Maintenance Charge": With respect to any Mortgage Loan, any
premium, fee or other additional amount paid or payable, as the context
requires, by a Borrower in connection with a Principal Prepayment on, or other
early collection of principal of, a Mortgage Loan, calculated, in whole or in
part, pursuant to a yield maintenance formula or otherwise pursuant to a formula
that reflects the lost interest, including a Yield Maintenance Minimum Amount.
"Yield Maintenance Minimum Amount": With respect to a Mortgage Loan
that provides for a Yield Maintenance Charge to be paid in connection with any
Principal Prepayment thereon or other early collection of principal thereof, any
specified amount or specified percentage of the amount prepaid which constitutes
the minimum amount that such Yield Maintenance Charge may be.
"Yield Rate": "With respect to any Trust Loan, a rate equal to a per
annum rate calculated by the linear interpolation of the yields, as reported in
the most recent "Federal Reserve Statistical Release H.15 - Selected Interest
Rates" under the heading U.S. Government Securities/Treasury constant maturities
published prior to the date of the relevant prepayment of any Loan, of U.S.
Treasury constant maturities with maturity dates (one longer, one shorter) most
nearly approximating the maturity date (or, with respect to ARD Loans, the
Anticipated Repayment Date) of the Trust Mortgage Loan being prepaid or the
monthly equivalent of such rate. If Federal Reserve Statistical Release H.15 -
Selected Interest Rates is no longer published, the Master Servicer, on behalf
of the Trustee, will select a comparable publication to determine the Yield
Rate.
Section 1.02 General Interpretive Principles
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(i) the terms defined in this Agreement include the plural as well
as the singular, and the use of any gender herein shall be deemed to
include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP as in effect from time to time;
(iii) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs" and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section
in which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder," "hereto," "hereby"
and other words of similar import refer to this Agreement as a whole and
not to any particular provision; and
(vi) the terms "include" and "including" shall mean without
limitation by reason of enumeration.
Section 1.03 Certain Calculations in Respect of the Mortgage Loans
(a) All amounts collected by or on behalf of the Trust in respect of
any Cross-Collateralized Group, including any payments from Borrowers, Insurance
and Condemnation Proceeds and Liquidation Proceeds, shall be applied among the
Trust Mortgage Loans constituting such Cross-Collateralized Group in accordance
with the express provisions of the related Mortgage Loan Documents and, in the
absence of such express provisions, in accordance with the Servicing Standard.
All amounts collected by or on behalf of the Trust in respect of any CBA A/B
Mortgage Loan Combination, including any payments from Borrowers, Insurance and
Condemnation Proceeds and Liquidation Proceeds, shall be applied between the
related CBA A Loan and CBA B Loan in accordance with the express provisions of
the related CBA A/B Intercreditor Agreement. All amounts collected by or on
behalf of the Trust in respect of the Andover House Apartments Total Loan,
including any payments from Borrowers, Insurance and Condemnation Proceeds and
Liquidation Proceeds, shall be applied between the Andover House Apartments A
Loan and Andover House Apartments B Loan in accordance with the express
provisions of the related Intercreditor Agreement. All amounts collected by or
on behalf of the Trust in respect of or allocable to any particular Trust
Mortgage Loan (whether or not such Trust Mortgage Loan is an A Loan or
constitutes part of a Cross-Collateralized Group), including any payments from
Borrowers, Insurance and Condemnation Proceeds or Liquidation Proceeds, shall be
applied to amounts due and owing under the related Mortgage Loan Documents
(including for principal and accrued and unpaid interest) in accordance with the
express provisions of the related Mortgage Loan Documents and, in the absence of
such express provisions or if and to the extent that such terms authorize the
lender to use its discretion, shall be applied as follows (net of portions
thereof to be payable to the Master Servicer, the Special Servicer or the
Trustee pursuant to the provisions of this Agreement): first, as a recovery of
any related and unreimbursed Servicing Advances and unreimbursed Nonrecoverable
Advances and, if applicable, unpaid Liquidation Expenses; second, as a recovery
of accrued and unpaid interest on such Trust Mortgage Loan to, but not
including, the date of receipt by or on behalf of the Trust (or, in the case of
a full Monthly Payment from any Borrower, through the related Due Date),
exclusive, however, of any portion of such accrued and unpaid interest that
constitutes Default Interest or, in the case of an ARD Trust Mortgage Loan after
its Anticipated Repayment Date, that constitutes Excess Interest, third, as a
recovery of any related Nonrecoverable Advances (and Advance Interest thereon)
and Workout-Delayed Reimbursement Amounts that were paid from principal
collections on the Trust Mortgage Loans; fourth, as a recovery of principal of
such Trust Mortgage Loan then due and owing, including by reason of acceleration
of the Trust Mortgage Loan following a default thereunder (or, if a Liquidation
Event has occurred in respect of such Trust Mortgage Loan, as a recovery of
principal to the extent of its entire remaining unpaid principal balance);
fifth, unless a Liquidation Event has occurred in respect of such Trust Mortgage
Loan, as a recovery of amounts to be currently applied to the payment of, or
escrowed for the future payment of, real estate taxes, assessments, insurance
premiums, ground rents (if applicable) and similar items; sixth, as a recovery
of any Penalty Charges then due and owing under such Trust Mortgage Loan;
seventh, as a recovery of any Yield Maintenance Charge then due and owing under
such Trust Mortgage Loan; eighth, as a recovery of any assumption fees and
modification fees then due and owing under such Trust Mortgage Loan; ninth, as a
recovery of any other amounts then due and owing under such Trust Mortgage Loan
other than remaining unpaid principal and, in the case of an ARD Trust Mortgage
Loan after its Anticipated Repayment Date, other than Excess Interest; tenth, as
a recovery of any remaining principal of such Trust Mortgage Loan to the extent
of its entire remaining unpaid principal balance; and, eleventh, in the case of
an ARD Trust Mortgage Loan after its Anticipated Repayment Date, as a recovery
of accrued and unpaid Excess Interest on such ARD Trust Mortgage Loan to but not
including the date of receipt by or on behalf of the Trust.
(b) Collections by or on behalf of the Trust in respect of each REO
Property (exclusive of amounts to be applied to the payment of the costs of
operating, managing, maintaining and disposing of such REO Property and, if such
REO Property relates to a Mortgage Loan Combination, exclusive of amounts
payable to the related B Loan Holder in accordance with the related
Intercreditor Agreement, and net of portions of such collections to be payable
to the Master Servicer, the Special Servicer or the Trustee pursuant to the
provisions of this Agreement) shall be treated: first, as a recovery of any
related and unreimbursed Servicing Advances and unreimbursed Nonrecoverable
Advances and, if applicable, unpaid Liquidation Expenses; second, as a recovery
of accrued and unpaid interest on the related REO Trust Mortgage Loan to, but
not including, the Due Date in the Collection Period of receipt by or on behalf
of the Trust, exclusive, however, of any portion of such accrued and unpaid
interest that constitutes Default Interest or, in the case of an REO Trust
Mortgage Loan that relates to an ARD Trust Mortgage Loan after its Anticipated
Repayment Date, that constitutes Excess Interest; third, as a recovery of any
related Nonrecoverable Advances (and Advance Interest thereon) and
Workout-Delayed Reimbursement Amounts that were paid from principal collections
on the Trust Mortgage Loans; fourth, as a recovery of principal of the related
REO Trust Mortgage Loan to the extent of its entire unpaid principal balance;
fifth, as a recovery of any Penalty Charges deemed to be due and owing in
respect of the related REO Trust Mortgage Loan; sixth, as a recovery of any
Yield Maintenance Charge deemed to be due and owing in respect of the related
REO Trust Mortgage Loan; seventh, as a recovery of any other amounts deemed to
be due and owing in respect of the related REO Trust Mortgage Loan (other than,
in the case of an REO Trust Mortgage Loan that relates to an ARD Trust Mortgage
Loan after its Anticipated Repayment Date, accrued and unpaid Excess Interest);
and eighth, in the case of an REO Trust Mortgage Loan that relates to an ARD
Trust Mortgage Loan after its Anticipated Repayment Date, as a recovery of any
accrued and unpaid Excess Interest on such REO Trust Mortgage Loan to but not
including the date of receipt by or on behalf of the Trust.
(c) For the purposes of this Agreement, Excess Interest on an ARD
Trust Mortgage Loan or a successor REO Trust Mortgage Loan with respect thereto
shall be deemed not to constitute principal or any portion thereof and shall not
be added to the unpaid principal balance or Stated Principal Balance of such ARD
Trust Mortgage Loan or successor REO Trust Mortgage Loan, notwithstanding that
the terms of the related loan documents so permit. To the extent any Excess
Interest is not paid on a current basis, it shall be deemed to be deferred
interest.
(d) The foregoing applications of amounts received in respect of any
Mortgage Loan, Mortgage Loan Combination or REO Property shall be determined by
the Master Servicer and reflected in the appropriate monthly report from the
Master Servicer and in the appropriate monthly Trustee Report as provided in
Section 4.02.
(e) [Reserved]
(f) Any Mortgage Loan payment is deemed to be received on the date
such payment is actually received by the Master Servicer, the Special Servicer,
the Trustee; provided, however, that for purposes of calculating distributions
on the Certificates, (i) any voluntary Principal Prepayment made on a date other
than the related Due Date and in connection with which the Master Servicer has
collected interest thereon through the end of the related Mortgage Interest
Accrual Period shall be deemed to have been made, and the Master Servicer shall
apply such Principal Prepayment to reduce the outstanding principal balance of
the related Mortgage Loan as if such Principal Prepayment had been received, on
the following Due Date (so long as such next following Due Date is in the same
Collection Period as the actual date of receipt) and (ii) all other Principal
Prepayments with respect to any Mortgage Loan are deemed to be received on the
date they are applied to reduce the outstanding principal balance of such
Mortgage Loan.
(g) Notwithstanding the terms of any Trust Mortgage Loan, the Master
Servicer shall not be entitled to the payment of any Penalty Charge in excess of
outstanding interest on Advances made with respect to such Trust Mortgage Loan,
except to the extent that (i) all reserves required to be established with the
Master Servicer and then required to be funded pursuant to the terms of such
Trust Mortgage Loan have been so funded, (ii) all payments of principal and
interest then due on such Trust Mortgage Loan have been paid and (iii) all
related operating expenses, if applicable, have been paid to the related
Lock-Box Account or reserved for pursuant to the related Lock-Box Agreement.
(h) Any reference to the Certificate Balance of any Class of
Certificates on or as of a Distribution Date shall refer to the Certificate
Balance of such Class of Certificates on such Distribution Date after giving
effect to (a) any distributions made on such Distribution Date pursuant to
Section 4.01(a) and (b) any Realized Loss allocated to such Class on such
Distribution Date pursuant to Section 4.04.
Section 1.04 Crossed Trust Mortgage Loans
Notwithstanding anything herein to the contrary, it is hereby
acknowledged that the groups of Trust Mortgage Loans identified on the Trust
Mortgage Loan Schedule as being cross-collateralized with each other are, in the
case of each such particular group of Trust Mortgage Loans, by their terms,
cross-defaulted and cross-collateralized with each other. For purposes of
reference only in this Agreement, and without in any way limiting the servicing
rights and powers of the Master Servicer and/or the Special Servicer, with
respect to any Crossed Trust Mortgage Loan (or successor REO Trust Mortgage
Loan), the Mortgaged Property (or REO Property) that relates or corresponds
thereto shall be the property identified in the Trust Mortgage Loan Schedule as
corresponding thereto. The provisions of this Agreement, including each of the
defined terms set forth in Section 1.01, shall be interpreted in a manner
consistent with this Section 1.04; provided that, if there exists with respect
to any Cross-Collateralized Group only one original of any document referred to
in the definition of "Mortgage File" covering all the Trust Mortgage Loans in
such Cross-Collateralized Group, then the inclusion of the original of such
document in the Mortgage File for any of the Trust Mortgage Loans constituting
such Cross-Collateralized Group shall be deemed an inclusion of such original in
the Mortgage File for each such Trust Mortgage Loan.
Section 1.05 Certain Adjustments to the Principal Distributions on
the Certificates
(a) If, in accordance with the provisions of this Agreement, any
party hereto is reimbursed out of general collections (but solely principal
collections with respect to Workout-Delayed Reimbursement Amounts) on the
Mortgage Pool on deposit in the Collection Account for any Nonrecoverable
Advance or any Workout-Delayed Reimbursement Amount (in each case, together with
interest accrued and payable thereon), then (for purposes of calculating
distributions on the Certificates) such reimbursement and payment of interest
shall be deemed to have been made:
first, out of any amounts then on deposit in the Collection Account
that represent payments or other collections of principal received by the Trust
with respect to the Mortgage Pool that, but for their application to reimburse a
Nonrecoverable Advance or Workout-Delayed Reimbursement Amount, as applicable,
and/or to pay interest thereon, would be included in the Available Distribution
Amount for any subsequent Distribution Date;
second, out of any amounts (but solely principal collections with
respect to Workout-Delayed Reimbursement Amounts) then on deposit in the
Collection Account that represent any other payments or other collections
received by the Trust with respect to the Mortgage Pool that, but for their
application to reimburse a Nonrecoverable Advance or Workout-Delayed
Reimbursement Amount, as applicable, and/or to pay interest thereon, would be
included in the Available Distribution Amount for any subsequent Distribution
Date; and
third, out of any other amounts (but solely principal collections
with respect to Workout-Delayed Reimbursement Amounts) then on deposit in the
Collection Account that may be available to reimburse the subject Nonrecoverable
Advance or Workout-Delayed Reimbursement Amount, as applicable, and/or to pay
interest thereon.
(b) If and to the extent that any payment or other collection of
principal of any Trust Mortgage Loan or REO Trust Mortgage Loan is deemed to be
applied in accordance with clause first of the preceding paragraph to reimburse
a Nonrecoverable Advance or Workout-Delayed Reimbursement Amount, as applicable,
or in each case, to pay interest thereon, and further if and to the extent that
such payment or other collection of principal constitutes part of the Total
Principal Distribution Amount for any Distribution Date, then the Total
Principal Distribution Amount for such Distribution Date shall be reduced by the
portion, if any, of such payment or other collection of principal that, but for
the application of this paragraph, would have been included as part of such
Total Principal Distribution Amount.
(c) If and to the extent that any Advance is determined to be a
Nonrecoverable Advance or Workout-Delayed Reimbursement Amount, as applicable,
such Advance is reimbursed out of general collections on the Mortgage Pool as
contemplated by Section 1.05(a) above and the particular item for which such
Nonrecoverable Advance or Workout-Delayed Reimbursement Amount was originally
made is subsequently collected out of payments or other collections in respect
of the related Trust Mortgage Loan, then the Total Principal Distribution Amount
for the Distribution Date that corresponds to the Due Period in which such item
was recovered shall be increased by an amount equal to the lesser of (A) the
amount of such item and (B) any previous reduction in the Total Principal
Distribution Amount for a prior Distribution Date pursuant to Section 1.05(b)
above resulting from the reimbursement of the subject Advance and/or the payment
of interest thereon.
Section 1.06 Certain Matters with Respect to the Andover House
Apartments Total Loan.
(a) The parties hereto acknowledge that, pursuant to the Andover
House Apartments Intercreditor Agreement, if neither the Andover House
Apartments Loan nor an interest in any related REO Property is part of the Trust
Fund, then the Andover House Apartments Total Loan or any related REO Property,
as applicable, shall be serviced and administered in accordance with such
successor servicing arrangements as are consistent with the Andover House
Apartments Intercreditor Agreement.
(b) For the avoidance of doubt, and subject to subsection (a) above,
the parties acknowledge the rights and duties of each of the Master Servicer and
Special Servicer under this Agreement and the obligation of the Master Servicer
or the Trustee to make Advances (subject to Section 1.06(c)), insofar as such
rights, duties and obligations relate to the Andover House Apartments Total
Loan, shall terminate upon the occurrence of a Liquidation Event with respect to
the Andover House Apartments Loan or any related REO Property; provided,
however, that this statement shall not limit (A) the duty of the Master Servicer
or Special Servicer to deliver or make available the reports otherwise required
of it hereunder with respect to the period in which such event occurs or (B) the
rights of the Master Servicer or Special Servicer that may otherwise accrue or
arise in connection with the performance of its duties hereunder with respect to
the Andover House Apartments Total Loan prior to the date on which such event
occurs.
None of the Master Servicers or the Trustee shall be required to
make P&I Advances as to any Andover House Apartments Junior Loan.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Original Trust Mortgage Loans
(a) It is the intention of the parties hereto that a common law
trust be established under the laws of the State of New York pursuant to this
Agreement and, further, that such trust be designated as "Credit Suisse First
Boston Mortgage Securities Trust 2006-C2." Xxxxx Fargo is hereby appointed, and
does hereby agree to act, as Trustee hereunder and, in such capacity, to hold
the Trust Fund in trust for the exclusive use and benefit of all present and
future Certificateholders and Junior Loan Holders (as their interests may
appear). It is not intended that this Agreement create a partnership or a
joint-stock association.
The Depositor, concurrently with the execution and delivery hereof,
does hereby assign, sell, transfer, set over and otherwise convey to the
Trustee, without recourse, for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in, to and under (i) the Original
Trust Mortgage Loans, (ii) the Mortgage Loan Purchase Agreements and (iii) all
other assets included or to be included in the Trust Fund. Such assignment
includes all interest and principal received or receivable on or with respect to
the Original Trust Mortgage Loans (other than payments of principal and interest
due and payable on the Original Trust Mortgage Loans on or before the Cut-off
Date and Principal Prepayments paid on or before the Cut-off Date). The transfer
of the Original Trust Mortgage Loans and the related rights and property
accomplished hereby is absolute and, notwithstanding Section 11.07, is intended
by the parties to constitute a sale.
Under GAAP, the Depositor shall report and cause all of its records
to reflect: (i) its acquisition of the Original Trust Mortgage Loans from
Column, pursuant to the Mortgage Loan Purchase Agreement, as a purchase of such
Trust Mortgage Loans from Column and (ii) its transfer of the Original Trust
Mortgage Loans to the Trust, pursuant to this Section 2.01(a), as a sale of such
Trust Mortgage Loans to the Trust; provided that, in the case of the
transactions described in clauses (i) and (ii) of this sentence, the Depositor
shall do so only upon the sale of Certificates representing at least 10% of the
aggregate fair value of all the Certificates to parties that are not Affiliates
of the Depositor. Regardless of its treatment of the transfer of the Original
Trust Mortgage Loans to the Trust under GAAP, the Depositor shall at all times
following the Closing Date cause all of its records and financial statements and
any relevant consolidated financial statements of any direct or indirect parent
clearly to reflect that the Original Trust Mortgage Loans have been transferred
to the Trust and are no longer available to satisfy claims of the Depositor's
creditors.
(b) In connection with the Depositor's assignment pursuant to
Section 2.01(a), the Depositor shall direct, and hereby represents and warrants
that it has directed, each Mortgage Loan Seller pursuant to the Mortgage Loan
Purchase Agreement to deliver to and deposit with, or cause to be delivered to
and deposited with, the Trustee, on or before the Closing Date, the Mortgage
File (except item (xx) of the definition of "Mortgage File") for each Original
Trust Mortgage Loan so assigned.
Notwithstanding the foregoing, if the Mortgage Loan Seller cannot
deliver, or cause to be delivered as to any Trust Mortgage Loan, the original
Note, the Mortgage Loan Seller shall deliver a copy or duplicate original of
such Note, together with an affidavit and indemnity substantially in the form
attached as Exhibit J hereto, certifying that the original thereof has been lost
or destroyed.
Notwithstanding the foregoing, if the Mortgage Loan Seller cannot
deliver, or cause to be delivered, as to any Trust Mortgage Loan, any of the
documents and/or instruments referred to in clauses (ii), (iv), (viii), (xi)
(other than assignments of UCC Financing Statements to be filed in accordance
with the transfer contemplated by the Mortgage Loan Purchase Agreement), (xii)
and (xiv) (other than assignments of UCC Financing Statements to be filed in
accordance with the transfer contemplated by the Mortgage Loan Purchase
Agreement) of the definition of "Mortgage File," with evidence of recording or
filing thereon, solely because of a delay caused by the public recording or
filing office where such document or instrument has been delivered for
recordation or filing, the delivery requirements of the Mortgage Loan Purchase
Agreement and this Section 2.01(b) shall be deemed to have been satisfied and
such non-delivered document or instrument shall be deemed to have been included
in the Mortgage File if: (i) a photocopy or duplicate original of such
non-delivered document or instrument (certified by the applicable public
recording or filing office, the applicable title insurance company or the
Mortgage Loan Seller to be a true and complete copy of the original thereof
submitted for recording or filing) is delivered to the Trustee, on or before the
Closing Date; and (ii) either the original of such non-delivered document or
instrument, or a photocopy thereof (certified by the appropriate public
recording or filing office to be a true and complete copy of the original
thereof submitted for recording or filing), with evidence of recording or filing
thereon, is delivered to the Trustee within 120 days of the Closing Date, which
period may be extended up to two times, in each case for an additional period of
45 days (provided that the Mortgage Loan Seller, as certified in writing to the
Trustee prior to each such 45-day extension, is in good faith attempting to
obtain from the appropriate county recorder's office such original or
photocopy).
Notwithstanding the foregoing, if the Mortgage Loan Seller cannot
deliver, or cause to be delivered, as to any Trust Mortgage Loan, any of the
documents and/or instruments referred to in clauses (ii), (iv), (viii), (xi)
(other than assignments of UCC Financing Statements to be filed in accordance
with the transfer contemplated by the Mortgage Loan Purchase Agreement), (xii)
and (xiv) (other than assignments of UCC Financing Statements to be filed in
accordance with the transfer contemplated by the Mortgage Loan Purchase
Agreement) of the definition of "Mortgage File," with evidence of recording or
filing thereon, for any other reason, including, without limitation, that such
non-delivered document or instrument has been lost, the delivery requirements of
the Mortgage Loan Purchase Agreement and this Section 2.01(b) shall be deemed to
have been satisfied and such non-delivered document or instrument shall be
deemed to have been included in the Mortgage File if a photocopy of such
non-delivered document or instrument (with evidence of recording or filing
thereon and certified by the appropriate recording or filing office to be a true
and complete copy of the original thereof submitted for recording or filing) is
delivered to the Trustee on or before the Closing Date.
Notwithstanding the foregoing, if any Mortgage Loan Seller fails to
deliver a UCC Financing Statement assignment on or before the Closing Date as
required above solely because the related UCC Financing Statement has not been
returned to the Mortgage Loan Seller by the applicable filing office and the
Mortgage Loan Seller has so notified the Trustee, the Mortgage Loan Seller shall
not be in breach of its obligations with respect to such delivery; provided that
the Mortgage Loan Seller promptly forwards such UCC Financing Statement to the
Trustee upon its return, together with the related original UCC Financing
Statement assignment in a form appropriate for filing.
Neither the Trustee, the Master Servicer nor the Special Servicer
shall be liable for any failure by the Mortgage Loan Seller or the Depositor to
comply with the delivery requirements of the Mortgage Loan Purchase Agreement
and this Section 2.01(b).
(c) At the expense of the Mortgage Loan Seller, the Trustee
(directly or through its designee) shall, as to each Trust Mortgage Loan, use
its best efforts to promptly (and in any event no later than the later of (i)
120 days after the Closing Date (or, in the case of a Replacement Trust Mortgage
Loan, the related date of substitution) and (ii) 60 days from receipt of
documents in form suitable for recording or filing, as applicable, including,
without limitation, all necessary recording and filing information) cause to be
submitted for recording or filing, as the case may be, each assignment referred
to in clauses (iii) and (v) of the definition of "Mortgage File" and each UCC
Financing Statement assignment to the Trustee referred to in clauses (xi) and
(xiv) of the definition of "Mortgage File." Unless otherwise indicated on any
documents provided to the Trustee, the Trustee shall file each such UCC
Financing Statement assignment in the state of incorporation or organization of
the related Borrower; provided that the Mortgage Loan Seller shall have filed,
if necessary, an initial UCC Financing Statement under the Revised Article 9 in
lieu of continuation in such jurisdiction. Each such assignment shall reflect
that it should be returned by the public recording office to the Trustee
following recording, and each such UCC Financing Statement assignment shall
reflect that the file copy thereof should be returned to the Trustee following
filing. If any such document or instrument is lost or returned unrecorded or
unfiled because of a defect therein, the Trustee shall prepare or cause to be
prepared a substitute therefor or cure such defect, as the case may be, and
thereafter the Trustee shall upon receipt thereof cause the same to be duly
recorded or filed, as appropriate. The respective Mortgage Loan Purchase
Agreements provide for the reimbursement of the Trustee, in each case by the
Mortgage Loan Seller, for the Trustee's costs and expenses incurred in
performing its obligation under this Section 2.01(c).
Notwithstanding the foregoing, any Mortgage Loan Seller may elect,
at its sole cost and expense, to engage a third party contractor to prepare or
complete in proper form for filing and recording any and all of the assignments
described in the immediately preceding paragraph, with respect to the Trust
Mortgage Loans conveyed by it to the Depositor (or, in the case of a Replacement
Trust Mortgage Loan, to the Trustee) under the applicable Mortgage Loan Purchase
Agreement, to submit such assignments for filing and recording, as the case may
be, in the applicable public filing and recording offices and to deliver such
assignments to the Trustee or its designee as such assignments (or certified
copies thereof) are received from the applicable filing and recording offices
with evidence of such filing or recording indicated thereon.
(d) In connection with the Depositor's assignment pursuant to
Section 2.01(a), the Depositor shall direct, and hereby represents and warrants
that it has directed, each Mortgage Loan Seller pursuant to the Mortgage Loan
Purchase Agreement to deliver to and deposit with, or cause to be delivered to
and deposited with, the Master Servicer, within 10 Business Days after the
Closing Date, all documents and records in the Depositor's or the Mortgage Loan
Seller's possession relating to the Trust Mortgage Loans (including reserve and
escrow agreements, rent rolls, leases, environmental and engineering reports,
third-party underwriting reports, appraisals, surveys, legal opinions, financial
statements, operating statements and any other information provided by the
respective Borrower from time to time and any other documents in the related
Servicing File, but excluding any draft documents, attorney/client privileged
communications and documents prepared by the Mortgage Loan Seller or any of its
Affiliates solely for internal communication, credit underwriting or due
diligence analyses, except for the underwriting information contained in the
underwriting memorandum or asset summary report prepared by the Mortgage Loan
Seller in connection with the preparation of Exhibit A-1 to the Prospectus
Supplement) that are not required to be a part of a Mortgage File in accordance
with the definition thereof, and all such items shall be held by the Master
Servicer on behalf of the Trustee in trust for the benefit of the
Certificateholders (and, insofar as such items relate to a B Loan, the related B
Loan Holder).
In addition, with respect to each Trust Mortgage Loan under which
any Additional Collateral is in the form of a Letter of Credit as of the Closing
Date, the Depositor hereby represents and warrants that it has contractually
obligated the Mortgage Loan Seller to cause to be prepared, executed and
delivered to the issuer of each such Letter of Credit such notices, assignments
and acknowledgments as are required under such Letter of Credit to assign,
without recourse, to (and vest in) the Trustee such party's rights as the
beneficiary thereof and drawing party thereunder, such assignment to be
evidenced by an acknowledgement of the issuer or a reissued letter of credit
delivered to the Master Servicer or the Trustee.
(e) In connection with the Depositor's assignment pursuant to
subsection (a) above, the Depositor shall deliver, and hereby represents and
warrants that it has delivered, to the Trustee, the Master Servicer and the
Special Servicer, on or before the Closing Date, a fully executed original
counterpart or copy of each of the Mortgage Loan Purchase Agreements, as in full
force and effect, without amendment or modification, on the Closing Date.
(f) The Depositor shall use reasonable efforts to require that,
promptly after the Closing Date, but in all events within three Business Days
after the Closing Date, each of the Mortgage Loan Sellers shall cause all funds
on deposit in escrow accounts maintained with respect to the Original Trust
Mortgage Loans in the name of the Mortgage Loan Seller or any other name, to be
transferred to the Master Servicer (or a Sub-Servicer at the direction of the
Master Servicer) for deposit into Servicing Accounts.
(g) For purposes of this Section 2.01, and notwithstanding any
contrary provision hereof or of the definition of "Mortgage File," if there
exists with respect to any group of Crossed Trust Mortgage Loans only one
original or certified copy of any document or instrument described in the
definition of "Mortgage File" which pertains to all of the Crossed Trust
Mortgage Loans in such group of Crossed Trust Mortgage Loans, the inclusion of
the original or certified copy of such document or instrument in the Mortgage
File for any of such Crossed Trust Mortgage Loans and the inclusion of a copy of
such original or certified copy in each of the Mortgage Files for the other
Crossed Trust Mortgage Loans in such group of Crossed Trust Mortgage Loans shall
be deemed the inclusion of such original or certified copy in the Mortgage Files
for each such Crossed Trust Mortgage Loan.
(h) The Master Servicer hereby acknowledges the receipt by it of the
Closing Date Deposit Amount. The Master Servicer shall hold such Closing Date
Deposit Amount in the Collection Account and shall remit such Closing Date
Deposit on the first Master Servicer Remittance Date to the Trustee, who shall
distribute the Closing Date Deposit Amount to the holders of the Class V-2
Certificates on the first Distribution Date. The Closing Date Deposit Amount
shall remain uninvested.
Section 2.02 Acceptance by Trustee
(a) The Trustee, by the execution and delivery of this Agreement,
acknowledges receipt by it, subject to the provisions of Sections 2.01 and
2.02(d), to any exceptions noted on the Trustee Exception Report, and to the
further review provided for in Section 2.02(b), of the Notes, fully executed
original counterparts of the Mortgage Loan Purchase Agreements and of all other
assets included in the Trust Fund, in good faith and without notice of any
adverse claim, and declares that it holds and will hold such documents and any
other documents delivered or caused to be delivered by the Mortgage Loan Sellers
constituting the Mortgage Files, and that it holds and will hold such other
assets included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders; provided that to the extent that a
Mortgage File relates to an A Loan, the Trustee shall also hold such Mortgage
File in the trust on behalf of the related B Loan Holders; provided further that
the Trustee or any Custodian appointed by the Trustee pursuant to Section 8.12
shall hold any Letter of Credit in a custodial capacity only and shall have no
obligation to maintain, extend the term of, enforce or otherwise pursue any
rights under such Letter of Credit which obligation the Master Servicer hereby
undertakes.
(b) Within 90 days of the Closing Date, the Trustee shall review
and, subject to Sections 2.01 and 2.02(d), certify in writing (substantially in
the form attached hereto as Exhibit O) to each of the Depositor, the Master
Servicer, the Special Servicer and the respective Mortgage Loan Sellers that, as
to each Trust Mortgage Loan listed in the Trust Mortgage Loan Schedule (other
than any Trust Mortgage Loan paid in full and any Trust Mortgage Loan
specifically identified in any exception report annexed thereto as not being
covered by such certification), (i) all documents specified in clauses (i)
through (v), (ix), (xi), (xii), (xvi) and (xviii) of the definition of "Mortgage
File" and all documents specified on the related Mortgage Loan checklist are in
its possession, and (ii) all documents delivered or caused to be delivered by
the Mortgage Loan Seller constituting the Mortgage Files have been received,
appear to have been executed, appear to be what they purport to be, purport to
be recorded or filed (if recordation or filing is specified for such document in
the definition of "Mortgage File") and have not been torn, mutilated or
otherwise defaced, and that such documents appear to relate to the Trust
Mortgage Loans identified on the Trust Mortgage Loan Schedule.
(c) The Trustee shall review each of the Mortgage Loan Documents
received after the Closing Date; and, on or about 90 days following the Closing
Date, 180 days following the Closing Date, the first anniversary of the Closing
Date, 180 days following the first anniversary of the Closing Date, 270 days
following the first anniversary of the Closing Date and on the second
anniversary of the Closing Date, the Trustee shall, subject to Sections 2.01 and
2.02(d), certify in writing to each of the Depositor, the Master Servicer, the
Special Servicer and the respective Mortgage Loan Sellers that, as to each Trust
Mortgage Loan listed on the Trust Mortgage Loan Schedule (excluding any Trust
Mortgage Loan as to which a Liquidation Event has occurred or any Trust Mortgage
Loan specifically identified in any exception report annexed thereto as not
being covered by such certification), (i) all documents specified in clauses (i)
through (v), (ix), (xi), (xii), (xvi) and (xviii) of the definition of "Mortgage
File" are in its possession and all documents specified on the related Mortgage
Loan checklist, (ii) it has received either a recorded original of each of the
assignments specified in clause (iii) and clause (v) of the definition of
"Mortgage File," or, insofar as an unrecorded original thereof had been
delivered or caused to be delivered by the Mortgage Loan Seller, a copy of such
recorded original certified by the applicable public recording office to be true
and complete, and (iii) all such Mortgage Loan Documents have been received,
have been executed, appear to be what they purport to be, purport to be recorded
or filed (if recordation or filing is specified for such document in the
definition of "Mortgage File") and have not been torn, mutilated or otherwise
defaced, and that such documents relate to the Trust Mortgage Loans identified
on the Trust Mortgage Loan Schedule. Further, with respect to the documents
described in clause (xi) of the definition of the Mortgage File, the Trustee may
assume, for purposes of the certification delivered pursuant to this Section
2.02(c), that the related Mortgage File should include one state level UCC
Financing Statement filing in the state of incorporation of the related Borrower
for each Mortgaged Property, or, with respect to any Mortgage Loan that has two
or more Borrowers, one state level UCC Financing Statement filing in the state
of incorporation of each such Borrower. The Trustee shall, upon request, provide
the Master Servicer with recording and filing information as to recorded
Mortgages, Assignments of Lease and UCC Financing Statements to the extent that
the Trustee receives them from the related recording offices.
(d) It is herein acknowledged that the Trustee is not under any duty
or obligation (i) to determine whether any of the documents specified in clauses
(vi), (vii), (viii), (x), (xiii), (xiv), (xv), (xvii) and (xix) of the
definition of "Mortgage File" and all documents specified on the related
Mortgage Loan checklist exist or are required to be delivered by the Depositor,
the Mortgage Loan Seller or any other Person other than to the extent identified
on the related Trust Mortgage Loan Schedule, (ii) to inspect, review or examine
any of the documents, instruments, certificates or other papers relating to the
Trust Mortgage Loans delivered to it to determine that the same are valid,
legal, effective, in recordable form, genuine, enforceable, sufficient or
appropriate for the represented purpose or that they are other than what they
purport to be on their face or (iii) to determine whether any omnibus assignment
specified in clause (vii) of the definition of "Mortgage File" is effective
under applicable law. To the extent the Trustee has actual knowledge or is
notified of any fixture or real property UCC Financing Statements, the Trustee
shall file an assignment to the Trust with respect to such UCC Financing
Statements in the appropriate jurisdiction under the UCC at the expense of the
Mortgage Loan Seller.
(e) If, in the process of reviewing the Mortgage Files or at any
time thereafter, the Trustee finds that a Defect exists with respect to any
Mortgage File, the Trustee shall promptly so notify the Depositor, the Master
Servicer, the Special Servicer and the Mortgage Loan Seller (and, solely with
respect to any Mortgage Loan Combination, the related Junior Loan Holder(s), as
applicable), by providing a written report (the "Trustee Exception Report")
setting forth for each affected Trust Mortgage Loan, with particularity, the
nature of such Defect. The Trustee shall not be required to verify the
conformity of any document with the Trust Mortgage Loan Schedule, except that
such documents have been properly executed or received, have been recorded or
filed (if recordation is specified for such document in the definition of
"Mortgage File"), appear to be related to the Trust Mortgage Loans identified on
the Trust Mortgage Loan Schedule, appear to be what they purport to be, or have
not been torn, mutilated or otherwise defaced.
(f) Upon the second anniversary of the Closing Date, the Trustee
shall deliver a final exception report as to any remaining Defects or required
Mortgage Loan Documents that are not in its possession and that it was required
to review pursuant to Section 2.02(c).
Section 2.03 Representations, Warranties and Covenants of the
Depositor; Repurchase and Substitution of Trust Mortgage Loans by the Mortgage
Loan Sellers for Defects in Mortgage Files and Breaches of Representations and
Warranties
(a) The Depositor hereby represents, warrants and covenants that:
(i) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and the
Depositor has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement by it, and has the
power and authority to execute, deliver and perform this Agreement and all
the transactions contemplated hereby, including, but not limited to, the
power and authority to sell, assign and transfer the Original Trust
Mortgage Loans in accordance with this Agreement; the Depositor has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;
(ii) Assuming the due authorization, execution and delivery of this
Agreement by each other party hereto, this Agreement and all of the
obligations of the Depositor hereunder are the legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in
accordance with the terms of this Agreement, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally, and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iii) The execution and delivery of this Agreement and the
performance of its obligations hereunder by the Depositor will not
conflict with any provisions of any law or regulations to which the
Depositor is subject, or conflict with, result in a breach of or
constitute a default under any of the terms, conditions or provisions of
the certificate of incorporation or the by-laws of the Depositor or any
indenture, agreement or instrument to which the Depositor is a party or by
which it is bound, or any order or decree applicable to the Depositor, or
result in the creation or imposition of any lien on any of the Depositor's
assets or property, which would materially and adversely affect the
ability of the Depositor to carry out the transactions contemplated by
this Agreement; the Depositor has obtained any consent, approval,
authorization or order of any court or governmental agency or body
required for the execution, delivery and performance by the Depositor of
this Agreement;
(iv) There is no action, suit or proceeding pending or, to the
Depositor's knowledge, threatened against the Depositor in any court or by
or before any other governmental agency or instrumentality which would
materially and adversely affect the validity of the Original Trust
Mortgage Loans or the ability of the Depositor to carry out the
transactions contemplated by this Agreement;
(v) The Depositor's transfer of the Original Trust Mortgage Loans to
the Trustee as contemplated herein is not subject to any bulk transfer or
similar law in effect in any applicable jurisdiction;
(vi) The Depositor is not transferring the Original Trust Mortgage
Loans to the Trustee with any intent to hinder, delay or defraud its
present or future creditors;
(vii) The Depositor has been solvent at all relevant times prior to,
and will not be rendered insolvent by, its transfer of the Original Trust
Mortgage Loans to the Trustee, pursuant to Section 2.01(a);
(viii) After giving effect to its transfer of the Original Trust
Mortgage Loans to the Trustee, pursuant to Section 2.01(a), the value of
the Depositor's assets, either taken at their present fair saleable value
or at fair valuation, will exceed the amount of the Depositor's debts and
obligations, including contingent and unliquidated debts and obligations
of the Depositor, and the Depositor will not be left with unreasonably
small assets or capital with which to engage in and conduct its business;
(ix) The Depositor does not intend to, and does not believe that it
will, incur debts or obligations beyond its ability to pay such debts and
obligations as they mature;
(x) No proceedings looking toward merger, liquidation, dissolution
or bankruptcy of the Depositor are pending or contemplated;
(xi) Immediately prior to the transfer of the Original Trust
Mortgage Loans to the Trustee for the benefit of the Certificateholders
pursuant to this Agreement, the Depositor had such right, title and
interest in and to each Original Trust Mortgage Loan as was transferred to
it by the Mortgage Loan Seller pursuant to the Mortgage Loan Purchase
Agreement;
(xii) The Depositor has not transferred any of its right, title and
interest in and to the Original Trust Mortgage Loans to any Person other
than the Trustee;
(xiii) The Depositor is transferring all of its right, title and
interest in and to the Original Trust Mortgage Loans to the Trustee for
the benefit of the Certificateholders free and clear of any and all liens,
pledges, charges, security interests and other encumbrances created by or
through the Depositor;
(xiv) Except for any actions that are the express responsibility of
another party hereunder or under any Mortgage Loan Purchase Agreement, and
further except for actions that the Depositor is expressly permitted to
complete subsequent to the Closing Date, the Depositor has taken all
actions required under applicable law to effectuate the transfer of all of
its right, title and interest in and to the Original Trust Mortgage Loans
by the Depositor to the Trustee; and
(xv) Following consummation of the conveyance of the Original Trust
Mortgage Loans by the Depositor to the Trustee, the Depositor shall take
no action inconsistent with the Trust Fund's ownership of the Original
Trust Mortgage Loans, and if a third party, including a potential
purchaser of the Original Trust Mortgage Loans, should inquire, the
Depositor shall promptly indicate that the Original Trust Mortgage Loans
have been sold and shall claim no ownership interest therein.
(b) If any Certificateholder, the Master Servicer, the Special
Servicer or the Trustee discovers (without implying any duty of such person to
make, or attempt to make, such discovery) or receives notice of a Defect or a
Breach with respect to any Trust Mortgage Loan, it shall give notice to the
Master Servicer, the Special Servicer and the Trustee. If the Master Servicer or
the Special Servicer determines that such Defect or Breach materially and
adversely affects the value of any Trust Mortgage Loan or the interests of the
Certificateholders therein (any such Defect or Breach, a "Material Defect" and a
"Material Breach," respectively), it shall give prompt written notice of such
Material Defect or Material Breach to the Depositor, the Trustee, the Master
Servicer, the Special Servicer and the Mortgage Loan Seller and shall request
that the Mortgage Loan Seller, not later than 90 days from the receipt by the
Mortgage Loan Seller of such request (subject to the second succeeding
paragraph, the "Initial Resolution Period"), (i) cure such Material Defect or
Material Breach in all material respects, (ii) repurchase the affected Trust
Mortgage Loan at the applicable Purchase Price in conformity with the Mortgage
Loan Purchase Agreement, or (iii) substitute a Qualified Substitute Trust
Mortgage Loan for such affected Trust Mortgage Loan (provided that in no event
shall such substitution occur later than the second anniversary of the Closing
Date) and pay to the Master Servicer for deposit into the Collection Account any
Substitution Shortfall Amount in connection therewith in conformity with the
Mortgage Loan Purchase Agreement; provided, however, that if (i) such Material
Defect or Material Breach is capable of being cured but not within the Initial
Resolution Period, (ii) such Material Defect or Material Breach is not related
to any Trust Mortgage Loan's not being a "qualified mortgage" within the meaning
of the REMIC Provisions, and (iii) the Mortgage Loan Seller has commenced and is
diligently proceeding with the cure of such Material Defect or Material Breach
within the Initial Resolution Period, then the Mortgage Loan Seller shall have
an additional 90 days to cure such Material Defect or Material Breach (provided
that the Mortgage Loan Seller has delivered to the Master Servicer, the Special
Servicer, the Rating Agencies and the Trustee an officer's certificate from an
officer of the Mortgage Loan Seller that describes the reasons that the cure was
not effected within the Initial Resolution Period and the actions that it
proposes to take to effect the cure and that states that it anticipates that the
cure will be effected within the additional 90-day period).
Any of the following will cause a document in the Mortgage File to
be deemed to have a "Defect" and to be conclusively presumed to materially and
adversely affect the interests of Certificateholders in a Trust Mortgage Loan
and the value of a Trust Mortgage Loan: (a) the absence from the Mortgage File
of the original signed Note, unless the Mortgage File contains a signed lost
note affidavit and indemnity; (b) the absence from the Mortgage File of the
original signed Mortgage, unless there is included in the Mortgage File a
certified copy of the Mortgage as recorded or as sent for recordation, together
with a certificate stating that the original signed Mortgage was sent for
recordation, or a copy of the Mortgage and the related recording information;
(c) the absence from the Mortgage File of the item called for by paragraph (ix)
of the definition of Mortgage File; (d) the absence from the Mortgage File of
any intervening assignment required to create an effective assignment to the
Trustee on behalf of the Trust, unless there is included in the Mortgage File a
certified copy of the intervening assignment as recorded or as sent for
recordation, together with a certificate stating that the original intervening
assignment was sent for recordation; (e) the absence from the Mortgage File of
any required original Letter of Credit (unless such original has been delivered
to the Master Servicer and a copy thereof is part of the Mortgage File) provided
that such Defect may be cured by the provision of a substitute Letter of Credit
or a cash reserve on behalf of the related Borrower; or (f) the absence from the
Mortgage File of the original or a copy of any required Ground Lease. The
absence of a document checklist from a Mortgage File shall in no event
constitute a Material Defect.
Any Defect or Breach which causes any Trust Mortgage Loan not to be
a "qualified mortgage" (within the meaning of Section 860G(a)(3) of the Code)
shall be deemed to materially and adversely affect the interest of the
Certificateholders therein and the Initial Resolution Period for the affected
Trust Mortgage Loan shall be 90 days following the earlier of (i) notice to the
Mortgage Loan Seller of the discovery of such Defect or Breach by any party to
this Agreement and (ii) the Mortgage Loan Seller's discovery of such Defect or
Breach (which period shall not be subject to extension).
If any affected Trust Mortgage Loan is to be repurchased by reason
of a Material Breach or a Material Defect with respect thereto, the Master
Servicer shall designate the Collection Account as the account into which funds
in the amount of the Purchase Price are to be deposited by wire transfer.
If (x) a Trust Mortgage Loan is to be repurchased or substituted for
as contemplated above, (y) such Trust Mortgage Loan is a Crossed Trust Mortgage
Loan and (z) the applicable Defect or Breach does not otherwise constitute a
Material Defect or a Material Breach, as the case may be, as to any related
Crossed Trust Mortgage Loan, then the applicable Defect or Breach shall be
deemed to constitute a Material Defect or a Material Breach as to any related
Crossed Trust Mortgage Loan for purposes of the above provisions, and the
Mortgage Loan Seller shall be required to repurchase or substitute for any
related Crossed Trust Mortgage Loan in accordance with the provisions above
unless the Crossed Trust Mortgage Loan Repurchase Criteria would be satisfied if
the Mortgage Loan Seller were to repurchase or substitute for only the affected
Crossed Trust Mortgage Loans as to which a Material Defect or Material Breach
had occurred without regard to this paragraph, and in the case of either such
repurchase or substitution, all of the other requirements set forth in this
Section 2.03 applicable to a repurchase or substitution, as the case may be,
would be satisfied. In the event that the Crossed Trust Mortgage Loan Repurchase
Criteria would be so satisfied, the Mortgage Loan Seller may elect either to
repurchase or substitute for only the affected Crossed Trust Mortgage Loan as to
which the Material Defect or Material Breach exists or to repurchase or
substitute for the aggregated Crossed Trust Mortgage Loans. The determination of
the Special Servicer as to whether the Crossed Trust Mortgage Loan Repurchase
Criteria have been satisfied shall be conclusive and binding in the absence of
manifest error. In the event that one or more of such other Crossed Trust
Mortgage Loans satisfy the Crossed Trust Mortgage Loan Repurchase Criteria, the
Mortgage Loan Seller may elect either to repurchase or substitute for only the
affected Crossed Trust Mortgage Loan as to which the related Defect or Breach
exists or to repurchase or substitute for all of the Crossed Trust Mortgage
Loans. The Special Servicer will be entitled to cause to be delivered, or direct
the Mortgage Loan Seller to (in which case the Mortgage Loan Seller shall) cause
to be delivered to the Master Servicer, an Appraisal of any or all of the
related Mortgaged Properties for purposes of determining whether clause (ii) of
the definition of Crossed Trust Mortgage Loan Repurchase Criteria has been
satisfied, in each case at the expense of the Mortgage Loan Seller if the scope
and cost of the Appraisal is approved by the Mortgage Loan Seller (such approval
not to be unreasonably withheld).
With respect to any Crossed Trust Mortgage Loan conveyed hereunder,
to the extent that the Mortgage Loan Seller repurchases an affected Crossed
Trust Mortgage Loan in the manner prescribed above while the Trustee continues
to hold any related Crossed Trust Mortgage Loans, the Mortgage Loan Seller and
the Depositor have agreed in the Mortgage Loan Purchase Agreement to modify,
upon such repurchase or substitution, the related Mortgage Loan Documents in a
manner such that such affected Crossed Trust Mortgage Loan repurchased or
substituted by the Mortgage Loan Seller, on the one hand, and any related
Crossed Trust Mortgage Loans held by the Trustee, on the other, would no longer
be cross-defaulted or cross-collateralized with one another; provided that the
Mortgage Loan Seller, at its expense, shall have furnished the Trustee with an
Opinion of Counsel that such modification shall not cause an Adverse REMIC
Event; provided, further, that if such Opinion cannot be furnished, the Mortgage
Loan Seller and the Depositor have agreed in the Mortgage Loan Purchase
Agreement that such repurchase or substitution of only the affected Crossed
Trust Mortgage Loan, notwithstanding anything to the contrary herein, shall not
be permitted (in which case, the Mortgage Loan Seller will be obligated to
purchase all Crossed Trust Mortgage Loans). Any reserve or other cash collateral
or Letters of Credit securing the affected Crossed Trust Mortgage Loans shall be
allocated between such Trust Mortgage Loans in accordance with the Mortgage Loan
Documents. All other terms of the Trust Mortgage Loans shall remain in full
force and effect, without any modification thereof (unless otherwise modified in
accordance with Section 3.20 hereof).
In connection with any repurchase of or substitution for a Trust
Mortgage Loan contemplated by this Section 2.03, the Trustee, the Master
Servicer and the Special Servicer shall each tender to the Mortgage Loan Seller
(in the event of a repurchase or substitution by the Mortgage Loan Seller) upon
delivery to each of the Trustee, the Master Servicer and the Special Servicer of
a trust receipt executed by the Mortgage Loan Seller; (i) all portions of the
Mortgage File, the Servicing File and other documents pertaining to such Trust
Mortgage Loan possessed by it, and each document that constitutes a part of the
Mortgage File that was endorsed or assigned to the Trustee, shall be endorsed or
assigned, as the case may be, to the Mortgage Loan Seller in the same manner as
provided in Section 7 of the Mortgage Loan Purchase Agreement, and (ii) any
escrow payments and reserve funds held by it, or on its behalf, with respect to
such repurchased or replaced Trust Mortgage Loan.
Notwithstanding the foregoing, if there is a Material Breach or
Material Defect with respect to one or more Mortgaged Properties (but not all of
the Mortgaged Properties) with respect to a Trust Mortgage Loan, the Mortgage
Loan Seller will not be obligated to repurchase or substitute for the entire
Trust Mortgage Loan if the Trust Mortgage Loan may, pursuant to the terms of the
related Mortgage Loan Documents, be severed to allow for the repurchase of a
portion of the Trust Mortgage Loan representing the affected Mortgaged Property
and the Mortgage Loan remaining after such severance satisfies the requirements,
if any, set forth in the Mortgage Loan Documents and (i) the Mortgage Loan
Seller provides an Opinion of Counsel to the effect that such partial release
would not cause an Adverse REMIC Event to occur, (ii) the Mortgage Loan Seller
pays (or causes to be paid) the applicable release price required under the
Mortgage Loan Documents and, to the extent not covered by such release price,
any additional amounts necessary to cover all reasonable out-of-pocket expenses
reasonably incurred by the Master Servicer, the Special Servicer, the Trustee or
the Trust Fund and (iii) such cure by release of such Mortgaged Property is
effected within the time periods specified for cures of Material Breach or
Material Defect in this Section 2.03(b).
Whenever one or more Replacement Trust Mortgage Loans are
substituted for a Defective Trust Mortgage Loan by the Mortgage Loan Seller, the
Master Servicer shall direct the party effecting the substitution to deliver the
related Mortgage File to the Trustee, to certify that such Replacement Trust
Mortgage Loan satisfies or such Replacement Trust Mortgage Loans satisfy, as the
case may be, all of the requirements of the definition of "Qualified Substitute
Trust Mortgage Loan" and to send such certification to the Trustee. No mortgage
loan may be substituted for a Defective Trust Mortgage Loan, as contemplated by
this Section 2.03, if the Trust Mortgage Loan to be replaced was itself a
Replacement Trust Mortgage Loan, in which case, absent a cure of the relevant
Material Breach or Material Defect in accordance herewith, the affected Trust
Mortgage Loan will be required to be repurchased as contemplated hereby. Monthly
Payments due with respect to each Replacement Trust Mortgage Loan after the
related date of substitution, and Monthly Payments due with respect to each
Trust Mortgage Loan that is being replaced thereby after the related Due Date in
May 2006 and on or prior to the related date of substitution, shall be part of
the Trust Fund. Monthly Payments due with respect to each Replacement Trust
Mortgage Loan on or prior to the related date of substitution, and Monthly
Payments due with respect to each Trust Mortgage Loan that is being replaced
thereby after the related date of substitution, shall not be part of the Trust
Fund and are to be remitted by the Master Servicer to the party effecting the
related substitution promptly following receipt.
All references in the foregoing paragraphs of this Section 2.03(b)
to "Mortgage Loan Seller" shall be deemed to also be references to the
Performance Guarantor (but only if and to the extent that the Performance
Guarantor would, pursuant to the Performance Guarantee, be liable for those
obligations of Column as the Mortgage Loan Seller under the Mortgage Loan
Purchase Agreement that are contemplated above in this Section 2.03(b)).
Section 7 of each of the Mortgage Loan Purchase Agreement and the
Performance Guarantee provide the sole remedy available to the
Certificateholders, or the Trustee on behalf of the Certificateholders,
respecting any Defect or Breach.
If the Mortgage Loan Seller (and the Performance Guarantor) defaults
on its obligations to repurchase any Trust Mortgage Loan as contemplated by
Section 2.03(b), the Trustee shall promptly notify the Certificateholders, the
Rating Agencies, the Master Servicer and the Special Servicer of such default.
The Trustee shall enforce the obligations of the Mortgage Loan Seller under
Section 7 of the Mortgage Loan Purchase Agreement and the obligations of the
Performance Guarantor under the Performance Guarantee. 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 affected Trust Mortgage Loan(s). The
Trustee shall be reimbursed for the reasonable costs of such enforcement: first,
from a specific recovery of costs, expenses or attorneys' fees against the
defaulting Mortgage Loan Seller; second, pursuant to Section 3.05(a)(ix) out of
the related Purchase 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 Section 3.05(a)(x) out of general collections on
the Trust Mortgage Loans on deposit in the Collection Account.
If the Mortgage Loan Seller or the Performance Guarantor incurs any
expense in connection with the curing of a Breach which also constitutes a
default under the related Trust Mortgage Loan, the Mortgage Loan Seller or the
Performance Guarantor, as the case may be, shall have a right, and shall be
subrogated to the rights of the Trustee, as successor to the mortgagee, to
recover the amount of such expenses from the related Borrower; provided,
however, that the Mortgage Loan Seller's or the Performance Guarantor's rights
pursuant to this paragraph shall be junior, subject and subordinate to the
rights of the Trust Fund to recover amounts owed by the related Borrower under
the terms of such Trust Mortgage Loan, including the rights to recover
unreimbursed Advances, accrued and unpaid interest on Advances at the
Reimbursement Rate and unpaid or unreimbursed expenses of the Trust Fund
allocable to such Trust Mortgage Loan; and provided, further, that in the event
and to the extent that such expenses of the Mortgage Loan Seller or the
Performance Guarantor, as the case may be, in connection with any Trust Mortgage
Loan exceed five percent of the then outstanding principal balance of such Trust
Mortgage Loan, then the Mortgage Loan Seller's or the Performance Guarantor's
rights to reimbursement pursuant to this paragraph with respect to such Trust
Mortgage Loan and such excess expenses shall not (without the prior written
consent of the Master Servicer or the Special Servicer, as applicable, which
shall not be unreasonably withheld or delayed) be exercised until the payment in
full of such Trust Mortgage Loan (as such Trust Mortgage Loan may be amended or
modified pursuant to the terms of this Agreement). Notwithstanding any other
provision of this Agreement to the contrary, the Master Servicer shall not have
any obligation pursuant to this Agreement to collect such reimbursable amounts
on behalf of the Mortgage Loan Seller or the Performance Guarantor, as the case
may be; provided, however, that the preceding clause shall not operate to
prevent the Master Servicer from using reasonable efforts, exercised in the
Master Servicer's sole discretion, to collect such amounts to the extent
consistent with the Servicing Standard. The Mortgage Loan Seller or the
Performance Guarantor may pursue its rights to reimbursement of such expenses
directly against the Borrower, by suit or otherwise; provided that (i) the
Master Servicer or, with respect to a Specially Serviced Trust Mortgage Loan,
the Special Servicer determines in the exercise of its sole discretion
consistent with the Servicing Standard that such actions by the Mortgage Loan
Seller or the Performance Guarantor, as the case may be, will not impair the
Master Servicer's and/or the Special Servicer's collection or recovery of
principal, interest and other sums due with respect to the related Mortgage Loan
which would otherwise be payable to the Master Servicer, the Special Servicer,
the Trustee, the Certificateholders and any related Junior Loan Holder(s)
pursuant to the terms of this Agreement, (ii) such actions will not include an
involuntary bankruptcy, receivership or insolvency proceeding against the
Borrower, (iii) such actions will not include the foreclosure or enforcement of
any lien or security interest under the related Mortgage or other Mortgage Loan
Documents and (iv) such actions will not result in the imposition of an
additional lien against the Mortgaged Property.
Section 2.04 Issuance of Uncertificated REMIC I Interests; Execution
of Certificates
Subject to Sections 2.01 and 2.02, the Trustee hereby acknowledges
the assignment to it of the Trust Mortgage Loans and the delivery of the
Mortgage Files and fully executed original counterparts of the Mortgage Loan
Purchase Agreements, together with the assignment to it of all other assets
included in the Trust Fund. Concurrently with such assignment and delivery, the
Trustee (i) hereby declares that it holds the Trust Mortgage Loans, exclusive of
Excess Interest thereon, on behalf of REMIC I and the Holders of the
Certificates, (ii) acknowledges the issuance of the Uncertificated REMIC I
Interests and, pursuant to the written request of the Depositor executed by an
officer of the Depositor acknowledges that it has caused the Authenticating
Agent to authenticate and to deliver to or upon the order of the Depositor the
Class V-2 Certificates and the Class LR Certificates, in exchange for the Trust
Mortgage Loans, exclusive of Excess Interest thereon, receipt of which is hereby
acknowledged, and (iii) pursuant to the written request of the Depositor
executed by an officer of the Depositor, acknowledges that (A) it has executed
and caused the Authenticating Agent to authenticate and to deliver to or upon
the order of the Depositor, in exchange for the Uncertificated REMIC I
Interests, the Regular Certificates and the Class R Certificates and (B) it has
executed and caused the Authenticating Agent to authenticate and to deliver to
or upon the order of the Depositor, in exchange for the Excess Interest, the
Class V-1 Certificates, and the Depositor hereby acknowledges the receipt by it
or its designees, of all such Certificates, and the Depositor hereby
acknowledges the receipt by it or its designees, of all such Certificates.
Section 2.05 Acceptance of Grantor Trusts; Issuance of the Class V-1
Certificates
It is the intention of the parties hereto that the segregated pool
of assets consisting of any collections of Excess Interest received on the ARD
Trust Mortgage Loans (and any successor REO Trust Mortgage Loans with respect
thereto) constitute a Grantor Trust for federal income tax purposes and,
further, that such segregated pool of assets be designated as "Grantor Trust
V-1." The Trustee, by its execution and delivery hereof, acknowledges the
assignment to it of the assets of Grantor Trust V-1 and declares that it holds
and will hold such assets in trust for the exclusive use and benefit of all
present and future Holders of the Class V-1 Certificates. Concurrently with the
assignment to it of the assets included in Grantor Trust V-1, the Trustee shall
execute, and the Certificate Registrar shall authenticate and deliver, to or
upon the order of the Depositor, the Class V-1 Certificates in authorized
denominations evidencing the entire beneficial ownership of Grantor Trust V-1.
The rights of the Holders of the Class V-1 Certificates to receive distributions
from the proceeds of Grantor Trust V-1, and all ownership interests of such
Holders in and to such distributions, shall be as set forth in this Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01 Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer; Administration of the Mortgage Loans
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans (and, with respect to the Special
Servicer, any REO Properties) that it is obligated to service and administer
pursuant to this Agreement on behalf of the Trustee and in the best interests of
and for the benefit of the Certificateholders (as a collective whole) or, in the
case of a Mortgage Loan Combination, in the best interests and for the benefit
of the Certificateholders and the related B Loan Holder (as a collective whole)
(as determined by the Master Servicer or the Special Servicer, as the case may
be, in its reasonable judgment), in accordance with applicable law, the terms of
this Agreement, the terms of the respective Mortgage Loans and any and all
applicable intercreditor, co-lender and similar agreements and, to the extent
consistent with the foregoing, further as follows (the "Servicing Standard")--
(i) (A) in the same manner in which, and with the same care, skill,
prudence and diligence with which the Master Servicer or the Special
Servicer, as the case may be, services and administers similar mortgage
loans for other third-party portfolios, giving due consideration to the
customary and usual standards of practice of prudent institutional
commercial and multifamily mortgage loan servicers servicing mortgage
loans for third parties, and (B) with the same care, skill, prudence and
diligence with which the Master Servicer or the Special Servicer, as the
case may be, services and administers commercial and multifamily mortgage
loans owned by the Master Servicer or the Special Servicer, as the case
may be, whichever standard is higher;
(ii) in the case of the Master Servicer, with a view to the timely
recovery of all scheduled payments of principal and interest under the
subject Mortgage Loans, the full collection of all Yield Maintenance
Charges that may become payable under the subject Mortgage Loans and, in
the case of the Special Servicer, if a Mortgage Loan comes into and
continues in default and if, in the good faith and reasonable judgment of
the Special Servicer, no satisfactory arrangements can be made for the
collection of the delinquent payments, the maximization of the recovery of
principal and interest on such Mortgage Loan to the Certificateholders (as
a collective whole) (or, in the case of a Mortgage Loan Combination, to
the Certificateholders and the related B Loan Holder (as a collective
whole)) on a present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders and/or a B
Loan Holder to be performed at a rate not less than the related Mortgage
Rate); and
(iii) without regard to--
(A) any relationship that the Master Servicer or the Special
Servicer, as the case may be, or any Affiliate thereof may have with
the related Borrower, the Mortgage Loan Seller or any other party to
the Pooling and Servicing Agreement,
(B) the ownership of any Certificate or any interest in a
mezzanine loan or a B Loan by the Master Servicer or the Special
Servicer, as the case may be, or by any Affiliate thereof,
(C) the Master Servicer's obligation to make Advances,
(D) the Special Servicer's obligation to request that the
Master Servicer make Servicing Advances,
(E) the right of the Master Servicer (or any Affiliate
thereof) or the Special Servicer (or any Affiliate thereof), as the
case may be, to receive reimbursement of costs, or the sufficiency
of any compensation payable to it, or with respect to any particular
transaction,
(F) the ownership, servicing or management for itself or
others of any other mortgage loans or mortgaged properties by the
Master Servicer or Special Servicer or any Affiliate of the Master
Servicer or Special Servicer, as applicable,
(G) any obligation of the Master Servicer or any of its
Affiliates (in the capacity as the Mortgage Loan Seller) to cure a
breach of a representation or warranty or repurchase any Trust
Mortgage Loan, or
(H) any debt that the Master Servicer or Special Servicer or
any Affiliate of the Master Servicer or Special Servicer, as
applicable, has extended to any Borrower or any Affiliates of any
Borrower.
Without limiting the foregoing, subject to Section 3.21, the Special
Servicer shall be obligated to service and administer (i) any Trust Mortgage
Loans as to which a Servicing Transfer Event has occurred and is continuing (the
"Specially Serviced Trust Mortgage Loans"), together with any related B Loans
that are being serviced hereunder (collectively with the Specially Serviced
Trust Mortgage Loans, the "Specially Serviced Mortgage Loans"), and (ii) any REO
Properties. Notwithstanding the foregoing, the Master Servicer shall continue to
make all calculations, and prepare, and deliver to the Trustee, all reports
required to be prepared by the Master Servicer hereunder with respect to the
Specially Serviced Trust Mortgage Loans as if no Servicing Transfer Event had
occurred and with respect to the REO Properties (and the related REO Trust
Mortgage Loans) as if no REO Acquisition had occurred, and to render such
incidental services with respect to the Specially Serviced Mortgage Loans and
REO Properties as are specifically provided for herein; provided, however, that
the Master Servicer shall not be liable for failure to comply with such duties
insofar as such failure results from a failure of the Special Servicer to
provide sufficient information to the Master Servicer to comply with such duties
or a failure of the Special Servicer to prepare and deliver to the Master
Servicer data required hereunder to be delivered by the Special Servicer to the
Master Servicer. Each Trust Mortgage Loan that becomes a Specially Serviced
Trust Mortgage Loan shall continue as such until all Servicing Transfer Events
have ceased to exist with respect to such Trust Mortgage Loan as described in
the definition of "Servicing Transfer Event." A B Loan shall cease to be a
Specially Serviced Mortgage Loan at such time as the related Trust Mortgage Loan
ceases to be a Specially Serviced Trust Mortgage Loan as described in the
definition of "Servicing Transfer Event." Without limiting the foregoing,
subject to Section 3.21, the Master Servicer shall be obligated to service and
administer all Mortgage Loans which are not Specially Serviced Mortgage Loans;
provided, however, that the Special Servicer shall have the exclusive right to
approve any draw down of funds under any Letter of Credit provided by the
related Borrower with respect to any Trust Mortgage Loan, and to approve any
modification, amendment, alteration or renewal of such Letter of Credit, it
being agreed, however, that the Master Servicer shall provide the Special
Servicer with notice of any communication with respect to a Borrower's inability
to renew any such Letter of Credit.
(b) Subject only to the Servicing Standard and the terms of this
Agreement and of the respective Mortgage Loans, the Master Servicer and, with
respect to the Specially Serviced Mortgage Loans and REO Mortgage Loans, the
Special Servicer each shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting the
generality of the foregoing, the Master Servicer and Special Servicer, each in
its own name, is hereby authorized and empowered by the Trustee and obligated to
execute and deliver, on behalf of the Certificateholders, any affected B Loan
Holder and the Trustee or any of them, with respect to each Mortgage Loan it is
obligated to service under this Agreement, any and all financing statements,
continuation statements and other documents or instruments necessary to maintain
the lien created by the related Mortgage or other security document in the
related Mortgage File on the related Mortgaged Property and related collateral;
subject to Section 3.20, any and all modifications, waivers, amendments or
consents to or with respect to any documents contained in the related Mortgage
File; and any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments. Subject to
Section 3.10, the Trustee shall furnish, or cause to be furnished, to the Master
Servicer and Special Servicer any limited powers of attorney and other documents
necessary or appropriate to enable the Master Servicer or the Special Servicer,
as the case may be, to carry out its servicing and administrative duties
hereunder; provided, however, that the Trustee shall not be held liable for any
negligence with respect to, or misuse of, any such power of attorney by the
Master Servicer or Special Servicer.
(c) The relationship of the Master Servicer and Special Servicer to
the Trustee under this Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer, partner or, except as
specifically set forth herein, agent.
(d) In the event that there shall occur a CBA A/B Material Default
with respect to any CBA A/B Mortgage Loan Combination, and for so long as such
CBA A/B Material Default shall be continuing, the Master Servicer and/or the
Special Servicer, as applicable, shall be obligated to service, subject to the
terms and conditions of the related CBA A/B Intercreditor Agreement, the related
CBA B Loan on behalf of the related B Loan Holder, and all references herein to
"Mortgage Loan" (and, if the related CBA A Loan is a Specially Serviced Trust
Mortgage Loan, all references herein to "Specially Serviced Mortgage Loan")
shall include a CBA B Loan that is being serviced under this Agreement.
(e) Pursuant to the related Intercreditor Agreement, each Junior
Loan Holder has agreed that the Master Servicer and the Special Servicer are
authorized and obligated to service and administer the subject Junior Loan
pursuant to this Agreement. Subject to the consultation and approval rights of
the Series 2006-C2 Directing Certificateholder under this Agreement, the Master
Servicer (or the Special Servicer if required or permitted pursuant to, and in
accordance with, the terms of this Agreement) shall be entitled, during any
period when any Junior Loan that is being serviced under this Agreement does not
constitute a Specially Serviced Mortgage Loan, to exercise the rights and powers
granted under the corresponding Intercreditor Agreement(s) to the holder of the
applicable Trust Mortgage Loan or to any servicer appointed thereby or acting on
its behalf, subject to the limitations of such Intercreditor Agreement and to
the rights and powers of the related Junior Loan Holder(s), if any, under such
Intercreditor Agreement.
Section 3.02 Collection of Mortgage Loan Payments
(a) The Master Servicer and Special Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Mortgage Loans it is obligated to service hereunder, and shall follow such
collection procedures as are consistent with this Agreement (including, without
limitation, the Servicing Standard). Consistent with the foregoing, the Master
Servicer or Special Servicer may in its discretion waive any Penalty Charge in
connection with any delinquent payment on a Mortgage Loan it is obligated to
service hereunder; provided that (subject to the last paragraph of Section
3.21(g)) the Master Servicer must obtain the consent of the Series 2006-C2
Directing Certificateholder with respect to the waiver of any Penalty Charge
with respect to a Mortgage Loan (to the extent such Penalty Charge is then
required for the reimbursement of any Advance or Additional Trust Fund Expense)
in excess of three (3) times during any 24-month period, such consent to be
deemed given if not objected to in writing within five (5) days of receipt of
notice.
(b) If the Master Servicer or Special Servicer receives, or receives
notice from the related Borrower that it will be receiving, Excess Interest on
any ARD Trust Mortgage Loan in any Collection Period, the Master Servicer or
Special Servicer, as applicable, shall, to the extent Excess Interest is not
otherwise reported on the CMSA Loan Periodic Update File, promptly notify the
Trustee in writing.
(c) The Master Servicer shall not accept a Principal Prepayment of
any Trust Mortgage Loan by the related Borrower on any date other than a Due
Date if accepting such payment would cause a Prepayment Interest Shortfall,
unless the Borrower is permitted to make such prepayment pursuant to the terms
of the related Mortgage Loan Documents. If the Master Servicer accepts a
Principal Prepayment of any Trust Mortgage Loan by the Borrower on any date
other than a Due Date which causes a Prepayment Interest Shortfall (unless such
Principal Prepayment is in respect of (i) a Specially Serviced Trust Mortgage
Loan (provided the Special Servicer consents to such prepayment), (ii) a payment
of Insurance and Condemnation Proceeds, (iii) a payment subsequent to a default
under the related Mortgage Loan Documents (provided the Master Servicer
reasonably believes that acceptance of such payment is consistent with the
Servicing Standard and the Master Servicer has obtained the consent of the
Special Servicer which shall not be unreasonably withheld or delayed and in any
event shall be deemed granted if not denied within five Business Days), (iv) a
payment pursuant to applicable law or court order, (v) a payment the related
Borrower is permitted to make under the terms of the related Mortgage Loan
Documents (without any discretion on the part of the lender) or (vi) a payment
accepted by the Master Servicer at the request of or with the consent of the
Series 2006-C2 Directing Certificateholder), the Master Servicer shall remit to
the Trustee on or before 1:00 p.m., New York City time, on the related Master
Servicer Remittance Date for deposit in the Distribution Account, immediately
available funds in an amount equal to any Prepayment Interest Shortfall
resulting from such Principal Prepayment (which remittance shall fully cure any
breach under this Section 3.02(c)).
Section 3.03 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts
(a) The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all Escrow Payments shall be
deposited and retained, and shall administer such Servicing Accounts in
accordance with the related Mortgage Loan Documents. Each Servicing Account
shall be maintained in accordance with the requirements of the related Mortgage
Loan and in accordance with the Servicing Standard and to the extent not
inconsistent with the terms of the Mortgage Loans, in an Eligible Account. Funds
on deposit in the Servicing Accounts may be invested in Permitted Investments in
accordance with the provisions of Section 3.06. As and to the extent consistent
with the Servicing Standard, applicable law and the related Mortgage Loan
Documents, the Master Servicer may make withdrawals from the Servicing Accounts
maintained by it, and may apply Escrow Payments held therein with respect to any
Mortgage Loan (together with interest earned thereon), only as follows: (i) to
effect the payment of real estate taxes, assessments, insurance premiums
(including, premiums on any Environmental Insurance Policy), ground rents (if
applicable) and comparable items in respect of the related Mortgaged Property;
(ii) to reimburse the Master Servicer, the Special Servicer or the Trustee, as
applicable, for any unreimbursed Servicing Advances made thereby (together with
Advance Interest accrued thereon) with respect to such Mortgage Loan to cover
any of the items described in the immediately preceding clause (i); (iii) to
refund to the related Borrower any sums as may be determined to be overages;
(iv) to pay interest or other income, if required and as described below, to the
related Borrower on balances in the Servicing Account (or, if and to the extent
not payable to the related Borrower, to pay such interest or other income (up to
the amount of any Net Investment Earnings in respect of such Servicing Account
for each Collection Period) to such Master Servicer); (v) after an event of
default, to pay the principal of, accrued interest on and any other amounts
payable with respect to such Mortgage Loan; or (vi) to clear and terminate the
Servicing Account at the termination of this Agreement in accordance with
Section 9.01. The Master Servicer shall pay or cause to be paid to the related
Borrowers interest and other income, if any, earned on the investment of funds
in Servicing Accounts maintained thereby, if and to the extent required by law
or the terms of the related Mortgage Loan Documents. If the Master Servicer
shall deposit in a Servicing Account maintained by it any amount not required to
be deposited therein, it may at any time withdraw such amount from such
Servicing Account, any provision herein to the contrary notwithstanding.
Promptly after any Escrow Payments are received by the Special Servicer from any
Borrower, and in any event within two Business Days after any such receipt, the
Special Servicer shall remit such Escrow Payments to the applicable Master
Servicer for deposit in the applicable Servicing Account(s).
(b) The Special Servicer, in the case of REO Properties, and the
Master Servicer, in the case of all Mortgage Loans, shall maintain accurate
records with respect to each related REO Property or Mortgaged Property, as
applicable, reflecting the status of real estate taxes, assessments and other
similar items that are or may become a lien thereon (including related penalty
or interest charges) and the status of Insurance Policy premiums and any ground
rents payable in respect thereof and the status of any Letters of Credit. The
Special Servicer, in the case of REO Properties, and the Master Servicer, in the
case of all Mortgage Loans, shall obtain all bills for the payment of such items
(including renewal premiums) and shall effect payment thereof from the REO
Account or the Servicing Accounts, as applicable, and, if such amounts are
insufficient to pay such items in full, the Master Servicer shall (subject to
Section 3.04(c)) make a Servicing Advance prior to the applicable penalty or
termination date, as allowed under the terms of the related Mortgage Loan and,
in any event, consistent with the Servicing Standard. Notwithstanding anything
to the contrary in the preceding sentence, with respect to Mortgage Loans that
do not provide for escrows for the payment of taxes and assessments, the Master
Servicer shall (subject to Section 3.04(c)) make a Servicing Advance for the
payment of such items upon the earlier of (i) five Business Days after the
Master Servicer has received confirmation that such item has not been paid and
(ii) the earlier of (A) 30 days after the date such payments first become due
and (B) if applicable, five Business Days before the scheduled date of
foreclosure of any lien arising from nonpayment of such items. In no event shall
the Master Servicer or Special Servicer be required to make any such Servicing
Advance that would, if made, be a Nonrecoverable Servicing Advance. To the
extent that a Mortgage Loan does not require a Borrower to escrow for the
payment of real estate taxes, assessments, Insurance Policy premiums, ground
rents (if applicable) and similar items, the Master Servicer and Special
Servicer, as applicable, shall use reasonable efforts consistent with the
Servicing Standard to require that payments in respect of such items be made by
the Borrower at the time they first become due.
(c) In accordance with the Servicing Standard and for all Mortgage
Loans and REO Properties, the Master Servicer shall make a Servicing Advance
with respect to each related Mortgaged Property and each REO Property of all
such funds as are necessary for the purpose of effecting the payment of (without
duplication) (i) ground rents (if applicable), (ii) premiums on Insurance
Policies, (iii) operating, leasing, managing and liquidation expenses for REO
Properties, (iv) environmental inspections, (v) real estate taxes, assessments
and other similar items that are or may become a lien thereon and (vi) any other
amount specifically required to be paid as a Servicing Advance hereunder, if and
to the extent monies in the Servicing Accounts are insufficient to pay such item
when due and the related Borrower has failed to pay such item on a timely basis;
provided that the Master Servicer shall not be required to make any such advance
that would, if made, constitute a Nonrecoverable Servicing Advance.
The Special Servicer shall give the Master Servicer and the Trustee
not less than five Business Days' written notice before the date on which the
Master Servicer is required to make any Servicing Advance with respect to any
Mortgage Loan that the Special Servicer is required to service or any REO
Property; provided, however, that only two Business Days' notice shall be
required in respect of Servicing Advances required to be made on an urgent or
emergency basis (the Special Servicer to identify any such urgent or emergency
basis to the Master Servicer at the time it notifies the Master Servicer of the
need to make the Advance); and provided, further, that the Special Servicer
shall not be entitled to make such a request (other than for Servicing Advances
required to be made on an urgent or emergency basis) more frequently than once
per calendar month (although such request may relate to more than one Servicing
Advance). The Master Servicer may pay the aggregate amount of such Servicing
Advances listed on a monthly request to the Special Servicer, in which case the
Special Servicer shall remit such Servicing Advances to the ultimate payees. In
addition, the Special Servicer shall provide the Master Servicer and the Trustee
with such information in its possession as the Master Servicer or the Trustee,
as applicable, may reasonably request to enable the Master Servicer or the
Trustee, as applicable, to determine whether a requested Servicing Advance would
constitute a Nonrecoverable Servicing Advance. Any request by the Special
Servicer that the Master Servicer make a Servicing Advance shall be deemed to be
a determination by the Special Servicer that such requested Servicing Advance is
not a Nonrecoverable Servicing Advance, and the Master Servicer shall be
entitled to conclusively rely on such determination; provided that such
determination shall not be binding upon the Master Servicer. On the fourth
Business Day before each Distribution Date, the Special Servicer shall report to
the Master Servicer the Special Servicer's determination as to whether any
Servicing Advance previously made with respect to a Specially Serviced Mortgage
Loan or REO Property is a Nonrecoverable Servicing Advance. The Master Servicer
shall be entitled to conclusively rely on such a determination; provided that
such determination shall be binding upon the Master Servicer if the Special
Servicer determines that such Servicing Advance is a Nonrecoverable Servicing
Advance. The Master Servicer shall not be responsible for any delay on the part
of the Special Servicer to notify the Master Servicer of any required Servicing
Advance with respect to a Specially Serviced Mortgage Loan or REO Property.
Notwithstanding anything to the contrary set forth herein, the
Master Servicer may (or, at the direction of the Special Servicer, upon not less
than five Business Days' (or, if payment is required to be made on an urgent or
emergency basis as indicated by the Special Servicer, two Business Days') prior
written notice if a Specially Serviced Mortgage Loan or REO Property is
involved, shall) pay directly out of the Collection Account any servicing
expense that, if paid by the Master Servicer or the Special Servicer, would
constitute a Nonrecoverable Servicing Advance (which shall be deemed first made
from amounts distributable as principal and then from all other amounts
comprising general collections); provided that such payment shall be made only
if the Master Servicer (or the Special Servicer, if a Specially Serviced
Mortgage Loan or REO Property is involved) has determined in accordance with the
Servicing Standard that making such payment is in the best interests of the
Certificateholders (or, in the case of a Mortgage Loan Combination, the
Certificateholders and the related B Loan Holder) (as a collective whole), as
evidenced by an Officer's Certificate promptly delivered by the Master Servicer
or the Special Servicer, as applicable, to the Trustee, the Master Servicer or
the Special Servicer, as applicable, the Depositor, each Rating Agency, the
Series 2006-C2 Directing Certificateholder, any Requesting Subordinate
Certificateholder and any affected B Loan Holder, setting forth the basis for
such determination and accompanied by any information that the Master Servicer
or the Special Servicer may have obtained that supports such determination; and
provided, further, that, if a Mortgage Loan Combination is involved, and if and
to the extent that funds are available in the related Mortgage Loan Combination
Custodial Account, such payment shall be made from such related Mortgage Loan
Combination Custodial Account.
All such Servicing Advances and interest thereon shall be
reimbursable in the first instance from related collections from the Borrowers
and further as provided in Sections 3.04 and 3.05. No costs incurred by the
Master Servicer or Special Servicer in effecting the payment of real estate
taxes, assessments and, if applicable, ground rents on or in respect of the
Mortgaged Properties shall, for purposes of calculating monthly distributions to
Certificateholders, be added to the unpaid principal balances of the related
Trust Mortgage Loans, notwithstanding that the terms of such Trust Mortgage
Loans so permit.
If the Master Servicer is required under any provision of this
Agreement to make a Servicing Advance, but it does not do so when such Advance
is required to be made, the Trustee shall, if it has actual knowledge of such
failure on the part of the Master Servicer, give written notice of such failure
to the Master Servicer. If such Servicing Advance is not made by the Master
Servicer within three Business Days after such notice is given to the Master
Servicer, then (subject to Section 7.05) the Trustee shall, within one Business
Day thereafter, make such Servicing Advance.
(d) In connection with its recovery of any Servicing Advance out of
the Collection Account pursuant to clauses (v) or (vi) of Section 3.05(a), from
a Mortgage Loan Combination Custodial Account pursuant to Section 3.04 or from a
Servicing Account pursuant to Section 3.03(a)(ii), the Master Servicer, the
Special Servicer and the Trustee shall each be entitled to receive, first out of
any Penalty Charges with respect to the related Mortgage Loan or REO Mortgage
Loan, and then out of any other amounts then on deposit in the Collection
Account, interest at the Reimbursement Rate in effect from time to time, accrued
on the amount of such Servicing Advance from and including the date made to, but
not including, the date of reimbursement; provided that any such interest with
respect to any Servicing Advances made or deemed made with respect to any
related B Loan or any successor REO B Loan with respect thereto that is not so
payable out of related Penalty Charges, shall be payable, after such Servicing
Advance is reimbursed, out of any other collections on such Mortgage Loan or REO
Mortgage Loan, as the case may be, on deposit in the Mortgage Loan Combination
Custodial Account (but in no event out of the Trust Fund) (except that this
provision is in no way intended to limit any rights that the Master Servicer,
the Special Servicer or the Trustee may have to receive payment for such
interest on such Servicing Advances from the related B Loan Holder under the
related Intercreditor Agreement); and provided, further, that any such interest
earned on any Servicing Advances made with respect to either Mortgage Loan of a
Mortgage Loan Combination or with respect to any REO Property related to a
Mortgage Loan Combination shall be payable out of the related Mortgage Loan
Combination Custodial Account, to the maximum extent permitted by the related
Intercreditor Agreement, before being paid out of general collections on the
Mortgage Pool on deposit in the Collection Account; and provided, further, that
the Master Servicer shall not be entitled to interest on any Servicing Advance
made thereby to the extent a payment that may be applied to reimburse such
Servicing advance is received but is being held by or on behalf of the Master
Servicer in suspense. The Master Servicer shall reimburse itself, the Special
Servicer or the Trustee, as the case may be, for any outstanding Servicing
Advance made by the Master Servicer, the Special Servicer or the Trustee as soon
as practically possible after funds available for such purpose are deposited in
the Collection Account or, if applicable, the related Mortgage Loan Combination
Custodial Account; provided that, upon a determination that a previously made
Servicing Advance is a Nonrecoverable Servicing Advance with respect to any
Trust Mortgage Loan or REO Trust Mortgage Loan the Master Servicer may reimburse
itself, the Special Servicer or the Trustee, as applicable, immediately from
general collections in the Collection Account (such reimbursement to be deemed
made first out of amounts distributable as principal). Notwithstanding the
foregoing, instead of obtaining reimbursement out of general collections on the
Mortgage Pool immediately, if and to the extent that there are insufficient
amounts that would otherwise be distributable as principal to fully reimburse
such Nonrecoverable Servicing Advance, the Master Servicer, the Special Servicer
or the Trustee, as applicable, may, in its sole discretion, elect to obtain
reimbursement for such Nonrecoverable Servicing Advance over a period of time
(not to exceed 12 months), with interest thereon at the Reimbursement Rate
(except that at any time after such a determination to obtain reimbursement over
time in accordance with this proviso, the Master Servicer, the Special Servicer
or the Trustee, as applicable, may, in its sole discretion, decide to obtain
reimbursement from general collections on the Mortgage Pool immediately),
provided, however, that the Master Servicer, the Special Servicer or the
Trustee, as applicable, must reimburse itself to the extent of funds in the
Collection Account otherwise distributable as principal. The fact that a
decision to recover any Nonrecoverable Servicing Advance over time, or not to do
so, benefits some Classes of Certificateholders to the detriment of other
Classes shall not constitute a violation of the Servicing Standard by the Master
Servicer or the Special Servicer or a breach of any fiduciary duty owed to the
Certificateholders by the Trustee, or a breach of any other contractual
obligation owed to the Certificateholders by any party to this Agreement.
(e) To the extent an operations and maintenance plan is required to
be established and executed pursuant to the terms of a Trust Mortgage Loan, the
Master Servicer or, with respect to Specially Serviced Trust Mortgage Loans, the
Special Servicer shall request from the Borrower written confirmation thereof
within a reasonable time after the later of the Closing Date and the date as of
which such plan is required to be established or completed. To the extent any
repairs, capital improvements, actions or remediations are required to have been
taken or completed pursuant to the terms of the Trust Mortgage Loan, the Master
Servicer or, with respect to Specially Serviced Trust Mortgage Loans, the
Special Servicer shall request from the Borrower written confirmation of such
actions and remediations within a reasonable time after the later of the Closing
Date and the date as of which such action or remediations are required to be or
to have been taken or completed. To the extent a Borrower fails to promptly
respond to any inquiry described in this Section 3.03(e), the Master Servicer
(with respect to Trust Mortgage Loans that are not Specially Serviced Trust
Mortgage Loans) shall determine whether the related Borrower has failed to
perform its obligations under the subject Trust Mortgage Loan and report any
such failure to the Special Servicer within a reasonable time after the date as
of which such operations and maintenance plan is required to be established or
executed or the date as of which such actions or remediations are required to be
or to have been taken or completed.
Section 3.04 The Collection Account, Distribution Account, Excess
Interest Distribution Account, Excess Liquidation Proceeds Account and Mortgage
Loan Combination Custodial Accounts
(a) The Master Servicer shall establish and maintain, or cause to be
established and maintained, the Collection Account, into which the Master
Servicer shall deposit or cause to be deposited on a daily basis (and, subject
to Section 3.04(e), in no event later than the Business Day following receipt of
available funds), except as otherwise specifically provided herein, the
following payments and collections received after the Cut-off Date (other than
payments of principal and interest on the Trust Mortgage Loans due and payable
on or before the Cut-off Date, and other than payments deposited into the
Mortgage Loan Combination Custodial Account pursuant to Section 3.04(e)) and
payments (other than Principal Prepayments) received by it on or prior to the
Cut-off Date but allocable to a period subsequent thereto:
(i) all payments (from whatever source) on account of principal,
including Principal Prepayments, on the Trust Mortgage Loans (including
from a debt service reserve account or any party exercising cure rights);
and
(ii) all payments (from whatever source) on account of interest,
including Default Interest and Excess Interest, Yield Maintenance Charges,
Static Prepayment Premiums and late payment charges on the Trust Mortgage
Loans (including from a debt service reserve account or any party
exercising cure rights); and
(iii) all Insurance and Condemnation Proceeds and Liquidation
Proceeds received in respect of any Trust Mortgage Loan (other than
Liquidation Proceeds that are to be deposited in the Distribution Account
or the Excess Interest Distribution Account) together with any amounts
representing recoveries of Workout-Delayed Reimbursement Amounts or
Nonrecoverable Advances in respect of the related Trust Mortgage Loans;
and
(iv) any amounts required to be transferred to the Collection
Account from the REO Account pursuant to Section 3.16(c) or from a
Mortgage Loan Combination Custodial Account pursuant to Section 3.04(e);
and
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses incurred with respect
to Permitted Investments of funds held in the Collection Account; and
(vi) any amounts required to be deposited by the Master Servicer or
the Special Servicer pursuant to Section 3.07(b) in connection with losses
resulting from a deductible clause in a blanket hazard policy or master
single interest policy; and
(vii) any amounts paid by any Junior Loan Holder or Mezzanine Loan
Holder in respect of the related A Loan in connection with any cure or
purchase option exercised pursuant to the terms of the related
Intercreditor Agreement, or paid or reimbursed from the related Mortgage
Loan Combination Custodial Account or by such Junior Loan Holder pursuant
to Section 3.05.
The foregoing requirements for deposit by the Master Servicer in the
Collection Account shall be exclusive, it being understood and agreed that
actual payments from Borrowers in the nature of Escrow Payments, charges for
beneficiary statements or demands, assumption fees, modification fees, extension
fees, amounts collected for Borrower checks returned for insufficient funds or
other amounts that the Master Servicer or the Special Servicer is entitled to
retain as additional servicing compensation pursuant to Section 3.11 need not be
deposited by the Master Servicer in the Collection Account. If the Master
Servicer shall deposit in the Collection Account any amount not required to be
deposited therein, then (notwithstanding anything herein to the contrary) it may
at any time withdraw such amount from the Collection Account.
Within one Business Day of receipt of any of the amounts described
in clauses (i)-(iii) of the second preceding paragraph with respect to any
Specially Serviced Trust Mortgage Loan, the Special Servicer shall remit such
amounts to the Master Servicer for deposit into the Collection Account in
accordance with the second preceding paragraph (or, if such Specially Serviced
Trust Mortgage Loan is part of a Mortgage Loan Combination, into the related
Mortgage Loan Combination Custodial Account in accordance with Section 3.04(e)).
Any amounts received by the Special Servicer with respect to an REO Property
shall be deposited into the REO Account and remitted to the Master Servicer for
deposit into the Collection Account (or, if such REO Property relates to a
Mortgage Loan Combination, into the related Mortgage Loan Combination Custodial
Account) pursuant to Section 3.16(c).
(b) The Trustee shall establish and maintain the Distribution
Account in trust for the benefit of the Certificateholders. The Trustee shall
make deposits in and withdrawals from the Distribution Account in accordance
with the terms of this Agreement. The Master Servicer shall deliver to the
Trustee each month on or before 1:00 p.m., New York City time, on the Master
Servicer Remittance Date, for deposit in the REMIC I Distribution Account, that
portion of the Available Distribution Amount (calculated without regard to
clauses (a)(iv), (a)(vii), (d), (e), (f) and (g) of the definition thereof) for
the related Distribution Date then on deposit in the Collection Account
maintained by the Master Servicer.
Subject to Section 3.05, the Master Servicer (or, in the case of
clause (iv) below, the Master Servicer or the Special Servicer, as applicable),
shall, as and when required hereunder, deliver to the Trustee for deposit in the
REMIC I Distribution Account:
(i) any P&I Advances required to be made by the Master Servicer in
accordance with Section 4.03 (or, if the Trustee succeeds to the Master
Servicer's obligations hereunder, Section 7.05) with respect to the
Mortgage Pool;
(ii) any Liquidation Proceeds paid by the Master Servicer in
connection with the purchase of all of the Trust Mortgage Loans and the
Trust's interest in any REO Properties in the Trust Fund pursuant to
Section 9.01 (exclusive of that portion thereof required to be deposited
in the Collection Account or the Excess Interest Distribution Account, or
remitted to a B Loan Holder, pursuant to Section 9.01);
(iii) any Yield Maintenance Charges on the Trust Mortgage Loans and
REO Trust Mortgage Loans;
(iv) any payments required to be made by the Master Servicer
pursuant to Section 3.02(c); and
(v) any other amounts required to be so delivered by the Master
Servicer for deposit in the Distribution Account pursuant to any provision
of this Agreement.
The Trustee shall, upon receipt, deposit in the Distribution Account
any and all amounts received by the Trustee that are required by the terms of
this Agreement to be deposited therein (including the withdrawal amount from the
Interest Reserve Account pursuant to Section 3.28(b) and such amount from the
Excess Liquidation Proceeds Account as required pursuant to Section 3.04(d)) and
any amounts required to be deposited by the Trustee pursuant to Section 3.06 in
connection with losses incurred with respect to Permitted Investments of funds
held in the Distribution Account.
(c) Prior to the Master Servicer Remittance Date relating to any
Collection Period in which Excess Interest is received on any ARD Trust Mortgage
Loan, the Trustee shall establish and maintain the Excess Interest Distribution
Account in the name of the Trustee for the benefit of the Holders of the Class
V-1 Certificates. The Excess Interest Distribution Account shall be established
and maintained as an Eligible Account or, subject to Section 3.04(h), a
subaccount of an Eligible Account. On or before each Master Servicer Remittance
Date, the Master Servicer shall remit to the Trustee for deposit in the Excess
Interest Distribution Account an amount equal to the Excess Interest received on
the respective ARD Trust Mortgage Loans (or any successor REO Trust Mortgage
Loans with respect thereto) during the related Collection Period. On each
Distribution Date, the Trustee shall withdraw the Excess Interest on deposit
therein from the Excess Interest Distribution Account for distribution pursuant
to Section 4.01(e). On each Distribution Date, the Trustee shall deposit any Net
Investment Loss into the Excess Interest Distribution Account and shall be
permitted to withdraw any Net Investment Earnings from the Excess Interest
Distribution Account. Following the distribution of Excess Interest to Holders
of the Class V-1 Certificates on the first Distribution Date after which no ARD
Trust Mortgage Loan and no successor REO Trust Mortgage Loan with respect to an
ARD Trust Mortgage Loan remains part of the Mortgage Pool, the Trustee shall
terminate the Excess Interest Distribution Account.
(d) If any Excess Liquidation Proceeds are received, the Trustee
shall establish and maintain one or more accounts (collectively, the "Excess
Liquidation Proceeds Account") to be held in trust for the benefit of the
Certificateholders. Each account that constitutes the Excess Liquidation
Proceeds Account shall be an Eligible Account and, subject to Section 3.04(h),
may be a sub-account of the same Eligible Account as the Distribution Account.
By 1:00 p.m., New York City time, on each Master Servicer Remittance Date, the
Master Servicer shall withdraw from the Collection Account and remit to the
Trustee for deposit in the Excess Liquidation Proceeds Account all Excess
Liquidation Proceeds received during the Collection Period ending on the
Determination Date immediately prior to such Master Servicer Remittance Date. If
any Excess Liquidation Proceeds received by the Master Servicer during any
Collection Period relate to any Junior Loan, such amount shall be deposited in
the applicable Mortgage Loan Combination Custodial Account.
On the Business Day prior to each Distribution Date, the Trustee
shall withdraw from the Excess Liquidation Proceeds Account and deposit in the
Distribution Account, for distribution on such Distribution Date, an amount
equal to the lesser of (i) the entire amount, if any, then on deposit in the
Excess Liquidation Proceeds Account and (ii) the excess, if any, of the
aggregate amount distributable with respect to the Regular Certificates on such
Distribution Date pursuant to Sections 4.01(a) and 4.01(b), over the Available
Distribution Amount for such Distribution Date (calculated without regard to
such transfer from the Excess Liquidation Proceeds Account to the Distribution
Account); provided that on the Business Day prior to the Final Distribution
Date, the Trustee shall withdraw from the Excess Liquidation Proceeds Account
and deposit in the Distribution Account, for distribution on such Distribution
Date, any and all amounts then on deposit in the Excess Liquidation Proceeds
Account. On the Business Day prior to each Distribution Date, the Trustee shall
deposit any Net Investment Loss into the Excess Liquidation Proceeds Account and
shall be permitted to withdraw any Net Investment Earnings from the Excess
Liquidation Proceeds Account.
(e) With respect to a CBA B Loan from and after the date, if any, on
which any CBA A/B Material Default occurs and is continuing with respect to the
subject CBA A/B Mortgage Loan Combination (and, as a result, such CBA B Loan is
being serviced hereunder), or if the Mortgaged Property securing the subject CBA
A/B Mortgage Loan Combination has become an REO Property, and with respect to
the Andover House Apartments B Loan from and after the Closing Date, the Master
Servicer shall establish and maintain, or cause to be established and
maintained, a Mortgage Loan Combination Custodial Account, into which the Master
Servicer shall promptly deposit or cause to be deposited (in no event later than
the Business Day following the receipt of available funds) (or shall transfer
from collections with respect to the related Mortgage Loan Combination on
deposit in the Collection Account maintained by the Master Servicer if any such
amounts were deposited in such account in error), except as otherwise
specifically provided herein, the following payments and collections on the
applicable Mortgage Loan Combination received after the Cut-off Date (other than
payments of principal and interest due and payable on or before the Cut-off
Date) and the following payments and collections (other than Principal
Prepayments) received on the applicable Mortgage Loan Combination by the Master
Servicer on or prior to the Cut-off Date but allocable to a period subsequent
thereto:
(i) all payments or transfers (from whatever source) on account of
principal, including Principal Prepayments, on such Mortgage Loan
Combination (including from a debt service reserve account or any party
exercising cure rights); and
(ii) all payments (from whatever source) on account of interest,
including Default Interest and Excess Interest, Yield Maintenance Charges
and late payment charges on such Mortgage Loan Combination (including from
a debt service reserve account or any party exercising cure rights); and
(iii) all Insurance and Condemnation Proceeds received in respect of
such Mortgage Loan Combination, together with any amounts representing
recoveries of Workout-Delayed Reimbursement Amounts or Nonrecoverable
Advances in respect of the related Mortgage Loan Combination; and
(iv) all Liquidation Proceeds of the type described in clauses (i)
and (ii) of the definition of Liquidation Proceeds; and
(v) any amounts required to be transferred to such Mortgage Loan
Combination Custodial Account from the REO Account pursuant to Section
3.16(c);
(vi) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.06 in connection with losses incurred with respect
to Permitted Investments of funds held in such Mortgage Loan Combination
Custodial Account; and
(vii) any amounts required to be deposited by the Master Servicer or
the Special Servicer pursuant to Section 3.07(b) in connection with losses
on such Mortgage Loan Combination resulting from a deductible clause in a
blanket hazard policy or master single interest policy; and
(viii) any amounts paid by the holder of any A Loan or any Mezzanine
Loan Holder in connection with any purchase option exercised pursuant to
the terms of the related Intercreditor Agreement, that are distributable
to the related Junior Loan Holder.
The foregoing requirements for deposit by the Master Servicer in a
Mortgage Loan Combination Custodial Account shall be exclusive, it being
understood and agreed that actual payments from a Borrower in the nature of
Escrow Payments, charges for beneficiary statements or demands, assumption fees,
modification fees, extension fees, amounts collected for Borrower checks
returned for insufficient funds or other amounts that the Master Servicer or the
Special Servicer is entitled to retain as additional servicing compensation
pursuant to Section 3.11 need not be deposited by the Master Servicer in such
Mortgage Loan Combination Custodial Account. If the Master Servicer shall
deposit in any Mortgage Loan Combination Custodial Account any amount not
required to be deposited therein, then (notwithstanding anything herein to the
contrary) it may at any time withdraw such amount from such Mortgage Loan
Combination Custodial Account.
Within one Business Day of receipt of any of the amounts described
in clauses (i)-(iv) of the second preceding paragraph with respect to any
Specially Serviced Mortgage Loan that is part of a Mortgage Loan Combination
during the period that the related B Loan is being serviced hereunder, the
Special Servicer shall remit such amounts to the Master Servicer for deposit in
the related Mortgage Loan Combination Custodial Account pursuant to the second
preceding paragraph. Any amounts received by the Special Servicer with respect
to an REO Property that relates to a Mortgage Loan Combination shall be
deposited into the REO Account and remitted to the Master Servicer for deposit
into the related Mortgage Loan Combination Custodial Account pursuant to Section
3.16(c).
With respect to a CBA B Loan from and after the date, if any, on
which any CBA A/B Material Default occurs and is continuing with respect to the
subject CBA A/B Mortgage Loan Combination (and, as a result, such CBA B Loan is
being serviced hereunder), or if the Mortgaged Property securing the subject CBA
A/B Mortgage Loan Combination has become an REO Property, and with respect to
the Andover House Apartments B Loan from and after the Closing Date, the Master
Servicer shall, as and when required pursuant to the related Intercreditor
Agreement and Section 3.05(a) (and in any event no later than the Master
Servicer Remittance Date), withdraw from the related Mortgage Loan Combination
Custodial Account and pay to the applicable parties hereunder such amounts as is
permitted under the related Intercreditor Agreement and this Agreement for
purposes of the reimbursement of Advances, the payment of interest on Advances,
the payment of Master Servicing Fees, Primary Servicing Fees, Special Servicing
Fees, Workout Fees and Liquidation Fees and the payment of any other servicing
expenses and fees relating to the subject Mortgage Loan Combination or any
related REO Property and, further, pay to the Trust, as "A Note Holder" under
the related Intercreditor Agreement, and to the B Loan Holder all amounts to
which each of them is entitled in respect of the subject A Loan and B Loan,
respectively, in accordance with the related Intercreditor Agreement. The
foregoing payments shall be made in accordance with the priorities set forth in
the related Intercreditor Agreement. Payments to the Trust shall be made by
transfer of the applicable funds to the Collection Account, and payments to the
B Loan Holder shall be made in accordance with the related Intercreditor
Agreement.
The Master Servicer may pay itself monthly any Net Investment
Earnings with respect to a Mortgage Loan Combination Custodial Account.
(f) [Reserved]
(g) Funds on deposit in the Collection Account and any Mortgage Loan
Combination Custodial Account may be invested only in Permitted Investments in
accordance with the provisions of Section 3.06. Funds on deposit in the
Distribution Account, the Excess Interest Distribution Account and the Excess
Liquidation Proceeds Account may be invested only in Permitted Investments in
accordance with the provisions of Section 3.06. The Master Servicer shall give
notice to the Trustee, the Special Servicer, the Rating Agencies and the
Depositor of the location of the Collection Account and any Mortgage Loan
Combination Custodial Account prior to any change thereof. As of the Closing
Date (or the date such account is established, if later), the Distribution
Account, the Excess Liquidation Proceeds Account and the Excess Interest
Distribution Account shall be located at the offices of the Trustee. The Trustee
shall give notice to the Master Servicer and the Depositor of any new location
of the Distribution Account, the Excess Liquidation Proceeds Account or the
Excess Interest Distribution Account, prior to any change thereof.
(h) Notwithstanding the foregoing or any other provision to the
contrary in this Agreement, the Master Servicer may maintain the Collection
Account and the respective Mortgage Loan Combination Custodial Accounts as
multiple separate sub-accounts of a single Eligible Account; provided that: (i)
all deposits into and withdrawals from such single Eligible Account shall be
made in the same manner as would be the case if the Collection Account and the
respective Mortgage Loan Combination Custodial Accounts were maintained as
multiple separate accounts; (ii) all distributions on the Certificates will be
calculated and made in the same manner as would be the case if the Collection
Account and the respective Mortgage Loan Combination Custodial Accounts were
maintained as multiple separate accounts; (iii) the Master Servicer shall make
credits and debits to those multiple sub-accounts in a manner consistent with
the provisions of this Agreement governing deposits and withdrawals of funds to
and from the Collection Account and the respective Mortgage Loan Combination
Custodial Accounts, respectively; (iv) the Master Servicer's maintaining the
Collection Account and the respective Mortgage Loan Combination Custodial
Accounts as multiple separate sub-accounts of a single Eligible Account (as
opposed to in the form of multiple separate Eligible Accounts) shall not
materially and adversely affect any of the Certificateholders or any B Loan
Holder; and (v) such single Eligible Account shall be entitled substantially as
follows: "Wachovia Bank, National Association, as Master Servicer, in trust for
Xxxxx Fargo Bank, N.A., as Trustee, on behalf of Holders of Credit Suisse First
Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates,
Series 2006-C2, and the respective B Loan Holders, as their interests may
appear, Collection/Custodial Account."
Also notwithstanding the foregoing or any other provision to the
contrary in this Agreement, the Trustee may maintain the Distribution Account,
the Excess Interest Distribution Account, the Interest Reserve Account and the
Excess Liquidation Proceeds Account as five separate subaccounts of a single
Eligible Account; provided that: (i) all deposits into and withdrawals from such
single Eligible Account shall be made in the same manner as would be the case if
the Distribution Account, the Excess Interest Distribution Account, the Interest
Reserve Account and the Excess Liquidation Proceeds Account were maintained as
five separate accounts; (ii) all distributions on the Certificates will be
calculated and made in the same manner as would be the case if the Distribution
Account, the Excess Interest Distribution Account, the Interest Reserve Account
and the Excess Liquidation Proceeds Account were maintained as five separate
accounts; (iii) the Trustee shall make debits and credits to those five
subaccounts in a manner consistent with the provisions of this Agreement
governing transfers of funds between the Distribution Account, the Excess
Interest Distribution Account, the Interest Reserve Account and the Excess
Liquidation Proceeds Account, as the case may be; (iv) the Trustee's maintaining
the Distribution Account, the Excess Interest Distribution Account, the Interest
Reserve Account and the Excess Liquidation Proceeds Account as five separate
subaccounts of a single Eligible Account (as opposed to in the form of four
separate Eligible Accounts) shall not materially and adversely affect any of the
Certificateholders; and (v) such single Eligible Account shall be entitled
"Xxxxx Fargo Bank, N.A., as Trustee, in trust for the registered holders of
Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2006-C2, Distribution Account, Excess Interest
Distribution Account, Interest Reserve Account and Excess Liquidation Proceeds
Account." The subaccount maintained for the Distribution Account shall be
further subdivided into the REMIC I Distribution Account and the REMIC II
Distribution Account, and deposits into and withdrawals from such accounts shall
be made or deemed made as provided in this Agreement.
Section 3.05 Permitted Withdrawals from the Collection Account and
the Distribution Account
(a) Subject to the provisions of this Section 3.05(a), the Master
Servicer may, from time to time, make withdrawals from the Collection Account
maintained by it for any of the following purposes (the order set forth below
not constituting an order of priority for such withdrawals):
(i) to remit to the Trustee for deposit in the REMIC I Distribution
Account the amount required to be remitted pursuant to the first paragraph
of Section 3.04(b) and clause (iii) of the second paragraph of Section
3.04(b) and the amount to be applied to make P&I Advances by the Master
Servicer pursuant to Section 4.03(a);
(ii) to remit to the Trustee for deposit in the Excess Interest
Distribution Account any Excess Interest on the ARD Trust Mortgage Loans
and any successor REO Trust Mortgage Loans with respect thereto pursuant
to Section 3.04(c);
(iii) to pay (x) to itself or the holder of the Excess Servicing
Strip (subject to Section 3.11(a)), unpaid Master Servicing Fees and any
Primary Servicing Fees to which it or such holder is entitled pursuant to
Section 3.11(a) in respect of each Mortgage Loan and REO Mortgage Loan,
(y) to any Primary Servicer entitled thereto, the related Primary
Servicing Fee (the Master Servicer's rights, any Primary Servicer's
rights, the rights of any other holder of the Excess Servicing Strip to
payment pursuant to this clause (iii) with respect to any Trust Mortgage
Loan, REO Trust Mortgage Loan or B Loan, as applicable, being limited to
amounts received on or in respect of such Trust Mortgage Loan or B Loan
(whether in the form of payments, Liquidation Proceeds or Insurance and
Condemnation Proceeds), or such REO Trust Mortgage Loan (whether in the
form of REO Revenues, Liquidation Proceeds or Insurance and Condemnation
Proceeds) that are allocable as a recovery of interest thereon), and (z)
to the Special Servicer, unpaid Special Servicing Fees to which it is
entitled in accordance with Section 3.11(b) (first out of collections on
the related Mortgage Loan, REO Proceeds or Liquidation Proceeds and then
from general collections) in respect of each Specially Serviced Trust
Mortgage Loan, REO Trust Mortgage Loan and, to the extent set forth in the
related Intercreditor Agreement, each B Loan, as applicable;
(iv) to reimburse itself or the Trustee, as applicable, for
xxxxxxxxxxxx X&X Advances (to the extent not previously reimbursed in the
form of a Cure Payment from any Junior Loan Holder), the Master Servicer's
or the Trustee's right to receive payment pursuant to this clause (iv)
being limited to amounts received which represent Late Collections of
interest (net of the related Master Servicing Fees and Primary Servicing
Fees) on and principal of the particular Trust Mortgage Loans and REO
Trust Mortgage Loans with respect to which such P&I Advances were made;
provided, however, that if such P&I Advance becomes a Workout-Delayed
Reimbursement Amount, then such P&I Advance shall thereafter be reimbursed
from the portion of general collections and recoveries on or in respect of
the Trust Mortgage Loans and REO Properties on deposit in the Collection
Account from time to time that represent collections or recoveries of
principal to the extent provided in clause (vi) below, first from such
amounts that are allocated to the Loan Group to which such Trust Mortgage
Loan belongs and second from such amounts that are allocated to the other
Loan Group;
(v) to reimburse itself, the Special Servicer or the Trustee, as
applicable, for unreimbursed Servicing Advances, the Master Servicer's,
the Special Servicer's or the Trustee's respective rights to receive
payment pursuant to this clause (v) with respect to any Mortgage Loan or
REO Property being limited to, as applicable, related payments,
Liquidation Proceeds, Insurance and Condemnation Proceeds and REO
Revenues); provided, however, that if such Servicing Advance becomes a
Workout-Delayed Reimbursement Amount, then such Servicing Advance shall
thereafter be reimbursed from the portion of general collections and
recoveries on or in respect of the Mortgage Loans and REO Properties on
deposit in the Collection Account from time to time that represent
collections or recoveries of principal to the extent provided in clause
(vi) below, first from such amounts that are allocated to the Loan Group
to which such Mortgage Loan belongs and second from such amounts that are
allocated to the other Loan Group;
(vi) to reimburse itself, the Special Servicer or the Trustee, as
applicable, for (A) Nonrecoverable Advances, first out of Late
Collections, REO Revenues, Liquidation Proceeds and Insurance and
Condemnation Proceeds received on the related Mortgage Loan, then out of
the principal portion of general collections on the Mortgage Loans and REO
Properties, first from such amounts that are allocated to the Loan Group
to which such Mortgage Loan belongs and second from such amounts that are
allocated to the other Loan Group and, to the extent the principal portion
of general collections is insufficient and with respect to such excess
only, subject to any exercise of the sole option of the Master Servicer,
the Special Servicer or the Trustee to defer reimbursement thereof
pursuant to Section 3.03(d) or 4.03(d), as applicable, out of other
collections on the Mortgage Loans and REO Properties and (B)
Workout-Delayed Reimbursement Amounts, out of the principal portion of the
general collections on the Mortgage Loans and REO Properties, net of such
amounts being reimbursed pursuant to (A) above, first from such amounts
that are allocated to the Loan Group to which such Mortgage Loan belongs
and second from such amounts that are allocated to the other Loan Group;
(vii) at such time as it reimburses itself, the Special Servicer or
the Trustee, as applicable, for (a) any xxxxxxxxxxxx X&X Advance pursuant
to clause (iv) above (including, pursuant to clause (vi) above, any such
P&I Advance that constitutes a Workout-Delayed Reimbursement Amount), to
pay itself or the Trustee, as applicable, any Advance Interest accrued and
payable thereon in accordance with Section 4.03(d), (b) any unreimbursed
Servicing Advances pursuant to clause (v) above (including, pursuant to
clause (vi) above, any such Servicing Advance that constitutes a
Workout-Delayed Reimbursement Amount) or pursuant to Section 3.03(a)(ii),
to pay itself, the Special Servicer or the Trustee, as the case may be,
any Advance Interest accrued and payable thereon in accordance with
Section 3.03(d) or (c) any Nonrecoverable Advances pursuant to clause (vi)
above, to pay itself, the Special Servicer or the Trustee, as the case may
be, any Advance Interest accrued and payable thereon (all such Advance
Interest to be payable first out of Penalty Charges on the related
Mortgage Loan or REO Mortgage Loan and then out of general collections on
the Mortgage Loans and REO Properties; provided, that Advance Interest
accrued and payable on any Workout-Delayed Reimbursement Amount as set
forth in subclause (a) or (b) above shall be solely reimbursable from the
principal portion of general collections, net of any amount used to
reimburse any Nonrecoverable Advance and Advance Interest thereon);
(viii) to pay the Special Servicer (or, if applicable, any
predecessor thereto) earned and unpaid Workout Fees and Liquidation Fees
with respect to any Specially Serviced Mortgage Loan or REO Mortgage Loan
to which it is entitled pursuant to, and from the sources contemplated by,
Section 3.11(b), the Liquidation Fee payable out of related full, partial
or discounted payoffs, REO Revenues and Liquidation Proceeds, and the
Workout Fees payable out of collections on the related Mortgage Loan;
(ix) to reimburse itself, the Special Servicer, the Depositor or the
Trustee, as the case may be, for any unreimbursed expenses reasonably
incurred by such Person in respect of any Breach or Defect relating to a
Trust Mortgage Loan and giving rise to a repurchase obligation of any
Mortgage Loan Seller under Section 7 of the Mortgage Loan Purchase
Agreement, including, any expenses arising out of the enforcement of the
repurchase obligation, each such Person's right to reimbursement pursuant
to this clause (ix) with respect to any Trust Mortgage Loan being limited
to that portion of the Purchase Price paid for such Trust Mortgage Loan
that represents such expense in accordance with clause (v) of the
definition of Purchase Price;
(x) subject to Section 2.03(b), to reimburse itself, the Trustee or
the Special Servicer, as the case may be, first out of Liquidation
Proceeds and Insurance and Condemnation Proceeds with respect to the
subject Mortgage Loan and then out of general collections on the Trust
Mortgage Loans and REO Properties, for any unreimbursed expense reasonably
incurred by such Person relating to a Trust Mortgage Loan in connection
with the enforcement of the Mortgage Loan Seller's obligations under
Section 7 of the Mortgage Loan Purchase Agreement, but only to the extent
that such expenses are not reimbursable pursuant to clause (ix) above or
otherwise;
(xi) to pay itself, as additional master servicing compensation all
amounts relating to the Mortgage Pool specified in Section 3.11(a); and to
pay the Special Servicer, as additional special servicing compensation all
amounts relating to the Mortgage Pool specified in Section 3.11(b);
(xii) to recoup any amounts deposited in the Collection Account
maintained by the Master Servicer in error;
(xiii) to pay itself, the Special Servicer, the Trustee, the
Depositor or any of their respective affiliates, directors, officers,
shareholders, members, managers, partners, employees and agents (including
any Primary Servicer), as the case may be, any amounts payable to any such
Person out of the Collection Account pursuant to Sections 6.03(a) or
6.03(b);
(xiv) to pay for (A) the cost of any Opinion of Counsel contemplated
by Sections 11.01(a) or 11.01(c) in connection with an amendment to this
Agreement requested by the Trustee, the Special Servicer or the Master
Servicer, which amendment is in furtherance of the rights and interests of
Certificateholders, (B) the cost of obtaining the REO Extension
contemplated by Section 3.16(a) (the amounts contemplated by this clause
may be paid from the Collection Account), (C) any reasonable out-of-pocket
cost or expense (including the reasonable fees of tax accountants and
attorneys) incurred by the Trustee pursuant to Section 3.17(a)(iii) in
connection with providing advice to the Special Servicer with respect to
any REO Property (except to the extent that the subject expense relates to
any B Loan or any successor REO B Loan with respect thereto), and (D) to
the extent not otherwise advanced by the Master Servicer, any fees and/or
expenses payable or reimbursable, as the case may be, in accordance with
Section 3.18, to the Master Servicer, the Trustee or an Independent third
party for confirming, in accordance with such Section 3.18(b), a Fair
Value determination made with respect to any Defaulted Trust Mortgage
Loan;
(xv) to pay itself, the Special Servicer, the Trustee or the
Depositor, as the case may be, any amount related to the Mortgage Loans
and/or REO Properties that is specifically required to be paid to such
Person at the expense of the Trust Fund under any provision of this
Agreement, including pursuant to any indemnification of such party
hereunder, and to which reference is not made in any other clause of this
Section 3.05(a), it being acknowledged that this clause (xv) shall not be
construed to modify any limitation otherwise set forth in this Agreement
on the time at which any Person is entitled to payment or reimbursement of
any amount or the funds from which any such payment or reimbursement is
permitted to be made;
(xvi) to pay, in accordance with Section 3.03(c), out of general
collections on the Mortgage Loans and any REO Properties, certain
servicing expenses related to the Mortgage Loans and REO Properties that
would, if advanced, constitute Nonrecoverable Servicing Advances;
(xvii) to pay itself, the Special Servicer, the Mortgage Loan
Seller, any Junior Loan Holder or any other particular Person, as the case
may be, with respect to each Mortgage Loan, if any, previously purchased
by such Person pursuant to this Agreement, all amounts received thereon
subsequent to the date of purchase;
(xviii) to pay for the cost of any environmental testing performed
at the Special Servicer's direction pursuant to the last sentence of
Section 3.09(c) and to pay for the cost of any remedial actions taken in
accordance with Section 3.09(c) to address actual or potential adverse
environmental conditions;
(xix) to transfer to the related Mortgage Loan Combination Custodial
Account or pay any amounts payable by the holder of the related A Loan to
any B Loan Holder under the related Intercreditor Agreement;
(xx) to remit any Excess Liquidation Proceeds to the Trustee for
deposit in the Excess Liquidation Proceeds Account in accordance with
Section 3.04(d); and
(xxi) to clear and terminate the Collection Account at the
termination of this Agreement pursuant to Section 9.01;
provided, however, that, in the case of the Andover House Apartments Total Loan:
(A) no Primary Servicing Fees, Workout Fees and
Liquidation Fees earned and other items that constitute
"Costs" (other than Special Servicing Fees and related
Nonrecoverable Servicing Advances or Workout-Delayed
Reimbursement Amounts made or paid hereunder and interest
thereon) under the Andover House Apartments Intercreditor
Agreement attributable to the Andover House Apartments Junior
Loan or any successor REO Loan with respect thereto shall in
any event be paid out of payments and other collections on the
Trust Mortgage Loans and/or any successor REO Loans with
respect thereto, and no Special Servicing Fees earned on the
Andover House Apartments Junior Loan or any successor REO
Loans with respect thereto shall in any event be paid out of
payments or other collections on the Mortgage Loans (exclusive
of the Andover House Apartments Total Loan) and/or any
successor REO Loans with respect thereto; and
(B) no fees, costs or expenses allocable to the Trust Mortgage
Loans, any successor REO Loans with respect thereto, or any
particular such Trust Mortgage Loan or REO Loan (exclusive of the
Andover House Apartments Loan or any successor REO Loan with respect
thereto) shall be paid out of payments and other collections on, or
amounts otherwise payable to the holders of, the Andover House
Apartments Junior Loan or any successor REO Loan with respect
thereto; and
provided, however, that, in the case of the CBA A/B Mortgage Loan Combination:
(A) to the maximum extent permitted by the related CBA A/B
Intercreditor Agreement, Special Servicing Fees, Workout Fees,
Liquidation Fees, and all other servicing costs and expenses
relating to such CBA A/B Mortgage Loan Combination or any related
REO Property shall be paid or reimbursed, as applicable, out of
amounts otherwise payable to the holder of the related CBA B Loan or
any successor REO Mortgage Loan with respect thereto; and
(B) no fees, costs or expenses, including servicing
compensation, allocable to the related CBA B Loan or any successor
REO Mortgage Loan with respect thereto (other than related Servicing
Advances (including Workout-Delayed Reimbursement Amounts), which
are otherwise payable or reimbursable, as applicable, in accordance
with this Agreement) shall be paid or reimbursed, as applicable, out
of any payments or other collections on the Mortgage Loans and/or
any successor REO Mortgage Loans with respect thereto (exclusive of
the related CBA A Loan or any successor REO Mortgage Loan with
respect thereto); and
(C) no fees, costs or expenses allocable to the Mortgage
Loans, any successor REO Mortgage Loans with respect thereto or any
particular such Mortgage Loan or REO Mortgage Loan (exclusive of the
related CBA A Loan or any successor REO Mortgage Loan with respect
thereto) shall be paid out of payments and other collections on, or
amounts otherwise payable to the holder of, the related CBA B Loan
or any successor REO Mortgage Loan with respect thereto; and
provided further, however, that in the case of any Junior Loan (to the extent
not inconsistent with the preceding provisos):
(A) the Master Servicer shall be entitled to make transfers
from time to time, from the related Mortgage Loan Combination
Custodial Account to the Collection Account, of amounts necessary
for the payments and/or reimbursements of amounts described above in
this Section 3.05(a), including the foregoing provisos, but only
insofar as the payment or reimbursement described therein arises
from or is related to the Andover House Apartments Total Loan or the
subject CBA A/B Mortgage Loan Combination, or is allocable to the
Andover House Apartments Total Loan or the subject CBA A/B Mortgage
Loan Combination, pursuant to this Agreement and, in either case, is
allocable to the related Junior Loan pursuant to the related
Intercreditor Agreement(s), and the Master Servicer shall also be
entitled to make transfers from time to time, from the related
Mortgage Loan Combination Custodial Account to the applicable
Collection Account, of amounts transferred to such related Mortgage
Loan Combination Custodial Account in error, and amounts necessary
for the clearing and termination of the related Mortgage Loan
Combination Custodial Account pursuant to Section 9.01;
(B) the Master Servicer shall on the Business Day following
receipt of payment from the related Borrower or as otherwise
required under the related Intercreditor Agreement, remit to the
related Junior Loan Holder any amounts on deposit in the related
Mortgage Loan Combination Custodial Account (net of amounts
permitted or required to be transferred therefrom as described in
clause (A) above), to the extent that such Junior Loan Holder is
entitled thereto under the related Intercreditor Agreement
(including, if applicable, by way of the operation of any provision
of the related Intercreditor Agreement(s) that entitles the holder
of such Junior Loan to reimbursement of cure payments made by it).
Expenses incurred with respect to each Mortgage Loan Combination
being serviced under this Agreement shall be allocated in accordance with the
corresponding Intercreditor Agreement(s).
If the Master Servicer is entitled to make any payment or
reimbursement described above and such payment or reimbursement relates to a
Mortgage Loan Combination, then the Master Servicer shall, if funds on deposit
in such Mortgage Loan Combination Custodial Account are insufficient therefor,
request the related Junior Loan Holder to make such payment or reimbursement to
the extent such Junior Loan Holder is obligated to make such payment or
reimbursement pursuant to the related Intercreditor Agreement. If such Junior
Loan Holder fails to make such payment or reimbursement that it is obligated to
make within three Business Days following such request, then (subject to the
provisos to the first paragraph of this Section 3.05(a)) the Master Servicer
shall be entitled to make such payment or reimbursement from the applicable
Collection Account. The Master Servicer shall use reasonable efforts to recover
any such payment or reimbursement paid out of general collections on the
Mortgage Pool from such Junior Loan Holder, and if such payment or reimbursement
is subsequently recovered from such Junior Loan Holder or from payments from the
Borrower or proceeds of the Mortgage Loan Combination Custodial Account that
would otherwise be payable to the Junior Loan Holder, to the extent that any
amounts were previously taken by the Master Servicer from general collections on
the Mortgage Pool on deposit in its Collection Account, the amount recovered (or
otherwise to be paid to the Junior Loan Holder) shall be deposited into the
Master Servicer's Collection Account and shall not be deposited into the related
Mortgage Loan Combination Custodial Account.
Subject to the provisions of Section 3.03(c), the Master Servicer
shall pay to the Special Servicer from the Master Servicer's Collection Account
on the Master Servicer Remittance Date amounts permitted to be paid to the
Special Servicer therefrom based upon an Officer's Certificate received from the
Special Servicer on the first Business Day following the immediately preceding
Determination Date describing the item and amount to which the Special Servicer
is entitled. The Master Servicer may rely conclusively on any such certificate
and shall have no duty to re-calculate the amounts stated therein. The Special
Servicer shall keep and maintain separate accounting for each Specially Serviced
Mortgage Loan and REO Property, on a loan-by-loan and property-by-property
basis, for the purpose of justifying any request thereby for withdrawal from a
Collection Account.
The Master Servicer shall keep and maintain separate accounting
records, on a loan-by-loan and property-by-property basis when appropriate, for
the purpose of justifying any withdrawal from the Collection Account and
Mortgage Loan Combination Custodial Account.
If at any time the Master Servicer (or the Trustee) determines that
the reimbursement of a Nonrecoverable Advance during a Collection Period will
exceed the full amount of the principal portion of general collections received
on the Mortgage Loans during such Collection Period, then the Master Servicer
(or the Trustee) shall use its reasonable efforts to give the Rating Agencies at
least 15 days notice prior to any reimbursement to it of Nonrecoverable Advances
from amounts in its Collection Account allocable to interest on the Mortgage
Loans unless extraordinary or unanticipated circumstances, including, without
limitation, the following, make such notice impractical (1) the Master Servicer
(or the Trustee) determines in its sole discretion that waiting 15 days after
such a notice could jeopardize the Master Servicer's (or the Trustee's) ability
to recover such Nonrecoverable Advance, (2) changed circumstances or new or
different information becomes known to the Master Servicer (or the Trustee) that
could affect or cause a determination of whether any Advance is a Nonrecoverable
Advance, whether to defer reimbursement of a Nonrecoverable Advance or the
determination in clause (1) above, or (3) the Master Servicer has not timely
received from the Trustee information requested by such Master Servicer to
consider in determining whether to defer reimbursement of a Nonrecoverable
Advance (or the Trustee has not timely received from the Master Servicer
information requested by the Trustee to consider in determining whether to defer
reimbursement of a Nonrecoverable Advance); provided, however, that, if clause
(1), (2) or (3) apply, the Master Servicer (or, if applicable, the Trustee)
shall use reasonable efforts to give Rating Agencies notice of an anticipated
reimbursement to it of Nonrecoverable Advances from amounts in its Collection
Account allocable to interest on the Mortgage Loans as soon as reasonably
practicable in such circumstances. The failure to give such notice to the Rating
Agencies shall not give rise to any liability whatsoever on the part of the
Master Servicer or Trustee, and shall not be a condition for reimbursement of a
Nonrecoverable Advance from its Collection Account.
(b) The Trustee, may, from time to time, make or be deemed to make
withdrawals from the Distribution Account for any of the following purposes:
(i) to make distributions of the Available Distribution Amount and
any Yield Maintenance Charges and/or Static Prepayment Premiums on the
Trust Mortgage Loans and REO Trust Mortgage Loans in respect of the
Uncertificated REMIC I Interests, and to the Certficateholders pursuant to
Section 4.01;
(ii) to pay the Trustee accrued but unpaid Trustee Fees;
(iii) to pay to the Trustee or any of its Affiliates, directors,
officers, employees and agents, as the case may be, any amounts payable or
reimbursable out of the Distribution Account to any such Person hereunder,
including but not limited to those pursuant to Section 6.03(a), 6.03(b),
8.05(c) or 8.05(d);
(iv) to pay for the cost of recording this Agreement;
(v) to pay for the cost of the Opinion of Counsel contemplated by
Section 11.01(c) in connection with any amendment to this Agreement
requested by the Trustee;
(vi) to pay any and all federal, state and local taxes imposed on
any of the REMIC Pools or any of their assets or transactions, together
with all incidental costs and expenses, to the extent that none of the
Depositor, the Master Servicer, the Special Servicer or the Trustee is
liable therefor;
(vii) to recoup any amounts deposited in the Distribution Account in
error;
(viii) to transfer amounts required to be transferred to the
Interest Reserve Account pursuant to Section 3.28(a);
(ix) to pay the Trustee any Net Investment Earnings on funds in the
Distribution Account pursuant to Section 3.06; and
(x) to clear and terminate the Distribution Account at the
termination of this Agreement pursuant to Section 9.01.
(c) Notwithstanding anything herein to the contrary, with respect to
any Mortgage Loan, (i) if amounts on deposit in the Collection Account and the
Distribution Account are not sufficient to pay the full amount of the Master
Servicing Fee listed in Section 3.05(a)(iii) and the Trustee Fee, then the
Trustee Fee, shall be paid in full prior to the payment of any Master Servicing
Fee payable under Section 3.05(a)(ii) and (ii) if amounts on deposit in the
Collection Account are not sufficient to reimburse the full amount of, together
with interest on, Advances listed in Sections 3.05(a)(iv), (v), (vi) and (vii),
then reimbursements shall be paid first to the Trustee and then to the Master
Servicer.
Section 3.06 Investment of Funds in the Collection Account, Mortgage
Loan Combination Custodial Accounts, Servicing Accounts, Cash Collateral
Accounts, Lock-Box Accounts, the Interest Reserve Account, Distribution Account,
Excess Liquidation Proceeds Account, Excess Interest Distribution Account and
the REO Account
(a) (i) The Master Servicer may direct any depository institution
maintaining for the Master Servicer the Collection Account, any Mortgage Loan
Combination Custodial Account, any Servicing Account, any Cash Collateral
Account and any Lock-Box Account (any of the foregoing accounts listed in this
clause (i) for purposes of this Section 3.06, a "Master Servicer Account"), (ii)
the Special Servicer may direct any depository institution maintaining the REO
Account and (iii) the Trustee may direct any depository institution maintaining
the Excess Liquidation Proceeds Account, the Excess Interest Distribution
Account, the Distribution Account and the Interest Reserve Account (any of the
foregoing accounts listed in this clause (iii) for purposes of this Section
3.06, a "Trustee Account" and any of the Master Servicer Accounts, the Trustee
Accounts and the REO Account, for purposes of this Section 3.06, an "Investment
Account"), to invest (or if such depository institution is the Master Servicer,
Special Servicer or the Trustee, as applicable, it may itself invest) the funds
held therein solely in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (A) no later than
the Business Day immediately preceding the next succeeding date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the depository institution maintaining such account is
the obligor thereon and (B) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
depository institution maintaining such account is the obligor thereon. 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
Master Servicer or Special Servicer, as applicable, on behalf of the Trustee or
in the name of the Trustee (in its capacity as such).
The Master Servicer (in the case of any Master Servicer Account) or
the Special Servicer (in the case of the REO Account), on behalf of the Trustee
(in the case of any Trustee Account) shall be the "entitlement holder," as such
term is defined in the UCC, of any Permitted Investment that is a "security
entitlement," as such term is defined in the UCC, and maintain continuous
possession of any Permitted Investment of amounts in such accounts that is
either (i) a "certificated security," as such term is defined in the UCC or (ii)
other property in which a secured party may perfect its security interest by
possession under the UCC or any other applicable law. Possession of any such
Permitted Investment by the Master Servicer or Special Servicer shall constitute
possession by the Trustee, as secured party, for purposes of Section 9-313 of
the UCC and any other applicable law. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Master Servicer (in the case of any Master Servicer Account), the
Special Servicer (in the case of the REO Account) or the Trustee (in the case of
any Trustee Account) 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 (A) all amounts then payable thereunder and (B) the amount required to
be withdrawn on such date; and
(ii) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer, Special Servicer or the Trustee, as
the case may be, that such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) Interest and investment income realized on funds and deposited
in each of the Master Servicer Accounts to the extent of the Net Investment
Earnings, if any, with respect to such account for each Collection Period shall
be for the sole and exclusive benefit of the Master Servicer to the extent not
required to be paid to the related Borrower and shall be subject to its
withdrawal, or withdrawal at its direction, in accordance with Section 3.03(a),
3.04(e), 3.05(a) or 3.27, as the case may be. Interest and investment income
realized on funds deposited in the REO Account, to the extent of the Net
Investment Earnings, if any, with respect to such account for each Collection
Period, shall be for the sole and exclusive benefit of the Special Servicer and
shall be subject to withdrawal, or withdrawal at its direction, in accordance
with Section 3.16(c). Interest and investment income realized on funds and
deposited in each of the Trustee Accounts, to the extent of the Net Investment
Earnings, if any, with respect to such account for each period from the day
succeeding any Distribution Date to the next succeeding Distribution Date shall
be for the sole and exclusive benefit of the Trustee, but shall be subject to
withdrawal in accordance with Section 3.04(c), 3.04(d), 3.05(b) or 3.28. If any
loss shall be incurred in respect of any Permitted Investment directed to be
made by the Master Servicer or the Special Servicer, as applicable, other than
any loss on an investment made at the direction of the Borrower or made as
required under the Mortgage Loan Documents and on deposit in any of the Master
Servicer Accounts (in the case of the Master Servicer), the Master Servicer or
the Special Servicer, as applicable, shall deposit therein, no later than the
next Determination Date, without right of reimbursement, the amount of the Net
Investment Loss, if any, with respect to such account for the most recently
ended Collection Period; provided, however, that such Net Investment Loss shall
not include any loss incurred as a result of the insolvency of the federal or
state chartered depository institution or trust company that holds such account
so long as such federal or state chartered depository institution or trust
company satisfied the qualifications set forth in the definition of Eligible
Account (i) at the time such investment was made and (ii) as of the date 30 days
prior to such insolvency. If any loss shall be incurred in respect of any
Permitted Investment directed to be made by the Trustee and on deposit in any of
the Trustee Accounts, the Trustee shall deposit therein, no later than the next
Distribution Date, without right of reimbursement, the amount of the Net
Investment Loss, if any, with respect to such account for the period from and
including the day succeeding the immediately preceding Distribution Date (or, in
the case of the initial Distribution Date, from and including the Closing Date)
to and including such Distribution Date.
(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 Trustee may (and, subject to Section 8.02, upon the request of
Holders of Certificates entitled to a majority of the Voting Rights allocated to
any Class shall) take such action as may be appropriate to enforce such payment
or performance, including the institution and prosecution of appropriate
proceedings.
Notwithstanding the investment of funds held in any Investment
Account pursuant to this Section 3.06, for purposes of calculating the Available
Distribution Amount, the amounts so invested shall be deemed to remain on
deposit in such account.
Section 3.07 Maintenance of Insurance Policies; Errors and Omissions
and Fidelity Coverage
(a) Subject to the following sentence, the Master Servicer shall use
its reasonable efforts, consistent with the Servicing Standard, to cause the
related Borrower to maintain, for each Mortgage Loan any and all Insurance
Policy coverage as is required under the related Mortgage Loan Documents (and,
if the related Borrower fails to do so, the Master Servicer shall itself
maintain such Insurance Policy coverage to the extent the Trustee as mortgagee
has an insurable interest in the related Mortgaged Property and to the extent
such Insurance Policy coverage is available at commercially reasonable rates, as
determined by the Master Servicer in accordance with the Servicing Standard);
provided that, subject to Section 3.07(f), if any Mortgage permits the holder
thereof to dictate to the Borrower the Insurance Policy coverage to be
maintained on such Mortgaged Property, the Master Servicer or Special Servicer,
as applicable, shall impose such insurance requirements as are consistent with
the Servicing Standard; and provided, further, that the Master Servicer is not
required to make a Nonrecoverable Servicing Advance to maintain any such
Insurance Policy. The Master Servicer shall use its reasonable efforts to cause
the related Borrower to maintain, and if the related Borrower does not so
maintain, the Master Servicer shall maintain, all-risk casualty insurance which
does not contain any carve-out for (or, alternatively, a separate insurance
policy that expressly provides coverage for) property damage resulting from a
terrorist or similar act, to the extent not prohibited by the terms of the
related Mortgage Loan Documents; provided that the Master Servicer shall not be
required to call default under a Mortgage Loan if the related Borrower fails to
maintain such insurance, and the Master Servicer shall not be required to
maintain such insurance, if, in each case, the Special Servicer has determined
in accordance with the Servicing Standard that either (a) such insurance is not
available at commercially reasonable rates and that such hazards are not at the
time commonly insured against for properties similar to the subject Mortgaged
Property and located in or around the region in which the subject Mortgaged
Property is located or (b) such insurance is not available at any rate; and
provided, further, that the Master Servicer shall use reasonable efforts,
consistent with the Servicing Standard, to enforce any express provisions in the
related Mortgage Loan Documents relating to insurance against loss or damage
resulting from terrorist or similar acts. Subject to Section 3.17(a), the
Special Servicer shall maintain for each REO Property no less Insurance Policy
coverage than was previously required of the Borrower under the related Mortgage
Loan(s) or, at Special Servicer's election, coverage satisfying insurance
requirements consistent with the Servicing Standard; provided that such coverage
is available at commercially reasonable rates.
All such Insurance Policies shall (i) contain a "standard" mortgagee
clause, with loss payable to the Master Servicer on behalf of the Trustee (in
the case of insurance maintained in respect of Mortgage Loans) or the Special
Servicer on behalf of the Trustee (in the case of insurance maintained in
respect of REO Properties), (ii) include coverage in an amount not less than the
lesser of the full replacement cost of the improvements which are a part of the
Mortgaged Property or the outstanding principal balance owing on the related
Mortgage Loan(s), but in any case in such an amount so as to avoid the
application of any co-insurance clause, (iii) include a replacement cost
endorsement providing no deduction for depreciation (unless such endorsement is
not permitted under the related Mortgage Loan Documents) and (iv) be issued by
either (X) a Qualified Insurer or (Y) for any Insurance Policy being maintained
by the related Borrower, an insurance carrier meeting the requirements of the
related Mortgage Loan Documents (provided that such Qualified Insurer or other
insurance carrier is authorized under applicable law to issue such Insurance
Policies). Any amounts collected by the Master Servicer or Special Servicer
under any such Insurance Policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or REO Property or
amounts to be released to the related Borrower, in each case in accordance with
the Servicing Standard and the provisions of the related Mortgage Loan
Documents) shall be deposited: (i) in the case of a Mortgage Loan, in the
Collection Account or any related Mortgage Loan Combination Custodial Account,
as applicable in accordance with Section 3.04, maintained by the Master
Servicer, subject to withdrawal pursuant to Section 3.05(a) or 3.04(e), as
applicable; and (ii) in the case of an REO Property, in the REO Account
maintained by the Special Servicer, subject to withdrawal pursuant to Section
3.16(c).
Any costs incurred by the Master Servicer in maintaining any such
Insurance Policies in respect of Mortgage Loans if the Borrower defaults on its
obligation to maintain such Insurance Policies shall, subject to Section
3.03(c), be advanced by and reimbursable to the Master Servicer as a Servicing
Advance. The amounts so advanced shall not, for purposes of calculating monthly
distributions to Certificateholders, be added to the unpaid principal balance of
the related Trust Mortgage Loan, notwithstanding that the terms of such Trust
Mortgage Loan so permit. Any cost incurred by the Special Servicer in
maintaining any such Insurance Policies with respect to REO Properties shall be
an expense of the Trust Fund payable out of the related REO Account pursuant to
Section 3.16(c) or, if the amount on deposit therein is insufficient therefor,
subject to Section 3.03(c), advanced by and reimbursable to the Master Servicer
as a Servicing Advance.
(b) If the Master Servicer or Special Servicer obtains and maintains
a blanket Insurance Policy with a Qualified Insurer insuring against fire and
hazard losses on all of the Mortgage Loans or REO Properties, as the case may
be, required to be serviced and administered by it hereunder, and such Insurance
Policy provides protection equivalent to the individual policies otherwise
required, then the Master Servicer or Special Servicer, as the case may be,
shall conclusively be deemed to have satisfied its obligation to cause fire and
hazard insurance to be maintained on the related Mortgaged Properties or REO
Properties. Such blanket Insurance Policy may contain a deductible clause, in
which case if there shall not have been maintained on the related Mortgaged
Property or REO Property a fire and hazard Insurance Policy complying with the
requirements of Section 3.07(a), and there shall have been one or more losses
which would have been covered by such individual Insurance Policy, the Master
Servicer or the Special Servicer shall promptly deposit into the Collection
Account or any related Mortgage Loan Combination Custodial Account, as
applicable in accordance with Section 3.04, from its own funds the portion of
such loss or losses that would have been covered under the individual policy
(giving effect to any deductible limitation or, in the absence of such
deductible limitation, the deductible limitation that is consistent with the
Servicing Standard) but is not covered under the blanket Insurance Policy
because of such deductible clause. The Master Servicer or Special Servicer, as
applicable, shall prepare and present, on behalf of itself, the Trustee, the
Certificateholders and any affected B Loan Holders, claims under any such
blanket Insurance Policy in a timely fashion in accordance with the terms of
such policy. The Special Servicer, to the extent consistent with the Servicing
Standard, may maintain earthquake insurance on REO Properties; provided that
such coverage is available at commercially reasonable rates.
If the Master Servicer or Special Servicer causes any Mortgaged
Property to be covered by a master single interest Insurance Policy with a
Qualified Insurer naming the Master Servicer or Special Servicer as the loss
payee, then to the extent such Insurance Policy provides protection equivalent
to the individual policies otherwise required, the Master Servicer or Special
Servicer shall conclusively be deemed to have satisfied its obligation to cause
such insurance to be maintained on the related Mortgage Properties. If the
Master Servicer or Special Servicer, as applicable, causes any Mortgaged
Property or REO Property to be covered by such master single interest Insurance
Policy, the incremental costs of such insurance applicable to such Mortgaged
Property (i.e., other than any minimum or standby premium payable for such
policy whether or not any Mortgaged Property is covered thereby) shall be paid
by and reimbursable to the Master Servicer as a Servicing Advance. Such master
single interest Insurance Policy may contain a deductible clause, in which case
the Master Servicer or the Special Servicer, as applicable, shall, if (A) there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy otherwise complying with the provisions of Section 3.07(a) and (B)
there shall have been one or more losses which would have been covered by such
policy had it been maintained, deposit into the Collection Account or any
related Mortgage Loan Combination Custodial Account, as applicable in accordance
with Section 3.04, from its own funds the amount not otherwise payable under the
master single interest Insurance Policy because of such deductible clause, to
the extent that any such deductible exceeds the deductible limitation that
pertained to the related Trust Mortgage Loan, or, in the absence of any such
deductible limitation, the deductible limitation which is consistent with the
Servicing Standard.
(c) The Master Servicer and Special Servicer, respectively, shall
maintain, at their own expense, a blanket fidelity bond (a "Fidelity Bond") and
an errors and omissions insurance policy with a Qualified Insurer, with coverage
on all of its officers or employees acting in any capacity requiring such
persons to handle funds, money, documents or paper relating to the Mortgage
Loans ("Master Servicer Employees," in the case of the Master Servicer, and
"Special Servicer Employees," in the case of the Special Servicer). Any such
Fidelity Bond and errors and omissions insurance shall protect and insure the
Master Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions, failure to maintain any insurance policies required
pursuant to the Agreement and negligent acts of the Master Servicer Employees or
Special Servicer Employees. Such errors and omissions policy shall also protect
and insure the Master Servicer against losses in connection with the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section requiring such
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Master Servicer or Special Servicer from its duties and obligations as set forth
in this Agreement.
The minimum coverage under any such Fidelity Bond and errors and
omissions insurance policy shall be at least equal to the greater of (i) the
amount necessary for the Master Servicer or Special Servicer, as applicable, to
qualify as a FNMA or FHLMC servicer or in an amount that would meet the
requirements of prudent institutional commercial mortgage loan servicers for
similar transactions, and (ii) $1,000,000. Notwithstanding the foregoing, so
long as the long-term debt or the deposit obligations or claims-paying ability
of the Master Servicer or Special Servicer (or its immediate or remote parent)
is rated at least "A" by S&P and "A2" by Xxxxx'x, the Master Servicer or Special
Servicer, respectively, shall be allowed to provide self-insurance with respect
to a Fidelity Bond and such errors and omissions policy. Coverage of the Master
Servicer or the Special Servicer under a policy or bond obtained by an Affiliate
of the Master Servicer or the Special Servicer and providing the coverage
required by this Section 3.07(c) shall satisfy the requirements of this Section
3.07(c).
The Special Servicer and the Master Servicer will promptly report in
writing to the Trustee any material changes that may occur in their respective
Fidelity Bonds, if any, and/or their respective errors and omissions Insurance
Policies, as the case may be, and will upon request furnish to the Trustee
copies of all binders and policies or certificates evidencing that such bonds,
if any, and insurance policies are in full force and effect.
(d) With respect to the Mortgage Loans that (i) require earthquake
insurance, or (ii) (A) at the date of origination were secured by Mortgaged
Properties on which the related Borrower maintained earthquake insurance and (B)
have provisions which enable the Master Servicer to continue to require the
related Borrower to maintain earthquake insurance, the Master Servicer shall use
reasonable efforts to cause the related Borrower to maintain such insurance in
the amount, in the case of clause (i), required by the related Mortgage Loan
Documents and in the amount, in the case of clause (ii), maintained at
origination, in each case, to the extent such amounts are available at
commercially reasonable rates. Any determination by the Master Servicer that
such insurance is not available at commercially reasonable rates with respect to
a Mortgage Loan for which any related Mortgaged Property has a "Probable Maximum
Loss," bounded on the basis of 50 years, in excess of 20% shall, with respect to
any Significant Trust Mortgage Loan, be subject to confirmation by each Rating
Agency that such determination not to purchase such insurance will, in and of
itself, not result in a downgrade, qualification or withdrawal of any of the
then-current ratings assigned to the Certificates rated by such Rating Agency.
The Master Servicer shall use reasonable efforts to cause the related Borrower
to pay the costs of such confirmation, otherwise, such costs shall be a Trust
Fund expense.
(e) The Master Servicer and Special Servicer shall review and be
familiar with the terms and conditions relating to enforcing claims and shall
monitor the dates by which any claim or action is required to be taken under
each insurance policy to realize the full value of such policy for the benefit
of Certificateholders (and, if a Serviced Loan Combination is involved, the
related Junior Loan Holder(s), if any).
(f) If, as of the Closing Date, a Mortgaged Property (other than an
REO Property) shall be in a federally designated special flood hazard area (if
flood insurance has been made available), or if the Master Servicer becomes
aware, in performing its duties under this Agreement, that a Mortgaged Property
becomes located in such area by virtue of remapping conducted by the Federal
Emergency Management Agency, the Master Servicer will use its reasonable efforts
to cause the related Borrower (in accordance with applicable law and the terms
of the related Mortgage Loan Documents) to maintain, and, if the related
Borrower shall default in any such obligation to so maintain, the Master
Servicer shall itself maintain (to the extent available at commercially
reasonable rates (as determined by the Master Servicer in accordance with the
Servicing Standard) and the Trustee as Mortgagee has an insurable interest in
the related Mortgaged Property), flood insurance in respect thereof, but only to
the extent the related Mortgage Loan Documents permit the mortgagee to require
such coverage and the maintenance of such coverage is consistent with the
Servicing Standard. Such flood insurance shall be in an amount equal to the
least of (i) the unpaid principal balance of the related Mortgage Loan(s), (ii)
the maximum amount of insurance which is available under the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as amended,
and (iii) the amount required by the related Mortgage Loan Documents. If the
cost of any insurance described above is not borne by the Borrower, the Master
Servicer shall promptly make a Servicing Advance for such costs, subject to
Section 3.03(c).
(g) During all such times as any REO Property shall be located in a
federally designated special flood hazard area, the Special Servicer will cause
to be maintained, to the extent available at commercially reasonable rates (as
determined by the Special Servicer in accordance with the Servicing Standard), a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration in an amount equal to the least of (i) the
unpaid principal balance of the related REO Mortgage Loan(s), (ii) the maximum
amount of insurance which is available under the National Flood Insurance Act of
1968 and the Flood Disaster Protection Act of 1973, as amended, and (iii) the
amount required by the related Mortgage Loan Documents. The cost of any such
flood insurance with respect to an REO Property shall be an expense of the Trust
Fund payable out of the related REO Account pursuant to Section 3.16(c) or, if
the amount on deposit therein is insufficient therefor, subject to Section
3.03(c), paid by the Master Servicer as a Servicing Advance.
(h) Subject to the related Mortgage Loan Documents, including in the
case where the related Mortgage Loan Documents permit the related Borrower to
maintain business income insurance for a shorter period of time imposed on such
Borrower at origination, the Master Servicer shall use reasonable efforts to
cause that each policy of business income insurance maintained by a Borrower
have a minimum term of at least twelve months.
(i) Within 45 days after the Closing Date, with respect to each
Trust Mortgage Loan covered by an Environmental Insurance Policy as identified
on Exhibit P, the Master Servicer shall notify each Environmental Insurer that
(A) both the Master Servicer and the Special Servicer shall be sent notices
under the related Environmental Insurance Policy and (B) the Trustee, on behalf
of the Trust and any affected B Loan Holder, shall be the loss payee under the
related Environmental Insurance Policy. The Master Servicer and the Special
Servicer shall abide by the terms and conditions precedent to payment of claims
under any Environmental Insurance Policy and shall take all such action as may
be required to comply with the terms and provisions of such policy in order to
maintain, in full force and effect, such policy.
(j) In the event the Master Servicer has actual knowledge of any
event (an "Insured Environmental Event") giving rise to a claim under any
Environmental Insurance Policy in respect of any Mortgage Loan covered thereby,
the Master Servicer shall, in accordance with the terms of such Environmental
Insurance Policy and the Servicing Standards, timely make a claim thereunder
with the appropriate insurer and shall take such other actions in accordance
with the Servicing Standard which are necessary under such Environmental
Insurance Policy in order to realize the full value thereof for the benefit of
the Certificateholders (and, if such Insured Environmental Event relates to any
Serviced Loan Combination, for the benefit of any related Junior Loan Holder, as
the case may be). Any legal fees, premiums or other out-of-pocket costs incurred
in accordance with the Servicing Standards under an Environmental Insurance
Policy shall be paid by the Master Servicer and shall be reimbursable to it as a
Servicing Advance.
In the event that the Master Servicer receives notice of any
termination of any Environmental Insurance Policy that relates to one or more of
the Mortgage Loans, the Master Servicer shall, within five Business Days after
receipt of such notice, notify the Special Servicer, the Series 2006-C2
Directing Certificateholder, any affected B Loan Holder, the Rating Agencies and
the Trustee of such termination in writing. Upon receipt of such notice, the
Master Servicer or Special Servicer shall address such termination in accordance
with Section 3.07(a) in the same manner as it would the termination of any other
Insurance Policy required under the related Mortgage Loan Documents.
Section 3.08 Enforcement of Due-on-Sale and Due-on-Encumbrance
Clauses; Assumption Agreements; Defeasance Provisions; Other Provisions
(a) (i) As to each Mortgage Loan which contains a provision in the
nature of a "due-on-sale" clause, which by its terms:
(A) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon (i) the full or
partial sale or other transfer of an interest in the related
Mortgaged Property or (ii) a sale or transfer of direct or indirect
ownership interests in the related Borrower; or
(B) provides that such Mortgage Loan or direct or indirect
ownership interests in the related Borrower may not be assumed
without the consent of the mortgagee in connection with any such
sale or other transfer,
the Master Servicer shall provide notice to the Special Servicer of any request
for a waiver thereof, and the Master Servicer (with respect to any Performing
Trust Mortgage Loans) and the Special Servicer (with respect to all Specially
Serviced Mortgage Loans) shall, if and to the extent necessary, enforce (or
waive the right to enforce) such due-on-sale clause; provided, that the Master
Servicer may not, without the consent of the Special Servicer (as set forth in
Section 3.08(c)), waive any due-on-sale clause in, or consent to the assumption
of, any Trust Mortgage Loan. The Master Servicer or Special Servicer, as
applicable, shall enforce such due-on-sale clause unless the Master Servicer or
Special Servicer, as applicable, determines, in accordance with the Servicing
Standard, that (1) not declaring an Event of Default (as defined in the related
Mortgage Loan Documents) or (2) granting such consent, as applicable, would be
likely to result in a greater or equal recovery, on a present value basis
(discounting at a rate no less than the related Mortgage Rate), than would
enforcement of such clause or the failure to grant such consent. If the Master
Servicer or Special Servicer, as applicable, determines that (1) not declaring
an Event of Default (as defined in the related Mortgage Loan Documents) or (2)
granting such consent, as applicable, would be likely to result in a greater or
equal recovery, the Master Servicer (in the case of a Performing Trust Mortgage
Loan) and the Special Servicer (in the case of any Specially Serviced Mortgage
Loan) shall waive such enforcement or take or enter into an assumption agreement
from or with the proposed transferee as obligor thereon, provided that (x) the
credit status of the prospective transferee is in compliance with the Servicing
Standard and the terms of the related Mortgage Loan Documents and (y) (A) with
respect to any Trust Mortgage Loan which is a Significant Trust Mortgage Loan,
the Master Servicer or the Special Servicer, as applicable, shall have received
written confirmation from S&P and (B) with respect to any Trust Mortgage Loan
which is one of the ten largest Trust Mortgage Loans by Stated Principal Balance
of all Trust Mortgage Loans at such time (treating any group of Crossed Trust
Mortgage Loans or any group of Trust Mortgage Loans with affiliated Borrowers as
a single Trust Mortgage Loan), the Master Servicer or the Special Servicer, as
applicable, shall have received written confirmation from Xxxxx'x, that such
assumption would not, in and of itself, cause a downgrade, qualification or
withdrawal of any of the then-current ratings assigned to the Certificates. To
the extent permitted by the related Mortgage Loan Documents, the Master Servicer
(in the case of a Performing Trust Mortgage Loan) and the Special Servicer (in
the case of any Specially Serviced Mortgage Loan) shall use reasonable efforts
to cause the related Borrower to pay the costs of such confirmation, otherwise,
such costs shall be a Trust Fund expense.
(ii) Notwithstanding the provisions of any Mortgage Loan,
foreclosure by a Mezzanine Loan Holder on any Mezzanine Loan Collateral
securing a Mezzanine Loan to an affiliate of the related Borrower shall
not, for purposes of this Agreement, be deemed to be a violation of the
due-on-sale clause of the related Mortgage Loan Documents or of clause (i)
of this Section 3.08(a) so long as the foreclosing party is a Permitted
Mezzanine Loan Holder, and other material requirements of the related
intercreditor agreement are satisfied.
(iii) Neither the Master Servicer nor the Special Servicer shall (x)
consent to the foreclosure of any Mezzanine Loan other than by a Permitted
Mezzanine Loan Holder or (y) consent to the transfer of any Mezzanine Loan
except to a Permitted Mezzanine Loan Holder, except, in each case, as
otherwise provided in Section 3.08(a)(ii). Neither the consent of the
Master Servicer nor the consent of the Special Servicer shall be required
for the foreclosure by a Permitted Mezzanine Loan Holder if an event of
default has been declared under the related Mortgage Loan(s) (and each
Rating Agency has been notified of such event of default), except as set
forth in any related intercreditor agreement. In no event shall a
Mezzanine Loan Holder be required to pay any assumption fee, modification
fee or other service charge in connection with any foreclosure upon
Mezzanine Loan Collateral, transfer of ownership of the related Mortgaged
Property to such Mezzanine Loan Holder and/or assumption of the related
Mortgage Loan; provided, that such Mezzanine Loan Holder may be
required to reimburse the Master Servicer or Special Servicer, as
applicable, for any costs or expenses incurred by it in connection with
such foreclosure, transfer and/or assumption. Nothing herein shall prevent
a Mezzanine Loan Holder from appointing a receiver or trustee with respect
to any Mezzanine Loan Collateral, foreclosing upon any reserves, escrow
accounts or cash collateral accounts pledged under the related Mezzanine
Loan (provided none of such accounts have been pledged under the related
Mortgage Loan) or otherwise taking an assignment of any cash flows from
any Mezzanine Loan Collateral.
(b) As to each Mortgage Loan which contains a provision in the
nature of a "due-on-encumbrance" clause), which by its terms:
(i) provides that such Mortgage Loan shall (or, at the mortgagee's
option, may) become due and payable upon (A) the creation of any
additional lien or other encumbrance on the related Mortgaged Property or
(B) an encumbrance, pledge or hypothecation of direct or indirect
ownership interests in the related Borrower or its owners (including any
incurrence of mezzanine financing secured by ownership interests in the
related Borrower or its owners or the creation of preferred equity in the
related Borrower or its owners); or
(ii) requires the consent of the mortgagee to the creation of any
such additional lien or other encumbrance on the related Mortgaged
Property or direct or indirect ownership interests in the related
Borrower;
the Master Servicer shall provide notice to the Special Servicer of any request
for a waiver thereof, and the Master Servicer (with respect to any Performing
Trust Mortgage Loans) and Special Servicer (with respect to any Specially
Serviced Mortgage Loans) shall, if and to the extent necessary, enforce (or
waive the right to enforce) such due-on-encumbrance clause; provided, that the
Master Servicer may not, without the consent of the Special Servicer (as set
forth in Section 3.08(c)), waive any due-on-encumbrance clause in, or consent to
the creation of any such additional lien or other encumbrance on the related
Mortgaged Property securing, any Trust Mortgage Loan, or make any determination
with respect to any Trust Mortgage Loan, which by its terms permits encumbrance
without lender consent provided certain conditions are satisfied, that such
conditions have been satisfied. The Master Servicer or Special Servicer shall
enforce such due-on-encumbrance clause unless the Special Servicer: (x)
determines, in accordance with the Servicing Standard, that (1) not declaring an
event of default under such Mortgage Loan or (2) granting such consent, as
applicable, would result in a greater or equal recovery on a present value basis
(discounting at the related Mortgage Rate) than would enforcement of such clause
or the failure to grant such consent; and (y)(A) with respect to any Trust
Mortgage Loan which (i) is a Significant Trust Mortgage Loan or (ii) by itself,
or as part of a Crossed Trust Mortgage Loan group or group of Trust Mortgage
Loans with affiliated Borrowers has (a) a Loan-to-Value Ratio equal to or
greater than 85% or (b) a Debt Service Coverage Ratio equal to or less than 1.2x
(in each case, treating the existing debt on the subject Mortgaged Property and
the proposed additional debt as if such total debt were a single Trust Mortgage
Loan), receives from S&P and (B) with respect to any Trust Mortgage Loan that is
one of the ten largest Trust Mortgage Loans by Stated Principal Balance of all
Trust Mortgage Loans at such time (treating any group of Crossed Trust Mortgage
Loans or any group of Trust Mortgage Loans with affiliated Borrowers as a single
Trust Mortgage Loan), receives from Xxxxx'x, prior written confirmation that (1)
not declaring an event of default under such Mortgage Loan or (2) granting such
consent, as applicable, would not, in and of itself, cause a downgrade,
qualification or withdrawal of any of the then-current ratings assigned to the
Certificates. To the extent permitted by the related Mortgage Loan Documents,
the Master Servicer or the Special Servicer shall use reasonable efforts to
cause the Borrower to pay the costs associated with such Rating Agency
confirmation, otherwise, such costs shall be a Trust Fund expense.
(c) Any approval required to be obtained by the Master Servicer from
the Special Servicer for any action taken by the Master Servicer pursuant to
this Section 3.08 with respect to a Performing Trust Mortgage Loan (the giving
of which approval shall be subject to the Servicing Standard and Section 3.21)
shall be deemed given if not denied in writing within ten (10) Business Days
after receipt by the Special Servicer of the Master Servicer's written
recommendation and analysis and any additional information requested by the
Special Servicer or the Series 2006-C2 Directing Certificateholder (through the
Special Servicer), as applicable. If any such action taken by the Master
Servicer pursuant to this Section 3.08 requires the approval of the Series
2006-C2 Directing Certificateholder (such consent to be obtained through the
Special Servicer), then such approval shall be deemed given if not denied in
writing within ten (10) Business Days, which 10-Business Day period shall
coincide with the Special Servicer's 10-Business Day period to object set forth
in the preceding sentence. Nothing in this Section 3.08 shall constitute a
waiver of the Trustee's right, as the mortgagee of record, to receive notice of
any assumption of a Mortgage Loan, any sale or other transfer of the related
Mortgaged Property or the creation of any additional lien or other encumbrance
with respect to such Mortgaged Property.
(d) Except as otherwise permitted by Section 3.20, the Master
Servicer or the Special Servicer, as applicable, shall not agree to modify,
waive or amend any payment term of any Mortgage Loan in connection with the
taking of, or the failure to take, any action pursuant to this Section 3.08.
(e) Notwithstanding any other provisions of this Section 3.08 or
Section 3.20, with respect to any Performing Trust Mortgage Loans, the Master
Servicer may (without the consent of the Special Servicer (provided the Master
Servicer delivers notices thereof to the Special Servicer) or the Series 2006-C2
Directing Certificateholder and without any Rating Agency confirmation) grant a
Borrower's request for consent to subject the related Mortgaged 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 related Mortgage Loan(s) to such easement, right-of-way or similar
agreement; provided that the Master Servicer shall have determined (i) in
accordance with the Servicing Standard that such easement, right-of-way or
similar agreement will not materially interfere with the then-current use of the
related Mortgaged Property or the security intended to be provided by such
Mortgage and will not materially or adversely affect the value of such Mortgaged
Property and (ii) that no REMIC Pool will fail to qualify as a REMIC as a result
thereof and that no tax on "prohibited transactions" or "contributions" after
the Closing Date would be imposed on either REMIC Pool as a result thereof; and
provided, further that the Master Servicer shall cause the Borrower to pay the
costs (including attorneys' fees and expenses) associated with the determination
described in clause (ii).
(f) With respect to any Mortgage Loan which permits release of
Mortgaged Properties through defeasance (each, a "Defeasance Mortgage Loan"), to
the extent permitted under the related Mortgage Loan Documents:
(i) The Master Servicer shall effect such defeasance only through
the purchase of non-callable U.S. government obligations satisfying the
REMIC Provisions ("Defeasance Collateral") which purchase shall be made in
accordance with the terms of the related Mortgage Loan Documents (except
that the Master Servicer is authorized to accept Defeasance Collateral
meeting the foregoing requirements in spite of more restrictive
requirements of the related Mortgage Loan Documents); provided, however,
that the Master Servicer shall not accept the amounts paid by the related
Borrower to effect defeasance until such Defeasance Collateral has been
identified; and provided, further, that no defeasance shall be accepted
within two years after the Closing Date.
(ii) If such Mortgage Loan permits the assumption of the obligations
of the related Borrower by a successor Borrower, the Master Servicer shall
cause the Borrower or such successor Borrower to pay all expenses incurred
in connection with the establishment of a successor Borrower (which shall
be a Single-Purpose Entity) and to cause an assumption by such successor
Borrower of the defeased obligations under the related Note. The Master
Servicer shall be permitted to establish a single Single-Purpose Entity to
assume the defeased obligations under all of the Mortgage Loans that have
been defeased.
(iii) The Master Servicer shall cause to be delivered an Opinion of
Counsel, at such Borrower's expense, to the effect that the assignment of
the Defeasance Collateral to the Trustee is valid and enforceable (subject
to certain customary qualifications and exceptions).
(iv) The Master Servicer shall obtain, at the related Borrower's
expense, a certificate from an Independent certified public accountant
certifying that the Defeasance Collateral is sufficient to make all
scheduled payments under the related Note.
(v) Prior to permitting release of any Mortgaged Property through
defeasance, (X) with respect to S&P, if such defeasance or partial
defeasance of such Mortgaged Property relates to any Trust Mortgage Loan
that (1) represents one of the ten largest Trust Mortgage Loans (which for
purposes of this clause (v) shall include groups of Crossed Trust Mortgage
Loans and groups of Trust Mortgage Loans made to affiliated Borrowers) or
(2) has a Stated Principal Balance at the time of defeasance of more than
$20,000,000 or represents more than 5% of the aggregate Stated Principal
Balance of all Trust Mortgage Loans at such time (which for purposes of
this clause (v) shall include groups of Crossed Trust Mortgage Loans and
groups of Trust Mortgage Loans made to affiliated Borrowers), the Master
Servicer shall obtain, at the expense of the related Borrower, written
confirmation from S&P that such defeasance would not, in and of itself,
result in a downgrade, qualification or withdrawal of any of the
then-current ratings assigned to the Certificates; provided that, in the
case of any Trust Mortgage Loan that is not a Trust Mortgage Loan covered
by clause (1) or (2), the Master Servicer shall obtain confirmation from
S&P unless the Master Servicer delivers to S&P a notice in the form
attached hereto as Exhibit K within a reasonable time after the completion
of the defeasance and (Y) with respect to Xxxxx'x, if such defeasance or
partial defeasance or such Mortgaged Property relates to any Trust
Mortgage Loan that represents one of the ten largest Loans of all Trust
Mortgage Loans at such time, the Master Servicer shall obtain, at the
expense of the related Borrower, written confirmation from Xxxxx'x that
such defeasance would not, in and of itself, result in a downgrade,
qualification or withdrawal of any of the then-current ratings assigned to
the Certificates.
(vi) Neither the Master Servicer nor the Special Servicer shall
permit the release of any Mortgaged Property through defeasance unless the
related Borrower establishes to the satisfaction of the Master Servicer or
the Special Servicer that the lien on such Mortgaged Property will be
released to facilitate the disposition thereof or to facilitate any other
customary commercial transaction.
(vii) Prior to permitting release of any Mortgaged Property through
defeasance, if the related Trust Mortgage Loan so requires and provides
for the related Borrower to pay the cost thereof, the Master Servicer
shall require such Borrower to deliver or cause to be delivered an Opinion
of Counsel to the effect that such release will not cause either REMIC
Pool to fail to qualify as a REMIC at any time that any Certificates are
outstanding or cause a tax to be imposed on the Trust Fund under the REMIC
Provisions.
(viii) Neither the Master Servicer nor the Special Servicer shall
permit a partial defeasance with respect to any Mortgage Loan unless the
Defeasance Collateral is sufficient to satisfy the payments and amount
required pursuant to the related Mortgage Loan Documents with respect to
such partial defeasance.
To the extent permitted under the related Mortgage Loan Documents, any costs to
the Master Servicer of obtaining legal advice to make the determinations
required to be made by it pursuant to this Section 3.08(f), or obtaining the
Rating Agency confirmations required by this Section 3.08(f), shall be borne by
the related Borrower as a condition to the Master Servicer's obligation to
effect the defeasance of the related Trust Mortgage Loan, or borne by the
Mortgage Loan Seller (to the extent it is required to make such payment under
the Mortgage Loan Purchase Agreement) or advanced as a Servicing Advance by the
Master Servicer, and otherwise shall be a Trust Fund expense. The Master
Servicer shall deliver all documents relating to the defeasance of any Trust
Mortgage Loan to the Trustee for inclusion in the related Mortgage File.
(g) With respect to any Mortgage Loan that permits the related
Borrower to incur subordinate indebtedness secured by the related Mortgaged
Property, the Master Servicer or the Special Servicer, as applicable, shall
enforce the rights of the lender, if any, under the related Mortgage Loan
Documents to require such Borrower to require the lender of such subordinate
indebtedness to enter into a subordination and standstill agreement with the
Trust.
(h) With respect to any Trust Mortgage Loan, subject to the related
Mortgage Loan Documents, neither the Master Servicer nor the Special Servicer
shall permit the related Borrower to substitute any real property, any rights
with respect to real property, or any other real property interest whatsoever
for the Mortgaged Property securing such Trust Mortgage Loan as of the Closing
Date without receipt of an Opinion of Counsel, at the expense of the Borrower
(if permitted by the related Mortgage Loan Documents, otherwise at the expense
of the Trust Fund), to the effect that the substitution will not cause the
related Trust Mortgage Loan to fail to qualify as a "qualified mortgage" as
defined under Section 860G(a)(3) of the Code while such Trust Mortgage Loan is
owned by REMIC I.
Section 3.09 Realization Upon Defaulted Mortgage Loans
(a) The Special Servicer shall, subject to subsections (b) through
(d) of this Section 3.09, exercise reasonable efforts, consistent with the
Servicing Standard, to foreclose upon or otherwise comparably convert (which may
include an REO Acquisition) the ownership of any property securing such Mortgage
Loans as come into and continue in default, as to which no satisfactory
arrangements can be made for collection of delinquent payments, and which are
not released from the Trust Fund pursuant to any other provision hereof. In any
case in which a Mortgaged Property shall have suffered damage such that the
complete restoration of such property is not fully reimbursable by the hazard
insurance policies or flood insurance policies required to be maintained
pursuant to Section 3.07, the Master Servicer shall not be required to make a
Servicing Advance and expend funds toward the restoration of such property
unless (i) the Special Servicer has determined in its reasonable judgment in
accordance with the Servicing Standard that such restoration will increase the
net proceeds of liquidation of such Mortgaged Property to Certificateholders and
any affected B Loan Holder, as a collective whole, after reimbursement to the
Master Servicer for such Servicing Advance and interest thereon and (ii) the
Master Servicer has determined that such Servicing Advance together with accrued
and unpaid interest thereon, will be recoverable by the Master Servicer out of
the proceeds of liquidation of such Mortgaged Property, as contemplated in
Sections 3.05(a)(v) and 3.05(a)(vii) (or, if applicable, Section 3.04(e)). The
Master Servicer shall advance all costs and expenses incurred by the Special
Servicer in any such proceedings (such costs and expenses to be advanced by the
Master Servicer to the Special Servicer in accordance with Section 3.03(c) and
recoverable by the Master Servicer as a Servicing Advance); provided that, in
each case, such cost or expense would not, if incurred, constitute a
Nonrecoverable Servicing Advance.
Nothing contained in this Section 3.09 shall be construed to require
the Special Servicer, on behalf of the Trust Fund and any affected B Loan
Holder, to make a bid on any Mortgaged Property at a foreclosure sale or similar
proceeding that is in excess of the fair market value of such property, as
determined by the Special Servicer in its reasonable judgment taking into
account, as applicable, among other factors, the period and amount of any
delinquency on the affected Mortgage Loan(s), the occupancy level and physical
condition of the Mortgaged Property or REO Property, the state of the local
economy, the obligation to dispose of any REO Property within the time period
specified in Section 3.16(a) and the results of any Appraisal obtained pursuant
to the following sentence, all such bids to be made in a manner consistent with
the Servicing Standard. If and when the Special Servicer deems it necessary and
prudent for purposes of establishing the fair market value of any Mortgaged
Property securing a defaulted Mortgage Loan, whether for purposes of bidding at
foreclosure or otherwise, the Special Servicer is authorized to have an
Appraisal performed with respect to such property, the cost of which Appraisal
shall be paid by the Master Servicer as a Servicing Advance.
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 3.09 unless either:
(i) such personal property is incident to real property (within the
meaning of Section 856(e)(1) of the Code) so acquired by the Special
Servicer; or
(ii) the Special Servicer shall have obtained an Opinion of Counsel
(the cost of which shall be a Servicing Advance) to the effect that the
holding of such personal property by the Trust Fund will not cause the
imposition of a tax on either REMIC Pool under the REMIC Provisions or
cause either REMIC Pool to fail to qualify as a REMIC.
(c) Notwithstanding the foregoing provisions of this Section 3.09,
the Special Servicer shall not, on behalf of the Trustee, obtain title to a
Mortgaged Property in lieu of foreclosure or otherwise, or take any other action
with respect to any Mortgaged Property, if, as a result of any such action, the
Trustee, on behalf of the Certificateholders (and, in the case of a Mortgage
Loan Combination, the related B Loan Holder), would be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or "operator" of
such Mortgaged Property within the meaning of CERCLA or any comparable law,
unless (as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously determined in accordance with the
Servicing Standard, based on an Environmental Assessment of such Mortgaged
Property performed within the preceding 12 months by an Independent Person who
regularly conducts Environmental Assessments, and taking into account the
existence of any Environmental Insurance Policy covering such Mortgaged
Property, that:
(i) the Mortgaged Property is in compliance with applicable
environmental laws and regulations or, if not, that taking such actions as
are necessary to bring the Mortgaged Property into compliance therewith is
reasonably likely to produce a greater recovery on a present value basis
than not taking such actions; and
(ii) there are no circumstances or conditions present at the
Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and regulations or, if such circumstances or
conditions are present for which any such action could be required, that
taking such actions with respect to such Mortgaged Property is reasonably
likely to produce a greater recovery on a present value basis than not
taking such actions.
The cost of any such Environmental Assessment and the cost of any
remedial, corrective or other further action contemplated by clause (i) and/or
clause (ii) of the preceding sentence shall be paid by the Master Servicer as a
Servicing Advance. If any such Environmental Assessment so warrants, the Special
Servicer shall, at the expense of the Trust Fund and/or, subject to the
applicable intercreditor, co-lender or similar agreement, any related B Loan
Holder, as a collective whole, perform such additional environmental testing as
it deems necessary and prudent to determine whether the conditions described in
clauses (i) and (ii) of the second preceding sentence have been satisfied.
(d) If (i) the environmental testing contemplated by subsection (c)
above establishes that either of the conditions set forth in clauses (i) and
(ii) of the first sentence thereof has not been satisfied with respect to any
Mortgaged Property securing a defaulted Mortgage Loan and (ii) there has been no
breach of any of the representations and warranties set forth in or required to
be made pursuant to the Mortgage Loan Purchase Agreement for which the Mortgage
Loan Seller could be required to repurchase the related Trust Mortgage Loan
pursuant to Section 7 of the Mortgage Loan Purchase Agreement, then the Special
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund and any affected B Loan Holder, as a collective whole, and
consistent with the Servicing Standard (other than proceeding to acquire title
to the Mortgaged Property) and is hereby authorized at such time as it deems
appropriate to release such Mortgaged Property from the lien of the related
Mortgage.
(e) The Special Servicer shall provide written reports and a copy of
any Environmental Assessments to the Trustee, the Master Servicer and the
Certificateholders (or, if the Controlling Class of Certificates are held in
book-entry form, the Certificate Owners) of the Controlling Class, any affected
B Loan Holder and any Requesting Subordinate Certificateholder (at the expense
of such Requesting Subordinate Certificateholder) monthly regarding any actions
taken by the Special Servicer with respect to any Mortgaged Property securing a
defaulted Mortgage Loan as to which the environmental testing contemplated in
subsection (c) above has revealed that either of the conditions set forth in
clauses (i) and (ii) of the first sentence thereof has not been satisfied, in
each case until the earlier to occur of satisfaction of both such conditions,
repurchase of the related Trust Mortgage Loan by the Mortgage Loan Seller or
release of the lien of the related Mortgage on such Mortgaged Property;
provided, however, that with respect to each such report or Environmental
Assessment, if beneficial ownership of the Controlling Class resides in more
than one Certificateholder (or, if the Controlling Class of Certificates are
held in book-entry form, more than one Certificate Owner), the Special Servicer
shall be responsible only for the expense of providing the first such copy
thereof and shall be entitled to reimbursement from the Trust Fund for the
expense of any additional copies so provided. The Trustee shall, upon request,
forward all such reports to the Certificateholders (at the expense of the
requesting party) and each Rating Agency.
(f) The Master Servicer shall report to the Internal Revenue Service
and the related Borrower, in the manner required by applicable law, the
information required to be reported regarding any Mortgaged Property that is
abandoned or foreclosed, the receipt of mortgage interests received in a trade
or business and the forgiveness of indebtedness with respect to any mortgaged
property required by Sections 6050J, 6050H and 6050P, respectively, of the Code.
The Special Servicer shall provide the Master Servicer with all information or
reports necessary to enable the Master Servicer to fulfill its obligations under
this Section 3.09(f) (and shall from time to time provide additional information
or reports promptly upon the Master Servicer's request therefor). The Master
Servicer shall deliver a copy of any such report to the Trustee.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the state in which the Mortgaged
Property securing any defaulted Mortgage Loan is located and the terms of that
Mortgage Loan permit such an action.
(h) The Special Servicer shall maintain accurate records, prepared
by one of its Servicing Officers, of each Final Recovery Determination in
respect of a defaulted Mortgage Loan or REO Property and the basis thereof. Each
Final Recovery Determination shall be evidenced by an Officer's Certificate
delivered to the Trustee, the Master Servicer and any affected B Loan Holder no
later than the first Business Day following the end of the Collection Period in
which such Final Recovery Determination was made.
Section 3.10 Trustee to Cooperate; Release of Mortgage Files
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer or the Special Servicer, as the case may be, of a
notification that payment in full shall be escrowed in a manner customary for
such purposes, the Master Servicer or Special Servicer, as the case may be, will
promptly notify the Trustee and request delivery of the related Mortgage File.
Any such notice and request shall be in the form of a Request for Release (and
shall include two copies) signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer) and shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Collection Account or a Mortgage Loan
Combination Custodial Account, as applicable pursuant to Section 3.04, or
remitted to the Master Servicer to enable such deposit, have been or will be so
deposited. Within six Business Days (or within such shorter period as release
can reasonably be accomplished if the Master Servicer or Special Servicer
notifies the Trustee of an exigency) of receipt of such notice and request, the
Trustee (or, to the extent provided in Section 3.01(b), the Master Servicer or
the Special Servicer, as applicable) shall execute such instruments of
satisfaction, deeds of reconveyance and other documents as shall have been
furnished to it by the Master Servicer or the Special Servicer, and the Trustee
shall release and deliver the related Mortgage File to the Master Servicer or
Special Servicer, as the case may be. No expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Collection Account or any Mortgage Loan Combination Custodial Account.
(b) From time to time as is appropriate for servicing or foreclosure
of any Mortgage Loan, the Master Servicer or the Special Servicer, as
applicable, shall deliver to the Trustee two copies of a Request for Release
signed by a Servicing Officer (or in a mutually agreeable electronic format that
will, in lieu of a signature on its face, originate from a Servicing Officer).
Upon receipt of the foregoing, the Trustee shall deliver the Mortgage File or
any document therein to the Master Servicer or the Special Servicer (or a
designee), as the case may be. Upon return of the Mortgage File to the Trustee,
the Trustee shall execute an acknowledgment of receipt.
(c) Within seven Business Days (or within such shorter period as
delivery can reasonably be accomplished if the Special Servicer notifies the
Trustee of an exigency) of receipt thereof, the Trustee shall execute and
deliver to the Special Servicer any court pleadings, requests for trustee's sale
or other documents necessary to the release of the lien of a Mortgage, or to
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Borrower on the Note or Mortgage
or to obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Note or Mortgage or otherwise available at law or in equity. The
Special Servicer shall be responsible for the preparation of all such documents
and pleadings. When submitted to the Trustee and, if applicable, the related
Junior Loan Holder(s) for signature, such documents or pleadings shall be
accompanied by a certificate of a Servicing Officer requesting that such
pleadings or documents be executed by the Trustee or any related Junior Loan
Holder and certifying as to the reason such documents or pleadings are required,
that the proposed action is in the best interest of the Certificateholders (and,
in the case of a Mortgage Loan Combination, the related B Loan Holder(s)) (as a
collective whole) and that the execution and delivery thereof by the Trustee and
any related Junior Loan Holder, as the case may be, will not invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
(d) From time to time as is appropriate for servicing or foreclosure
of any B Loan, the Master Servicer or Special Servicer, as applicable, subject
to the related intercreditor, co-lender or similar agreement, shall request the
original of the related Note from the related B Loan Holder.
Section 3.11 Servicing Compensation
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each Trust Mortgage Loan and REO Trust Mortgage Loan (including Specially
Serviced Trust Mortgage Loans, Defeasance Mortgage Loans and Additional
Collateral Trust Mortgage Loans). As to each Trust Mortgage Loan and REO Trust
Mortgage Loan, the Master Servicing Fee shall accrue at the related Master
Servicing Fee Rate (in accordance with the same terms of the related Note as are
applicable to the accrual of interest at the Mortgage Rate) and shall be
computed on the basis of the same principal amount as interest accrues from time
to time on such Trust Mortgage Loan or is deemed to accrue from time to time on
such REO Trust Mortgage Loan, as the case may be, and for the same period
respecting which any related interest payment due on such Trust Mortgage Loan or
deemed due on such REO Trust Mortgage Loan, as the case may be, is computed. The
Master Servicing Fee with respect to any Trust Mortgage Loan or REO Trust
Mortgage Loan shall cease to accrue if a Liquidation Event occurs in respect
thereof. The Master Servicing Fee shall be payable monthly, on a loan-by-loan
basis, from payments of interest on each Trust Mortgage Loan and REO Revenues
allocable as interest on each REO Trust Mortgage Loan. In no event will the
Master Servicer or any Primary Servicer be entitled to retain a servicing fee
from the amount of any P&I Advance, regardless of whether the related Borrower
is obligated to reimburse Master Servicing Fees or Primary Servicing Fees.
Wachovia (and its successors and assigns) shall also be entitled to
receive all Primary Servicing Fees on any Mortgage Loan, Serviced Loan
Combination and REO Mortgage Loan (including any Specially Serviced Mortgage
Loan, Additional Collateral Trust Mortgage Loan and Defeasance Mortgage Loan)
which is not serviced by a Primary Servicer. As to each Mortgage Loan, Serviced
Loan Combination and REO Mortgage Loan, the Primary Servicing Fee shall accrue
at the related Primary Servicing Fee Rate (in accordance with the same terms of
the related Note as are applicable to the accrual of interest at the Mortgage
Rate) and shall be computed on the basis of the same principal amount as
interest accrues from time to time on such Mortgage Loan or Serviced Loan
Combination or is deemed to accrue from time to time on such REO Mortgage Loan,
as the case may be, and for the same period respecting which any related
interest payment due on such Mortgage Loan or Serviced Loan Combination or
deemed due on such REO Mortgage Loan, as the case may be, is computed.
Notwithstanding anything herein to the contrary, Wachovia (and its successors
and assigns) may, at its option and without restriction, assign or pledge to any
third party or retain for itself the Primary Servicing Fees to which Wachovia is
entitled, and the right of Wachovia (and its successors and assigns) to receive
such Primary Servicing Fees in accordance with the provisions hereof shall not
be terminated or reduced under any circumstance, including transfer of the
servicing or subservicing of the Mortgage Loans to another entity or the
resignation or termination of the Master Servicer; provided, however, that in
the event of any resignation or termination of Wachovia as a Primary Servicer,
the Assignable Primary Servicing Fees may be reduced by the Trustee to the
extent reasonably necessary (in the discretion of the Trustee) to compensate any
replacement primary servicer for assuming the duties of Wachovia as Primary
Servicer under this Agreement. Notwithstanding the foregoing, each Primary
Servicer shall be entitled to all Primary Servicing Fees on all Mortgage Loans
serviced under the applicable Primary Servicing Agreement, whether or not any of
such Mortgage Loans shall become Specially Serviced Mortgage Loans.
The Master Servicer, on behalf of itself, the holder of the Excess
Servicing Strip and the Assignable Primary Servicing Fee, and any Primary
Servicer shall be entitled to recover unpaid Master Servicing Fees and Primary
Servicing Fees in respect of any Mortgage Loan or REO Mortgage Loan required to
be serviced by it out of that portion of related payments, Insurance and
Condemnation Proceeds, Liquidation Proceeds and REO Revenues (in the case of an
REO Mortgage Loan) allocable as recoveries of interest, to the extent permitted
by Section 3.05(a). Subject to the second and fourth paragraphs of this Section
3.11(a), the right to receive the Master Servicing Fee (and, except to the
extent set forth in the Primary Servicing Agreement with respect to a Primary
Servicer and except as set forth in this Section 3.11(a), the related Primary
Servicing Fee) may not be transferred in whole or in part except in connection
with the transfer of all of the Master Servicer's responsibilities and
obligations under this Agreement. The parties hereto acknowledge that the annual
fees of each Rating Agency allocable to the Trust Mortgage Loans have been paid
on or prior to the Closing Date.
Notwithstanding anything herein to the contrary, Wachovia (and its
successors and assigns) may at its option assign or pledge to any third party or
retain for itself the Excess Servicing Strip, if any; provided that any assignee
or pledgee of the Excess Servicing Strip must be a Qualified Institutional Buyer
or Institutional Accredited Investor (other than a Plan); and provided, further,
that no transfer, sale, pledge or other assignment of the Excess Servicing Strip
shall be made unless 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; and provided, further,
that in the event of any resignation or termination of Wachovia as the Master
Servicer, all or any portion of the Excess Servicing Strip may be reduced by the
Trustee to the extent reasonably necessary (in the sole discretion of the
Trustee) for the Trustee to obtain a qualified successor Master Servicer (which
successor may include the Trustee) that meets the requirements of Section 6.04
and that requires market rate servicing compensation that accrues at a per annum
rate in excess of 0.005% per annum (one-half basis point). Wachovia and each
holder of the Excess Servicing Strip desiring to effect a transfer, sale, pledge
or other assignment of the Excess Servicing Strip shall, and Wachovia hereby
agrees, and each such holder of the Excess Servicing Strip by its acceptance of
the Excess Servicing Strip shall be deemed to have agreed, in connection with
any transfer of the Excess Servicing Strip effected by such Person, to indemnify
the Certificateholders, the Trust, the B Loan Holders, the Depositor, the
Underwriters, the Trustee, the Master Servicer, the Certificate Registrar and
the Special Servicer 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 the Excess Servicing Strip, the holder
thereof shall be deemed to have agreed (i) to keep all information relating to
the Trust and the Trust Fund and made available to it by the Master Servicer
confidential (except as permitted pursuant to clause (iii) below or, in the case
of the Master Servicer, as contemplated hereby in the performance of its duties
and obligations hereunder), (ii) not to use or disclose such information in any
manner that could result in a violation of any provision of the Securities Act
or other applicable securities laws or that would require registration of the
Excess Servicing Strip or any Non-Registered Certificate pursuant to the
Securities Act, and (iii) not to disclose such information, and to cause its
officers, directors, partners, employees, agents or representatives not to
disclose such information, in any manner whatsoever, in whole or in part, to any
other Person other than such holder's auditors, legal counsel and regulators,
except to the extent such disclosure is required by law, court order or other
legal requirement or to the extent such information is of public knowledge at
the time of disclosure by such holder or has become generally available to the
public other than as a result of disclosure by such holder; provided, however,
that such holder may provide all or any part of such information to any other
Person who is contemplating an acquisition of the Excess Servicing Strip if, and
only if, such Person (x) confirms in writing such prospective acquisition and
(y) agrees in writing to keep such information confidential, not to use or
disclose such information in any manner that could result in a violation of any
provision of the Securities Act or other applicable securities laws or that
would require registration of the Excess Servicing Strip or any Non-Registered
Certificates pursuant to the Securities Act and not to disclose such
information, and to cause its officers, directors, partners, employees, agents
or representatives not to disclose such information, in any manner whatsoever,
in whole or in part, to any other Person other than such Persons' auditors,
legal counsel and regulators. From time to time following any transfer, sale,
pledge or assignment of the Excess Servicing Strip, the Person then acting as
the Master Servicer shall pay, out of each amount paid to such Master Servicer
as Master Servicing Fees with respect to any Trust Mortgage Loan or REO Trust
Mortgage Loan, as the case may be, the portion of the Excess Servicing Strip
attributable to such Trust Mortgage Loan or REO Trust Mortgage Loan to the
holder of the Excess Servicing Strip within one Business Day following the
payment of such Master Servicing Fees to the Master Servicer, in each case in
accordance with payment instructions provided by such holder in writing to the
Master Servicer. The holder of the Excess Servicing Strip shall not have any
rights under this Agreement except as set forth in the preceding sentences of
this paragraph.
The Master Servicer shall pay the Excess Servicing Strip and the
Assignable Primary Servicing Fee to the holder of the Excess Servicing Strip and
the Assignable Primary Servicing Fee (i.e., Wachovia or any such third party) at
such time and to the extent the Master Servicer is entitled to receive payment
of its Master Servicing Fees and Primary Servicing Fees hereunder,
notwithstanding any resignation or termination of Wachovia hereunder.
Additional master servicing compensation ("Additional Servicing
Compensation") in the form of:
(i) 100% of all assumption application fees and 50% of all
assumption fees, modification fees, extension fees, consent fees, release
fees, waiver fees, fees in connection with defeasance and earn-out fees
paid by the Borrowers (and all other commercially reasonable fees
collected on or with respect to other actions for which the Master
Servicer is responsible) on all Trust Mortgage Loans that are not
Specially Serviced Trust Mortgage Loans (provided, however, that if the
consent of the Special Servicer is not required pursuant to the terms of
this Agreement in connection with the underlying servicing action, then
the Master Servicer shall be entitled to receive 100% of such fees) (but
only to the extent that all amounts then due and payable (after giving
effect to any modification) with respect to the subject Trust Mortgage
Loan have been paid);
(ii) all Penalty Charges actually collected on each Trust Mortgage
Loan during the period that such Trust Mortgage Loan is not a Specially
Serviced Mortgage Loan, but only to the extent that (A) all amounts then
due and payable with respect to such Trust Mortgage Loan (including
outstanding interest on all Advances accrued with respect to such Trust
Mortgage Loan) have been paid, (B) the Trust Fund has been reimbursed with
respect to any Advances made with respect to such Trust Mortgage Loan,
together with interest thereon if such interest was paid to the Master
Servicer, Special Servicer or the Trustee, as applicable, from a source of
funds other than Penalty Charges collected on such Trust Mortgage Loan and
(C) the Trust Fund has been reimbursed for any Additional Trust Fund
Expenses incurred since the Closing Date with respect to such Trust
Mortgage Loan and previously paid from a source other than Penalty Charges
on such Trust Mortgage Loan;
(iii) all charges for beneficiary statements or demands and amounts
collected for checks returned for insufficient funds; and
(iv) all other customary charges, in each case only to the extent
actually paid by the related Borrower;
shall be retained by the Master Servicer and shall not be required
to be deposited in the Collection Account or any Mortgage Loan Combination
Custodial Account pursuant to Section 3.04. Notwithstanding anything to the
contrary in clause (ii) of the first sentence of this paragraph or in the last
paragraph of Section 3.11(b), the Master Servicer shall be entitled to that
portion, if any, of a Penalty Charge collected on a Specially Serviced Trust
Mortgage Loan prior to the related Servicing Transfer Event.
The Master Servicer also shall be entitled to receive and retain
additional servicing compensation in the form of: (i) interest or other income
earned on deposits relating to the Trust Fund in the Collection Account and any
Mortgage Loan Combination Custodial Accounts, maintained by the Master Servicer
in accordance with Section 3.06 (but only to the extent of the Net Investment
Earnings, if any, with respect to each such account for each Collection Period);
(ii) interest earned on deposits in any Cash Collateral Account, any Lockbox
Account and the Servicing Accounts maintained by the Master Servicer that is not
required by applicable law or the related Trust Mortgage Loan to be paid to the
Borrower; and (iii) collections representing Prepayment Interest Excesses for
any Distribution Date (except to the extent necessary to offset Prepayment
Interest Shortfalls for such Distribution Date).
Without limiting its rights under any other agreement or arrangement
(including without limitation, the related CBA A/B Intercreditor Agreement), the
Master Servicer shall not be entitled to any Master Servicing Fees or any other
compensation hereunder with respect to the CBA B Loans.
Except as specifically provided in this Agreement, the Master
Servicer shall be required to pay out of its own funds all overhead expenses
incurred by it in connection with its servicing activities hereunder, if and to
the extent such expenses are not payable directly out of the Collection Account
or any Mortgage Loan Combination Custodial Account, and the Master Servicer
shall not be entitled to reimbursement therefor except as expressly provided in
this Agreement.
(b) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and REO Mortgage Loan. As to each such
Specially Serviced Mortgage Loan or REO Mortgage Loan, the Special Servicing Fee
shall accrue at the Special Servicing Fee Rate (in accordance with the same
terms of the related Note as are applicable to the accrual of interest at the
Mortgage Rate) and shall be computed on the basis of the same principal amount
as interest accrues from time to time on such Specially Serviced Mortgage Loan
or is deemed to accrue from time to time on such REO Mortgage Loan and for the
same period respecting which any related interest payment due on such Specially
Serviced Mortgage Loan or deemed to be due on such REO Mortgage Loan is
computed. The Special Servicing Fee with respect to any Specially Serviced
Mortgage Loan or REO Mortgage Loan shall cease to accrue if a Liquidation Event
occurs in respect thereof or, in the case of a Specially Serviced Mortgage Loan,
when all applicable Servicing Transfer Events cease to exist as described in the
definition of "Servicing Transfer Event." The Special Servicing Fee shall be
payable monthly, on a loan-by-loan basis, to the extent permitted by Section
3.05(a). The right to receive the Special Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of (i) 100% of all
assumption fees and assumption application fees on all Specially Serviced
Mortgage Loans, (ii) 50% of all assumption fees on any Mortgage Loans other than
Specially Serviced Mortgage Loans and 50% of all consent, waiver and
modification fees with respect to Performing Trust Mortgage Loan, for which
Special Servicer consent or approval is required and (iii) all commercially
reasonable extension fees and all fees received on or with respect to Trust
Mortgage Loan modifications, waivers and consents for which the Special Servicer
is responsible pursuant to Section 3.20(a), but only to the extent actually
collected from the related Borrower and only to the extent that all amounts then
due and payable after giving effect to any modification with respect to the
related Trust Mortgage Loan (including those payable to the Master Servicer
pursuant to Section 3.11(a)) have been paid, shall be promptly paid to the
Special Servicer by the Master Servicer and shall not be required to be
deposited in the Collection Account or any Mortgage Loan Combination Custodial
Account pursuant to Section 3.04.
The Special Servicer shall also be entitled to additional servicing
compensation in the form of a Workout Fee with respect to each Corrected
Mortgage Loan at the Workout Fee Rate. The Workout Fee shall be payable out of,
and shall be calculated by application of the Workout Fee Rate to, each
collection of interest, other than Default Interest and Excess Interest, and
principal (including scheduled payments, prepayments, Balloon Payments, payments
at maturity and payments received with respect to a partial condemnation of a
Mortgaged Property securing a Specially Serviced Mortgage Loan) received on such
Mortgage Loan for so long as it remains a Corrected Mortgage Loan. The Workout
Fee with respect to any Corrected Mortgage Loan will cease to be payable if such
Mortgage Loan again becomes a Specially Serviced Mortgage Loan; provided that a
new Workout Fee will become payable if and when such Mortgage Loan again becomes
a Corrected Mortgage Loan. If the Special Servicer is terminated (other than for
cause) or resigns, it shall retain the right to receive any and all Workout Fees
payable with respect to Mortgage Loans that became Corrected Mortgage Loans
during the period that it acted as Special Servicer and were Corrected Mortgage
Loans at the time of such termination or resignation (or for any Specially
Serviced Mortgage Loan that had not yet become a Corrected Mortgage Loan because
at the time the Special Servicer was terminated or resigned the Borrower had not
made three consecutive monthly debt service payments and subsequently the
Specially Serviced Mortgage Loan becomes a Corrected Mortgage Loan), and the
successor Special Servicer shall not be entitled to any portion of such Workout
Fees) in each case until the Workout Fee for any such loan ceases to be payable
in accordance with the terms hereof.
A Liquidation Fee will be payable to the Special Servicer with
respect to each Trust Mortgage Loan repurchased by the Mortgage Loan Seller
after the Initial Resolution Period as described in Section 2.03, any Specially
Serviced Mortgage Loan or REO Mortgage Loan as to which the Special Servicer
receives a full, partial or discounted payoff with respect thereto from the
related Borrower or any Liquidation Proceeds or Insurance and Condemnation
Proceeds with respect thereto, equal to the product of (i) the Liquidation Fee
Rate and (ii) the proceeds of such repurchase or full, partial or discounted
payoff or the Liquidation Proceeds or Insurance and Condemnation Proceeds
related to such repurchased Trust Mortgage Loan or liquidated Specially Serviced
Mortgage Loan or REO Mortgage Loan, as the case may be (in each such case,
however, exclusive of any portion of such payoff and/or proceeds that represents
Penalty Charges and/or Excess Interest); provided, however, that no Liquidation
Fee shall be payable out of, or in connection with the receipt of, Liquidation
Proceeds received as a result of the repurchase or replacement of any Trust
Mortgage Loan in connection with a Material Breach or Material Defect by the
Mortgage Loan Seller or, in the case of a Trust Mortgage Loan, by the
Performance Guarantor as contemplated by Section 2.03 (so long as such
repurchase or replacement occurs within the applicable cure period set forth in
the Mortgage Loan Purchase Agreement, as such cure period may be extended in
accordance with the Mortgage Loan Purchase Agreement), the purchase of any
Defaulted Trust Mortgage Loan by the Special Servicer or any Affiliate thereof
pursuant to Section 3.18, the purchase of any CBA A Loan by the related B Loan
Holder pursuant to the related CBA A/B Intercreditor Agreement so long as such
purchase occurs within 90 days of the Servicing Transfer Event, the purchase of
the Andover House Apartments A Loan by the related B Loan Holder pursuant to the
related Intercreditor Agreement so long as such purchase occurs within 90 days
of the Servicing Transfer Event, the purchase of any Trust Mortgage Loan by any
related Mezzanine Loan Holder (but only so long as such purchase occurs within
60 days of the Mezzanine Loan Holder's option in the related intercreditor
agreement first becoming exercisable) or the purchase of all the Trust Mortgage
Loans and REO Properties in the Trust Fund by Holders of more than 50% of the
Percentage Interests in the Controlling Class, the Special Servicer or the
Master Servicer pursuant to Section 9.01. Liquidation Fees are payable from and
out of the proceeds of such repurchase or full, partial or discounted payoff or
Liquidation Proceeds or Insurance and Condemnation Proceeds.
Notwithstanding anything in this Agreement to the contrary, no
Liquidation Fee will be payable under the circumstances set forth in the proviso
in the preceding paragraph. If, however, Liquidation Proceeds are received with
respect to any Corrected Mortgage Loan and the Special Servicer is properly
entitled to a Workout Fee, such Workout Fee will be payable based on and out of
such Liquidation Proceeds.
The Special Servicer will also be entitled to additional fees in the
form of Penalty Charges collected on each Specially Serviced Mortgage Loan (but
only to the extent actually collected from the related Borrower and, with
respect to the Andover House Apartments Total Loan, to the extent permitted in
the Andover House Apartments Intercreditor Agreement) and to the extent that (i)
all amounts then due and payable with respect to such Specially Serviced
Mortgage Loan (including outstanding interest on all Advances accrued with
respect to such Specially Serviced Mortgage Loan) have been paid, (ii) the Trust
Fund has been reimbursed with respect to any Advances made with respect to such
Specially Serviced Mortgage Loan, together with interest thereon if such
interest was paid to the Master Servicer, Special Servicer or the Trustee, as
applicable, from a source of funds other than Penalty Charges collected on such
Specially Serviced Mortgage Loan, and (iii) the Trust Fund has been reimbursed
for any Additional Trust Fund Expenses incurred since the Closing Date with
respect to such Specially Serviced Mortgage Loan and previously paid from a
source other than Penalty Charges on such Trust Mortgage Loan). The Special
Servicer shall be required to pay out of its own funds all expenses incurred by
it in connection with its servicing activities hereunder (including, without
limitation, payment of any amounts, other than management fees in respect of REO
Properties, due and owing to any of its Sub-Servicers and the premiums for any
blanket or master single interest Insurance Policy obtained by it insuring
against hazard losses pursuant to Section 3.07), if and to the extent such
expenses are not payable directly out of the Collection Account, a Mortgage Loan
Combination Custodial Account or the REO Account, and the Special Servicer shall
not be entitled to reimbursement therefor except as expressly provided in this
Agreement.
Notwithstanding the foregoing provisions of this Section 3.11(b),
Special Servicing Fees, Workout Fees and Liquidation Fees earned with respect to
any A Loan, any successor REO Trust Mortgage Loan with respect thereto or any
related REO Property shall be payable out of the related Mortgage Loan
Combination Custodial Account, to the maximum extent permitted by the related
Intercreditor Agreement, before being paid out of the Collection Account. The
Special Servicer shall be entitled to such compensation with respect to the B
Loans as is provided under the respective Intercreditor Agreements; provided
that, in no such case, shall the payment of any such compensation reduce amounts
otherwise payable to the Certificateholders with respect to the related A Loan.
Section 3.12 Reports to the Trustee
(a) The Master Servicer shall deliver to the Trustee and the Special
Servicer, no later than 2:00 p.m. New York City time on the second Business Day
prior to each Distribution Date beginning in June 2006, the CMSA Loan Periodic
Update File with respect to the subject Distribution Date. As to each Trust
Mortgage Loan and REO Property (or related REO Trust Mortgage Loan), to the
extent that the relevant information is not included as part of the CMSA Loan
Periodic Update File, the Master Servicer shall provide to the Special Servicer,
by the close of business on each Distribution Date and in a mutually agreeable
electronic format, the amount of each outstanding Advance and the interest
accrued thereon as of the related Determination Date.
(b) Notwithstanding the foregoing, because the Master Servicer will
not receive the Servicing Files until the Closing Date and will not have
sufficient time to review and analyze such Servicing Files before the initial
Distribution Date, the parties agree that the CMSA Loan Periodic Update File
required to be delivered by the Master Servicer in June 2006 will be based
solely upon information generated from actual collections received by the Master
Servicer and from information the Depositor delivers or causes to be delivered
to the Master Servicer (including but not limited to information prepared by
third-party servicers of the subject Trust Mortgage Loans with respect to the
period prior to the Closing Date).
(c) No later than 4:00 p.m. New York City time on each Master
Servicer Remittance Date beginning in October 2006 (or with respect to clause
(viii) below, in June 2006), the Master Servicer shall deliver or cause to be
delivered to the Trustee the following reports with respect to the Trust
Mortgage Loans (and, if applicable, the related REO Properties, providing the
required information as of the related Determination Date): (i) a CMSA
Comparative Financial Status Report; (ii) a CMSA Delinquent Loan Status Report;
(iii) a CMSA Historical Loan Modification and Corrected Mortgage Loan Report;
(iv) a CMSA Historical Liquidation Report; (v) a CMSA REO Status Report; (vi) a
CMSA Servicer Watch List; (vii) a CMSA Property File; (viii) a CMSA Loan Set-up
File; (ix) a CMSA Financial File; (x) CMSA Loan Level Reserve LOC Report; (xi)
CMSA Reconciliation of Funds Report; (xii) CMSA Realized Loss Report; and (xiii)
CMSA Advance Recovery Report. Such reports shall be in CMSA format (as in effect
from time to time) and shall be in an electronic format reasonably acceptable to
both the Trustee and the Master Servicer.
(d) The Special Servicer shall from time to time (and, in any event,
upon request) provide the Master Servicer with such information in its
possession regarding the Specially Serviced Mortgage Loans and REO Properties as
may be necessary for the Master Servicer to prepare each report and any
supplemental information to be provided by the Master Servicer to the Trustee.
Without limiting the generality of the foregoing, not later than 2:00 p.m. (New
York City time) on the Business Day following each Determination Date, beginning
in June 2006, the Special Servicer shall prepare and deliver or cause to be
delivered to the Master Servicer (on a computer readable medium reasonably
acceptable to the Master Servicer and the Special Servicer) the CMSA Special
Servicer Loan File providing the data to enable the Master Servicer to produce
the following supplemental reports with respect to the Specially Serviced
Mortgage Loans and REO Properties, providing the required information as of such
Determination Date: (i) a CMSA Property File; (ii) a CMSA Loan Periodic Update
File; (iii) a CMSA Delinquent Loan Status Report; (iv) a CMSA Comparative
Financial Status Report; (v) a CMSA Historical Liquidation Report; (vi) a CMSA
Historical Loan Modification and Corrected Mortgage Loan Report; (vii) a CMSA
REO Status Report; and (viii) a CMSA NOI Adjustment Worksheet and CMSA Operating
Statement Analysis Report.
(e) Notwithstanding the foregoing, the failure of the Master
Servicer or the Special Servicer to disclose any information otherwise required
to be disclosed pursuant to this Section 3.12 shall not constitute a breach of
this Agreement to the extent that the Master Servicer or the Special Servicer,
as the case may be, so fails because such disclosure, in the reasonable belief
of the Master Servicer or the Special Servicer, as the case may be, would
violate any applicable law or any provision of a Mortgage Loan Document
prohibiting disclosure of information with respect to the Mortgage Loans or the
Mortgaged Properties, would constitute a waiver of the attorney-client privilege
on behalf of the Trust or would otherwise materially harm the Trust Fund. The
Master Servicer or the Special Servicer may affix to any information provided by
it any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).
(A) At least annually by September 30, commencing September
30, 2006 or as soon thereafter as is reasonably practicable based
upon when, and the format in which, the Master Servicer has received
the subject information, with respect to each Trust Mortgage Loan
and REO Trust Mortgage Loan, the Master Servicer shall prepare and
deliver or cause to be delivered to the Trustee a CMSA Operating
Statement Analysis Report and CMSA NOI Adjustment Worksheet for the
related Mortgaged Property or REO Property as of the end of the
preceding fiscal year, based upon the operating statements and rent
rolls (but only to the extent the related Borrower delivers such
information to the Master Servicer or the Special Servicer and, with
respect to operating statements and rent rolls for Specially
Serviced Trust Mortgage Loans and REO Properties, to the extent
timely delivered by the Special Servicer to the Master Servicer) for
the related Mortgaged Property or REO Property as of the end of the
preceding fiscal year.
(B) Commencing with respect to the calendar quarter ending
September 30, 2006, the Master Servicer shall use its reasonable
efforts (but shall not be required to institute litigation) to
obtain quarterly and annual operating statements and rent rolls, the
quarterly and annual financial statements and the annual budgets (to
the extent the Mortgage Loan Documents require the Borrower to
deliver such budgets) of each Borrower with respect to each of the
Trust Mortgage Loans other than Specially Serviced Trust Mortgage
Loans, which efforts shall include sending a letter to the related
Borrower each quarter (followed up with telephone calls) requesting
such quarterly and annual operating statements and rent rolls by no
later than 60 days after the subject fiscal quarter or 90 days after
the subject fiscal year, as applicable, to the extent such action is
consistent with applicable law, the terms of such Trust Mortgage
Loans and the Servicing Standard. The Master Servicer shall (to the
extent not delivered pursuant to the preceding paragraph) deliver
copies of all of the foregoing items so collected to the Special
Servicer, the Series 2006-C2 Directing Certificateholder and any
Requesting Certificateholder (at the expense of such requesting
Holder) and, upon request, the Trustee, (x) in the case of quarterly
operating statements and rent rolls, within the later of (A) 60 days
after the subject fiscal quarter and (B) 45 days following receipt
by the Master Servicer of such operating statements and rent rolls
(or, if received from the Special Servicer, 15 days following such
receipt), and (y) in the case of annual operating statements and
rent rolls, not later than the later of (A) September 30 of each
calendar year, commencing September 30, 2006, and (B) 60 days
following receipt by the Master Servicer of such operating
statements and rent rolls (or, if received from the Special
Servicer, 15 days following such receipt).
(C) The Master Servicer shall maintain a CMSA Operating
Statement Analysis Report for each Mortgaged Property or REO
Property that shall be prepared or, once prepared, updated by the
Master Servicer and delivered to the Trustee within 30 days after
receipt by the Master Servicer of updated operating statements for
such Mortgaged Property; provided that the Master Servicer shall not
be required to update the CMSA Operating Statement Analysis Reports
more often than quarterly or such other longer period as operating
statements are required to be delivered to the lender by the
Borrower pursuant to the related Mortgage Loan Documents.
The Special Servicer will be required pursuant to Section 3.12(g) to deliver to
the Master Servicer the information required pursuant to this Section 3.12(f)
with respect to Specially Serviced Trust Mortgage Loans and REO Trust Mortgage
Loans after its receipt of any operating statement or rent rolls for any related
Mortgaged Property or REO Property.
(f) The Special Servicer shall use its reasonable efforts (but shall
not be required to institute litigation) to obtain quarterly and annual
operating statements, budgets and rent rolls and quarterly and annual financial
statements of each Borrower with respect to each Mortgaged Property constituting
security for a Specially Serviced Trust Mortgage Loan (and shall deliver or
cause to be delivered such materials to the Master Servicer and, upon the
request of the Trustee, the Depositor or any Rating Agency, to any such
requesting party), which efforts shall include sending a letter to the related
Borrower or other appropriate party each quarter (followed up with telephone
calls) requesting such annual operating statements and rent rolls by no later
than 60 days after the subject fiscal quarter or 90 days after the subject
fiscal year, as applicable, and shall cause quarterly and annual operating
statements and rent rolls to be prepared and delivered to it with respect to
each REO Property within 60 days after each fiscal quarter or 90 days after each
fiscal year, as applicable. The Special Servicer shall (to the extent not
delivered pursuant to the preceding paragraph) deliver copies of all of the
foregoing items so collected to the Master Servicer, the Series 2006-C2
Directing Certificateholder and any Requesting Certificateholder (at the expense
of such requesting Holder), and upon request, the Trustee and the Depositor, (x)
in the case of quarterly operating statements and rent rolls, within the later
of (A) 60 days after such quarter and (B) 20 days following receipt by the
Special Servicer of such operating statements and rent rolls, and (y) in the
case of annual operating statements and rent rolls, not later than the later of
(A) April 30 of each calendar year and (B) 20 days following receipt by the
Special Servicer of such operating statements and rent rolls.
(g) The Master Servicer's responsibilities under this Section 3.12
with respect to REO Properties and Specially Serviced Trust Mortgage Loans shall
be subject to the satisfaction of the Special Servicer's obligations under this
Section 3.12 and Section 3.21. The information that pertains to Specially
Serviced Trust Mortgage Loans and REO Properties reflected in the reports
referred to in this Section 3.12 shall be based solely upon the data delivered
by the Special Servicer to the Master Servicer. For the purposes of the
production by the Master Servicer or the Special Servicer of any reports,
documents or information required under this Section 3.12 or under any other
provision of this Agreement, the Master Servicer or the Special Servicer, as the
case may be, may conclusively rely (absent manifest error and without
investigation, inquiry, independent verification or any duty or obligation to
recompute, verify or recalculate any of the amounts and other information
contained in any such reports, documents or information) on any such reports,
documents or information provided to it by the Depositor, by the Mortgage Loan
Seller, by the related Borrower or (x) in the case of any such reports,
documents or information produced by the Master Servicer, by the Special
Servicer (if other than the Master Servicer or an Affiliate thereof) and (y) in
the case of any such reports, documents and information produced by the Special
Servicer, by the Master Servicer (if other than the Special Servicer or an
Affiliate thereof). The Trustee shall be entitled to conclusively rely on and
shall not be responsible for the content or accuracy of any reports, documents
or information provided to it by the Master Servicer or the Special Servicer
pursuant to this Agreement, without any duty or obligation to recompute, verify
or recalculate any of the amounts and other information stated therein.
(h) If the Master Servicer or the Special Servicer is required to
deliver any statement, report or information under any provision of this
Agreement, the Master Servicer or the Special Servicer, as the case may be, may
satisfy such obligation by (x) physically delivering a paper copy of such
statement, report or information, (y) delivering such statement, report or
information in a commonly used electronic format or (z) making such statement,
report or information available on the Master Servicer's internet website,
unless this Agreement expressly specifies a particular method of delivery or
such statement, report or information must be filed with the Commission as
contemplated by Section 12.06, 12.07 or 12.09; provided, that all reports
required to be delivered to the Trustee shall be delivered in accordance with
clause (x) or (y). Notwithstanding the foregoing, the Master Servicer and the
Special Servicer shall prepare and deliver to the Series 2006-C2 Directing
Certificateholder electronically the reports described on Exhibit I in the forms
and formats and within the time frames set forth therein, and in the ARCap
Naming Convention.
(i) The Master Servicer shall, with the reasonable cooperation of
the other parties hereto, deliver to each B Loan Holder all documents,
statements, reports and information with respect to the related B Loan and/or
the related Mortgaged Property as may be required under the related
Intercreditor Agreement.
Section 3.13 Reserved
Section 3.14 Reserved
Section 3.15 Access to Certain Information
(a) Each of the Master Servicer and the Special Servicer shall
provide reasonable access during its normal business hours at each of its
principal servicing offices to any Certificateholder, Certificate Owner or
holder of a security backed by a B Loan that is, or is affiliated with, a
federally insured financial institution, the Trustee, the Depositor, each Rating
Agency, to the Master Servicer or to the Special Servicer, as applicable, and to
the OTS, the FDIC, the Federal Reserve Board and the supervisory agents and
examiners of such boards and such corporations, and any other federal or state
banking or insurance regulatory authority that may exercise authority over any
Certificateholder, Certificate Owner or holder of a security backed by a B Loan,
access to any documentation regarding the Mortgage Loans and the Trust Fund (or,
in the case of a holder of a security backed by a B Loan, regarding such B Loan)
within its control which may be required by this Agreement or by applicable law.
Such access shall be afforded without charge (except that the Master
Servicer and the Special Servicer may charge a reasonable fee for copies and
out-of-pocket costs to parties other than the Rating Agencies) but only upon
reasonable prior written request and during normal business hours at the offices
of the Master Servicer or the Special Servicer, as the case may be, designated
by it. The Master Servicer and Special Servicer may satisfy any obligation or
request to provide information or copies of any reports or documents described
in this Section 3.15 by (x) physically delivering a paper copy of such
information, reports or documents, (y) delivering such information, reports or
documents in a commonly used electronic format or (z) making such information,
reports or documents available on its Website; provided, that all reports
required to be delivered to the Trustee shall be delivered in accordance with
clause (x) or (y).
Nothing in this Section 3.15 shall detract from the obligation of
the Master Servicer and the Special Servicer to observe any applicable law or
agreement prohibiting disclosure of information with respect to the Borrowers,
and the failure of the Master Servicer or the Special Servicer to provide access
as provided in this Section 3.15 as a result of such obligation shall not
constitute a breach of this Section 3.15. Nothing herein shall be deemed to
require the Master Servicer or Special Servicer to confirm, represent or warrant
the accuracy or completeness of any other Person's information or report,
including any communication from the Master Servicer, the Special Servicer, a
Borrower or any other Person. Notwithstanding the above, the Master Servicer and
Special Servicer shall not have any liability to the Depositor, the Trustee, any
Certificateholder, any Certificate Owner, the Initial Purchaser, any
Underwriter, any Rating Agency or any other Person to whom it delivers
information pursuant to and in accordance with this Section 3.15 or any other
provision of this Agreement for federal, state or other applicable securities
law violations relating to the disclosure of such information, unless the Master
Servicer or Special Servicer, as the case may be, acted with negligence, bad
faith or willful misfeasance. The Master Servicer and the Special Servicer may
each deny any of the foregoing Persons access to confidential information or any
intellectual property which the Master Servicer or the Special Servicer is
restricted by license or contract from disclosing. Notwithstanding the
foregoing, the Master Servicer and the Special Servicer shall maintain separate
from such confidential information and intellectual property, all documentation
regarding the Mortgage Loans and REO Properties that is not confidential.
(b) The Master Servicer and the Special Servicer may, in accordance
with such reasonable rules and procedures as it may adopt, also make available
through its Website or otherwise, any additional information relating to the
Trust Mortgage Loans, the Mortgaged Properties or the Borrowers, for review by
the Depositor, the Rating Agencies and any other Persons to whom the Master
Servicer or the Special Servicer believes such disclosure is appropriate, in
each case except to the extent doing so is prohibited by applicable law or by
the related Trust Mortgage Loan.
(c) The Master Servicer and the Special Servicer shall make the
following items available at their respective offices during normal business
hours, for review by the Depositor, the Trustee, any B Loan Holder (or its
designee), the Rating Agencies, any Certificateholder, any Certificate Owner,
any prospective transferee of a Certificate or an interest therein (or any
licensed or registered investment adviser acting on its behalf) and any other
Persons to whom the Master Servicer or the Special Servicer, as applicable,
believes such disclosure to be appropriate, or shall send such items to any
requesting party (at the expense of such requesting party, except in the case of
the Series 2006-C2 Directing Certificateholder (so long as the requests are not
excessive or duplicative), any B Loan Holder (or its designee) (so long as the
requests are not excessive or duplicative), the Trustee and the Rating Agencies,
and except as otherwise provided in the last sentence of this paragraph): (i)
all financial statements, occupancy information, rent rolls, retail sales
information, average daily room rates and similar information received from the
respective Borrowers or otherwise obtained by the Master Servicer or the Special
Servicer, as applicable, (ii) the inspection reports prepared by or on behalf of
the Master Servicer or the Special Servicer, as applicable, with respect to the
respective Mortgaged Properties in connection with the property inspections
pursuant to Section 3.19, (iii) any appraisals and/or internal valuations
prepared by or on behalf of the Master Servicer or the Special Servicer, as
applicable, with respect to the respective Mortgaged Properties in accordance
with this Agreement, (iv) any and all modifications, waivers and amendments of
the terms of a Trust Mortgage Loan entered into by the Master Servicer or the
Special Servicer, as applicable, and (v) any and all officer's certificates and
other evidence delivered to the Trustee and the Depositor to support the Master
Servicer's determination that any Advance was, or if made would be, a
Nonrecoverable Advance. Except as otherwise specifically provided herein, copies
of all such information shall be delivered by the Master Servicer or the Special
Servicer, as applicable, upon request, not more frequently than quarterly to the
Certificateholders (or, if the Controlling Class of Certificates is held in
book-entry form, the Certificate Owners) of the Controlling Class (as identified
by the related Depository Participant and for so long as such Class remains
outstanding) at the address specified by such Certificate Owners; provided,
however, that if beneficial ownership of the Controlling Class resides in more
than one Certificateholder or Certificate Owner, as applicable, the Master
Servicer or the Special Servicer, as applicable, shall be responsible only for
the expense of providing the first such copy of such information and shall be
entitled to reimbursement from the requesting party for the expense of any
additional copies so provided.
(d) With respect to any information furnished by the Master Servicer
or the Special Servicer pursuant to the foregoing provisions of this Section
3.15, the Master Servicer or the Special Servicer, as the case may be, shall be
entitled to (i) indicate the source of such information and affix thereto any
disclaimer it deems appropriate in its discretion and/or (ii) require that the
recipient of such information acknowledge that the Master Servicer or the
Special Servicer may contemporaneously provide such information to the
Depositor, the Trustee, the Initial Purchaser, any Underwriter, any Rating
Agency and/or Certificateholders or Certificate Owners. Without limiting the
foregoing, in connection with providing access to or copies of the items
described above in this Section 3.15 to Certificateholders, Certificate Owners,
the Series 2006-C2 Directing Certificateholder, prospective purchasers of
Certificates or interests therein, a licensed or registered investment advisor
acting on behalf of any of the foregoing, the Master Servicer or the Special
Servicer, as the case may be, shall require: (i) in the case of
Certificateholders, Certificate Owners and the Series 2006-C2 Directing
Certificateholder (or licensed or registered investment advisors acting on their
behalf), a confirmation executed by the requesting Person (and its investment
advisor, if applicable) substantially in the form of Exhibit R-1 hereto (or such
other form as may be reasonably acceptable to the Master Servicer or Special
Servicer, as applicable, and which may provide indemnification to the Master
Servicer or Special Servicer, as applicable), generally to the effect that such
Person is a registered or beneficial holder of Certificates or an investment
advisor representing such Person and is requesting the information solely for
use in evaluating such Person's investment in the Certificates and will
otherwise keep such information confidential; and (ii) in the case of a
prospective purchaser or a licensed or registered investment advisor
representing such Person, confirmation executed by the requesting Person (and
its investment advisor, if applicable) substantially in the form of Exhibit R-2
hereto (or such other form as may be reasonably acceptable to the Master
Servicer or Special Servicer, as applicable, and which may provide
indemnification to the Master Servicer or Special Servicer, as applicable),
generally to the effect that such Person is a prospective purchaser of a
Certificate or an interest therein or a licensed or registered investment
advisor representing such Person, and is requesting the information solely for
use in evaluating a possible investment in Certificates and will otherwise keep
such information confidential. Neither the Master Servicer nor the Special
Servicer shall be liable for the dissemination of information in accordance with
this Agreement.
(e) Any transmittal of information by the Master Servicer or Special
Servicer to any Person other than the Trustee, the Rating Agencies or the
Depositor may be accompanied by a letter from the Master Servicer or Special
Servicer containing the following provision:
"By receiving the information set forth herein, you hereby
acknowledge and agree that the United States securities laws
restrict any person who possesses material, non-public information
regarding the Trust which issued Credit Suisse First Boston Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates,
Series 2006-C2 from purchasing or selling such Certificates in
circumstances where the other party to the transaction is not also
in possession of such information. You also acknowledge and agree
that such information is being provided to you for the purposes of,
and such information may be used only in connection with, evaluation
by you or another Certificateholder, Certificate Owner or
prospective purchaser (or licensed or registered investment advisor
acting on their behalf) of such Certificates or beneficial interest
therein."
(f) Notwithstanding anything in this Agreement to the contrary, the
Master Servicer and the Special Servicer may withhold any information not yet
included in a Current Report on Form 8-K filed with the Commission or otherwise
made publicly available with respect to which the Trustee, the Special Servicer
or the Master Servicer has determined that such withholding is appropriate in
accordance with applicable law.
(g) Except as otherwise required by this Agreement and except for
statements, reports and information to be filed with the Commission as
contemplated by Article XII, the Master Servicer and the Special Servicer each
may, in its discretion, make available by hard copy, electronic media, internet
website or bulletin board service certain information and may make available by
hard copy, electronic media, internet website or bulletin board service any
reports or information that the Master Servicer or the Special Servicer is
required by this Agreement to provide to any of the Rating Agencies, the
Trustee, the Depositor and anyone the Depositor reasonably designates.
Section 3.16 Title to REO Property; REO Account
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued to the Trustee or its nominee, on behalf of
the Certificateholders and, if such REO Property relates to a Mortgage Loan
Combination, on behalf of the related B Loan Holder. The Special Servicer, on
behalf of the Trust and, if such REO Property relates to a Mortgage Loan
Combination, on behalf of the related B Loan Holder, shall sell any REO Property
in accordance with Section 3.18 by the end of the third calendar year following
the year in which the Trust acquires ownership of such REO Property for purposes
of Section 860G(a)(8) of the Code, unless the Special Servicer either (i)
applies, more than 60 days prior to the expiration of such liquidation period,
for and is granted an extension of time (an "REO Extension") by the IRS to sell
such REO Property or (ii) obtains for the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that the holding by the Trust of such
REO Property subsequent to the end of the third calendar year following the year
in which such acquisition occurred will not result in an Adverse REMIC Event
with respect to either REMIC Pool or an Adverse Grantor Trust Event with respect
to Grantor Trust V-1. Regardless of whether the Special Servicer applies for or
is granted the REO Extension contemplated by clause (i) of the immediately
preceding sentence or obtains the Opinion of Counsel referred to in clause (ii)
of such sentence, the Special Servicer shall act in accordance with the
Servicing Standard to liquidate the subject REO Property on a timely basis. If
the Special Servicer is granted such REO Extension or obtains such Opinion of
Counsel with respect to any REO Property, the Special Servicer shall (i)
promptly forward a copy of such REO Extension or Opinion of Counsel to the
Trustee, and (ii) sell such REO Property within such extended period as is
permitted by such REO Extension or contemplated by such Opinion of Counsel, as
the case may be. Any expense incurred by the Special Servicer in connection with
its applying for and being granted the REO Extension contemplated by clause (i)
of the third preceding sentence or its obtaining the Opinion of Counsel
contemplated by clause (ii) above shall be an expense of the Trust Fund (or, if
applicable, the Trust Fund and any affected B Loan Holder) payable out of the
Collection Account pursuant to Section 3.05 (or, if applicable, out of the
related Mortgage Loan Combination Custodial Account pursuant to Section 3.04)
first from REO Proceeds, and then from general collections in the Collection
Account (in which case such expense shall be reimbursable to the Trust from
Liquidation Proceeds received with respect to the REO Loan).
(b) The Special Servicer shall segregate and hold all funds
collected and received by it in connection with any REO Property separate and
apart from its own funds and general assets. If title to any REO Property is
acquired by or on behalf of the Trust (or, if such REO Property relates to a
Mortgage Loan Combination, on behalf of the Trust Fund and the related B Loan
Holder), then the Special Servicer shall establish and maintain one or more
accounts (collectively, the "REO Account"), to be held on behalf of the Trustee
in trust for the benefit of the Certificateholders (and any affected B Loan
Holder), for the retention of revenues and other proceeds derived from such REO
Property. Each account that constitutes an REO Account shall be an Eligible
Account. The Special Servicer shall deposit, or cause to be deposited, in the
REO Account, within one Business Day following receipt, all REO Revenues,
Insurance and Condemnation Proceeds and Liquidation Proceeds received in respect
of an REO Property. Funds in the REO Account may be invested in Permitted
Investments in accordance with Section 3.06. The Special Servicer shall be
entitled to make withdrawals from the REO Account to pay itself, as additional
special servicing compensation, interest and investment income earned in respect
of amounts held in the REO Account as provided in Section 3.06(b) (but only to
the extent of the Net Investment Earnings, if any, with respect to the REO
Account for any Collection Period). The Special Servicer shall give notice to
the other parties hereto of the location of the REO Account when first
established and of the new location of the REO Account prior to any change
thereof.
(c) The Special Servicer shall withdraw from the REO Account funds
necessary for the proper operation, management, leasing, maintenance and
disposition of any REO Property, but only to the extent of amounts on deposit in
the REO Account relating to such REO Property. On the first Business Day
following each Determination Date, the Special Servicer shall withdraw from the
REO Account and deposit into the Collection Account (or, if the subject REO
Property relates to a Mortgage Loan Combination, into the related Mortgage Loan
Combination Custodial Account), or deliver to the Master Servicer for deposit
into the Collection Account (or, if the subject REO Property relates to a
Mortgage Loan Combination, into the related Mortgage Loan Combination Custodial
Account), the aggregate of all amounts received in respect of each REO Property
during the Collection Period ending on such Determination Date that are then on
deposit in the REO Account, net of any withdrawals made out of such amounts
pursuant to the preceding sentence; provided that, in the case of each REO
Property, the Special Servicer may retain in the REO Account such portion of
such proceeds and collections as may be necessary to maintain a reserve of
sufficient funds for the proper operation, management, leasing, maintenance and
disposition of such REO Property (including the creation of a reasonable reserve
for repairs, replacements, necessary capital improvements and other related
expenses), such reserve not to exceed an amount sufficient to cover such items
reasonably expected to be incurred during the following 12-month period.
(d) The Special Servicer shall keep and maintain separate records,
on a property-by-property basis, for the purpose of accounting for all deposits
to, and withdrawals from, the REO Account pursuant to Section 3.16(b) or
3.16(c).
Section 3.17 Management of REO Property
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income that
would be derived from such property if it were acquired by the Trust. If the
Special Servicer determines from such review that:
(i) None of the income from Directly Operating such Mortgaged
Property would be subject to tax as "net income from foreclosure property"
within the meaning of the REMIC Provisions or to the tax imposed on
"prohibited transactions" under Section 860F of the Code (either such tax
referred to herein as an "REO Tax"), then such Mortgaged Property may be
Directly Operated by the Special Servicer as REO Property (other than
performing construction work thereon or holding such REO Property for sale
to customers in the ordinary course of a trade or business);
(ii) Directly Operating such Mortgaged Property as an REO Property
could result in income from such property that would be subject to an REO
Tax, but that a lease of such property to another party to operate such
property, or the performance of some services by an Independent Contractor
with respect to such property, or another method of operating such
property would not result in income subject to an REO Tax, then the
Special Servicer may (provided that in the judgment of the Special
Servicer, exercised in accordance with the Servicing Standard, it is
commercially reasonable) so lease or otherwise operate such REO Property
or, in accordance with the Servicing Standard, the Special Servicer
determines the income or earnings with respect to such REO Property will
offset any REO Tax and will maximize the net recovery from the REO
Property to the Certificateholders then the Special Servicer may so
operate the REO Property;
(iii) It is reasonable to believe that Directly Operating such
property as REO Property could result in income subject to an REO Tax and
that no commercially reasonable means exists to operate such property as
REO Property without the Trust incurring or possibly incurring an REO Tax
on income from such property, then the Special Servicer shall deliver to
the Trustee and to the Series 2006-C2 Directing Certificateholder, in
writing, a proposed plan (the "Proposed Plan") to manage such property as
REO Property. Such plan shall include potential sources of income and good
faith estimates of the amount of income from each such source. Within a
reasonable period of time after receipt of such plan, the Trustee shall
consult with the Special Servicer and shall advise the Special Servicer of
the Trust's federal income tax reporting position with respect to the
various sources of income that the Trust would derive under the Proposed
Plan. In addition, the Trustee shall (to the maximum extent reasonably
possible) advise the Special Servicer of the estimated amount of taxes
that the Trust would be required to pay with respect to each such source
of income. After receiving the information described in the two preceding
sentences from the Trustee, the Special Servicer shall either (A)
implement the Proposed Plan (after acquiring the respective Mortgaged
Property as REO Property) or (B) manage and operate such property in a
manner that would not result in the imposition of an REO Tax on the income
derived from such property.
Subject to Section 3.17(b), the Special Servicer's decision as to
how each REO Property shall be managed and operated shall be in accordance with
the Servicing Standard. Neither the Special Servicer nor the Trustee shall be
liable to the Certificateholders, the Trust, the other parties hereto, any
affected B Loan Holder or each other for errors in judgment made in good faith
in the exercise of their discretion while performing their respective
responsibilities under this Section 3.17(a) with respect to any REO Property.
Nothing in this Section 3.17(a) is intended to prevent the sale of any REO
Property pursuant to the terms and subject to the conditions of Section 3.18.
(b) If title to any REO Property is acquired, the Special Servicer
shall manage, conserve, protect, operate and lease such REO Property for the
benefit of the Certificateholders (or, if such REO Property relates to a
Mortgage Loan Combination, for the benefit of the Certificateholders and the
related B Loan Holder) solely for the purpose of its prompt disposition and sale
in accordance with Section 3.18, in a manner that does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or, except as contemplated by Section 3.17(a),
result in the receipt by either REMIC Pool of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, in an Adverse
REMIC Event with respect to either REMIC Pool or in an Adverse Grantor Trust
Event with respect to Grantor Trust V-1. Subject to the foregoing, however, the
Special Servicer shall have full power and authority to do any and all things in
connection with the administration of any REO Property as are consistent with
the Servicing Standard, and consistent therewith, shall withdraw from the REO
Account, to the extent of amounts on deposit therein with respect to such REO
Property, funds necessary for the proper operation, management, leasing,
maintenance and disposition of such REO Property, including:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property, if
applicable; and
(iv) all other costs and expenses necessary to maintain, lease,
sell, protect, manage, operate and restore such REO Property.
To the extent that amounts on deposit in the REO Account with respect to any REO
Property are insufficient for the purposes contemplated by the preceding
sentence with respect to such REO Property, the Master Servicer shall, at the
direction of the Special Servicer in accordance with Section 3.03(c), make a
Servicing Advance of such amounts as are necessary for such purposes unless the
Master Servicer determines, in its reasonable judgment, that such advances
would, if made, be Nonrecoverable Servicing Advances (in accordance with and
subject to the third to the last paragraph of Section 3.03(c)); provided,
however, that the Master Servicer may in its sole discretion make any such
Servicing Advance without regard to recoverability if it is a necessary fee or
expense incurred in connection with the defense or prosecution of legal
proceedings.
(c) Without limiting the generality of the foregoing, the Special
Servicer shall not:
(i) permit the Trust Fund to enter into, renew or extend any New
Lease with respect to any REO Property, if the New Lease by its terms will
give rise to any income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New Lease
other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO Property,
other than the repair or maintenance thereof or the completion of a
building or other improvement thereon, and then only if more than 10% of
the construction of such building or other improvement was completed
before default on the related Mortgage Loan became imminent, all within
the meaning of Section 856(e)(4)(B) of the Code; or
(iv) except as provided for in Section 3.17(a)(i) and (a)(ii) above,
Directly Operate, or allow any other Person, other than an Independent
Contractor, to Directly Operate, any REO Property on any date more than 90
days after its Acquisition Date;
unless, in any such case, the Special Servicer has obtained an Opinion of
Counsel (the cost of which shall be paid by the Master Servicer as a Servicing
Advance unless non-recoverable) to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Special Servicer may take such actions as are
specified in such Opinion of Counsel. Except as limited above in this Section
3.17 and by Section 3.17(d), the Special Servicer shall be permitted to cause
the Trust Fund to earn "net income from foreclosure property," subject to the
Servicing Standard.
(d) Except as permitted by Section 3.17(a), Special Servicer shall
contract with any Independent Contractor for the operation and management of any
REO Property; provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall be
expenses of the Trust and, in the case of an REO Property related to a
Serviced Loan Combination, of the related Junior Loan Holder(s)) shall be
reasonable and customary in light of the nature and locality of such REO
Property;
(iii) any such contract shall require, or shall be administered to
require, that the Independent Contractor, in a timely manner, (A) pay all
costs and expenses incurred in connection with the operation and
management of such REO Property, including those listed in Section 3.17(b)
above, and (B) remit all related revenues collected (net of its fees and
such costs and expenses) to the Special Servicer upon receipt;
(iv) none of the provisions of this Section 3.17(d) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer of any of its duties and
obligations hereunder with respect to the operation and management of any
such REO Property; and
(v) the Special Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. To the extent the costs of any contract with any
Independent Contractor for the operation and management of any REO Property are
greater that the revenues available from such property, such excess costs shall
be covered by, and be reimbursable to, the Master Servicer as a Servicing
Advance.
Section 3.18 Fair Value Purchase Option; Sale of REO Properties
(a) Each of the Master Servicer, the Special Servicer or the Trustee
may sell or purchase, or permit the sale or purchase of, a Trust Mortgage Loan
or REO Property only on the terms and subject to the conditions set forth in
this Section 3.18 or as otherwise expressly provided in or contemplated by
Section 2.03(b), Section 9.01, the related Mortgage Loan Documents and/or any
related intercreditor, co-lender and/or similar agreement(s).
(b) If any Trust Mortgage Loan becomes a Defaulted Trust Mortgage
Loan, then the Special Servicer shall promptly so notify in writing the Trustee,
the Master Servicer and the Series 2006-C2 Directing Certificateholder, and with
respect to any related Junior Loan of a Serviced Loan Combination, any related
Junior Loan Holder(s). The Series 2006-C2 Directing Certificateholder and the
Special Servicer, in that order of priority, may, at its option, purchase any
Defaulted Trust Mortgage Loan out of the Trust Fund at a cash price equal to the
applicable Purchase Price. The Series 2006-C2 Directing Certificateholder may,
after receipt of the notice described in the first sentence of this Section
3.18(b), assign its option under the preceding sentence to any party (including,
without limitation, in connection with an A Loan, any related Junior Loan
Holder), other than to a Person whose purchase of the related Mortgage Loan
would violate the terms of any related Intercreditor Agreement or Mezzanine Loan
intercreditor agreement; provided that the Series 2006-C2 Directing
Certificateholder, in connection therewith, shall deliver to the Trustee and the
Special Servicer a copy of the related written assignment executed by the Series
2006-C2 Directing Certificateholder, provided, further, that with respect to any
A Loan, the option holder's rights under this Section 3.18(b) are subject to the
rights of the holder of the related Junior Loan to purchase such A Loan pursuant
to the terms of a related Intercreditor Agreement or by a Mezzanine Loan Holder
pursuant to the related Mezzanine Loan intercreditor agreement. The option with
respect to an A Loan shall terminate upon the purchase of such A Loan by the
holder of the related Junior Loan pursuant to the related Intercreditor
Agreement or by a Mezzanine Loan Holder pursuant to the related Mezzanine Loan
intercreditor agreement. The applicable Purchase Price for any Defaulted Trust
Mortgage Loan purchased under this Section 3.18(b) shall be deposited into the
Collection Account, and the Trustee, upon receipt of a written notice from the
Master Servicer to the effect that such deposit has been made, shall release or
cause to be released to the Person effecting such purchase (or to its designee)
the related Mortgage File, and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be provided to
it and are reasonably necessary to vest in the Person effecting such purchase
(or its designee) ownership of such Trust Mortgage Loan. In connection with any
such purchase, the Special Servicer shall deliver the related Servicing File to
the Person effecting such purchase (or to its designee).
If not exercised sooner, such purchase option with respect to any
Defaulted Trust Mortgage Loan will automatically terminate upon (i) the related
Borrower's (or, subject to the related Intercreditor Agreement, any Junior Loan
Holder's) cure of all defaults on the Defaulted Trust Mortgage Loan, (ii) the
acquisition on behalf of the Trust of title to the related Mortgaged Property by
foreclosure or deed in lieu of foreclosure or (iii) the modification, waiver or
pay-off (full or discounted) of the Defaulted Trust Mortgage Loan in connection
with a workout.
The applicable Purchase Price for any Defaulted Trust Mortgage Loan
purchased under this Section 3.18(b) shall, (i) pending determination of the
Fair Value thereof pursuant to the succeeding sentence, be the Purchase Price
calculated in accordance with the definition of Purchase Price, and (ii)
following determination of the Fair Value pursuant to the succeeding sentence,
be the Fair Value. The Special Servicer shall promptly obtain an Appraisal
(unless it has an Appraisal that is less than 12 months old and has no actual
knowledge of, or notice of, any event which in the Special Servicer's judgment
would materially affect the validity of such Appraisal), and shall, within 60
days following the date it receives an Appraisal following the date on which a
Trust Mortgage Loan becomes a Defaulted Trust Mortgage Loan, determine the fair
value thereof in accordance with the Servicing Standard (the "Fair Value"). In
determining the Fair Value of any Defaulted Trust Mortgage Loan the Special
Servicer shall take into account, among other factors, the period and amount of
the delinquency on such Trust Mortgage Loan, the occupancy level and physical
condition of the related Mortgaged Property, the state of the local economy in
the area where the Mortgaged Property is located, the time and expense
associated with a purchaser's foreclosing on the related Mortgaged Property, and
the expected recoveries from such Defaulted Trust Mortgage Loan if the Special
Servicer were to pursue a workout or foreclosure strategy instead of selling
such Defaulted Trust Mortgage Loan pursuant to the subject purchase option. In
addition, the Special Servicer shall refer to all relevant information contained
in the Servicing File, including the most recent Appraisal obtained or conducted
with respect to the related Mortgaged Property and available objective
third-party information obtained from generally available sources, as well as
information obtained from vendors providing real estate services to the Special
Servicer, concerning the market for distressed real estate loans and the real
estate market for the subject property type in the area where the related
Mortgaged Property is located based on the Appraisal. The Special Servicer must
give prompt written notice of its Fair Value determination to the Trustee, the
Master Servicer and the Series 2006-C2 Directing Certificateholder.
The Special Servicer shall be required to change from time to time
thereafter its determination of the Fair Value of a Defaulted Trust Mortgage
Loan based upon changed circumstances, new information or otherwise, in
accordance with the Servicing Standard. If the most recent Fair Value
calculation was made more than 90 days prior to the exercise date of a purchase
option (under this Section 3.18(b) or Section 3.18(c)), then the Special
Servicer shall confirm or revise the Fair Value determination, which Fair Value
may be higher or lower.
In the event that the Special Servicer or any affiliate of the
Special Servicer exercises the purchase option (under this Section 3.18(b) or
Section 3.18(c)) with respect to any Defaulted Trust Mortgage Loan, including as
the Series 2006-C2 Directing Certificateholder or as the assignee thereof, then
the Master Servicer or, if the Master Servicer is also the Special Servicer or
an affiliate of the Special Servicer, the Trustee shall determine whether the
Special Servicer's determination of Fair Value for a Defaulted Trust Mortgage
Loan is no less than the amount that the Master Servicer or the Trustee, as
applicable, considers to be the Fair Value of such Defaulted Trust Mortgage
Loan. In such event, the Special Servicer shall promptly deliver to the Master
Servicer or the Trustee, as applicable, in accordance with the foregoing
sentence, the most recent related Appraisal then in the Special Servicer's
possession, together with such other third-party reports and other information
then in the Special Servicer's possession that is relevant to the confirmation
of the Special Servicer's determination of Fair Value, including information
regarding any change in circumstance regarding the Defaulted Trust Mortgage Loan
known to the Special Servicer that has occurred subsequent to, and that would
materially affect the value of the related Mortgaged Property reflected in, the
most recent related Appraisal. Notwithstanding the foregoing, the Master
Servicer or the Trustee, as the case may be, may (at its option) designate an
Independent Qualified Appraiser, selected with reasonable care by the Master
Servicer or the Trustee, as the case may be, to confirm that the Special
Servicer's determination of Fair Value is consistent with or greater than what
the Independent Qualified Appraiser considers to be the Fair Value of such
Defaulted Trust Mortgage Loan. In that event, the Master Servicer or Trustee, as
applicable, will be entitled to rely upon such Independent Qualified Appraiser's
determination. The Master Servicer or Trustee, as applicable, shall be entitled
to a fee of $2,500 in connection with each such Fair Value determination. The
costs of all third party opinions of value and any Appraisals and inspection
reports incurred by the Master Servicer or Trustee, as the case may be, as
contemplated by this paragraph shall be advanced by the Master Servicer or
Trustee, as the case may be, and will constitute, and be reimbursable as, a
Servicing Advance.
Unless and until the purchase option granted hereunder with respect
to a Defaulted Trust Mortgage Loan is exercised, the Special Servicer will be
required to pursue such other resolution strategies available hereunder,
including workout and foreclosure, consistent with the Servicing Standard, but
the Special Servicer will not be permitted to sell the Defaulted Trust Mortgage
Loan other than pursuant to the exercise of such purchase option or as otherwise
permitted under Section 3.18(a).
(c) If the Series 2006-C2 Directing Certificateholder or an assignee
thereof has not exercised its option to purchase any Defaulted Trust Mortgage
Loan as provided in Section 3.18(b) within 30 days of the Series 2006-C2
Directing Certificateholder's having received notice of the Fair Value
determination pursuant to Section 3.18(b), then the Special Servicer or its
assignee may, at its option, exercise the option to purchase (or designate an
Affiliate thereof to purchase) such Trust Mortgage Loan out of the Trust Fund at
a cash price equal to the applicable Purchase Price. Each of the Series 2006-C2
Directing Certificateholder and the Special Servicer shall thereafter have the
option to purchase the Defaulted Mortgage Loan until such option otherwise
expires or is exercised. The cash price paid for any such Trust Mortgage Loan
purchased under this Section 3.18 shall be paid to the Master Servicer within 10
Business Days following the date notice is received that the option is exercised
and shall be deposited into the Collection Account, and the Trustee, upon
receipt of written notice from the Master Servicer to the effect that such
deposit has been made, shall release or cause to be released to the Special
Servicer (or the designated Affiliate thereof), as applicable, the related
Mortgage File, and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be provided to it and are
reasonably necessary to vest in the Special Servicer (or the designated
Affiliate thereof), as applicable, the ownership of such Trust Mortgage Loan.
Nothing in this Section 3.18(c) shall be deemed to limit the ability of any
Junior Loan Holder to purchase the related A loan in accordance with the related
Intercreditor Agreement.
(d) The Special Servicer may purchase any REO Property at the
Purchase Price thereof. The Special Servicer shall use reasonable efforts to
solicit bids for each REO Property in such manner as will be reasonably likely
to realize a fair price as soon as reasonably possible and, in any event, within
the time period provided for by Section 3.16(a). Such solicitation shall be made
in a commercially reasonable manner. The Special Servicer shall accept the
highest cash bid received from any Person for such REO Property in an amount at
least equal to the Purchase Price therefor; provided, however, that in the
absence of any such bid, the Special Servicer shall accept the highest cash bid
received from any Person that is determined by the Special Servicer to be a fair
price for such REO Property. If the Special Servicer reasonably believes that it
will be unable to realize a fair price for any REO Property within the time
constraints imposed by Section 3.16(a), then the Special Servicer shall dispose
of such REO Property upon such terms and conditions as the Special Servicer
shall deem necessary and desirable to maximize the recovery thereon under the
circumstances and, in connection therewith, shall accept the highest outstanding
cash bid, regardless of from whom received. If the Special Servicer determines
with respect to any REO Property that the offers being made with respect thereto
are not in the best interests of the Certificateholders and, if the subject REO
Property relates to a Mortgage Loan Combination, the related B Loan Holder, as a
collective whole, and that the end of the period referred to in Section 3.16(a)
with respect to such REO Property is approaching, the Special Servicer shall
seek an extension of such period in the manner described in Section 3.16(a);
provided, however, that the Special Servicer shall use its best efforts,
consistent with the Servicing Standard, to sell any REO Property prior to three
years prior to the Rated Final Distribution Date.
The Special Servicer shall give the Trustee, the Master Servicer,
Directing Certificateholder and any affected B Loan Holder not less than three
Business Days' prior written notice of its intention to sell any REO Property.
No Interested Person shall be obligated to submit a bid to purchase any REO
Property, and notwithstanding anything to the contrary herein, neither the
Trustee, in its individual capacity, nor any of its Affiliates may bid for or
purchase any REO Property pursuant hereto.
(e) Whether any cash bid constitutes a fair price for any REO
Property for purposes of Section 3.18(d), shall be determined by the Special
Servicer, if the highest bidder is a Person other than the Special Servicer or
an Affiliate thereof, and by the Master Servicer, if the highest bidder is the
Special Servicer or an Affiliate thereof. In determining whether any bid
received from the Special Servicer or an Affiliate thereof represents a fair
price for any REO Property, the Master Servicer shall obtain and may
conclusively rely on the opinion of an Appraiser retained at the expense of the
Trust Fund (and/or any affected B Loan Holder) by the Master Servicer. In
determining whether any bid constitutes a fair price for any REO Property, such
Appraiser shall be instructed to take into account, as applicable, among other
factors, the occupancy level and physical condition of the REO Property, the
state of the local economy and the obligation to dispose of any REO Property
within the time period specified in Section 3.16(a). The Purchase Price for any
REO Property shall in all cases be deemed a fair price.
Subject to subsections (a) through (d) above, the Special Servicer
shall act on behalf of the Trustee and, in the case of any Serviced Loan
Combination, the related Junior Loan Holder(s), in negotiating and taking any
other action necessary or appropriate in connection with the sale of any REO
Property, and the collection of all amounts payable in connection therewith. Any
sale of any REO Property shall be final and without recourse to the Trustee, the
Trust Fund or any affected B Loan Holder, except, in the case of the Trust Fund,
as shall be customary in deeds of real property, and if such sale is consummated
in accordance with the terms of this Agreement, neither the Special Servicer nor
the Master Servicer shall have any liability to any Certificateholder and, with
respect to any Serviced Loan Combination, to any Junior Loan Holder, with
respect to the purchase price therefor accepted by the Special Servicer or the
Master Servicer.
(f) Any sale of any Defaulted Trust Mortgage Loan or REO Property
shall be for cash only.
(g) The parties hereto acknowledge the purchase option of each B
Loan Holder with respect to the related A Loan provided for in the related
Intercreditor Agreement. The purchase price paid by any B Loan Holder for the
related A Loan in accordance with such purchase option shall be deposited into
the Collection Account, and the Trustee, upon receipt of written notice from the
Master Servicer to the effect that such deposit has been made, shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as shall be provided to it and are reasonably necessary to vest
ownership of such Mortgage Loan in the related B Loan Holder.
(h) If pursuant to any purchase option provided for in the related
intercreditor, co-lender or similar agreement, a Mezzanine Loan Holder purchases
any Trust Mortgage Loan, then the purchase price paid by such Mezzanine Loan
Holder for such Trust Mortgage Loan in accordance with such purchase option
shall be deposited into the Collection Account, and the Trustee, upon receipt of
written notice from the Master Servicer to the effect that such deposit has been
made, shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as shall be provided to it and are reasonably
necessary to vest ownership of such Trust Mortgage Loan in such Mezzanine Loan
Holder.
Section 3.19 Additional Obligations of the Master Servicer and
Special Servicer; Inspections; Appraisals
(a) The Master Servicer (or, with respect to each Specially Serviced
Trust Mortgage Loan and REO Property and each Trust Mortgage Loan described in
Section 3.19(c) below, the Special Servicer at the expense of the Trust Fund)
shall physically inspect or cause to be physically inspected (which inspection
may be conducted by an independent third party contractor), at its own expense,
each Mortgaged Property at such times and in such manner as are consistent with
the Servicing Standard, but in any event shall inspect each Mortgaged Property
(A) (1) at least once every 12 months for Trust Mortgage Loans with Stated
Principal Balances in excess of $2,000,000 and (2) at least once every 24 months
for Trust Mortgage Loans with Stated Principal Balances of $2,000,000 or less
and (B) if the Trust Mortgage Loan becomes a Specially Serviced Trust Mortgage
Loan, as soon as practicable and thereafter at least once every 12 months for so
long as such condition exists. The Master Servicer or Special Servicer, as
applicable, shall on a quarterly basis (but only in respect of subclauses (ii)
and (iii) below) send each inspection report (i) to S&P and/or Moody's, upon
request, (ii) to the Series 2006-C2 Directing Certificateholder and any
Requesting Subordinate Certificateholder (at the expense of such Requesting
Subordinate Certificateholder), (iii) if the subject Mortgaged Property relates
to a Mortgage Loan Combination, to the related B Loan Holder and (iv) to the
Trustee upon request. At the request of any Certificateholder or Certificate
Owner, the Trustee shall request a copy of the relevant inspection report(s) and
deliver the same to such Certificateholder or Certificate Owner, as the case may
be.
(b) With respect to each Mortgage Loan that allows the mortgagee to
terminate, or cause the related Borrower to terminate, the related Manager upon
the occurrence of certain events specified in the related Mortgage Loan
Documents, the Special Servicer may enforce the Trustee's rights with respect to
the Manager under the related Mortgage Loan Documents and Management Agreement;
provided that, if such right accrues under the related Mortgage Loan Documents
or Management Agreement only because of the occurrence of the related
Anticipated Repayment Date, if any, the Special Servicer may in its sole
discretion, in accordance with the Servicing Standard, waive such right with
respect to such date. If the Special Servicer is entitled to terminate the
Manager, the Special Servicer shall promptly give notice to the Series 2006-C2
Directing Certificateholder, to each Rating Agency and, with respect to any
Serviced Loan Combination, to the related Junior Loan Holder(s). In accordance
with the Servicing Standard, the Special Servicer shall cause the Borrower to
terminate the Manager, and to recommend a Successor Manager (meeting the
requirements set forth below) only if the Special Servicer determines in its
reasonable discretion that such termination is not likely to result in
successful litigation against the Trust Fund and any affected B Loan Holder by
such Manager or the related Borrower, or create a defense to the enforcement of
remedies under the subject Mortgage Loan.
The Special Servicer shall effect such termination only if the
Special Servicer has, in the case of any Specially Serviced Trust Mortgage Loan
that is a Significant Trust Mortgage Loan, received a written confirmation from
each of the Rating Agencies, that the appointment of such Successor Manager
would not cause such Rating Agency to withdraw, downgrade or qualify any of the
then-current ratings on the Certificates. If a Manager is otherwise terminated
or resigns under the related Mortgage Loan Documents or Management Agreement and
the related Borrower does not appoint a Successor Manager, the Special Servicer
shall use its best efforts to retain a Successor Manager (or the recommended
Successor Manager, if any) on terms substantially similar to the Management
Agreement or, failing that, on terms as favorable to the Trust Fund as can
reasonably be obtained by the Special Servicer. For the purposes of this Section
3.19(b), a "Successor Manager" shall be a professional management corporation or
business entity reasonably acceptable to the Special Servicer which (i) manages,
and is experienced in managing, other comparable commercial and/or multifamily
properties, (ii) in the case of a Significant Trust Mortgage Loan, will not
result in a downgrade, qualification or withdrawal of the then-current ratings
assigned to the Certificates by each Rating Agency, as confirmed by such Rating
Agency in writing (if required pursuant to the first sentence of this
paragraph), and (iii) otherwise satisfies any criteria set forth in the related
Mortgage Loan Documents.
(c) The Special Servicer shall be required to obtain any Appraisal
or perform an internal valuation required in connection with an Appraisal
Reduction Event within 60 days after the occurrence of such Appraisal Reduction
Event, the cost of which shall be paid by the Master Servicer as a Servicing
Advance; provided that in no event shall the period to receive such Appraisal or
perform such internal valuation exceed 120 days from the occurrence of the event
that, with the passage of time, would become such Appraisal Reduction Event.
Upon receipt, the Special Servicer shall send a copy of such Appraisal or
internal valuation to the Trustee, the Master Servicer, any affected B Loan
Holder, the Certificateholders (or, if the Controlling Class of Certificates is
held in book-entry form, the Certificate Owners) of the Controlling Class and
any Requesting Subordinate Certificateholder (at the expense of such Requesting
Subordinate Certificateholder); provided, however, that as to each such
Appraisal or internal valuation, if beneficial ownership of the Controlling
Class resides in more than one Certificateholder or Certificate Owner, as the
case may be, the Special Servicer shall be responsible only for the expense of
providing the first such copy thereof and shall be entitled to reimbursement
from the Trust Fund for the expense of any additional copies so provided. If
neither a required Appraisal is received, nor an internal valuation is
completed, by such date, the Appraisal Reduction Amount for such Trust Mortgage
Loan shall be conclusively established to be 25% of the Stated Principal Balance
of such Trust Mortgage Loan as of the date of the related Appraisal Reduction
Event; provided that the obligation of the Special Servicer to obtain such
Appraisal or complete such internal valuation shall continue until such
Appraisal is obtained or such internal valuation is completed. On the first
Determination Date occurring on or after the delivery of such Appraisal or the
completion of such internal valuation, and on each anniversary thereafter, the
Special Servicer shall calculate and report to the Master Servicer and the
Trustee, the Appraisal Reduction Amount taking into account such Appraisal or
internal valuation. The Master Servicer shall conclusively rely on any report by
the Special Servicer of an initial or redetermined Appraisal Reduction Amount.
Notwithstanding the foregoing, the Special Servicer will not be required to
obtain an Appraisal or perform an internal valuation, as the case may be, under
this Section 3.19(c) with respect to a Trust Mortgage Loan which is the subject
of an Appraisal Reduction Event if the Special Servicer has obtained an
Appraisal with respect to the related Mortgaged Property within the 12-month
period immediately prior to the occurrence of such Appraisal Reduction Event,
unless the Special Servicer, in the exercise of its reasonable judgment, has
reason to believe there has been a material adverse change in the value of the
related Mortgaged Property. Instead, the Special Servicer may use such prior
Appraisal in calculating any Appraisal Reduction Amount with respect to such
Trust Mortgage Loan.
(d) With respect to each Mortgage Loan as to which an Appraisal
Reduction Event has occurred (unless such Mortgage Loan has become a Corrected
Mortgage Loan, taking into account any amendment or modification of such
Mortgage Loan, and no other Servicing Transfer Event or Appraisal Reduction
Event has occurred and is continuing with respect thereto), the Special Servicer
shall, within 30 days of each annual anniversary of such Appraisal Reduction
Event, order an Appraisal (which may be an update of a prior Appraisal), or with
respect to any Mortgage Loan with an outstanding principal balance less than
$2,000,000, perform an internal valuation or obtain an Appraisal (which may be
an update of a prior Appraisal), the cost of which shall be paid by the Master
Servicer as a Servicing Advance. Upon receipt, the Special Servicer shall send a
copy of such Appraisal to the Trustee, the Master Servicer, each affected B Loan
Holder (if any), the Certificateholders (or, if the Controlling Class of
Certificates is held in book-entry form, the Certificate Owners) of the
Controlling Class and any Requesting Subordinate Certificateholder (at the
expense of such Requesting Subordinate Certificateholder); provided, however,
that as to each such Appraisal, if beneficial ownership of the Controlling Class
resides in more than one Certificateholder or Certificate Owner, as the case may
be, the Special Servicer shall be responsible only for the expense of providing
the first such copy thereof and shall be entitled to reimbursement from the
Trust Fund for the expense of any additional copies so provided. On the first
Determination Date occurring on or after the delivery of such Appraisal or the
completion of such internal valuation, and on each Determination Date
thereafter, the Special Servicer shall calculate and report to the Master
Servicer and the Trustee, the Appraisal Reduction Amount taking into account
such Appraisal or internal valuation. Such Appraisal or internal valuation or
calculation of the Appraisal Reduction described in the preceding sentence, as
the case may be, shall be used to determine the amount of the Appraisal
Reduction Amount with respect to the subject Mortgage Loan for each Distribution
Date until the next Appraisal is required pursuant to this Section 3.19(d), and
such redetermined Appraisal Reduction Amount shall replace the prior Appraisal
Reduction Amount with respect to such Mortgage Loan.
Section 3.20 Modifications, Waivers, Amendments and Consents
(a) Subject to the provisions of this Section 3.20 and Section 3.21
(and, in the case of any Mortgage Loan Combination, subject to the terms of the
related Intercreditor Agreement), the Master Servicer and the Special Servicer
may, on behalf of the Trustee, agree to any modification, waiver or amendment of
any term of any Mortgage Loan without the consent of the Trustee or any
Certificateholder.
(i) For any Performing Mortgage Loan, and subject to the rights of
the Special Servicer set forth below, the Master Servicer shall be
responsible subject to the other requirements of this Agreement with
respect thereto, for any request by a Borrower for the consent of the
mortgagee or a modification, waiver or amendment of any term thereof;
provided that such consent or modification, waiver or amendment would not
(except as provided in Section 3.02) affect the amount or timing of any
scheduled payments of principal, interest or other amounts payable under
such Mortgage Loan, affect the obligation of the related Borrower to pay a
Yield Maintenance Charge or permit a Principal Prepayment by the Borrower
during a prepayment lockout period, result in the release of the related
Borrower from any material term thereunder, waive any material rights
thereunder with respect to any guarantor thereof, relate to the release or
substitution of any material collateral for such Mortgage Loan or, in the
reasonable judgment of the Master Servicer, materially impair the security
for such Mortgage Loan or reduce the likelihood of timely payments of
amounts due thereon; and provided, further, that this Section 3.20(a)(i)
does not apply to waivers contemplated by Section 3.07 or 3.08. Without
limiting the foregoing, the Master Servicer shall be responsible for the
following actions (which actions shall not require notice to or approval
from the Special Servicer, the Series 2006-C2 Directing Certificateholder
or any Rating Agency):
(A) approving annual budgets for the related Mortgaged
Property;
(B) waivers of Penalty Interest and late payment charges, to
the extent allowed under Section 3.02;
(C) with respect to a Mortgage Loan (I) with an unpaid
principal balance of greater than $3,000,000, approval of routine
leasing activities that affect less than the lesser of 30,000 square
feet or 30% of the net rentable area of the related Mortgaged
Property, or (II) with an unpaid principal balance of $3,000,000 or
less, approval of any routine leasing activity; and
(D) temporary waivers of any requirements in the related
Mortgage Loan Documents with respect to (w) insurance deductible
amounts, (x) claims-paying ability ratings of insurance providers,
(y) replacement cost insurance with respect to the Mortgaged
Property and (z) co-insurance clauses or related agreed-amount
endorsements;
(E) waiving any provision of a Mortgage Loan requiring the
receipt of a rating confirmation if such Mortgage Loan is not a
Significant Trust Mortgage Loan and the related provision of such
Mortgage Loan does not relate to a "due-on-sale" or
"due-on-encumbrance" clause or defeasance (which shall be subject to
the terms of Section 3.08 hereof);
(F) subject to other restrictions herein regarding Principal
Prepayments, waiving any provision of a Mortgage Loan requiring a
specified number of days notice prior to a Principal Prepayment;
(G) releases of non-material, non-income producing parcels of
a Mortgaged Property and (subject to Section 3.08(f)) releases of
Mortgaged Property in connection with a defeasance;
(H) grants of easements, rights of way or similar agreements
(and related consents to the subordination of the Mortgage Loan
thereto) that do not materially affect the use or value of a
Mortgaged Property or the related Borrower's ability to make any
payment with respect to the related Mortgage Loan;
(I) grants of waivers of non-material covenant defaults (other
than financial covenants) including late financial statements; and
(J) consents to a change in property management relating to
any Mortgage Loan with outstanding Principal Balance of $10,000,000
or less.
provided, however, that if in the reasonable judgment of the Master Servicer any
request by a Borrower for consent of the Mortgagee or any modification, waiver
or amendment is not included within the scope of the consents listed in clauses
(A)-(J) above, the Master Servicer shall process the Borrower's request and
submit such request for approval by the Special Servicer which approval shall be
deemed given if not denied within 10 days of the Special Servicer's receipt of
the Master Servicer's recommendation and analysis.
(ii) In addition to certain actions related to Performing Mortgage
Loans, the Special Servicer shall be responsible for any request by a
Borrower for the consent of the mortgagee and any modification, waiver or
amendment of any term of any Mortgage Loan if such consent, request,
modification, waiver or amendment relates to a Specially Serviced Mortgage
Loan.
(b) All modifications, waivers or amendments of any Mortgage Loan
shall be (i) in writing and (ii) effected in accordance with the Servicing
Standard.
(c) Neither the Master Servicer nor, except as provided in Section
3.20(d), the Special Servicer, on behalf of the Trustee, shall agree or consent
to (or consent to a Primary Servicer performing), any modification, waiver or
amendment of any term of any Performing Mortgage Loan if such modification,
waiver or amendment would:
(i) except for the waiver of Penalty Charges in accordance with
Section 3.02(a), affect the amount or timing of any related payment of
principal, interest or other amount (including Yield Maintenance Charges)
payable thereunder;
(ii) affect the obligation of the related Borrower to pay a Yield
Maintenance Charge or Static Prepayment Premium or permit a Principal
Prepayment during any period in which the related Note prohibits Principal
Prepayments;
(iii) except as expressly contemplated by the related Mortgage or in
connection with a defeasance or condemnation or pursuant to Section
3.09(e), result in a release of the lien of the Mortgage on any material
portion of the related Mortgaged Property without a corresponding
Principal Prepayment in an amount not less than the fair market value (as
determined by an appraisal by an Appraiser delivered at the expense of the
related Borrower and upon which the Master Servicer and the Special
Servicer, as applicable, may conclusively rely) of the property to be
released; or
(iv) in the judgment of the Master Servicer or Special Servicer, as
applicable, otherwise materially impair the security for such Mortgage
Loan or reduce the likelihood of timely payment of amounts due thereon;
unless either (x) the subject Trust Mortgage Loan is in default or
default is reasonably foreseeable or (y) the Special Servicer has determined
(and may rely on an opinion of counsel in making the determination) that the
modification, waiver or amendment will not be a "significant modification" of
the subject Trust Mortgage Loan within the meaning of Treasury Regulations
Section 1.860G-2(b). Nothing contained in this Section 3.20(c) shall modify the
scope of the modifications, amendments, waivers and consents for Mortgage Loans
for which the Master Servicer and Special Servicer, as applicable, are
responsible under Sections 3.20(a)(i) and (a)(ii).
(d) Notwithstanding Sections 3.20(a)(ii) and 3.20(c), but subject to
Sections 3.20(e) and 3.20(f), the Special Servicer may (i) reduce the amounts
owing under any Specially Serviced Mortgage Loan by forgiving principal, accrued
interest and/or any Yield Maintenance Charge or Static Prepayment Premium, (ii)
reduce the amount of the Monthly Payment on any Specially Serviced Mortgage
Loan, including by way of a reduction in the related Mortgage Rate, (iii)
forbear in the enforcement of any right granted under any Note or Mortgage
relating to a Specially Serviced Mortgage Loan, (iv) extend the maturity of any
Specially Serviced Mortgage Loan, (v) waive Excess Interest if such waiver
conforms to the Servicing Standard, (vi) permit the release or substitution of
collateral for a Specially Serviced Mortgage Loan and/or (vii) waive a Yield
Maintenance Charge or Static Prepayment Premium or accept a Principal Prepayment
during any Lockout Period; provided that (A) the related Borrower is in default
with respect to the Specially Serviced Mortgage Loan or, in the judgment of the
Special Servicer, such default is reasonably foreseeable and (B) in the sole
good faith judgment of the Special Servicer and in accordance with the Servicing
Standard, such modification would result in recovery that equals or exceeds
recovery for liquidation on the subject Mortgage Loan to Certificateholders (or,
in the case of a Mortgage Loan Combination, Certificateholders and the related B
Loan Holder), as a collective whole, on a present value basis (the relevant
discounting of amounts that will be distributable to Certificateholders or a B
Loan Holder to be performed at a rate not less than the related Mortgage Rate).
(e) Neither the Master Servicer nor the Special Servicer shall
consent to, make or permit any modification, waiver or amendment of any term of
any Mortgage Loan that would cause an Adverse REMIC Event with respect to either
REMIC Pool, an Adverse Grantor Trust Event with respect to Grantor Trust V-1 or
any event similar to the foregoing with respect to either a REMIC or a grantor
trust that includes a B Loan.
(f) In no event shall the Special Servicer (i) extend the Maturity
Date of a Mortgage Loan beyond a date that is three years prior to the Rated
Final Distribution Date; (ii) extend the Maturity Date of any Mortgage Loan at
an interest rate less than the lower of (A) the interest rate in effect prior to
such extension or (B) the then prevailing interest rate for comparable loans, as
determined by the Special Servicer by reference to available indices for
commercial mortgage lending; (iii) if the Mortgage Loan is secured by a Ground
Lease, extend the Maturity Date of such Mortgage Loan beyond a date which is 10
years prior to the expiration of the term of such Ground Lease (after giving
effect to all extension options); or (iv) defer interest due on any Mortgage
Loan in excess of 10% of the Stated Principal Balance of such Mortgage Loan;
provided that with respect to clause (iii) above, the Special Servicer gives due
consideration to the term of such Ground Lease prior to any extension beyond a
date 20 years prior to the expiration of the term of such Ground Lease (after
giving effect to all extension options).
(g) [Reserved]
(h) The Master Servicer and the Special Servicer may, as a condition
to granting any request by a Borrower for consent, modification, waiver or
indulgence or any other matter or thing, the granting of which is within its
discretion pursuant to the terms of the instruments evidencing or securing the
related Mortgage Loan and is permitted by the terms of this Agreement, require
that such Borrower pay to it (i) as additional servicing compensation, a
reasonable or customary fee for the additional services performed in connection
with such request (provided that such fee does not constitute a "significant
modification" of such Mortgage Loan under Treasury Regulations Section
1.860G-2(b)), and (ii) any related costs and expenses incurred by it. In no
event shall the Master Servicer or the Special Servicer be entitled to payment
for such fees or expenses unless such payment is collected from the related
Borrower.
(i) The Master Servicer and the Special Servicer shall notify each
other, each affected B Loan Holder (if any) and the Trustee, in writing, of any
modification, waiver or amendment of any term of any Mortgage Loan (including
fees charged the Borrower) agreed to by the Master Servicer or the Special
Servicer, as the case may be, and the date thereof, and shall deliver to the
Trustee (in the case of the Special Servicer, with a copy to the Master
Servicer) for deposit in the related Mortgage File, an original counterpart of
the agreement relating to such modification, waiver or amendment, promptly (and
in any event within ten Business Days) following the execution thereof. The
Master Servicer or Special Servicer, as applicable, shall notify the Rating
Agencies of any modification, waiver or amendment of any term of any Significant
Trust Mortgage Loan agreed to by the Master Servicer or the Special Servicer, as
the case may be. Copies of each agreement whereby any such modification, waiver
or amendment of any term of any Mortgage Loan is effected shall be made
available for review upon prior request during normal business hours at the
offices of the Master Servicer or Special Servicer, as applicable, pursuant to
Section 3.15 hereof.
(j) With respect to each Borrower that has been established as a
"bankruptcy-remote entity," neither the Master Servicer nor the Special Servicer
shall consent to (x) the amendment by such Borrower of its organizational
documents or (y) any action that would violate any covenant of such Borrower
relating to its status as a separate or bankruptcy-remote entity, unless
granting such consent is consistent with the Servicing Standard and, with
respect to a Borrower under any Significant Trust Mortgage Loan, the Master
Servicer or the Special Servicer, as applicable, has obtained written
confirmation from each of the Rating Agencies that such amendment or action
would not result in a downgrade or withdrawal of any rating on a Class of
Certificates rated by such Rating Agency.
Section 3.21 Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping; Series 2006-C2 Directing Certificateholder
(a) Upon determining that a Servicing Transfer Event has occurred
with respect to any Trust Mortgage Loan or Junior Loan, the Master Servicer
shall promptly give notice thereof to the Special Servicer, the Trustee, each
Rating Agency, the Series 2006-C2 Directing Certificateholder and any Requesting
Subordinate Certificateholder (at the expense of such requesting Holder) (and,
solely as it relates to any related Junior Loan of a Serviced Loan Combination,
any related Junior Loan Holder), shall deliver copies of the related Servicing
File to the Special Servicer and shall use its reasonable efforts to provide the
Special Servicer with all information, documents and records (including records
stored electronically on computer tapes, magnetic discs and the like) relating
to such Trust Mortgage Loan and any related B Loan(s) that are in the possession
of the Master Servicer or available to the Master Servicer without undue burden
or expense, and reasonably requested by the Special Servicer to enable it to
assume its functions hereunder with respect thereto. The Master Servicer shall
use its reasonable efforts to comply with the preceding sentence within five
Business Days of the occurrence of each related Servicing Transfer Event and in
any event shall continue to act as Master Servicer and administrator of such
Trust Mortgage Loan and any related B Loan(s) until the Special Servicer has
commenced the servicing of such Trust Mortgage Loan. The Trustee shall make
available to the Underwriters, the Initial Purchaser, each affected B Loan
Holder (if any) and each Holder of a Certificate of the Controlling Class, a
copy of the notice of such Servicing Transfer Event provided by the Master
Servicer to the Special Servicer pursuant to this Section.
Upon determining that a Specially Serviced Mortgage Loan (other than
an REO Mortgage Loan) has become a Corrected Mortgage Loan (provided no
additional Servicing Transfer Event is foreseeable in the reasonable judgment of
the Special Servicer) and that no other Servicing Transfer Event is continuing
with respect thereto, the Special Servicer shall immediately give notice thereof
and shall return the related Servicing File to the Master Servicer and, upon
giving such notice and returning such Servicing File to the Master Servicer, the
Special Servicer's obligation to service such Corrected Mortgage Loan shall
terminate and the obligations of the Master Servicer to service and administer
such Corrected Mortgage Loan shall re-commence.
(b) In servicing any Specially Serviced Trust Mortgage Loan, the
Special Servicer will provide to the Trustee originals of documents included
within the definition of "Mortgage File" for inclusion in the related Mortgage
File (with a copy of each such original to the Master Servicer) that come into
its possession after the occurrence of the applicable Servicing Transfer Event,
and provide the Master Servicer with copies of any additional related Trust
Mortgage Loan information including correspondence with the related Borrower.
(c) [Reserved]
(d) The Master Servicer shall maintain ongoing payment records with
respect to each of the Specially Serviced Mortgage Loans and REO Properties and
shall provide the Special Servicer with any information in its possession
required by the Special Servicer to perform its duties under this Agreement.
(e) Subject to the last paragraph of this Section 3.21(e), the
Special Servicer shall not take, or consent to the Master Servicer's taking, any
of the Specially Designated Servicing Actions with respect to any Mortgage Loan
or REO Property unless and until it has notified the Series 2006-C2 Directing
Certificateholder and the Series 2006-C2 Directing Certificateholder has not
objected in writing within 10 Business Days of having been notified thereof and
having been provided with all information that the Series 2006-C2 Directing
Certificateholder has reasonably requested with respect thereto promptly
following its receipt of the subject notice (it being understood and agreed that
if such written objection has not been received by the Special Servicer within
such 10-Business Day period, then the Series 2006-C2 Directing Certificateholder
shall be deemed to have approved the taking of the subject Specially Designated
Servicing Action); provided that, in the event that the Special Servicer
determines that immediate action is necessary to protect the interests of the
Certificateholders (as a collective whole) (or, in the case of a Mortgage Loan
Combination, to protect the interests of the Certificateholders and the related
B Loan Holder (as a collective whole)), the Special Servicer may take, or
consent to the Master Servicer's taking, a Specially Designated Servicing Action
with respect to any Mortgage Loan or REO Property without waiting for the Series
2006-C2 Directing Certificateholder's response; and provided, further, that,
with respect to any Specially Designated Servicing Action being performed by the
Master Servicer, the above-referenced 10-Business Day period shall not exceed
the 10-day period within which the Special Servicer must object to the Master
Servicer's performance of such Specially Designated Servicing Action.
In addition, subject to the last paragraph of this Section 3.21(e),
the Series 2006-C2 Directing Certificateholder may direct the Special Servicer
to take, or to refrain from taking, any actions with respect to the servicing
and/or administration of a Specially Serviced Mortgage Loan or REO Property as
the Series 2006-C2 Directing Certificateholder may deem advisable or as to which
provision is otherwise made herein. Upon reasonable request, the Special
Servicer shall provide the Series 2006-C2 Directing Certificateholder with any
information in the Special Servicer's possession with respect to such matters,
including its reasons for determining to take a proposed action.
Notwithstanding the foregoing, no advice, direction or objection of
the Series 2006-C2 Directing Certificateholder shall (i) require or cause the
Special Servicer or the Master Servicer to violate the terms of any Mortgage
Loan or any related intercreditor, co-lender or similar agreement, applicable
law or any provision of this Agreement, including the Special Servicer's and
Master Servicer's obligation to act in accordance with the Servicing Standard
and to maintain the REMIC status of each REMIC Pool, or (ii) result in an
Adverse REMIC Event with respect to either REMIC Pool or an Adverse Grantor
Trust Event with respect to Grantor Trust V-1, or (iii) expose the Master
Servicer, the Special Servicer, the Depositor, any of the Mortgage Loan Sellers,
the Trust Fund, any B Loan Holder, the Trustee or their Affiliates, officers,
directors, shareholders, partners, members, managers, employees or agents to any
claim, suit or liability for which this Agreement does not provide
indemnification to such party, or (iv) materially expand the scope of the
Special Servicer's or the Master Servicer's responsibilities under this
Agreement; and the Special Servicer will neither follow any such advice,
direction or objection if given by the Series 2006-C2 Directing
Certificateholder nor initiate any such actions.
(f) Upon receiving notice of (i) the filing of a case under any
federal or state bankruptcy, insolvency or similar law or the commencing of any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings with respect to a Mortgage Loan or the related Borrower,
(ii) the existence of a material non-payment default or (iii) the request by a
Borrower for the amendment or modification of a Mortgage Loan required to be
handled by the Special Servicer, the Master Servicer shall promptly give notice
thereof, and shall deliver copies of the related Servicing File, to the Special
Servicer and shall use its reasonable efforts to provide the Special Servicer
with all information relating to the Mortgage Loan and reasonably requested by
the Special Servicer to enable it to negotiate with the related Borrower and
prepare for any such proceedings. The Master Servicer shall use its reasonable
efforts to comply with the preceding sentence within five Business Days of the
occurrence of each such event, and upon receiving such documents and
information, the Special Servicer shall use its reasonable efforts to cause the
related Borrower to cure any default and/or remedy any such event, work out or
modify the Mortgage Loan consistent with the terms of this Agreement, and/or
prepare for such proceedings. Notwithstanding the foregoing, the occurrence of
the above-referenced event shall not in and of itself be considered a Servicing
Transfer Event.
(g) No later than 30 days after receipt by the Special Servicer of
the information reasonably required by the Special Servicer after a Servicing
Transfer Event for a Mortgage Loan, the Special Servicer shall deliver to each
Rating Agency, and the Series 2006-C2 Directing Certificateholder a report (the
"Asset Status Report") with respect to such Mortgage Loan and the related
Mortgaged Property. The Special Servicer shall not take any action under an
Asset Status Report until such report has been delivered to the Master Servicer
and, if written confirmation from each Rating Agency that the proposed action
will not lead to a withdrawal, downgrade or qualification of any then-current
rating assigned by each Rating Agency to any Class of Certificate is required
under this Agreement, the related Intercreditor Agreement or the related
Mortgage Loan Documents, such written confirmation has been obtained. Any Asset
Status Report with respect to a Mortgage Loan Combination will also be delivered
to the related B Loan Holder. Such Asset Status Report shall set forth the
following information to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced Mortgage Loan;
(ii) a discussion of the legal and environmental considerations
reasonably known to the Special Servicer, consistent with the Servicing
Standard, that are applicable to the exercise of remedies as aforesaid and
to the enforcement of any related guaranties or other collateral for the
related Mortgage Loan and whether outside legal counsel has been retained;
(iii) the most current rent roll (for properties other than
residential cooperative properties) and income or operating statement
available for the related Mortgaged Property;
(iv) the Appraised Value of the Mortgaged Property and Appraisal
Reduction Event for the related Mortgage Loan, if any, together with the
assumptions used in the calculation thereof;
(v) a recommendation by the Special Servicer as to how such
Specially Serviced Mortgage Loan might be returned to performing status,
returned to the Master Servicer for regular servicing or otherwise
realized upon;
(vi) a summary of any proposed actions 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 the
basis on which the Special Servicer made such determination;
(vii) a status report on any foreclosure actions or other
proceedings undertaken with respect to such mortgaged real property, 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 events of default thereon; and
(viii) such other information as the Special Servicer deems relevant
in light of the Servicing Standard.
With respect to any Mortgage Loan that becomes a Specially Serviced
Mortgage Loan, if within 10 Business Days of receiving an Asset Status Report,
the Series 2006-C2 Directing Certificateholder (and with respect to the Andover
House Apartments Loan, the Andover House Apartments Controlling Holder, if not
the same party) does not disapprove such Asset Status Report in writing, the
Special Servicer shall implement the recommended action as outlined in such
Asset Status Report; provided, however, that the Special Servicer may not take
any action that is contrary to applicable law or the terms of the applicable
Loan Documents. If the Series 2006-C2 Directing Certificateholder (or, with
respect to the CBA A/B Mortgage Loan Combination, the related B Loan Holder, or
with respect to the Andover House Apartments Loan, the Andover House Apartments
Controlling Holder, if not the same party) disapproves such Asset Status Report,
the Special Servicer shall revise such Asset Status Report and deliver to the
Series 2006-C2 Directing Certificateholder (or, with respect to the CBA A/B
Mortgage Loan Combination, the related B Loan Holder, or with respect to the
Andover House Apartments Loan, the Andover House Apartments Controlling Holder,
if not the same party), the Rating Agencies and the Master Servicer a new Asset
Status Report as soon as practicable, but in no event later than 30 days after
such disapproval.
The Special Servicer shall revise such Asset Status Report as
described above in this Section 3.21(g) until the earlier of (a) the failure of
the Series 2006-C2 Directing Certificateholder to disapprove such revised Asset
Status Report in writing within 10 Business Days of receiving such revised Asset
Status Report; (b) a determination by the Special Servicer as set forth below or
(c) the passage of 60 days from the date of preparation of the first Asset
Status Report. The Special Servicer shall deliver such finalized Asset Status
Report to the Series 2006-C2 Directing Certificateholder (or, with respect to
the CBA A/B Mortgage Loan Combination, the related B Loan Holder, or with
respect to the Andover House Apartments Loan, the Andover House Apartments
Controlling Holder, if not the same party), the Rating Agencies, the Master
Servicer, the Trustee and any Requesting Subordinate Certificateholder (at the
expense of such requesting Holder). 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. Notwithstanding the foregoing, the
Special Servicer (i) may, following the occurrence of an extraordinary event
with respect to the related Mortgaged Property, take any action set forth in
such Asset Status Report before the expiration of a 10 Business Day period if
the Special Servicer has reasonably determined that failure to take such action
would materially and adversely affect the interests of the Certificateholders
(as a collective whole) and it has made a reasonable effort to contact the
Series 2006-C2 Directing Certificateholder and (ii) in any case, shall determine
whether any affirmative disapproval by the Series 2006-C2 Directing
Certificateholder described in this paragraph is not in the best interest of the
Certificateholders (as a collective whole) pursuant to the Servicing Standard.
The Special Servicer shall have the authority to meet with the
Borrower for any Specially Serviced Loan and, subject to the next paragraph,
take such actions consistent with the Servicing Standard and any related Asset
Status Report. Subject to the next paragraph, the Special Servicer shall not
take any action inconsistent with the related Asset Status Report, unless such
action would be required in order to act in accordance with the Servicing
Standard.
Notwithstanding anything to the contrary contained in this
Agreement, no direction of the Series 2006-C2 Directing Certificateholder or
failure to consent to any action requiring its or their consent under this
Agreement shall (i) require or cause the Master Servicer or Special Servicer to
violate the terms of a Mortgage Loan or Specially Serviced Mortgage Loan,
applicable law or any provision of this Agreement, including the Master
Servicer's or Special Servicer's obligation to act in accordance with the
Servicing Standard and to maintain the REMIC status of each REMIC Pool, or (ii)
result in the imposition of a "prohibited transaction" or "prohibited
contribution" tax under the REMIC Provisions, or (iii) expose the Master
Servicer, the Special Servicer, the Depositor, any of the Mortgage Loan Sellers,
the Trust Fund, the Trustee, or B Loan Holder or their Affiliates, shareholders,
officers, directors, members, managers, employees or agents to any claim, suit
or liability, or (iv) materially expand the scope of the Special Servicer's or
the Master Servicer's responsibilities under this Agreement; and the Special
Servicer (1) shall not follow any such direction if given by the Series 2006-C2
Directing Certificateholder, (2) shall not initiate any such actions having any
of the effects in clauses (i)-(iv) of this paragraph and (3) shall not refrain
from taking any action if the failure to take such action would violate the
Servicing Standard.
Section 3.22 Sub-Servicing Agreements
(a) The Master Servicer and, subject to Section 3.22(f), the Special
Servicer may enter into Sub-Servicing Agreements to provide for the performance
by third parties of any or all of its respective obligations under this
Agreement; provided that the Sub-Servicing Agreement: (i) is consistent with
this Agreement (including the Events of Default in clauses (i)-(viii) of Section
7.01(a)) in all material respects and requires the Sub-Servicer to comply with
all of the applicable conditions of this Agreement; (ii) provides that if the
Master Servicer or the Special Servicer, as the case may be, shall for any
reason no longer act in such capacity hereunder (including by reason of an Event
of Default), the Trustee or its designee or any other successor to the Master
Servicer or the Special Servicer, as the case may be, may thereupon assume all
of the rights and, except to the extent they arose prior to the date of
assumption, obligations of the Master Servicer or the Special Servicer, as the
case may be, under such agreement or, alternatively, may terminate such
Sub-Servicing Agreement without cause and without payment of any penalty or
termination fee (provided that any Sub-Servicing Agreements entered into by the
Master Servicer with entities identified on Exhibit N by May 30, 2006, and any
Sub-Servicing Agreement entered into or deemed entered into by Wachovia or any
other Primary Servicer as a primary servicer, with the Master Servicer (or any
replacement or successor Master Servicer) or the Trustee can only be terminated
for cause); (iii) provides that the Trustee for the benefit of the
Certificateholders shall be a third-party beneficiary under such Sub-Servicing
Agreement, but that (except to the extent the Trustee or its designee assumes
the obligations of the Master Servicer or the Special Servicer, as the case may
be, thereunder as contemplated by the immediately preceding clause (ii), and
except with respect to the obligations of any successor Master Servicer under
the Primary Servicing Agreements) none of the Trust Fund, the Trustee, any
successor Master Servicer, Special Servicer or any Certificateholder shall have
any duties under such Sub-Servicing Agreement or any liabilities arising
therefrom; (iv) permits any purchaser of a Trust Mortgage Loan pursuant to this
Agreement to terminate such Sub-Servicing Agreement with respect to such
purchased Trust Mortgage Loan at its option and without penalty; (v) does not
permit the Sub-Servicer any direct rights of indemnification that may be
satisfied out of assets of the Trust Fund except to the extent of its rights of
indemnification, if any, as an agent of the Master Servicer or Special Servicer,
as applicable; (vi) does not permit the Sub-Servicer to foreclose on the related
Mortgaged Property or consent to the modification of any Mortgage Loan without
the prior consent of the Master Servicer or the Special Servicer, as applicable;
(vii) provides that the Sub-Servicer shall act in accordance with the Servicing
Standard; (viii) provides that in the event of an act or failure to act by the
Sub-Servicer that causes the Master Servicer or Special Servicer, as applicable,
to be in default of its obligations under this Agreement, the Sub-Servicer shall
be in default of its obligations under such Sub-Servicing Agreement; and (ix)
provides that the failure of the related Sub-Servicer to comply with any of the
requirements under Article XII of this Agreement that are applicable to such
Sub-Servicer under such Sub-Servicing Agreement (or with requirements set forth
in such Sub-Servicing Agreement that are substantially similar in all material
respects to the requirements under Article XII of this Agreement), including the
failure to deliver any reports or certificates at the time such report or
certification is required under Article XII shall constitute an event of default
by such Sub-Servicer upon the occurrence of which either the applicable Master
Servicer or the Depositor may immediately terminate the related Sub-Servicer
under the related Sub-Servicing agreement and that such termination shall be
deemed for cause. Any successor Master Servicer or Special Servicer hereunder,
upon becoming successor Master Servicer or Special Servicer, as applicable,
shall have the right to be assigned and shall have the right to assume any
Sub-Servicing Agreements from the predecessor Master Servicer or Special
Servicer, as applicable. Upon a termination of the Master Servicer pursuant to
this Agreement, the successor to the Master Servicer (other than the Trustee or
its designee) shall automatically succeed to the rights and obligations of the
prior Master Servicer, under the Primary Servicing Agreement, (subject only to
any termination rights set forth therein), it being understood that any such
succession by the Trustee or its designee shall not be automatic but shall be in
the discretion of the Trustee or such designee. With respect to any
Sub-Servicing Agreement entered into by the Master Servicer after the Closing
Date and prior to the date upon which the Trust's Exchange Act reporting
obligations are terminated by the filing of a Form 15 Suspension Notification as
contemplated by Section 12.10, such Sub-Servicer shall not be a Prohibited
Party. Any such Sub-Servicing Agreement may permit the Sub-Servicer to delegate
its duties to agents or subcontractors so long as the related agreements or
arrangements with such agents or subcontractors are (or may be required to be),
to the extent of the services to be performed, consistent with the provisions of
this Section 3.22 (including, for the avoidance of doubt, that no such agent or
subcontractor is a Prohibited Party prior to the date upon which the Trust's
Exchange Act reporting obligations are terminated by the filing of a Form 15
Suspension Notification as contemplated by Section 12.10).
In addition, each Sub-Servicing Agreement entered into by the Master
Servicer may provide that the obligations of the Sub-Servicer thereunder shall
terminate with respect to any Mortgage Loan serviced thereunder at the time such
Mortgage Loan becomes a Specially Serviced Mortgage Loan. The Master Servicer
and the Special Servicer, as applicable, shall deliver to the Trustee copies of
all Sub-Servicing Agreements, and any amendments thereto and modifications
thereof, entered into by it promptly upon its execution and delivery of such
documents. For purposes of this Agreement (except with respect to any
requirement that the Master Servicer deposit funds in the Collection Account or
any Servicing Account within a specified time period), the Master Servicer shall
be deemed to have received any payment when a Sub-Servicer retained by it
receives such payment. The Master Servicer shall notify the Special Servicer,
the Trustee and the Depositor in writing promptly of the appointment by it of
any Sub-Servicer not identified on Exhibit N hereto. The Special Servicer shall
notify the Master Servicer, the Trustee, the Depositor and any affected B Loan
Holder in writing promptly of the appointment by it of any Sub-Servicer.
(b) Each Sub-Servicer shall be authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to ensure the
enforceability of the Mortgage Loans to be serviced by such Sub-Servicer.
(c) As part of its servicing activities hereunder, the Master
Servicer or the Special Servicer, as applicable, for the benefit of the Trustee
and the Certificateholders, shall (at no expense to the Trustee, the
Certificateholders, the Trust Fund or any B Loan Holder) monitor the performance
and enforce the obligations of each Sub-Servicer under each Sub-Servicing
Agreement it has entered into. Such enforcement, including, without limitation,
the legal prosecution of claims, termination of Sub-Servicing Agreements in
accordance with their respective terms and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer or Special Servicer, as applicable, would require
were it the owner of the subject Mortgage Loans. The Master Servicer or the
Special Servicer, as applicable, shall have the right to remove a Sub-Servicer
retained by it in accordance with the terms of the related Sub-Servicing
Agreement upon the events of default and other termination events specified in
the related Sub-Servicing Agreement.
(d) If the Trustee or its designee becomes successor Master Servicer
and elects or is required to assume the rights and obligations of the Master
Servicer or the Special Servicer, as applicable, under any Sub-Servicing
Agreement, the Master Servicer or the Special Servicer, as applicable, at its
expense, shall deliver to the assuming party all documents and records relating
to such Sub-Servicing Agreement and the Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held on behalf of it
thereunder, and otherwise use reasonable efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding the provisions of any Sub-Servicing Agreement,
but subject to Section 12.14, each of the Master Servicer and the Special
Servicer represents, warrants and covenants that it shall remain obligated and
liable to the Trustee, the Certificateholders and the B Loan Holders for the
performance of its obligations and duties under this Agreement in accordance
with the provisions hereof to the same extent and under the same terms and
conditions as if it alone were servicing and administering the Mortgage Loans
for which it is responsible, and the Master Servicer, or the Special Servicer,
as applicable, shall pay the fees of any Sub-Servicer thereunder from its own
funds or, with respect to the Primary Servicers, shall permit each to retain the
Primary Servicing Fees and any additional servicing compensation payable
pursuant to the related Sub-Servicing Agreement from amounts collected by such
Primary Servicer. Such additional servicing compensation shall not exceed the
Additional Servicing Compensation payable to the Master Servicer under this
Agreement, shall be paid out of such Additional Servicing Compensation and shall
not be paid from any amount otherwise payable to the Special Servicer hereunder.
In no event shall the Trust Fund bear any termination fee required to be paid to
any Sub-Servicer as a result of such Sub-Servicer's termination under any
Sub-Servicing Agreement.
(f) The Special Servicer shall not enter into any Sub-Servicing
Agreement unless either: (i) such agreement relates to one or more Trust
Mortgage Loans (including any such Trust Mortgage Loan(s) previously
sub-serviced in accordance with this Section 3.22) that together represent less
than 25% of the aggregate outstanding principal balance of all Specially
Serviced Trust Mortgage Loans; or (ii) the Series 2006-C2 Directing
Certificateholder has consented.
Section 3.23 Representations, Warranties and Covenants of the Master
Servicer
(a) The Master Servicer hereby represents and warrants to the
Trustee, for its own benefit and the benefit of the Certificateholders, and to
the Depositor, the Special Servicer and the B Loan Holders, as of the Closing
Date, that:
(i) The Master Servicer is a national banking association, duly
organized, validly existing and in good standing under the laws of the
United States of America, and the Master Servicer is in compliance with
the laws of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement, except
where the failure to so qualify or comply would not have a material
adverse effect on the ability of the Master Servicer to perform its
obligations hereunder;
(ii) The execution and delivery of this Agreement by the Master
Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will not (A) violate the Master
Servicer's certificate of incorporation and by-laws or (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 instrument to which it is a party or by which it is
bound, or (C) result in the violation of any law, rule, regulation, order,
judgment or decree binding on the Master Servicer which, in the case of
either (B) or (C), is likely to materially and adversely affect the Master
Servicer's ability to perform hereunder;
(iii) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against the Master
Servicer in accordance with the terms hereof, except as such enforcement
may be limited by (A) applicable bankruptcy, insolvency, reorganization,
liquidation, receivership, moratorium and other laws relating to or
affecting creditors' rights generally, and (B) general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in violation with respect to any
law, any order or decree of any court, or any order, regulation or demand
of any federal, state, municipal or governmental agency, which violations
are reasonably likely to have consequences that would materially and
adversely affect the financial condition or operations of the Master
Servicer or its properties taken as a whole or are reasonably likely to
have consequences that would materially and adversely affect its ability
to perform its duties and obligations hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which, if
determined adversely to the Master Servicer, would prohibit the Master
Servicer from entering into this Agreement or, in the Master Servicer's
good faith and reasonable judgment, is likely to materially and adversely
affect the ability of the Master Servicer to perform its obligations under
this Agreement;
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the Master Servicer's
transactions contemplated by this Agreement, except for any consent,
approval, authorization or order which has been obtained or cannot be
obtained prior to the actual performance by the Master Servicer of its
obligations under this Agreement, or which, if not obtained, would not
have a materially adverse effect on the ability of the Master Servicer to
perform its obligations hereunder;
(vii) The Master Servicer has full corporate power and authority to
enter into and perform in accordance with this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;
(viii) The Master Servicer has examined each Sub-Servicing Agreement
to which it is a party, and shall examine each Sub-Servicing Agreement to
which it intends to become a party, and in each such case, the terms of
such Sub-Servicing Agreements are not, or, in the case of any
Sub-Servicing Agreement to be entered into by the Master Servicer at a
future date, will not be, materially inconsistent with the terms of this
Agreement; and
(ix) Each officer and employee of the Master Servicer that has
responsibilities concerning the servicing and administration of Mortgage
Loans is covered by errors and omissions insurance and the fidelity bond
in the amounts and with the coverage required by Section 3.07(c).
(b) The representations, warranties and covenants set forth in
subsection (a) above shall survive the execution and delivery of this Agreement.
Section 3.24 Representations, Warranties and Covenants of the
Special Servicer
(a) The Special Servicer hereby represents and warrants to the
Trustee, for its own benefit and the benefit of the Certificateholders, and to
the Depositor, the Master Servicer and the B Loan Holders, as of the Closing
Date and as to the Special Servicer, that:
(i) The Special Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
the Special Servicer is in compliance with the laws of each State in which
any Mortgaged Property is located to the extent necessary to perform its
obligations under this Agreement;
(ii) The execution and delivery of this Agreement by the Special
Servicer, and the performance and compliance with the terms of this
Agreement by the Special Servicer, will not (A) violate the Special
Servicer's certificate of incorporation and by-laws or (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 instrument to which it is a party or by which it is
bound, or (C) result in the violation of any law, rule, regulation, order,
judgment or decree binding on the Special Servicer which, in the case of
either (B) or (C), is likely to materially and adversely affect the
Special Servicer's ability to perform hereunder;
(iii) The Special Servicer has full corporate power and authority to
enter into and perform in accordance with this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Special Servicer, enforceable against the
Special Servicer in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium and other
laws affecting the enforcement of creditors' rights generally and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(v) The Special Servicer is not in violation with respect to any
law, any order or decree of any court, or any order, regulation or demand
of any federal, state, municipal or governmental agency, which violations
are reasonably likely to have consequences that would materially and
adversely affect the financial condition or operations of the Special
Servicer or its properties taken as a whole or are reasonably likely to
have consequences that would materially and adversely affect its ability
to perform its duties and obligations hereunder;
(vi) No litigation is pending or, to the best of the Special
Servicer's knowledge, threatened against the Special Servicer which, if
determined adversely to the Special Servicer, would prohibit the Special
Servicer from entering into this Agreement or, in the Special Servicer's
good faith and reasonable judgment, is likely to materially and adversely
affect the ability of the Special Servicer to perform its obligations
under this Agreement;
(vii) Each officer, director or employee of the Special Servicer
that has or, following the occurrence of a Servicing Transfer Event, would
have responsibilities concerning the servicing and administration of
Mortgage Loans is covered by errors and omissions insurance and fidelity
bond in the amounts and with the coverage required by Section 3.07(c).
Neither the Special Servicer nor any of its officers, directors or
employees that is or, following the occurrence of a Servicing Transfer
Event, would be involved in the servicing or administration of Mortgage
Loans has been refused such coverage or insurance;
(viii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Special Servicer, or compliance by the Special Servicer
with, this Agreement or the consummation of the transactions contemplated
by this Agreement, except for any consent, approval, authorization or
order which has been obtained or cannot be obtained prior to the actual
performance by the Special Servicer of its obligations under this
Agreement, or which, if not obtained would not have a materially adverse
effect on the ability of the Special Servicer to perform its obligations
hereunder;
(ix) The Special Servicing Fee represents reasonable servicing
compensation; and
(x) The Special Servicer has examined each Sub-Servicing Agreement
to which it is a party, and shall examine each Sub-Servicing Agreement to
which it intends to become a party, and in each such case, the terms of
such Sub-Servicing Agreements are not, or, in the case of any
Sub-Servicing Agreement to be entered into by the Special Servicer at a
future date, will not, be materially inconsistent with the terms of this
Agreement.
(b) The representations, warranties and covenants set forth in
subsection (a) above shall survive the execution and delivery of this Agreement.
Section 3.25 Limitation on Liability of the Series 2006-C2 Directing
Certificateholder
The Series 2006-C2 Directing Certificateholder shall have no
liability whatsoever to the Trust Fund or any Certificateholder other than a
Controlling Class Certificateholder and shall have no liability to any
Controlling Class Certificateholder for any action taken, or for refraining from
the taking of any action, in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that, with respect to Controlling Class
Certificateholders, the Series 2006-C2 Directing Certificateholder shall not be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations or duties. By its acceptance of a
Certificate, each Certificateholder confirms its understanding that the Series
2006-C2 Directing Certificateholder may take actions that favor the interests of
one or more Classes of the Certificates over other Classes of the Certificates,
and that the Series 2006-C2 Directing Certificateholder may have special
relationships and interests that conflict with those of Holders of some Classes
of the Certificates, that the Series 2006-C2 Directing Certificateholder may act
solely in the interests of the Holders of the Controlling Class, that the Series
2006-C2 Directing Certificateholder does not have any duties to the Holders of
any Class of Certificates other than the Controlling Class, that the Series
2006-C2 Directing Certificateholder may take actions that favor the interests of
the Holders of the Controlling Class over the interests of the Holders of one or
more other classes of Certificates, and that the Series 2006-C2 Directing
Certificateholder shall have no liability whatsoever for having so acted, and no
Certificateholder may take any action whatsoever against the Series 2006-C2
Directing Certificateholder or any director, officer, employee, agent or
principal thereof for having so acted.
Section 3.26 Reserved
Section 3.27 Lock-Box Accounts, Cash Collateral Accounts and
Servicing Accounts
(a) The Master Servicer shall administer each Lock-Box Account, Cash
Collateral Account and Servicing Account in accordance with the related Mortgage
or Loan Agreement, Cash Collateral Account Agreement or Lock-Box Agreement, if
any. Each Lock-Box Account, Cash Collateral Account and Servicing Account shall
be an Eligible Account, except to the extent provided in the related Mortgage
Loan Documents.
(b) For any Mortgage Loan that provides that a Lock-Box Account will
be established upon the occurrence of certain events specified in the related
Mortgage Loan Documents, the Master Servicer shall establish on behalf of the
Trust such Lock-Box Account upon the occurrence of such events unless the Master
Servicer determines, in accordance with the Servicing Standard, that such
Lock-Box Account should not be established. Notwithstanding the foregoing, the
Master Servicer shall establish a Lock-Box Account for each ARD Mortgage Loan no
later than its Anticipated Repayment Date.
(c) [Reserved]
(d) The Master Servicer shall timely provide all notifications and
otherwise timely take all actions necessary to perfect or maintain the
perfection of the security interest of the Trustee in each Lock-Box Account,
Cash Collateral Account and Servicing Account with respect to any Mortgage Loan.
Section 3.28 Interest Reserve Account
(a) The Trustee shall establish, on or before the Closing Date, and
maintain the Interest Reserve Account. The Trustee shall maintain the Interest
Reserve Account at its Corporate Trust Office and shall give notice to the
Master Servicer, the Special Servicer and the Depositor of any new location of
the Interest Reserve Account prior to any change thereof. On each Distribution
Date in any February and on each Distribution Date in any January which occurs
in a year that is not a leap year, unless, in either case, such Distribution
Date is the Final Distribution Date, the Trustee shall withdraw from the
Distribution Account and deposit into the Interest Reserve Account in respect of
each Interest Reserve Loan an amount withheld from the related Monthly Payment
or P&I Advance equal to one day's interest on the Stated Principal Balance of
such Interest Reserve Loan immediately prior to such Distribution Date at the
related Net Mortgage Rate, to the extent a full Monthly Payment or P&I Advance
is made in respect thereof (all amounts so deposited in any January, except in
the case of a leap year, and in any February, "Withheld Amounts").
(b) On each Distribution Date occurring in March (or in February, if
the Final Distribution Date occurs in such month) the Trustee shall withdraw
from the Interest Reserve Account an amount equal to the Withheld Amounts from
the immediately preceding January and February, if any, and deposit such amount
(excluding any net investment income thereon) into the Distribution Account. On
each Distribution Date, the Trustee shall deposit any Net Investment Loss into
the Interest Reserve Account and shall be permitted to withdraw any Net
Investment Earnings from the Interest Reserve Account.
Section 3.29 Limitations on and Authorizations of the Master
Servicer and Special Servicer with Respect to Certain Mortgage Loans
(a) Prior to taking any action with respect to a Mortgage Loan
secured by any Mortgaged Properties located in a "one-action" state, the Special
Servicer shall consult with legal counsel, the fees and expenses of which shall
be covered by a Servicing Advance by the Master Servicer.
(b) [Reserved].
(c) With respect to any ARD Mortgage Loan, so long as no event of
default beyond applicable notice and grace periods has occurred and is
continuing, the Master Servicer and the Special Servicer shall not take any
enforcement action with respect to the payment of Excess Interest or principal
in excess of the principal component of the constant Monthly Payment, other than
requests for collection, until the date on which principal and all accrued
interest (other than Excess Interest) has been paid in full (the failure of the
Borrower to pay Excess Interest shall not be considered an event of default for
purposes of this paragraph). Nothing in this paragraph shall limit the
obligation of the Master Servicer and the Special Servicer to establish a
Lock-Box Account pursuant to Section 3.27.
(d) To the extent not inconsistent with the related Mortgage Loan
Documents, neither the Master Servicer nor the Special Servicer shall consent to
a change of franchise affiliation with respect to any hotel property that in
whole or in part constitutes the Mortgaged Property securing a Mortgage Loan
unless it obtains written confirmation from each Rating Agency that such change
of franchise affiliation would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then-current ratings on any Class of
Certificates. Neither the Master Servicer nor the Special Servicer shall be
required to obtain such written consent from any Rating Agency if such Mortgage
Loan is not one of the ten largest Trust Mortgage Loans (which term shall, for
the purposes of this Section 3.29(d), include groups of Crossed Trust Mortgage
Loans and groups of Trust Mortgage Loans made to affiliated Borrowers) by
outstanding principal balance at such time and the then-current principal
balance of such Mortgage Loan is less than $35,000,000.
(e) To the extent not inconsistent with the related Mortgage Loan
Documents, the Master Servicer or Special Servicer shall not consent to a change
in the property manager with respect to a property securing a Mortgage Loan that
is one of the ten largest Trust Mortgage Loans (which term shall, for the
purposes of this Section 3.29(e), include groups of Crossed Trust Mortgage Loans
and groups of Trust Mortgage Loans made to affiliated Borrowers) by outstanding
principal balance at such time or that has a then-current principal balance of
greater than $35,000,000, unless it obtains confirmation from S&P that the
appointment of such new property manager would not, in and of itself, result in
a downgrade, qualification or withdrawal of the then current ratings on any
Class of Certificates. The Master Servicer or Special Servicer, as applicable,
shall use reasonable efforts to cause the related Borrower to pay the costs of
such confirmation, and otherwise such costs shall be a Trust Fund expense.
(f) The Master Servicer shall, as to each Trust Mortgage Loan which
is secured by the interest of the related Borrower under a Ground Lease, at its
own expense, promptly (and in any event within 45 days of the Closing Date)
notify the related ground lessor of the transfer of such Trust Mortgage Loan to
the Trust pursuant to this Agreement and inform such ground lessor that any
notices of default under the related Ground Lease should thereafter be forwarded
to the Master Servicer, on behalf of the Trustee.
(g) Subject to the last paragraph of Section 3.21(g), the Special
Servicer shall not grant any discretionary consent to a transfer of any Junior
Loan pursuant to the related Intercreditor Agreement or to any additional cure
beyond those specifically provided for in the related Intercreditor Agreement
unless it obtains the consent of the Series 2006-C2 Directing Certificateholder.
The Special Servicer shall receive any such request for such discretionary
consents from any Junior Loan Holder, and shall forward its analysis and
recommendation to the Series 2006-C2 Directing Certificateholder, who shall
approve or reject such recommendation. The Series 2006-C2 Directing
Certificateholder shall be deemed to have approved such recommendation if not
denied within ten Business Days of its receipt of the Special Servicer's
recommendation and any additional documents and information that the Series
2006-C2 Directing Certificateholder may reasonably request, such ten Business
Day period to commence upon the receipt of the rating agency confirmation
described in the next sentence. Notwithstanding the foregoing, the Special
Servicer shall not grant any discretionary consent to a transfer of any Junior
Loan pursuant to the related Intercreditor Agreement unless it receives the
rating agency confirmation, if any, required pursuant to such Intercreditor
Agreement. In addition, notwithstanding the foregoing, with respect to granting
of any additional cure beyond those specifically provided for in the related
Intercreditor Agreement, there shall not be any deemed approvals and only
affirmative approvals (and for the avoidance of doubt, the time periods for
approvals set forth in this paragraph shall not apply to affirmative approvals)
by the Series 2006-C2 Directing Certificateholder shall permit the Special
Servicer to process such documentation as described above.
Section 3.30 Master Servicer and Special Servicer May Own
Certificates
(a) The Master Servicer and any agent of the Master Servicer in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not the Master Servicer or such
agent; except, with respect to Voting Rights, as set forth in the definition of
"Certificateholder."
(b) The Special Servicer and any agent of the Special Servicer in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not the Special
Servicer or such agent; except, with respect to Voting Rights, as set forth in
the definition of "Certificateholder."
Section 3.31 Authenticating Agent
The Trustee may appoint an Authenticating Agent to execute and to
authenticate Certificates. The Authenticating Agent must be acceptable to the
Trustee and must be a corporation organized and doing business under the laws of
the United States of America or any state, having a principal office and place
of business in a state and city acceptable to the Trustee, having a combined
capital and surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by federal or state
authorities. The Trustee shall serve as the initial Authenticating Agent and the
Trustee hereby accepts such appointment.
Any corporation into which the Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Authenticating Agent
shall be party, or any corporation succeeding to the corporate agency business
of the Authenticating Agent, shall be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee, the Depositor and
the Master Servicer. The Trustee may at any time terminate the agency of the
Authenticating Agent other than the initial Authenticating Agent by giving
written notice of termination to the Authenticating Agent, the Depositor and the
Master Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time the Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 3.31, the Trustee may
appoint a successor Authenticating Agent, which shall be acceptable to the
Depositor, and shall mail notice of such appointment to all Certificateholders.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, duties and responsibilities of
its predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 3.31.
The Authenticating Agent shall have no responsibility or liability
for any action taken by it as such at the direction of the Trustee. Any
compensation paid to the Authenticating Agent shall be an unreimbursable expense
of the Trustee.
Notwithstanding the foregoing in this Section 3.31, the appointment
of the Authenticating Agent shall not relieve the Trustee from any of its
obligations hereunder, and the Trustee shall remain responsible for all acts and
omissions of the Authenticating Agent.
Section 3.32 Series 2006-C2 Directing Certificateholder Contact with
Master Servicer.
No less often than on a monthly basis, each of the Master Servicer
and the Special Servicer shall, without charge, make a knowledgeable Servicing
Officer available via telephone to verbally answer questions from the Series
2006-C2 Directing Certificateholder regarding the performance and servicing of
the Mortgage Loans and/or REO Properties for which the Master Servicer or the
Special Servicer, as the case may be, is responsible. Any such telephone contact
shall be conditioned on the Directing Certificateholder's delivery to the Master
Servicer or Special Servicer, as applicable, of an agreement substantially in
the form of Exhibit R-1.
Section 3.33 Certain Matters with Respect to the Andover House
Apartments Total Loan. (a) The Master Servicer (or, if the Andover House
Apartments Loan is a Specially Serviced Loan, then Special Servicer) shall
service and administer the Andover House Apartments Total Loan in a manner
consistent with the Andover House Apartments Intercreditor Agreement and, unless
another party is expressly responsible hereunder, shall (subject to the
Servicing Standard) satisfy all of the obligations required to be performed by
the "Note A Holder" or contemplated to be performed by a "Servicer" under
Sections 3, 4, 5, 6, 7, 8, 10, 11, 19, 20, 22 and 25 the Andover House
Apartments Intercreditor Agreement.
(b) Prior to taking any of the Andover House Apartments Consultation
Actions, the Master Servicer (or, if the Andover House Apartments Loan is a
Specially Serviced Loan, then the Special Servicer) shall provide notice of its
intent to take such particular action to the Directing Certificateholder and the
Andover House Apartments Junior Loan Holders. In connection with the foregoing,
such Master Servicer or such Special Servicer, as the case may be, shall
promptly provide to the Directing Certificateholder and each Andover House
Apartments Junior Loan Holder (other than a Andover House Apartments Junior Loan
Holder who is also the related Borrower or any Affiliate of the related
Borrower) all information in its possession with respect to any proposed Andover
House Apartments Consultation Action, including its reasons for determining to
take or permit a proposed action, in each case as such Andover House Apartments
Junior Loan Holder (other than a Andover House Apartments Junior Loan Holder who
is also the related Borrower or any Affiliate of the related Borrower) may
reasonably request. For 10 Business Days following its receipt of any notice
delivered by the Master Servicer or the Special Servicer pursuant to the prior
sentence, and subject to Section 20(c) of the Andover House Apartments
Intercreditor Agreement, each Andover House Apartments Junior Loan Holder shall
have the right, as and to the extent permitted under the Andover House
Apartments Intercreditor Agreement, to consent or to contact and consult with
the Master Servicer or Special Servicer, as applicable, regarding any Andover
House Apartments Consultation Actions; provided that if such Master Servicer or
Special Servicer, as the case may be, determines that immediate action is
necessary to protect the interests of the Certificateholders and the Andover
House Apartments Junior Loan Holders (as a collective whole, taking into account
the subordinate nature of the Junior Loan), then such Master Servicer or Special
Servicer, as the case may be, may take any Andover House Apartments Consultation
Action without waiting for a response to such notice.
Notwithstanding anything herein to the contrary, no advice,
direction or objection from or by the Andover House Apartments Controlling
Holder, as contemplated by the foregoing provisions of this Section 3.33(b), may
(and the Master Servicer or Special Servicer, as the case may be, shall ignore
and act without regard to any such advice, direction or objection that such
Master Servicer or such Special Servicer, as the case may be, has determined, in
its reasonable, good faith judgment, will) require or cause such Master Servicer
or such Special Servicer, as the case may be or the Trustee to take any action
or refrain from taking any action which would violate any law of any applicable
jurisdiction, be inconsistent with the Servicing Standard or violate the REMIC
Provisions or violate any other provisions of this Agreement, the Loan
Documents, or any provisions of the Andover House Apartments Intercreditor
Agreement or materially expand the scope of any Master Servicer's or Special
Servicer's responsibilities under this Agreement.
(c) If a Andover House Apartments Triggering Event of Default has
occurred and is continuing, then, upon written notice (a "Andover House
Apartments Repurchase Option Notice") of such occurrence (which notice the
Master Servicer or Special Servicer, as applicable, shall give promptly to the
Andover House Apartments Junior Loan Holders), each Andover House Apartments
Junior Loan Holder shall have the right, prior to any other party, by written
notice to the Master Servicer and Special Servicer (a "Andover House Apartments
Junior Loan Holder Repurchase Notice"), at any time after the occurrence of the
Andover House Apartments Triggering Event of Default and prior to the earliest
to occur of (a) the cure of the Andover House Apartments Triggering Event of
Default, (b) the consummation of a foreclosure sale, sale by power of sale or
delivery of a deed in lieu of foreclosure with respect to the related Mortgaged
Property, (c) the modification of the related Loan Documents effected in
accordance with the terms of this Agreement and the Andover House Apartments
Intercreditor Agreement and (d) the date that is 90 days after such Andover
House Apartments Junior Loan Holder's receipt of the Andover House Apartments
Repurchase Option Notice, to purchase the Andover House Apartments Loan at the
applicable "Defaulted Mortgage Loan Purchase Price" (as defined in the Andover
House Apartments Intercreditor Agreement). Upon the delivery of the Andover
House Apartments Junior Loan Holder Repurchase Notice to the Master Servicer and
Special Servicer, the Trustee shall sell (and the applicable Andover House
Apartments Junior Loan Holder shall purchase) the Andover House Apartments Loan
free and clear of any sub-interests therein or any other liens, claims or
encumbrances for the applicable "Defaulted Mortgage Loan Purchase Price" (as
defined in the Andover House Apartments Intercreditor Agreement), on a date (the
"Andover House Apartments Repurchase Date") not less than five Business Days nor
more than 10 Business Days after the date of the Andover House Apartments Junior
Loan Holder Repurchase Notice, as shall be established by the Special Servicer
and reasonably acceptable to the purchasing Andover House Apartments Junior Loan
Holder. The applicable "Defaulted Mortgage Loan Purchase Price" (as defined in
the Andover House Apartments Intercreditor Agreement) shall be calculated by the
Special Servicer three Business Days prior to the Andover House Apartments
Repurchase Date (and such calculation shall be accompanied by reasonably
detailed back-up documentation explaining how such price was determined) and
shall, absent manifest error, be binding upon the Certificateholders and the
Andover House Apartments Junior Loan Holder. The right of a Andover House
Apartments Junior Loan Holder to purchase the Andover House Apartments Loan
shall automatically terminate upon the consummation of a foreclosure sale, sale
by power of sale or delivery of a deed in lieu of foreclosure with respect to
the Mortgaged Property. For the avoidance of doubt, neither Andover House
Apartments Junior Loan Holder shall have any option to purchase the Andover
House Apartments Loan under Section 3.18 (without a direct assignment of such
right to such Andover House Apartments Junior Loan Holder from the Directing
Certificateholder).
(d) In connection with any purchase of the Andover House Apartments
Loan, pursuant to or as contemplated by Section 3.33(c), the Master Servicer or
Special Servicer shall (i) if it receives the related Purchase Price or
"Defaulted Mortgage Loan Purchase Price" (as defined in the Andover House
Apartments Intercreditor Agreement) and/or any other amounts payable in
connection with the purchase, deposit same, or remit same to the Master Servicer
for deposit, as applicable, into the Master Servicer's Collection Account and/or
the related Junior Loan Custodial Account, as applicable, and so notify the
Trustee; and (ii) deliver the related Servicing File to the Person effecting the
purchase or its designee. In addition, upon its receipt of a Request for Release
from the Master Servicer, the Trustee shall: (i) deliver the Mortgage File to
the Person effecting the purchase or its designee; and (ii) execute and deliver
such endorsements, assignments and instruments of transfer as shall be provided
to it and are reasonably necessary to vest ownership of the Andover House
Apartments Loan in the appropriate transferee, without recourse, representations
or warranties.
(e) The parties hereto acknowledge the purchase options of the
respective Andover House Apartments Junior Loan Holders (and/or their respective
designees and/or representatives) in respect of the Andover House Apartments
Loan pursuant to Andover House Apartments Intercreditor Agreement. Upon its
receipt of any Andover House Apartments Junior Loan Holder Repurchase Notice,
each party hereto shall promptly forward a copy of such notice to the Directing
Certificateholder.
(f) In the event any monetary default beyond applicable notice and
grace periods or non-monetary default beyond applicable notice and grace periods
(of which the Master Servicer or applicable Special Servicer has knowledge)
shall exist with respect to the Andover House Apartments Total Loan, then, upon
notice (a "Andover House Apartments Cure Option Notice") of the occurrence of
such default beyond applicable notice and grace periods (which notice such
Master Servicer or such Special Servicer, as the case may be, shall promptly
give to the Andover House Apartments Junior Loan Holder Designee upon receipt of
knowledge thereof), each Andover House Apartments Junior Loan Holder shall have
the right, exercisable by the Andover House Apartments Junior Loan Holder
Designee giving written notice of its intent to cure a default within five (5)
Business Days of receipt of the Andover House Apartments Cure Option Notice, to
cure such default; provided, in the event that any Andover House Apartments
Junior Loan Holder has elected to cure any default, the default must be cured by
such Andover House Apartments Junior Loan Holder within, in the case of a
monetary default, five (5) Business Days of receipt of such Andover House
Apartments Cure Option Notice and, in the case of a non-monetary default, 30
days of receipt of such Andover House Apartments Cure Option Notice. In the
event that the Andover House Apartments Controlling Junior Loan Holder elects to
cure a default that can be cured by the payment of money (each such payment, a
"Andover House Apartments Cure Payment"), the curing Andover House Apartments
Junior Loan Holder shall make such Andover House Apartments Cure Payment as
directed by the Master Servicer or Special Servicer, as the case may be, and
each such Andover House Apartments Cure Payment shall include all costs,
expenses, losses, liabilities, obligations, damages, penalties, and
disbursements imposed on, incurred by or asserted against the Trustee, Master
Servicer or Special Servicer (including, without limitation, all unreimbursed
Advances (without regard to whether such Advance would be a Nonrecoverable
Advance) and any interest accrued thereon, and any unpaid Master Servicing Fees
(and Primary Servicing Fees) (but excluding Penalty Charges) with respect to the
Andover House Apartments Total Loan) during the period of time from the
expiration of the grace period under the Andover House Apartments Total Loan
until such Andover House Apartments Cure Payment is made or such other cure is
otherwise effected. The right of the curing Andover House Apartments Junior Loan
Holder to reimbursement of any Andover House Apartments Cure Payment shall be
subordinate in all respects to the rights of the holder of the Andover House
Apartments Loan to distributions with respect to the Andover House Apartments
Total Loan and to all amounts distributable to them. So long as a default exists
that is being cured by the Andover House Apartments Controlling Junior Loan
Holder pursuant to this Section 3.33(f) and Section 10(b) of the Andover House
Apartments Intercreditor Agreement and the cure period has not expired and the
Andover House Apartments Junior Loan Holder is permitted to cure under the terms
of such provisions, such default shall not constitute a default or an event of
default (i) for purposes of Sections 4 or 5 of the Andover House Apartments
Intercreditor Agreement; (ii) for purposes of accelerating the Andover House
Apartments Total Loan, modifying, amending or waiving any provisions of the
related Loan Documents or commencing proceedings for foreclosure or the taking
of title by deed-in-lieu of foreclosure or other similar legal proceedings with
respect to the related Mortgaged Property; or (iii) for purposes of treating the
Andover House Apartments Total Loan as a Specially Serviced Loan; provided that
such limitations shall not prevent Master Servicer or Special Servicer from
sending notices of the default to the related Borrower or any related guarantor
or making demands on the related Borrower or any related guarantor or from
collecting Penalty Charges from the related Borrower. Notwithstanding anything
to the contrary contained in this subsection, (A) the Andover House Apartments
Controlling Junior Loan Holder's right to cure a monetary default or
non-monetary default shall be limited to six Andover House Apartments Cure
Events over the life of the Andover House Apartments Total Loan and (B) no
single Andover House Apartments Cure Event may exceed three consecutive months.
Notwithstanding the foregoing, the making of a Andover House Apartments Cure
Payment by any Person entitled to do so shall not act as a waiver of any amounts
due under the related Loan Documents by the related Borrower.
(g) Any decisions made by the Master Servicer or Special Servicer,
as the case may be, with respect to the Andover House Apartments Total Loan
pursuant to and in accordance with the Servicing Standard and the other
provisions of this Agreement shall automatically be deemed to be reasonably
exercised for purposes of this Section 3.33 and this Agreement.
(h) The Master Servicer and Special Servicer each shall provide to
each Andover House Apartments Junior Loan Holder (other than a Andover House
Apartments Junior Loan Holder who is also the related Borrower or any Affiliate
of the related Borrower) or its designee, with respect to its Andover House
Apartments Junior Loan, or any related REO Property, subject to the same
conditions and restrictions on the distribution of information as apply with
respect to the Loans, the same reports, documents and other information that
Master Servicer or Special Servicer, as the case may be, provides to the Trustee
with respect to the Andover House Apartments Loan or any related REO Property,
and on a concurrent basis (unless an earlier delivery is otherwise expressly
provided for herein). The Trustee, Master Servicer and Special Servicer each
shall provide to each Andover House Apartments Junior Loan Holder or its
designee, with respect to its Andover House Apartments Junior Loan or any
related REO Property, the same reports, documents and other information that the
Trustee, Master Servicer or Special Servicer, as the case may be, provides to
the Directing Certificateholder with respect to the Andover House Apartments
Loan or any related REO Property, and on a concurrent basis. In addition, the
Trustee, Master Servicer or Special Servicer, as applicable, shall, upon receipt
of a written request, subject to the same conditions and restrictions on the
distribution of information as apply with respect to the Loans, provide to each
Andover House Apartments Junior Loan Holder or its designee (at such holder's
cost) all other reports, documents and information that such holder or its
designee may reasonably request with respect to the Andover House Apartments
Whole Loan, the Borrower or its Andover House Apartments Junior Loan or any
related REO Property; provided, however, that in no event shall a Andover House
Apartments Junior Loan Holder be provided with any Fair Value calculation in
respect of the Andover House Apartments Loan. Notwithstanding the foregoing,
none of the Trustee, Master Servicer or Special Servicer shall be required to
deliver to any Andover House Apartments Junior Loan Holder or its designee any
particular report, document or other information pursuant to this Section
3.33(h) if and to the extent that (but only if and to the extent that) such
particular report, document or other information is otherwise delivered to such
Andover House Apartments Junior Loan Holder within the same time period
contemplated by this Section 3.33(h) pursuant to any other section of this
Agreement.
(i) Each of the rights of the respective Junior Loan Holder under or
contemplated by this Section 3.33 shall be assignable to, and/or exercisable by,
a designee thereof; provided that the Master Servicer, the Special Servicer and
the Trustee are provided with written notice by the assignor of such assignment
(upon which such party may conclusively rely) and the contact details of the
assignee.
(j) If any Andover House Apartments Junior Loan Holder purchases the
Andover House Apartments Loan pursuant to Section 3.33(c), or if any Person
purchases the Andover House Apartments Loan as a Defaulted Loan pursuant to
Section 3.18, then the Person effecting the purchase must also pay and/or
reimburse to the Master Servicer, the Special Servicer, the Trustee and the
Depositor the respective amounts then currently due and owing to them hereunder
with respect to the Andover House Apartments Total Loan and that, pursuant to
the Andover House Apartments Intercreditor Agreement, would otherwise have been
payable out of future collections on the Andover House Apartments Total Loan.
Notwithstanding anything herein to the contrary, any such purchase shall be
subject to such reimbursements.
(k) If there are any conflicts between this Section 3.33 and any of
the Loan Documents relating to the Andover House Apartments Total Loan or
between this Section 3.33 and the Andover House Apartments Intercreditor
Agreement, then such Loan Documents or such Andover House Apartments
Intercreditor Agreement shall control. The parties hereto recognize and
acknowledge the respective rights of the Andover House Apartments Junior Loan
Holders under the Andover House Apartments Intercreditor Agreements.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Distributions
On each Distribution Date, the Trustee shall transfer or be deemed
to transfer the Available Distribution Amount from the REMIC I Distribution
Account to the REMIC II Distribution Account in the amounts and priorities set
forth in Section 4.01(b) with respect to each Class of Uncertificated REMIC I
Interests, and immediately thereafter, on each Distribution Date prior to the
date on which the Certificate Balance of the last outstanding Class of
Subordinate Certificates has been reduced to zero, to the extent of the
Available Distribution Amount for such Distribution Date, shall make
distributions in the following order of priority from the REMIC II Distribution
Account, satisfying in full, to the extent required and possible, each priority
before making any distribution with respect to any succeeding priority from the
relevant portion of the Available Distribution Amount:
(i) concurrently, (i) from that portion of the Available
Distribution Amount attributable to Loan Group No. 1, to the Class A-1,
Class A-2 and Class A-3 Certificates, pro rata, up to the Optimal Interest
Distribution Amounts for each such Class for such Distribution Date, (ii)
from that portion of the Available Distribution Amount attributable to
Loan Group No. 2, to the Class A-1-A Certificates, up to the Optimal
Interest Distribution Amount for such Class for such Distribution Date and
(iii) from the entire Available Distribution Amount, to the Class A-X
Certificates, up to the Optimal Interest Distribution Amounts for each
such Class for such Distribution Date; provided, however, that if the
Available Distribution Amount for any Distribution Date (or the portion
thereof attributable to either Loan Group) is insufficient to pay in full
the Optimal Interest Distribution Amount, as provided above, on such
Distribution Date, then the entire Available Distribution Amount shall be
applied to make distributions of interest to the Class A-1, Class A-2,
Class A-3, Class A-1-A and Class A-X Certificateholders of, up to, and pro
rata as among such Classes in accordance with, the respective Optimal
Interest Distribution Amounts in respect of such Classes of Certificates
for such Distribution Date;
(ii) to make distributions of principal to the Class A-1, Class
A-1-A, Class A-2 and Class A-3 Certificates, in reduction of the
Certificate Balances thereof, an amount up to the Total Principal
Distribution Amount for such Distribution Date, in the following order of
priority:
First, to the Class A-1-A Certificates, equal to the portion of the
Total Principal Distribution Amount for such Distribution Date that is
attributable to Loan Group No. 2, until the Certificate Balance thereof
has been reduced to zero;
Second, to the Class A-1 Certificates, until the Certificate Balance
thereof has been reduced to zero (net of any portion thereof distributed
on such Distribution Date to the Holders of the Class A-1-A Certificates
pursuant to a prior subclause of this clause (ii));
Third, to the Class A-2 Certificates, until the Certificate Balance
thereof has been reduced to zero (net of any portion thereof distributed
on such Distribution Date to the Holders of the Class A-1-A and Class A-1
Certificates pursuant to a prior subclause of this clause (ii));
Fourth, to the Class A-3 Certificates, until the Certificate Balance
thereof has been reduced to zero (net of any portion thereof distributed
on such Distribution Date to the Holders of the Class A-1-A, Class A-1 and
Class A-2 Certificates pursuant to a prior subclause of this clause (ii));
and
Fifth, to the Class A-1-A Certificates, until the Certificate
Balance thereof has been reduced to zero (net of any distribution of
principal made with respect to the Class A-1-A Certificates on such
Distribution Date pursuant to subclause first of this clause (ii), up to
an amount equal to the entire Total Principal Distribution Amount for such
Distribution Date (net of any portion thereof distributed on such
Distribution Date to the Holders of the Class A-1-A, Class A-1, Class A-2
and Class A-3 Certificates pursuant to a prior subclause of this clause
(ii));
provided, however, that, notwithstanding the immediately preceding
subclauses First through Tenth, on each Distribution Date coinciding with
or following the Senior Principal Distribution Cross-Over Date, and in any
event on the Final Distribution Date, the Trustee shall make distributions
of principal to the Holders of the Class A-1-A, Class A-1, Class A-2 and
Class A-3 Certificates, on a pro rata basis, in accordance with the
respective Certificate Balances of those Classes outstanding immediately
prior to such Distribution Date, until the Certificate Balance of each
such Class has been reduced to zero, in an aggregate amount equal to the
entire Principal Distribution Amount for such Distribution Date;
(iii) to the Class A-1, Class A-2, Class A-3 and Class A-1-A
Certificates, pro rata (based on the aggregate unreimbursed Realized Loss
previously allocated to each such Class), until all amounts of such
Realized Loss previously allocated to such Classes, but not previously
reimbursed, have been reimbursed in full;
(iv) to the Class A-M Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(v) to the Class A-M Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(vi) to the Class A-M Certificates, until all amounts of Realized
Loss previously allocated to the Class A-M Certificates, but not
previously reimbursed, have been reimbursed in full;
(vii) to the Class A-J Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(viii) to the Class A-J Certificates, in reduction of the
Certificate Balance thereof, an amount up to the Remaining Principal
Distribution Amount for such Distribution Date until such Certificate
Balance has been reduced to zero;
(ix) to the Class A-J Certificates, until all amounts of Realized
Loss previously allocated to the Class A-J Certificates, but not
previously reimbursed, have been reimbursed in full;
(x) to the Class B Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(xi) to the Class B Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xii) to the Class B Certificates, until all amounts of Realized
Loss previously allocated to the Class B Certificates, but not previously
reimbursed, have been reimbursed in full;
(xiii) to the Class C Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xiv) to the Class C Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xv) to the Class C Certificates, until all amounts of Realized Loss
previously allocated to the Class C Certificates, but not previously
reimbursed, have been reimbursed in full;
(xvi) to the Class D Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(xvii) to the Class D Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xviii) to the Class D Certificates, until all amounts of Realized
Loss previously allocated to the Class D Certificates, but not previously
reimbursed, have been reimbursed in full;
(xix) the Class E Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(xx) to the Class E Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxi) to the Class E Certificates, until all amounts of Realized
Loss previously allocated to the Class E Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxii) to the Class F Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xxiii) to the Class F Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxiv) to the Class F Certificates, until all amounts of Realized
Loss previously allocated to the Class F Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxv) to the Class G Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(xxvi) to the Class G Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxvii) to the Class G Certificates, until all amounts of Realized
Loss previously allocated to the Class G Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxviii) to the Class H Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xxix) to the Class H Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxx) to the Class H Certificates, until all amounts of Realized
Loss previously allocated to the Class H Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxxi) to the Class J Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xxxii) to the Class J Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxxiii) to the Class J Certificates, until all amounts of Realized
Loss previously allocated to the Class J Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxxiv) to the Class K Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xxxv) to the Class K Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xxxvi) to the Class K Certificates, until all amounts of Realized
Loss previously allocated to the Class K Certificates, but not previously
reimbursed, have been reimbursed in full;
(xxxvii) to the Class L Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xxxviii) to the Class L Certificates, in reduction of the
Certificate Balance thereof, an amount up to the Remaining Principal
Distribution Amount for such Distribution Date until such Certificate
Balance has been reduced to zero;
(xxxix) to the Class L Certificates, until all amounts of Realized
Loss previously allocated to the Class L Certificates, but not previously
reimbursed, have been reimbursed in full;
(xl) to the Class M Certificates, in respect of interest, up to the
Optimal Interest Distribution Amount for such Class for such Distribution
Date;
(xli) to the Class M Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xlii) to the Class M Certificates, until all amounts of Realized
Loss previously allocated to the Class M Certificates, but not previously
reimbursed, have been reimbursed in full;
(xliii) to the Class N Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xliv) to the Class N Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xlv) to the Class N Certificates, until all amounts of Realized
Loss previously allocated to the Class N Certificates, but not previously
reimbursed, have been reimbursed in full;
(xlvi) to the Class O Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(xlvii) to the Class O Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(xlviii) to the Class O Certificates, until all amounts of Realized
Loss previously allocated to the Class O Certificates, but not previously
reimbursed, have been reimbursed in full;
(xlix) to the Class P Certificates, in respect of interest, up to
the Optimal Interest Distribution Amount for such Class for such
Distribution Date;
(l) to the Class P Certificates, in reduction of the Certificate
Balance thereof, an amount up to the Remaining Principal Distribution
Amount for such Distribution Date until such Certificate Balance has been
reduced to zero;
(li) to the Class P Certificates, until all amounts of Realized Loss
previously allocated to the Class P Certificates, but not previously
reimbursed, have been reimbursed in full; and
(lii) to the Class R Certificates, the amount, if any, remaining in
the REMIC II Distribution Account after all other distributions pursuant
to this Section 4.01(a) and Section 4.01(e).
Notwithstanding the foregoing, on each Distribution Date occurring
on or after the date on which the Certificate Balance of the last outstanding
Class of Subordinate Certificates has been reduced to zero, the Trustee shall
apply amounts on deposit in the REMIC II Distribution Account in the following
order of priority: (i) concurrently, to the Class X-0, Xxxxx X-0, Class A-3,
Class A-1-A and Class A-X Certificates, pro rata, in respect of the Optimal
Interest Distribution Amount allocable to each such Class; (ii) to the Class
A-1, Class A-2, Class A-3 and Class A-1-A Certificates, pro rata in reduction of
the Certificate Balances thereof, until the Certificate Balance of each such
Class has been reduced to zero; and (iii) to the Class X-0, Xxxxx X-0, Class A-3
and Class A-1-A Certificates, pro rata (based on the aggregate unreimbursed
Realized Loss previously allocated to such Class) until all amounts of such
Realized Loss previously allocated to such Classes but not previously reimbursed
have been reimbursed in full.
(b) On each Distribution Date, each Uncertificated REMIC I Interest
shall be deemed to receive distributions from the REMIC I Distribution Account
in respect of principal or reimbursement of Realized Loss in an amount equal to
the amount of principal or reimbursement of Realized Loss distributable to such
Uncertificated REMIC I Interest's respective Class of Corresponding Certificates
as provided in Section 4.01(a).
During each Interest Accrual Period, each Uncertificated REMIC I
Interest shall accrue interest in an amount equal to the product of the REMIC I
Principal Amount of each such Uncertificated REMIC I Interest and the Weighted
Average Net Mortgage Pass-Through Rate. On each Distribution Date, each
Uncertificated REMIC I Interest shall be deemed to receive distributions in
respect of interest in an amount equal to the sum of (i) the amount of interest
that will actually be distributed in respect of such Uncertificated REMIC I
Interest's Corresponding Certificates and (ii) the amount of interest that will
actually be distributed in respect of such Uncertificated REMIC I Interest's
corresponding Class A-X Component. In all events, the amount accrued in respect
of each Corresponding Uncertificated REMIC I Interest less Uncovered Prepayment
Interest Shortfalls allocated thereto pursuant to Section 4.01(j) and less the
amount actually distributed in respect of such Uncertificated REMIC I Interests
shall equal the sum of (i) the Interest Shortfall Amount allocated to such
Uncertificated REMIC I Interest's Corresponding Certificates; and (ii) the
Interest Shortfall Amount allocated to the Corresponding Components of the Class
A-X Certificates and attributable to such Uncertificated REMIC I Interest. Any
amounts remaining in the REMIC I Distribution Account after payment to the
Uncertificated REMIC I Interests pursuant to this Section 4.01(b) and Section
4.01(d) and payment of expenses of the Trust Fund shall be distributed to the
Class LR Certificates.
Interest Shortfall Amounts allocated to the Class A-X Certificates
shall be attributed to the Uncertificated REMIC I Interests to the extent of
their Related Components, pro rata, based on interest accrued on such
Components. Any amounts so allocated shall have the same seniority as interest
payments due on the Class A-X Certificates. Prepayment Interest Shortfalls shall
be allocated to each Class of Uncertificated REMIC I Interests pro rata on the
basis of their respective interest entitlements.
The initial REMIC I Principal Amount of each Uncertificated REMIC I
Interest equals the respective Original REMIC I Principal Amount. The REMIC I
Principal Amount of each Uncertificated REMIC I Interest as of any date equals
the Original REMIC I Principal Amount of such Uncertificated REMIC I Interest
less the principal allocated thereto pursuant to the first paragraph of this
Section 4.01(b) and Realized Losses allocated thereto pursuant to Section
4.04(c). As of any date, the REMIC I Principal Amount of each Uncertificated
REMIC I Interest shall equal the Certificate Balance of the Corresponding
Certificates.
On the first Distribution Date, the Class V-2 Certificates shall
receive a distribution of $100 in reduction of its principal balance to zero.
Any amount that remains in the REMIC I Distribution Account on each
Distribution Date after distribution on the Uncertificated REMIC I Interests and
the Class V-2 Certificates and distribution of Yield Maintenance Charges
pursuant to Section 4.01(e) shall be distributed to the Holders of the Class LR
Certificates (but only to the extent of the Available Distribution Amount for
such Distribution Date remaining in the REMIC I Distribution Account, if any).
(c) [Reserved]
(d) On each Master Servicer Remittance Date, the Master Servicer
shall remit all Yield Maintenance Charges to the Trustee for deposit in the
REMIC I Distribution Account for payment to the Uncertificated REMIC I Regular
Interests. On each Distribution Date, the Trustee shall withdraw from the REMIC
I Distribution Account an aggregate amount equal to all such Yield Maintenance
Charges actually collected on the Trust Mortgage Loans or any REO Trust Mortgage
Loans during the related Collection Period (other than any Excess Parc at Duluth
Earnout Yield Maintenance Charge) and shall distribute such amount to the
Uncertificated REMIC I Regular Interests, pro rata in proportion to their
outstanding REMIC I Principal Amounts. The Excess Parc at Duluth Earnout Yield
Maintenance Charge shall be distributed to the holders of the Class V-2
Certificates.
(e) On each Distribution Date, the Trustee shall withdraw any
amounts on deposit in the REMIC II Distribution Account that represent Yield
Maintenance Charges actually collected on the Trust Mortgage Loans or REO Trust
Mortgage Loans (other than any Excess Parc at Duluth Earnout Yield Maintenance
Charge) during the related Collection Period and remitted in respect of the
Uncertificated REMIC I Interests pursuant to Section 4.01(d), and shall
distribute such amounts to the Class A-1, Class A-2, Class A-3, Class A-1-A,
Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G and
Class H Certificates in an amount that shall, as to each such Class equal to the
product of (a) a fraction whose numerator is the amount distributed as principal
to such Class on such Distribution Date that is attributable to the Loan Group
that includes the prepaid Trust Mortgage Loan, and whose denominator is the
total amount distributed as principal to the Class A-1, Class A-2, Class A-3,
Class A-1-A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O and Class
P Certificates on such Distribution Date that is attributable to the Loan Group
that includes the prepaid Trust Mortgage Loan, (b) the Base Interest Fraction
for the related Principal Prepayment and such Class of Certificates and (c) the
aggregate amount of Yield Maintenance Charges collected on such Principal
Prepayment during the related Collection Period. Any Yield Maintenance Charges
(other than any Excess Parc at Duluth Earnout Yield Maintenance Charge)
collected during the related Collection Period remaining after such
distributions for shall be distributed to the Holders of the Class A-X
Certificates.
(f) On any applicable Distribution Date, (i) any Excess Interest
collected for such Distribution Date shall be distributed from the Excess
Interest Distribution Account to the Class V-1 Certificates.
(g) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise specifically provided in Sections 4.01(h), 4.01(i) and 9.01, all such
distributions with respect to each Class on each Distribution Date shall be made
to the Certificateholders of record of the respective Class at the close of
business on the related Record Date and shall be made by wire transfer of
immediately available funds to the account of any such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided the Paying Agent with written wiring
instructions prior to the related Record Date (which wiring instructions may be
in the form of a standing order applicable to all subsequent Distribution Dates)
or otherwise by check mailed to the address of such Certificateholder as it
appears in the Certificate Register. The final distribution on each Certificate
(determined without regard to any possible future reimbursement of Realized Loss
previously allocated to such Certificate) shall be made in like manner, but only
upon presentation and surrender of such Certificate at the offices of the
Trustee or such other location specified in the notice to Certificateholders of
such final distribution.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Depositor, the Master Servicer, the Special Servicer, the Underwriters or the
Initial Purchasers shall have any responsibility therefor except as otherwise
provided by this Agreement or applicable law.
(h) Except as otherwise provided in Section 9.01, whenever the
Trustee expects that the final distribution with respect to any Class of
Certificates (determined without regard to any possible future reimbursement of
any amount of Realized Loss previously allocated to such Class of Certificates)
will be made on the next Distribution Date, the Trustee shall, as soon as
practicable prior to the final Distribution Date for such Class, post a notice
on the Website to the effect that no interest shall accrue on such Certificates
from and after such Distribution Date.
Any funds not distributed to any Holder or Holders of Certificates
of any 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
uninvested in trust and credited to the account or accounts of the appropriate
non-tendering Holder or Holders. If any Certificates as to which notice has been
given pursuant to this Section 4.01(h) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within one year after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee, directly or through an agent, shall take such steps
to contact the remaining non-tendering Certificateholders concerning the
surrender of their Certificates as it shall deem appropriate. The costs and
expenses of holding such funds in trust and of contacting such
Certificateholders following the first anniversary of the delivery of such
second notice to the non-tendering Certificateholders shall be paid out of such
funds. No interest shall accrue or be payable to any Certificateholder on any
amount held in trust hereunder by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 4.01(h).
(i) Distributions in reimbursement of Realized Loss previously
allocated to the Regular Certificates shall be made in the amounts and manner
specified in Section 4.01(a) to the Holders of the respective Class otherwise
entitled to distributions of interest and principal on such Class on the
relevant Distribution Date; provided, however, that all distributions in
reimbursement of Realized Loss previously allocated to a Class of Certificates
which has since been retired shall be to the prior Holders that surrendered the
Certificates of such Class upon retirement thereof and shall be made by check
mailed to the address of each such prior Holder last shown in the Certificate
Register, and such amounts shall be deemed to have been distributed from REMIC I
to REMIC II in each case as such Realized Loss was allocated to the
Uncertificated REMIC I Interests pursuant to Section 4.04(c). Notice of any such
distribution to a prior Holder shall be made in accordance with Section 10.05 at
such last address. The amount of the distribution to each such prior Holder
shall be based upon the aggregate Percentage Interest evidenced by the
Certificates surrendered thereby. If the check mailed to any such prior Holder
is returned uncashed, then the amount thereof shall be set aside and held
uninvested in trust for the benefit of such prior Holder, and the Trustee shall
attempt to contact such prior Holder in the manner contemplated by Section
4.01(h) as if such Holder had failed to surrender its Certificates.
(j) Shortfalls in the Available Distribution Amount on any
Distribution Date resulting from Uncovered Prepayment Interest Shortfall Amounts
shall be allocated to each Class of Regular Certificates, pro rata, based on the
Accrued Certificate Interest Amount distributable to each such Class on such
Distribution Date. Uncovered Prepayment Interest Shortfall Amounts so allocated
to the Regular Certificates (in the case of the Class A-X Certificates, pro
rata, to the related Components based on interest accrued) shall be allocated to
the Corresponding Uncertificated REMIC I Interests.
(k) Shortfalls in the Available Distribution Amount resulting from
unanticipated Trust Fund indemnification expenses incurred pursuant to Section
6.03 and Section 8.05 shall be allocated to the most subordinate Class of
Principal Balance Certificates then outstanding, until the Certificate Balance
thereof equals zero, and then to the next most subordinate Class of Principal
Balance Certificates then outstanding.
Section 4.02 Trustee Report; Certain Other Reports
(a) Based solely on information provided to the Trustee by the
Master Servicer pursuant to Section 3.12 and this Section 4.02, the Trustee
shall prepare (or cause to be prepared) and, on each Distribution Date, provide
or make available electronically (or, upon request, by first class mail) to each
Privileged Person a statement substantially in the form of, and containing the
information set forth in, Exhibit E hereto (the "Trustee Report"), detailing the
distributions on such Distribution Date and the performance, both in the
aggregate and individually to the extent available, of the Trust Mortgage Loans
and the Mortgaged Properties; provided that the Trustee need not deliver to any
Privileged Person or the Series 2006-C2 Directing Certificateholder any Trustee
Report that has been made available to such Person via the Trustee's internet
website as provided below; and provided, further, that the Trustee has no
affirmative obligation to discover the identities of Certificate Owners and need
only react to Persons claiming to be Certificate Owners in accordance with
Section 5.06; and provided, further, that during any period that reports are
required to be filed with the Commission with respect to the Trust pursuant to
Section 15(d) of the Exchange Act, each recipient of the Trustee Report shall be
deemed to have agreed to keep confidential the information therein until such
Trustee Report is filed with the Commission.
The Trustee shall have no obligation to provide the information or
reports described in this Section 4.02(a) until it has received the requisite
information or reports from the Master Servicer provided for herein, and the
Trustee shall not be in default hereunder due to a delay in providing the
Certificateholder Reports caused by the Master Servicer's or the Special
Servicer's failure to timely deliver any information or reports hereunder. None
of the Master Servicer, the Special Servicer or the Trustee shall be responsible
for the accuracy or completeness of any information supplied to it by a
Borrower, each other or a third party, and accepted by it in good faith, that is
included in any reports, statements, materials or information prepared or
provided by the Master Servicer, the Special Servicer or the Trustee, as
applicable. None of the Trustee, the Master Servicer or the Special Servicer
shall have any obligation to verify the accuracy or completeness of any
information provided by a Borrower, a third party or each other.
The Trustee shall make available each month, to the general public,
the related Trustee Report via its internet website initially located at
"xxx.xxxxxxx.xxx." In addition, the Trustee shall make available each month, via
its internet website to the extent received by the Trustee, on a restricted
basis solely to Privileged Persons, (i) the Unrestricted Master Servicer
Reports, (ii) the CMSA Loan Periodic Update File, the CMSA Loan Setup File, CMSA
Bond Level File and the CMSA Collateral Summary File, (iii) and any other report
at the direction of the Depositor and (iv) as a convenience to the general
public (and not in furtherance of the distribution thereof under the securities
laws), the Prospectus and this Agreement. Upon notification by the Depositor
that Credit Suisse has sold the Non-Registered Certificates to unaffiliated
third parties, the Trustee shall remove the restriction provided for in the
preceding sentence and shall make such reports and documents available to the
general public. The Trustee shall also make available each month, on a
restricted basis to any Privileged Person via its internet website, to the
extent received by the Trustee, (i) the Restricted Master Servicer Reports, (ii)
the CMSA Property File and (iii) any other report at the direction of the
Depositor. During any period that reports are required to be filed with the
Commission with respect to the Trust pursuant to Section 15(d) of the Exchange
Act, each recipient of information regarding the Trust on the Trustee's internet
website shall be deemed to have agreed to keep confidential such information
until such information is filed with the Commission, and the Trustee's internet
website shall bear a legend to the following effect:
No recipient shall use or disclose the information contained on this
website in any manner which could result in a violation of any
provision of the Securities Act of 1933 or the Securities Exchange
Act of 1934 or would require registration of any Non-Registered
Certificates pursuant to Section 5 of the Securities Act of 1933.
The Trustee makes no representations or warranties as to the
accuracy or completeness or any report, document or other information made
available on its internet website and assumes no responsibility therefor. In
addition, the Trustee may disclaim responsibility for any information
distributed by the Trustee for which it is not the original source.
In connection with providing access to the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee shall not be liable for the dissemination of information
in accordance herewith. Questions regarding the Trustee's internet website can
be directed to the Trustee's CMBS customer service desk at (000) 000-0000 or
such other number as the Trustee may hereinafter specify.
The Trustee shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the Trustee Report and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall prepare, or cause to be prepared, and mail to
each Person who at any time during the calendar year was a Certificateholder (i)
a statement containing the aggregate information set forth on pages 2 and 3 of
Exhibit E hereto for such calendar year or applicable portion thereof during
which such person was a Certificateholder and (ii) such other customary
information as the Trustee deems necessary or desirable for Certificateholders
to prepare their federal, state and local income tax returns, including the
amount of original issue discount accrued on the Certificates, if applicable.
The obligations of the Trustee in the immediately preceding sentence shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code. As soon as practicable following the request of any Certificateholder in
writing, the Trustee shall furnish to such Certificateholder such information
regarding the Trust Mortgage Loans and the Mortgaged Properties as such
Certificateholder may reasonably request and, as has been furnished to, or may
otherwise be in the possession of, the Trustee. The Master Servicer and the
Special Servicer shall promptly provide to the Depositor and the Trustee such
information regarding the Trust Mortgage Loans and the Mortgaged Properties as
such party may reasonably request and that has been furnished to, or may
otherwise be in the possession of, the Master Servicer or the Special Servicer,
as the case may be.
Xxxxxxx 0.00 X&X Advances
(a) On or before 1:30 p.m., New York City time, on each Master
Servicer Remittance Date, the Master Servicer shall, subject to Section 4.03(c),
either (i) remit from its own funds to the Trustee for deposit into the
Distribution Account an amount equal to the aggregate amount of P&I Advances, if
any, to be made by the Master Servicer in respect of the Mortgage Pool for the
related Distribution Date, (ii) apply amounts held in the Collection Account for
future distribution to Certificateholders in subsequent months in discharge of
any such obligation to make such P&I Advances, or (iii) make such P&I Advances
in the form of any combination of (i) and (ii) aggregating the total amount of
such P&I Advances to be made by the Master Servicer. Any amounts held in the
Collection Account for future distribution and so used to make P&I Advances in
respect of the Mortgage Pool shall be appropriately reflected in the Master
Servicer's records and replaced by the Master Servicer by deposit in the
Collection Account prior to the next succeeding Master Servicer Remittance Date
(to the extent not previously replaced through the deposit of Late Collections
of the delinquent principal and interest in respect of which such P&I Advances
were made). If, as of 3:30 p.m., New York City time, on any Master Servicer
Remittance Date, the Master Servicer shall not have made any P&I Advance
required to be made by it in respect of the Mortgage Pool on such date pursuant
to this Section 4.03(a) (and shall not have delivered to the Trustee the
Officer's Certificate and other documentation related to a determination of
nonrecoverability of a P&I Advance pursuant to Section 4.03(c)) or, to the
actual knowledge of a Responsible Officer of the Trustee, shall not have
remitted any other amounts required to be remitted by the Master Servicer on
such date, then the Trustee shall provide notice of such failure to the Master
Servicer by facsimile transmission as soon as possible, but in any event before
5:00 p.m., New York City time, on such Master Servicer Remittance Date. If after
such notice the Trustee does not receive the full amount of such P&I Advances in
respect of the Mortgage Pool by 11:00 a.m., New York City time, on the related
Distribution Date, then the Trustee shall (not later than 12:00 noon, New York
City time, on the related Distribution Date) make the portion of such P&I
Advances in respect of the Mortgage Pool that was required to be, but was not,
made or remitted, as the case may be, by the Master Servicer with respect to the
related Distribution Date.
(b) The aggregate amount of P&I Advances to be made by the Master
Servicer in respect of the Mortgage Pool for any Distribution Date, subject to
Section 4.03(c) below, shall equal the aggregate of all Monthly Payments (other
than Balloon Payments) and any Assumed Scheduled Payments, in each case net of
any related Master Servicing Fees and Primary Servicing Fees, due or deemed due,
as the case may be, in respect of the Trust Mortgage Loans (including Balloon
Trust Mortgage Loans delinquent as to their respective Balloon Payments) and any
REO Trust Mortgage Loans on their respective Due Dates during the related
Collection Period, in each case to the extent such amount was not paid by or on
behalf of the related Borrower or otherwise collected by or on behalf of the
Trust as of the close of business on the related Determination Date; provided
that, if an Appraisal Reduction Amount exists with respect to any Trust Mortgage
Loan or REO Trust Mortgage Loan, then the interest portion of any P&I Advance
required to be made in respect of such Trust Mortgage Loan or REO Trust Mortgage
Loan, as the case may be, for the related Distribution Date shall be reduced (it
being herein acknowledged that there shall be no reduction in the principal
portion of such P&I Advance) to equal the product of (i) the amount of the
interest portion of such P&I Advance that would otherwise be required to be made
in respect of such Trust Mortgage Loan or REO Trust Mortgage Loan, as the case
may be, for such Distribution Date without regard to this proviso, multiplied by
(ii) a fraction, expressed as a percentage, the numerator of which shall equal
the Stated Principal Balance of such Trust Mortgage Loan or REO Trust Mortgage
Loan, as the case may be, immediately prior to such Distribution Date, net of
the related Appraisal Reduction Amount (in the case of an A Loan in a Mortgage
Loan Combination, to the extent allocated to such A Loan herein), and the
denominator of which shall equal the Stated Principal Balance of such Trust
Mortgage Loan or REO Trust Mortgage Loan, as the case may be, immediately prior
to such Distribution Date.
(c) Notwithstanding anything herein to the contrary, no P&I Advance
shall be required to be made hereunder if such P&I Advance would, if made,
constitute a Nonrecoverable P&I Advance. Also, notwithstanding anything herein
to the contrary, no P&I Advance shall be required to be made hereunder in
respect of the Andover House Apartments B Loan or any CBA B Loan or any
successor REO B Loan.
(d) Subject to the last two sentences of this Section 4.03(d), the
Master Servicer and the Trustee shall each be entitled to receive interest at
the Reimbursement Rate in effect from time to time, accrued on the amount of
each P&I Advance made thereby (with its own funds), for so long as such P&I
Advance is outstanding (or, if such P&I Advance was made prior to the end of any
grace period applicable to the subject delinquent Monthly Payment, for so long
as such P&I Advance is outstanding following the end of such grace period). Such
interest with respect to any P&I Advance shall be payable: (i) first, out of any
Penalty Charges subsequently collected on the particular Trust Mortgage Loan or
REO Trust Mortgage Loan as to which such P&I Advance relates; and (ii) then,
after such P&I Advance is reimbursed, but only if and to the extent that such
Penalty Charges are insufficient to cover such Advance Interest, out of general
collections on the Trust Mortgage Loans and REO Properties on deposit in the
Master Servicer's Collection Account; provided that interest earned on any P&I
Advances made with respect to the A Loan of a Mortgage Loan Combination or any
successor REO Trust Mortgage Loan in respect thereof shall be payable out of the
related Mortgage Loan Combination Custodial Account, to the maximum extent
permitted by the related Intercreditor Agreement, before being paid out of
general collections on the Mortgage Pool on deposit in the Collection Account.
The Master Servicer shall reimburse itself or the Trustee, as applicable, for
any outstanding P&I Advance made thereby with respect to any Trust Mortgage Loan
or REO Trust Mortgage Loan as soon as practicable after funds available for such
purpose are deposited in the Master Servicer's Collection Account.
Notwithstanding the foregoing, upon a determination that a P&I Advance
previously made with respect to the Mortgage Pool is a Nonrecoverable P&I
Advance, the Master Servicer may reimburse itself or the Trustee, as applicable,
immediately from general collections in the Collection Account. Notwithstanding
the foregoing, instead of obtaining reimbursement out of general collections on
the Mortgage Pool immediately (as contemplated by Section 3.05(a)(vi)), the
Master Servicer or the Trustee, as applicable, may, in its sole discretion,
after reimbursement of such amounts up to the principal portions of general
collections, elect to obtain reimbursement for such Nonrecoverable P&I Advance
over a period of time (not to exceed 12 months) and the unreimbursed portion of
such P&I Advance will accrue interest at the Reimbursement Rate in effect from
time to time. The Master Servicer must reimburse itself each month up to the
amount of such collections otherwise allocable as principal. At any time after
such a determination to obtain reimbursement over time in accordance with the
preceding sentence, the Master Servicer or the Trustee, as applicable, may, in
its sole discretion, decide to obtain reimbursement immediately. The fact that a
decision to recover such Nonrecoverable P&I Advance over time, or not to do so,
benefits some Classes of Certificateholders to the detriment of other Classes
shall not constitute a violation of the Servicing Standard by the Master
Servicer or a breach of any fiduciary duty owed to the Certificateholders by the
Trustee, or a breach of any other contractual obligation owed to the
Certificateholders by any party to this Agreement. In no event shall interest
accrue in accordance with this Section 4.03(d) on any P&I Advance as to which
the corresponding Late Collection was received by or on behalf of the Trust as
of the related Master Servicer Remittance Date. In addition, the Master Servicer
shall not be entitled to Advance Interest on any particular P&I Advance made
thereby to the extent a payment is received but is being held by or on behalf of
the Master Servicer in suspense.
Section 4.04 Allocation of Realized Losses and Additional Trust Fund
Expenses
(a) On each Distribution Date, following the distributions to
Certificateholders to be made on such date pursuant to Sections 4.01, the
Trustee shall determine the amount, if any, by which (i) the then aggregate of
the Class Principal Balances of all the Classes of Principal Balance
Certificates, exceeds (ii) the aggregate Stated Principal Balance (for purposes
of this calculation only, not giving effect to any reductions of the Stated
Principal Balance for payments of principal collected on the Trust Mortgage
Loans that were used to reimburse any Nonrecoverable Advances and
Workout-Delayed Reimbursement Amounts pursuant to Section 3.05(a)(vi), other
than Total Principal Distribution Amounts used to reimburse Nonrecoverable
Advances or Workout-Delayed Reimbursement Amounts with respect to Trust Mortgage
Loans for which a Final Recovery Determination has been made) of the Mortgage
Pool that will be outstanding immediately following such Distribution Date. If
such excess does exist, then the respective Class Principal Balances of the
Principal Balance Certificates will be reduced sequentially, in the following
order, until such excess is reduced to zero: first, the Class Principal Balance
of the Class P Certificates, until such Class Principal Balance is reduced to
zero; second, the Class Principal Balance of the Class O Certificates, until
such Class Principal Balance is reduced to zero; third, the Class Principal
Balance of the Class N Certificates, until such Class Principal Balance is
reduced to zero; fourth, the Class Principal Balance of the Class M
Certificates, until such Class Principal Balance is reduced to zero; fifth, the
Class Principal Balance of the Class L Certificates, until such Class Principal
Balance is reduced to zero; sixth, the Class Principal Balance of the Class K
Certificates, until such Class Principal Balance is reduced to zero; seventh,
the Class Principal Balance of the Class J Certificates, until such Class
Principal Balance is reduced to zero; eighth, the Class Principal Balance of the
Class H Certificates, until such Class Principal Balance is reduced to zero;
ninth, the Class Principal Balance of the Class G Certificates, until such Class
Principal Balance is reduced to zero; tenth, the Class Principal Balance of the
Class F Certificates, until such Class Principal Balance is reduced to zero;
eleventh, the Class Principal Balance of the Class E Certificates, until such
Class Principal Balance is reduced to zero; twelfth, the Class Principal Balance
of the Class D Certificates, until such Class Principal Balance is reduced to
zero; thirteenth, the Class Principal Balance of the Class C Certificates, until
such Class Principal Balance is reduced to zero; fourteenth, the Class Principal
Balance of the Class B Certificates, until such Class Principal Balance is
reduced to zero; fifteenth, the Class Principal Balance of the Class A-J
Certificates, until such Class Principal Balance is reduced to zero; sixteenth,
the Class Principal Balance of the Class A-M Certificates, until such Class
Principal Balance is reduced to zero and seventeenth, the respective Class
Principal Balances of the Class A-1 Certificates, the Class A-2 Certificates,
Class A-3 Certificates and the Class A-1-A Certificates (on a pro rata basis in
accordance with the relative sizes of such Class Principal Balances, until such
Class Principal Balances are reduced to zero. All such reductions in the Class
Principal Balances of the respective Classes of the Principal Balance
Certificates shall constitute allocations of Realized Losses and Additional
Trust Fund Expenses. Any Realized Loss allocated to a Class of Certificates will
be allocated among respective Certificates of such Class in proportion to the
Percentage Interests evidenced thereby.
(b) [Reserved]
(c) With respect to any Distribution Date, any Realized Loss
allocated to a Class of Certificates pursuant to Section 4.04(b) with respect to
such Distribution Date shall reduce the REMIC I Principal Amount of the
Corresponding Uncertificated REMIC I Interest as a write-off.
Section 4.05 Calculations
Provided that the Trustee receives the necessary information from
the Master Servicer and/or the Special Servicer, the Trustee shall be
responsible for performing all calculations necessary in connection with the
actual and deemed distributions to be made pursuant to Section 4.01, the
preparation of the Trustee Reports pursuant to Section 4.02(a) and the actual
and deemed allocations of Realized Losses and Additional Trust Fund Expenses to
be made pursuant to Section 4.04. The Trustee shall calculate the Available
Distribution Amount for each Distribution Date and shall allocate such amounts
among Certificateholders in accordance with this Agreement. Absent actual
knowledge of an error therein, the Trustee shall have no obligation to
recompute, recalculate or otherwise verify any information provided to it by the
Master Servicer. The calculations by the Trustee contemplated by this Section
4.05 shall, in the absence of manifest error, be presumptively deemed correct
for all purposes hereunder.
Section 4.06 Grantor Trust Reporting
The parties intend that Grantor Trust V-1 shall be treated as a
Grantor Trust, and the provisions thereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall furnish or
cause to be furnished to the Class V-1 Certificateholders and shall file or
cause to be filed with the Internal Revenue Service together with Form 1041 or
such other form as may be applicable for Grantor Trust V-1 and shall furnish or
cause to be furnished to the Holders of the Class V-1 Certificates their
allocable share of income with respect to Excess Interest as such amounts
accrue.
Section 4.07 Compliance with Withholding Requirements
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements with respect to payments
to Certificateholders of interest or original issue discount that the Paying
Agent reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such withholding. The Paying
Agent agrees that it will not withhold with respect to payments of interest or
original issue discount in the case of a Certificateholder that is (A) a United
States Tax Person that has furnished or caused to be furnished a Form W-9 or an
acceptable substitute form or a successor form (or is exempt from furnishing
such a form), or (B) a Non-United States Tax Person that has furnished or caused
to be furnished (i) an effective Form W-8BEN or W-8IMY (with appropriate
attachments) or an acceptable substitute form or a successor form and who is not
a "10-percent shareholder" within the meaning of Code Section 871(h)(3)(B) or a
"controlled foreign corporation" described in Code Section 881(c)(3)(C) with
respect to the Trust Fund or the Depositor, or (ii) an effective Form W-8ECI or
an acceptable substitute form or a successor form. In the event the Trustee or
its agent withholds any amount from interest or original issue discount payments
or advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholder. Any amount so withheld shall be treated as having been
distributed to such Certificateholder for all purposes of this Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates
(a) The Certificates shall consist of 25 Classes with the following
respective alphabetic or alphanumeric Class designations: "A-X," "X-0," "X-0,"
"X-0," "X-0-X," "X-X," "X-X," "X," "X," "D," "E," "F," "G," "H," "J," "K," "L,"
"M," "N," "O," "P," "R," "LR," "V-1" and "V-2," respectively. Any reference in
any other section or subsection of this Agreement to any Certificate or
Certificates preceded by a Class designation shall be to a Certificate or
Certificates of the Class so designated in this Section 5.01(a).
(b) The Certificates will be substantially in the respective forms
attached hereto as Exhibits A-1 through A-5; provided, however, that any of the
Certificates may be issued with appropriate insertions, omissions, substitutions
and variations, and may have imprinted or otherwise reproduced thereon such
legend or legends, not inconsistent with the provisions of this Agreement, as
may be required to comply with any law or with rules or regulations pursuant
thereto, or with the rules of any securities market in which the Certificates
are admitted to trading, or to conform to general usage. The Certificates will
be issuable in registered form only; provided, however, that in accordance with
Section 5.03 beneficial ownership interests in the Regular Certificates
initially shall (and, at the option of the Depositor, following the Closing
Date, all or a portion of any other Class of Certificates may) be held and
transferred through the book-entry facilities of the Depository. The Regular
Certificates will be issuable only in denominations corresponding to initial
Certificate Balances (or, in the case of the Interest Only Certificates, initial
Certificate Notional Amounts) as of the Closing Date of not less than $10,000
and any whole dollar denomination in excess thereof. The Class R, Class LR and
Class V Certificates will be issuable only in denominations representing
Percentage Interests in the related Class of not less than 10.0%.
(c) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by an
authorized signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the authorized signatory of the Trustee shall
be entitled to all benefits under this Agreement, subject to the following
sentence, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, however, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 5.02 Registration of Transfer and Exchange of Certificates
(a) At all times during the term of this Agreement, there shall be
maintained at the office of the Certificate Registrar a Certificate Register in
which, subject to such reasonable regulations as the Certificate Registrar
(located as of the Closing Date at Xxxxx Fargo Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-0113) may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee is hereby initially
appointed (and hereby agrees to act in accordance with the terms hereof) as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided. The Trustee may appoint, by a
written instrument delivered to the other parties hereto, any other bank or
trust company to act as Certificate Registrar under such conditions as the
Trustee may prescribe; provided that the Trustee shall not be relieved of any of
its duties or responsibilities hereunder as Certificate Registrar by reason of
such appointment. If the Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee shall immediately succeed to its
predecessor's duties as Certificate Registrar. The Depositor, the Master
Servicer and the Special Servicer shall each have the right to inspect the
Certificate Register or to obtain a copy thereof at all reasonable times, and to
rely conclusively upon a certificate of the Certificate Registrar as to the
information set forth in the Certificate Register.
If three or more Certificateholders make a written request to the
Trustee, and such request states that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and is accompanied by a copy of the
communication that such requesting Certificateholders propose to transmit, then
the Trustee shall, within 30 days after the receipt of such request, afford (or
cause any other Certificate Registrar to afford) the requesting
Certificateholders access during normal business hours to, or deliver to the
requesting Certificateholders a copy of, the most recent list of
Certificateholders held by the Certificate Registrar (which list shall be
current as of a date no earlier than 30 days prior to the Trustee's receipt of
such request). Every Certificateholder, by receiving such access, acknowledges
that neither the Certificate Registrar nor the Trustee will be held accountable
in any way by reason of the disclosure of any information as to the names and
addresses of any Certificateholder regardless of the source from which such
information was derived.
(b) No transfer, sale, pledge or other disposition of any
Non-Registered Certificate or interest therein shall be made unless that
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and
such state securities laws.
If a transfer of any Non-Registered Certificate is to be made
without registration under the Securities Act (other than in connection with the
initial issuance of the Certificates or a transfer of such Non-Registered
Certificate by the Depositor or an Affiliate of the Depositor or, in the case of
a Global Certificate, any transfer of such Certificate to a successor Depository
or, in the case of a Definitive Certificate issued with respect to a Global
Certificate, any transfer of such Certificate to the applicable Certificate
Owner in accordance with Section 5.03(c)), then the Certificate Registrar shall
refuse to register such transfer unless it receives (and, upon receipt, may
conclusively rely upon) either: (i) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached hereto as
Exhibit F-1A; or (ii) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached hereto as Exhibit F-1B
and a certificate from such Certificateholder's prospective Transferee
substantially in the form attached hereto either as Exhibit F-2A or as Exhibit
F-2B; or (iii) an Opinion of Counsel satisfactory to the Trustee to the effect
that such transfer may be made without registration under the Securities Act
(which Opinion of Counsel shall not be an expense of the Trust or of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Certificate Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from the
Certificateholder desiring to effect such transfer and/or such
Certificateholder's prospective Transferee on which such Opinion of Counsel is
based.
Each Global Certificate shall be deposited with the Trustee as
custodian for the Depository and registered in the name of Cede & Co. as nominee
of the Depository.
If a transfer of an interest in any Rule 144A Global Certificate is
to be made without registration under the Securities Act (other than in
connection with the initial issuance of the Certificates or a transfer of an
interest in such Rule 144A Global Certificate by the Depositor or an Affiliate
of the Depositor), then (except as provided in the next succeeding paragraph or
in the penultimate paragraph of this Section 5.02(b)) the Certificate Owner
desiring to effect such transfer shall require from its prospective Transferee:
(i) a certificate substantially in the form attached as Exhibit F-2C hereto; or
(ii) an Opinion of Counsel to the effect that the prospective Transferee is a
Qualified Institutional Buyer and such transfer may be made without registration
under the Securities Act. Except as provided in the next succeeding paragraph or
in the penultimate paragraph of this Section 5.02(b), any interest in a Rule
144A Global Certificate shall not be transferred to any Person other than a
Qualified Institutional Buyer that takes delivery in the form of an interest in
such Rule 144A Global Certificate. If any Transferee of an interest in a Rule
144A Global Certificate does not, in connection with the subject transfer,
deliver to the Transferor the Opinion of Counsel or the certification described
in the second preceding sentence, then such Transferee shall be deemed to have
represented and warranted that all the certifications set forth in Exhibit F-2C
hereto are, with respect to the subject transfer, true and correct.
Notwithstanding the preceding paragraph, any interest in any Rule
144A Global Certificate may be transferred (without delivery of any certificate
or Opinion of Counsel described in clauses (i) and (ii) of the first sentence of
the preceding paragraph) to any Person who takes delivery in the form of a
beneficial interest in the Regulation S Global Certificate for the same Class as
such Rule 144A Global Certificate upon delivery to the Certificate Registrar and
the Trustee of (i) a certificate from the Certificate Owner desiring to effect
such transfer substantially in the form attached hereto as Exhibit F-1D and a
certificate from such Certificate Owner's prospective Transferee substantially
in the form attached hereto as Exhibit F-2D and (ii) such written orders and
instructions as are required under the applicable procedures of the Depository,
Clearstream and/or Euroclear to direct the Trustee to debit the account of a
Depository Participant by a denomination of interests in such Rule 144A Global
Certificate, and credit the account of a Depository Participant by a
denomination of interests in such Regulation S Global Certificate, that is equal
to the denomination of beneficial interests in the Class A-X, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O or Class
P, as applicable, Certificates to be transferred. Upon delivery to the Trustee
of such certifications and such orders and instructions, the Trustee, subject to
and in accordance with the applicable procedures of the Depository, shall reduce
the denomination of the Rule 144A Global Certificate with respect to the Class
A-X, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M,
Class N, Class O or Class P, as applicable, Certificates, and increase the
denomination of the Regulation S Global Certificate for such Class, by the
denomination of the beneficial interest in such Class specified in such orders
and instructions.
Except as provided in the next succeeding paragraph or in the
penultimate paragraph of this Section 5.02(b), beneficial interests in any
Regulation S Global Certificate shall not be transferred to any Person other
than a non-United States Securities Person that takes delivery in the form of a
beneficial interest in such Regulation S Global Certificate, and the Certificate
Owner desiring to effect such transfer shall be required to obtain from such
prospective Transferee a certification substantially in the form attached hereto
as Exhibit F-2D. On or prior to the Release Date, beneficial interests in any
Regulation S Global Certificate may be held only through Euroclear or
Clearstream.
Notwithstanding the preceding paragraph, any interest in any
Regulation S Global Certificate may be transferred (without delivery of any
certificate described in the first sentence of the preceding paragraph) to any
Person who takes delivery in the form of a beneficial interest in the Rule 144A
Global Certificate for the same Class as such Regulation S Global Certificate
upon delivery to the Certificate Registrar and the Trustee of (i) a certificate
from the Certificate Owner desiring to effect such transfer substantially in the
form attached hereto as Exhibit F-1C and a certificate from such Certificate
Owner's prospective Transferee substantially in the form attached hereto as
Exhibit F-2C and (ii) such written orders and instructions as are required under
the applicable procedures of the Depository, Clearstream and/or Euroclear to
direct the Trustee to debit the account of a Depository Participant by a
denomination of interests in such Regulation S Global Certificate, and credit
the account of a Depository Participant by a denomination of interests in such
Rule 144A Global Certificate, that is equal to the denomination of beneficial
interests in the Class A-X, Class E, Class F, Class G, Class H, Class J, Class
K, Class L, Class M, Class N, Class O or Class P Certificates, as applicable, to
be transferred. Upon delivery to the Trustee of such certifications and such
orders and instructions, the Trustee, subject to and in accordance with the
applicable procedures of the Depository, shall reduce the denomination of the
Regulation S Global Certificate with respect to the Class A-X, Class E, Class F,
Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O or Class
P, as applicable, Certificates, and increase the denomination of the Rule 144A
Global Certificate for such Class, by the denomination of the beneficial
interest in such Class specified in such orders and instructions.
Notwithstanding the foregoing, any interest in a Global Certificate
may be transferred by any Certificate Owner holding such interest to any
Institutional Accredited Investor (other than a Qualified Institutional Buyer)
that takes delivery in the form of a Definitive Certificate of the same Class as
such Global Certificate upon delivery to the Certificate Registrar and the
Trustee of (i) such certifications and/or opinions as are contemplated by the
second paragraph of this Section 5.02(b) and (ii) such written orders and
instructions as are required under the applicable procedures of the Depository,
Clearstream and/or Euroclear to direct the Trustee to debit the account of a
Depository Participant by the denomination of the transferred interests in such
Global Certificate. Upon delivery to the Certificate Registrar of the
certifications and/or opinions contemplated by the second paragraph of this
Section 5.02(b), the Trustee, subject to and in accordance with the applicable
procedures of the Depository, shall reduce the denomination of the subject
Global Certificate, and cause a Definitive Certificate of the same Class as such
Global Certificate, and in a denomination equal to the reduction in the
denomination of such Global Certificate, to be executed, authenticated and
delivered in accordance with this Agreement to the applicable Transferee.
None of the Depositor, the Trustee or the Certificate Registrar is
obligated to register or qualify any Class of Non-Registered Certificates under
the Securities Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of any
Non-Registered Certificate or interest therein without registration or
qualification. Any Certificateholder or Certificate Owner desiring to effect a
transfer, sale, pledge or other disposition of any Non-Registered Certificate or
interest therein shall, and does hereby agree to, indemnify the Depositor,
Credit Suisse, the Trustee, the Master Servicer, the Special Servicer and the
Certificate Registrar against any liability that may result if such transfer,
sale, pledge or other disposition is not exempt from the registration and/or
qualification requirements of the Securities Act and any applicable state
securities laws or is not made in accordance with such federal and state laws.
(c) No transfer of any Certificate or interest therein shall be made
to a Plan or to any Person who is directly or indirectly purchasing such
Certificate or interest therein on behalf of, as named fiduciary of, as trustee
of, or with assets of a Plan, if the purchase and holding of such Certificate or
interest therein by the prospective Transferee would result in a violation of
Sections 406 or 407 of ERISA or Section 4975 of the Code or Similar Law or would
result in the imposition of an excise tax under Section 4975 of the Code or
Similar Law.
Except in connection with the initial issuance of the Certificates
or any transfer of a Non-Registered Certificate by the Depositor or an Affiliate
of the Depositor or, in the case of a Global Certificate, any transfer of such
Certificate to a successor Depository or, in the case of a Definitive
Certificate issued with respect to a Global Certificate, any transfer of such
Certificate to the applicable Certificate Owner in accordance with Section
5.03(c), the Certificate Registrar shall refuse to register the transfer of a
Non-Registered Certificate unless it has received from the prospective
Transferee one of the following: (i) a certification to the effect that such
prospective Transferee is not a Plan and is not directly or indirectly
purchasing such Certificate or interest therein on behalf of, as named fiduciary
of, as trustee of, or with assets of a Plan; or (ii) except in the case of a
Class R, Class LR or Class V Certificate ,a certification to the effect that the
purchase and continued holding of such Certificate by such prospective
Transferee is exempt from the prohibited transaction provisions of Section 406
and 407 of ERISA, Section 4975 of the Code and Similar Law by reason of Sections
I and III of Prohibited Transaction Class Exemption 95-60 or comparable
exemption under Similar Law; or (iii) in the case of a Non-Registered
Certificate (other than a Class R, Class LR or Class V Certificate) that is
rated investment grade by at least one of the Rating Agencies and is being
acquired by or on behalf of a Plan in reliance on PTE 89-90 (or comparable
exemption under Similar Law), a certification to the effect that such Plan (X)
is an accredited investor as defined in Rule 501(a)(1) of Regulation D of the
Securities Act, (Y) is not sponsored (within the meaning of Section 3(16)(B) of
ERISA) by the Trustee, any Exemption-Favored Party, the Depositor, any Mortgage
Loan Seller, the Master Servicer, the Special Servicer, any Sub-Servicer or any
Borrower with respect to Trust Mortgage Loans constituting more than 5% of the
aggregate unamortized principal of all the Trust Mortgage Loans determined as of
the Closing Date, or by any Affiliate of such Person, and (Z) agrees that it
will obtain from each of its Transferees a written representation that such
Transferee, if a Plan, satisfies the requirements of the immediately preceding
clauses (iii)(X) and (iii)(Y), together with a written agreement that such
Transferee will obtain from each of its Transferees that are Plans a similar
written representation regarding satisfaction of the requirements of the
immediately preceding clauses (iii)(X) and (iii)(Y); or (iv) except in the case
of a Class R, Class LR or Class V Certificate, a certification of facts and an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee, the Certificate Registrar or the Trust) which otherwise establish to
the reasonable satisfaction of the Trustee that such transfer will not result in
a violation of Sections 406 or 407 of ERISA, Section 4975 of the Code or Similar
Law or result in the imposition of an excise tax under Section 4975 of the Code
or Similar Law. It is hereby acknowledged that the form of certification
attached hereto as Exhibit G-1 is acceptable for purposes of the preceding
sentence.
Except in connection with the initial issuance of the Certificates
or any transfer of an interest in a Book-Entry Non-Registered Certificate by the
Depositor or an Affiliate of the Depositor, the Certificate Owner desiring to
effect a transfer of an interest in a Book-Entry Non-Registered Certificate
shall obtain from its prospective Transferee one of the following: (i) a
certification to the effect that such prospective Transferee is not a Plan and
is not directly or indirectly purchasing such interest in such Certificate on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan; or
(ii) except in the case of a Class R, Class LR or Class V Certificate, a
certification to the effect that the purchase and continued holding of an
interest in such Certificate by such prospective Transferee is exempt from the
prohibited transaction provisions of Sections 406 and 407 of ERISA, Section 4975
of the Code and Similar Law by reason of Sections I and III of Prohibited
Transaction Class Exemption 95-60 (or comparable exemption under Similar Law);
or (iii) if such Certificate is not a Class R, Class LR or Class V Certificate,
if such Certificate is rated investment grade by at least one of the Rating
Agencies and if the interest in such Certificate is being acquired by or on
behalf of a Plan in reliance on PTE 89-90 (or comparable exemption under Similar
Law), a certification to the effect that such Plan (X) is an accredited investor
as defined in Rule 501(a)(1) of Regulation D of the Securities Act, (Y) is not
sponsored (within the meaning of Section 3(16)(B) of ERISA) by the Trustee, the
Depositor, any Mortgage Loan Seller, the Master Servicer, the Special Servicer,
any Sub-Servicer or any Borrower with respect to Trust Mortgage Loans
constituting more than 5% of the aggregate unamortized principal of all the
Trust Mortgage Loans determined as of the Closing Date, or by any Affiliate of
such Person, and (Z) agrees that it will obtain from each of its Transferees a
written representation that such Transferee, if a Plan, satisfies the
requirements of the immediately preceding clauses (iii)(X) and (iii)(Y),
together with a written agreement that such Transferee will obtain from each of
its Transferees that are Plans a similar written representation regarding
satisfaction of the requirements of the immediately preceding clauses (iii)(X)
and (iii)(Y); or (iv) except in the case of a Class R, Class LR or Class V
Certificate, a certification of facts and an Opinion of Counsel to the effect
that such transfer will not result in a violation of Sections 406 or 407 of
ERISA, Section 4975 of the Code or Similar Law or result in the imposition of an
excise tax under Section 4975 of the Code or Similar Law. It is hereby
acknowledged that the form of certification attached hereto as Exhibit G-2 is
acceptable for purposes of the preceding sentence.
Each Transferee of any Registered Certificate or interest therein or
of an interest in any Book-Entry Non-Registered Certificate shall be deemed to
have represented and warranted that either: (i) such Transferee is not a Plan
and is not directly or indirectly purchasing such Certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan; or (ii) the purchase and continued holding of such Certificate or interest
therein by such Transferee is exempt from the prohibited transaction provisions
of Section 406 and 407 of ERISA, Section 4975 of the Code and Similar Law.
(d) (i) Each Person who has or acquires any Ownership Interest in a
Class R or Class LR Certificate shall be deemed by the acceptance or acquisition
of such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee under clause (d)(ii)
below to deliver payments to a Person other than such Person and, further, to
negotiate the terms of any mandatory disposition and to execute all instruments
of Transfer and do all other things necessary in connection with any such
disposition. The rights of each Person acquiring any Ownership Interest in a
Class R or Class LR Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Class R or Class LR Certificate shall be a Permitted Transferee
and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R or Class LR Certificate, the Certificate
Registrar shall require delivery to it, and shall not register the
Transfer of any Class R or Class LR Certificate until its receipt,
of an affidavit and agreement substantially in the form attached
hereto as Exhibit H-1 (a "Transfer Affidavit and Agreement"), from
the proposed Transferee, representing and warranting, among other
things, that such Transferee is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the Class R or Class LR
Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person that is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in
a Class R or Class LR Certificate it will endeavor to remain a
Permitted Transferee, and that it has reviewed the provisions of
this Section 5.02(d) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of either the Trustee or the Certificate
Registrar has actual knowledge that the proposed Transferee is not a
Permitted Transferee, no Transfer of an Ownership Interest in a
Class R or Class LR Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (1) to require a Transfer
Affidavit and Agreement in the form attached hereto as Exhibit H-1
from any prospective Transferee to whom such Person attempts to
transfer its Ownership Interest in such Class R or Class LR
Certificate and (2) not to transfer its Ownership Interest in such
Class R or Class LR Certificate unless it provides to the
Certificate Registrar and the Trustee a certificate substantially in
the form attached hereto as Exhibit H-2 stating that, among other
things, it has no actual knowledge that such prospective Transferee
is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership Interest in
a Class R or Class LR Certificate, by purchasing such Ownership
Interest, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R or Class LR Certificate
if it is, or is holding an Ownership Interest in a Class R or Class
LR Certificate on behalf of, a "pass-through interest holder."
(ii) If any purported Transferee shall become a Holder of a Class R
or Class LR Certificate in violation of the provisions of this Section
5.02(d), then the last preceding Holder of such Class R or Class LR
Certificate that was in compliance with the provisions of this Section
5.02(d) shall be restored, to the extent permitted by law, to all rights
as Holder thereof retroactive to the date of registration of such Transfer
of such Class R or Class LR Certificate. None of the Depositor, the
Trustee or the Certificate Registrar shall be under any liability to any
Person for any registration of Transfer of a Class R or Class LR
Certificate that is in fact not permitted by this Section 5.02(d) or for
making any payments due on such Certificate to the Holder thereof or for
taking any other action with respect to such Holder under the provisions
of this Agreement.
If any purported Transferee shall become a Holder of a Class R or
Class LR Certificate in violation of the restrictions in this Section 5.02(d),
then, to the extent that retroactive restoration of the rights of the preceding
Holder of such Class R or Class LR Certificate as described in the preceding
paragraph of this clause (d)(ii) shall be invalid, illegal or unenforceable, the
Trustee shall have the right, but not the obligation, to cause the transfer of
such Class R or Class LR Certificate to a Permitted Transferee selected by the
Trustee on such terms as the Trustee may choose, and the Trustee shall not be
liable to any Person having an Ownership Interest in such Class R or Class LR
Certificate or any other Person as a result of its exercise of such discretion.
Such purported Transferee shall promptly endorse and deliver such Class R or
Class LR Certificate in accordance with the instructions of the Trustee. Such
Permitted Transferee may be the Trustee itself or any Affiliate of the Trustee.
(iii) The Trustee shall make available to the IRS and to those
Persons specified by the REMIC Provisions all information furnished to it
by the other parties hereto necessary to compute any tax imposed (A) as a
result of the Transfer of an Ownership Interest in a Class R or Class LR
Certificate to any Person who is a Disqualified Organization, including
the information described in Treasury Regulations Sections 1.860D-1(b)(5)
and 1.860E-2(a)(5) with respect to the "excess inclusions" for a Class R
or Class LR Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust, estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Class R or Class LR Certificate having as
among its record holders at any time any Person which is a Disqualified
Organization, and each of the other parties hereto shall furnish to the
Trustee all information in its possession necessary for the Trustee to
discharge such obligation. The Person holding such Ownership Interest
shall be responsible for the reasonable compensation of the Trustee for
providing such information.
(iv) The provisions of this Section 5.02(d) set forth prior to this
clause (iv) may be modified, added to or eliminated; provided that there
shall have been delivered to the Trustee the following:
(A) written confirmation from each Rating Agency to the effect
that the modification of, addition to or elimination of such
provisions will not result in an Adverse Rating Event with respect
to any Class of Rated Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory
to the Trustee, obtained at the expense of the party seeking such
modification of, addition to or elimination of such provisions (but
in no event at the expense of the Trustee or the Trust), to the
effect that doing so will not (1) cause either REMIC Pool to cease
to qualify as a REMIC or be subject to an entity-level tax caused by
the Transfer of any Class R or Class LR Certificate to a Person
which is not a Permitted Transferee or (2) cause a Person other than
the prospective Transferee to be subject to a REMIC-related tax
caused by the Transfer of a Class R or Class LR Certificate to a
Person that is not a Permitted Transferee.
(e) If a Person is acquiring any Non-Registered Certificate as a
fiduciary or agent for one or more accounts, such Person shall be required to
deliver to the Certificate Registrar a certification to the effect that, and
such other evidence as may be reasonably required by the Trustee to confirm
that, it has (i) sole investment discretion with respect to each such account
and (ii) full power to make the applicable foregoing acknowledgments,
representations, warranties, certifications and/or agreements with respect to
each such account as set forth in subsections (b), (c) and/or (d), as
appropriate, of this Section 5.02.
(f) Subject to the preceding provisions of this Section 5.02, upon
surrender for registration of transfer of any Certificate at the offices of the
Certificate Registrar maintained for such purpose, the Trustee shall execute and
the Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of authorized
denominations of the same Class evidencing a like aggregate Percentage Interest.
(g) At the option of any Holder, its Certificates may be exchanged
for other Certificates of authorized denominations of the same Class evidencing
a like aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at the offices of the Certificate Registrar maintained for such
purpose. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive.
(h) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in the form
satisfactory to the Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(i) No service charge shall be imposed for any transfer or exchange
of Certificates, but the Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(j) All Certificates surrendered for transfer and exchange shall be
physically canceled by the Certificate Registrar, and the Certificate Registrar
shall dispose of such canceled Certificates in accordance with its standard
procedures.
(k) The Certificate Registrar or the Trustee shall provide to each
of the other parties hereto, upon reasonable written request and at the expense
of the requesting party, an updated copy of the Certificate Register.
Section 5.03 Book-Entry Certificates
(a) The Regular Certificates shall, in the case of each Class
thereof, initially be issued (and, at the option of the Depositor, subsequent to
the Closing Date, all or any portion of any other Class of Certificates may be
issued) as one or more Certificates registered in the name of the Depository or
its nominee and, except as provided in Section 5.02(b) or Section 5.03(c),
transfer of such Certificates may not be registered by the Certificate Registrar
unless such transfer is to a successor Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. Such Certificate Owners shall hold and, subject to Section 5.02,
transfer their respective Ownership Interests in and to such Certificates
through the book-entry facilities of the Depository; and, except as provided in
Section 5.02(b) or Section 5.03(c) below, such Certificate Owners shall not be
entitled to fully registered, physical Certificates ("Definitive Certificates")
in respect of such Ownership Interests. All transfers by Certificate Owners of
their respective Ownership Interests in the Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or indirect participating brokerage firm representing each such Certificate
Owner. Each Depository Participant shall only transfer the Ownership Interests
in the Book-Entry Certificates of Certificate Owners it represents or of
indirect participating brokerage firms for which it acts as agent in accordance
with the Depository's normal procedures.
(b) Except as expressly provided to the contrary herein, the
Depositor, the Master Servicer, the Special Servicer, the Trustee and the
Certificate Registrar may for all purposes, including the making of payments due
on the Book-Entry Certificates, deal with the Depository as the authorized
representative of the Certificate Owners with respect to such Certificates for
the purposes of exercising the rights of Certificateholders hereunder. Except as
expressly provided to the contrary herein, the rights of Certificate Owners with
respect to the Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Depository
Participants and indirect participating brokerage firms representing such
Certificate Owners. Multiple requests and directions from, and votes of, the
Depository as Holder of the Book-Entry Certificates with respect to any
particular matter shall not be deemed inconsistent if they are made with respect
to different Certificate Owners. The Trustee may establish a reasonable record
date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the Certificate
Registrar in writing that the Depository is no longer willing or able to
discharge properly its responsibilities with respect to any Class of Book-Entry
Certificates, and (B) the Depositor is unable to locate a qualified successor,
or (ii) the Depositor at its option advises the Trustee and the Certificate
Registrar in writing that it elects to terminate the book-entry system through
the Depository with respect to all or any portion of any Class of Book-Entry
Certificates, the Certificate Registrar shall notify all affected Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of Book-Entry
Certificates (or any portion of any Class thereof) by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall execute, and the Certificate Registrar shall
authenticate and deliver, the Definitive Certificates in respect of such Class
(or portion thereof) to the Certificate Owners identified in such instructions.
None of the Depositor, the Master Servicer, the Special Servicer, the Trustee or
the Certificate Registrar shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates for purposes of
evidencing ownership of any Book-Entry Certificates, the registered holders of
such Definitive Certificates shall be recognized as Certificateholders hereunder
and, accordingly, shall be entitled directly to receive payments on, to exercise
Voting Rights with respect to, and to transfer and exchange such Definitive
Certificates.
Section 5.04 Mutilated, Destroyed, Lost or Stolen Certificates
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee and the Certificate Registrar such security or indemnity as may
be reasonably required by them to save each of them harmless, then, in the
absence of actual notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and like Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee and the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the reasonable fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any replacement
Certificate issued pursuant to this section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.05 Persons Deemed Owners
Prior to due presentment for registration of transfer, the
Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Certificate Registrar and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.01 and for all other
purposes whatsoever, and none of the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Certificate Registrar or any agent of any of them
shall be affected by notice to the contrary.
Section 5.06 Certification by Certificateholders and Certificate
Owners
(a) Each Certificate Owner is hereby deemed by virtue of its
acquisition of an Ownership Interest in the Book-Entry Certificates to agree to
comply with the transfer requirements of Section 5.02.
(b) To the extent that it is necessary, pursuant to the terms of
this Agreement, to determine whether any Person is a Certificateholder or a
Certificate Owner, the Trustee shall make such determination based on a
certificate of such Person, which certificate shall be in such form as shall be
reasonably acceptable to the Trustee and shall specify the Class and Certificate
Balance or Certificate Notional Amount, as the case may be, of the Book-Entry
Certificate beneficially owned; provided, however, that the Trustee shall not
knowingly recognize such Person as a Certificate Owner if such Person, to the
knowledge of a Responsible Officer of the Trustee, acquired its Ownership
Interest in a Book-Entry Certificate in violation of Section 5.02, or if such
Person's certification that it is a Certificate Owner is in direct conflict with
information obtained by the Trustee from the Depository, Depository Participants
and/or indirect participating brokerage firms for which Depository Participants
act as agents, with respect to the identity of a Certificate Owner. The Trustee
shall exercise its reasonable discretion in making any determination under this
Section 5.06(b) and shall afford any Person providing information with respect
to its beneficial ownership of any Book-Entry Certificate an opportunity to
resolve any discrepancies between the information provided and any other
information available to the Trustee.
Section 5.07 Appointment of Paying Agent
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.01. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Servicer, to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee that such Paying Agent will hold all sums held by it for the
payment to Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums have been paid to the Certificateholders or
disposed of as otherwise provided herein. The initial Paying Agent shall be the
Trustee. Except for the Trustee, as the initial Paying Agent, the Paying Agent
shall at all times be an entity having a long-term unsecured debt rating of at
least "A+" by S&P and "A1" by Xxxxx'x.
Notwithstanding the foregoing in this Section 5.07, the appointment
of the Paying Agent shall not relieve the Trustee from any of its obligations
hereunder, and the Trustee shall remain responsible for all acts and omissions
of the Paying Agent.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
Section 6.01 Liability of the Depositor, the Master Servicer and the
Special Servicer
The Depositor, the Master Servicer and the Special Servicer shall be
liable in accordance herewith only to the extent of the respective obligations
specifically imposed upon and undertaken by the Depositor, the Master Servicer
or the Special Servicer, as applicable, herein.
Section 6.02 Merger, Consolidation or Conversion of the Depositor,
the Master Servicer or the Special Servicer
(a) Subject to subsection (b) below, the Depositor, the Master
Servicer and the Special Servicer each will keep in full effect its existence,
rights and franchises under the laws of the jurisdiction of its incorporation or
organization, and each will obtain and preserve its qualification to do business
as a foreign corporation or limited partnership in each jurisdiction in which
such qualification is or shall be necessary to protect the validity and
enforceability of the Mortgage Loans and to perform its respective duties under
this Agreement.
(b) The Depositor, the Master Servicer and the Special Servicer each
may be merged or consolidated with or into any Person (other than the Trustee),
or transfer all or substantially all of its assets to any Person (other than the
Trustee), in which case any Person resulting from any merger or consolidation to
which the Depositor, the Master Servicer or the Special Servicer shall be a
party, or any Person succeeding to the business of the Depositor, the Master
Servicer or the Special Servicer, shall be the successor of the Depositor, the
Master Servicer and the Special Servicer, as the case may be, hereunder, without
the execution or filing of any paper (other than an assumption agreement wherein
the successor shall agree to perform the obligations of and serve as the
Depositor, the Master Servicer or the Special Servicer, as the case may be, in
accordance with the terms of this Agreement) or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that such merger, consolidation or succession will not or has
not resulted in a withdrawal, downgrading or qualification of the then-current
ratings of the Classes of Certificates that have been so rated (as evidenced by
a letter to such effect from each Rating Agency).
Section 6.03 Limitation on Liability of the Trustee, the Depositor,
the Master Servicer, the Special Servicer and Others
(a) None of the Depositor, the Trustee, the Master Servicer, the
Special Servicer nor any of the Affiliates, directors, partners, members,
managers, shareholders, officers, employees or agents of any of them shall be
under any liability to the Trust Fund, the Underwriters, the parties hereto, the
Certificateholders, the holders of any Junior Loan or any other Person for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Trustee, the Master Servicer
or the Special Servicer against any breach of warranties or representations made
herein or any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of negligent disregard of obligations and duties hereunder. The Depositor, the
Master Servicer, the Special Servicer, the Trustee and any Affiliate, director,
partner, member, manager, shareholder, officer, employee or agent of the
Depositor, the Trustee, the Master Servicer or the Special Servicer may rely in
good faith on any document of any kind which, prima facie, is properly executed
and submitted by any Person respecting any matters arising hereunder.
The Depositor, the Master Servicer, the Special Servicer, the
Trustee and any Affiliate, director, shareholder, member, partner, manager,
officer, employee or agent of any of the foregoing shall be indemnified and held
harmless by the Trust Fund and/or any affected Junior Loan Holder(s) out of the
Collection Account or the Distribution Account, as applicable in accordance with
Section 3.05 (or, insofar as a Mortgage Loan Combination is involved, and to the
extent permitted by the related Intercreditor Agreement, out of amounts
attributable to such Mortgage Loan Combination on deposit in the related
Mortgage Loan Combination Custodial Account as provided in Section 3.04),
against any loss, liability or expense (including legal fees and expenses)
incurred in connection with any legal action or claim relating to this
Agreement, the Trust Mortgage Loans, any Junior Loan or the Certificates, other
than any loss, liability or expense: (i) specifically required to be borne
thereby pursuant to the terms hereof or that would otherwise constitute a
Servicing Advance; (ii) incurred in connection with any breach of a
representation or warranty made by it herein; (iii) incurred by reason of bad
faith, willful misconduct or negligence in the performance of its obligations or
duties hereunder, or by reason of negligent disregard of such obligations or
duties or (iv) in the case of the Depositor and any of its directors, officers,
employees and agents, incurred in connection with any violation by any of them
of any state or federal securities law.
(b) None of the Depositor, the Trustee, the Master Servicer or the
Special Servicer shall be under any obligation to appear in, prosecute or defend
any legal or administrative action, proceeding, hearing or examination that is
not incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability which it is not reasonably
assured of reimbursement thereof by the Trust; provided, however, that the
Depositor, the Master Servicer, the Special Servicer or the Trustee may in its
discretion undertake any such action, proceeding, hearing or examination that it
may deem necessary or desirable in respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal fees, expenses and costs of such action,
proceeding, hearing or examination and any liability resulting therefrom shall
be expenses, costs and liabilities of the Trust Fund, and the Depositor, the
Master Servicer, the Special Servicer and the Trustee shall be entitled to be
reimbursed therefor out of amounts attributable to the Mortgage Loans on deposit
in the Collection Account as provided by Section 3.05(a) (or, insofar as a
Mortgage Loan Combination is involved, and to the extent permitted by the
related Intercreditor Agreement, as applicable, out of amounts attributable to
such Mortgage Loan Combination on deposit in the related Mortgage Loan
Combination Custodial Account as provided in Section 3.04).
(c) Each of the Master Servicer and the Special Servicer agrees to
indemnify the Depositor, the Trust Fund and the Trustee, and hold them harmless,
from and against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related out-of-pocket costs, judgments, and any other
out-of-pocket costs, liabilities, fees and expenses that any of them may sustain
arising from or as a result of any willful misfeasance, bad faith or negligence
of the Master Servicer or the Special Servicer, as the case may be, in the
performance of its obligations and duties under this Agreement or by reason of
negligent disregard by the Master Servicer or the Special Servicer, as the case
may be, of its duties and obligations hereunder or by reason of breach of any
representations or warranties made by it herein. The Master Servicer and the
Special Servicer may consult with counsel, and any written advice or Opinion of
Counsel shall be full and complete authorization and protection with respect to
any action taken or suffered or omitted by it hereunder in good faith in
accordance with the Servicing Standard and in accordance with such advice or
Opinion of Counsel relating to (i) tax matters, (ii) any amendment of this
Agreement under Article XI, (iii) the defeasance of any Defeasance Mortgage Loan
or (iv) any matter involving legal proceedings with a Borrower.
The Trustee shall immediately notify the Master Servicer or the
Special Servicer, as applicable, if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans entitling the Trust Fund or the
Trustee to indemnification hereunder, whereupon the Master Servicer or Special
Servicer, as the case may be, shall assume the defense of such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim. Any failure to so notify the Master Servicer or
Special Servicer, as the case may be, shall not affect any rights that the Trust
Fund or the Trustee, as the case may be, may have to indemnification under this
Agreement or otherwise, unless the Master Servicer's or Special Servicer's, as
the case may be, defense of such claim is materially prejudiced thereby. The
indemnification provided herein shall survive the termination of this Agreement
and the termination or resignation of the indemnifying party.
The Depositor shall immediately notify the Master Servicer or the
Special Servicer, as applicable, if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans entitling the Depositor to
indemnification hereunder, whereupon the Master Servicer or Special Servicer, as
the case may be, shall assume the defense of such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or them in
respect of such claim. Any failure to so notify the Master Servicer or Special
Servicer, as the case may be, shall not affect any rights that the Depositor may
have to indemnification under this Agreement or otherwise, unless the Master
Servicer's or Special Servicer's, as the case may be, defense of such claim is
materially prejudiced thereby. The indemnification provided herein shall survive
the termination of this Agreement and the termination or resignation of the
indemnifying party.
The Depositor agrees to indemnify the Master Servicer, the Special
Servicer and the Trustee and any Affiliate, director, officer, member, manager,
partner, shareholder, employee or agent thereof, and hold them harmless, from
and against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related out-of-pocket costs, judgments, and any other
out-of-pocket costs, liabilities, fees and expenses that any of them may sustain
arising from or as a result of any breach of representations and warranties or
failure in the performance of the Depositor's obligations and duties under this
Agreement. The Master Servicer, the Special Servicer or the Trustee, as
applicable, shall promptly notify the Depositor if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans entitling it to
indemnification hereunder, whereupon the Depositor shall assume the defense of
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim. Any failure to so notify
the Depositor shall not affect any rights that any of the foregoing Persons may
have to indemnification under this Agreement or otherwise, unless the
Depositor's defense of such claim is materially prejudiced thereby. The
indemnification provided herein shall survive the termination of this Agreement.
The Trustee agrees to indemnify the Master Servicer, the Special
Servicer and the Depositor and any Affiliate, director, officer, shareholder,
partner, member, manager, employee or agent thereof, and hold them harmless,
from and against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related out-of-pocket costs, judgments, and any other
out-of-pocket costs, liabilities, fees and expenses that any of them may sustain
arising from or as a result of any breach of representations and warranties made
by it herein or as a result of any willful misfeasance, bad faith or negligence
of the Trustee in the performance of its obligations and duties under this
Agreement or the negligent disregard by the Trustee of its duties and
obligations hereunder. The Depositor, Master Servicer or the Special Servicer,
as applicable, shall promptly notify the Trustee, if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans entitling it to
indemnification hereunder, whereupon the Trustee, shall assume the defense of
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim. Any failure to so notify
the Trustee shall not affect any rights that any of the foregoing Persons may
have to indemnification under this Agreement or otherwise, unless the Trustee's
defense of such claim is materially prejudiced thereby. The indemnification
provided herein shall survive the termination of this Agreement and the
termination or resignation of the indemnifying party.
Section 6.04 Master Servicer and Special Servicer Not to Resign
Subject to the provisions of Section 6.02, neither the Master
Servicer nor the Special Servicer shall resign from their respective obligations
and duties hereby imposed on each of them except upon (a) a determination that
such party's duties hereunder are no longer permissible under applicable law or
are in material conflict by reason of applicable law with any other activities
carried on by it (the other activities of the Master Servicer or the Special
Servicer, as the case may be, so causing such a conflict being of a type and
nature carried on by the Master Servicer or the Special Servicer, as the case
may be, at the date of this Agreement) or (b) upon the appointment of, and the
acceptance of such appointment by, a successor Master Servicer or Special
Servicer, as applicable, and receipt by the Trustee of written confirmation from
each applicable Rating Agency that such resignation and appointment will not
cause such Rating Agency to downgrade, withdraw or qualify any of then-current
ratings assigned by such Rating Agency to any Class of Certificates. Any such
determination permitting the resignation of the Master Servicer or the Special
Servicer pursuant to clause (a) above shall be evidenced by an Opinion of
Counsel (the cost of which, together with any other expenses of such
resignation, shall be at the expense of the resigning party) to such effect
delivered to the Trustee. No such resignation by the Master Servicer or the
Special Servicer shall become effective until the Trustee or a successor Master
Servicer shall have assumed the Master Servicer's or Special Servicer's, as
applicable, responsibilities and obligations in accordance with Section 7.02;
provided that, if no successor master servicer or special servicer, as
applicable, shall have been so appointed and have accepted appointment within 90
days after the Master Servicer or the Special Servicer, as the case may be, has
given notice of such resignation, the resigning Master Servicer or Special
Servicer, as applicable, may petition any court of competent jurisdiction for
the appointment of a successor thereto.
Section 6.05 Rights of the Depositor in Respect of the Master
Servicer and the Special Servicer
The Depositor may, but is not obligated to, enforce the obligations
of the Master Servicer and the Special Servicer hereunder and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer and the Special Servicer hereunder or exercise the rights
of the Master Servicer or Special Servicer, as applicable, hereunder; provided,
however, that the Master Servicer and the Special Servicer shall not be relieved
of any of their respective obligations hereunder by virtue of such performance
by the Depositor or its designee. The Depositor shall not have any
responsibility or liability for any action or failure to act by the Master
Servicer or the Special Servicer and is not obligated to supervise the
performance of the Master Servicer or the Special Servicer under this Agreement
or otherwise.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default; Master Servicer and Special Servicer
Termination
(a) "Event of Default," wherever used herein, means any one of the
following events: (i) any failure by the Master Servicer or the Special Servicer
to deposit, or to remit to the appropriate party for deposit, into the
Collection Account or the REO Account, as appropriate, any amount required to be
so deposited or remitted, which failure continues unremedied for three Business
Days following the date on which the deposit or remittance was required to be
made;
(ii) any failure by the Master Servicer to remit to the Trustee for
deposit in the Distribution Account or to any B Loan Holder any amount
required to be so remitted, which failure continues unremedied beyond
11:00 a.m. on the Business Day immediately following the date on which the
remittance was required to be made; provided, however, that if the Master
Servicer fails to timely make any such remittance required to be made to
the Trustee on a Master Servicer Remittance Date, the Master Servicer
shall pay to the Trustee (for the account of the Trustee) interest on any
amount not timely remitted at the Prime Rate from and including such
Master Servicer Remittance Date to but excluding the date such remittance
is actually made;
(iii) any failure by the Master Servicer to timely make any
Servicing Advance required to be made by it under this Agreement, which
failure continues unremedied for three Business Days following the date on
which written notice of such failure, requiring the same to be remedied,
has been given to the Master Servicer by any party to this Agreement;
(iv) any failure by the Master Servicer or the Special Servicer to
observe or perform in any material respect any of its other covenants or
agreements under this Agreement which failure continues unremedied for 30
days after written notice of such failure, requiring the same to be
remedied, has been given to the Master Servicer or the Special Servicer,
as the case may be, by any other party to this Agreement, by the Series
2006-C2 Directing Certificateholder or by Certificateholders entitled to
not less than 25% of the Voting Rights; provided, however, that, with
respect to any such failure that is not curable within such 30-day period,
the Master Servicer or the Special Servicer, as appropriate, will have an
additional cure period of 30 days to effect such cure so long as the
Master Servicer or the Special Servicer, as appropriate, has commenced to
cure such failure within the initial 30-day period and has diligently
pursued, and is continuing to pursue, a full cure;
(v) it is determined that there is a breach by the Master Servicer
or the Special Servicer of any of its representations or warranties
contained in this Agreement that materially and adversely affects the
interests of any Class of Certificateholders, which breach continues
unremedied for 30 days after written notice of such failure, requiring the
same to be remedied, has been given to the Master Servicer or the Special
Servicer, as the case may be, by any other party to this Agreement, by the
Series 2006-C2 Directing Certificateholder or by Certificateholders
entitled to not less than 25% of the Voting Rights; provided, however,
that, with respect to any such breach that is not curable within such
30-day period the Master Servicer or the Special Servicer, as appropriate,
will have an additional cure period of 30 days to effect such cure so long
as the Master Servicer or the Special Servicer, as appropriate, has
commenced to cure such breach within the initial 30-day period and has
diligently pursued, and is continuing to pursue, a full cure;
(vi) a decree or order of a court having jurisdiction in an
involuntary case for the appointment of a receiver, liquidator, trustee or
similar official in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings is entered
against the Master Servicer or the Special Servicer and the decree or
order remains in force for a period of 60 days; provided, however, that,
with respect to any such decree or order that cannot be discharged,
dismissed or stayed within such 60-day period the Master Servicer or the
Special Servicer, as appropriate, will have an additional period of 30
days to effect such discharge, dismissal or stay so long as the Master
Servicer or the Special Servicer, as appropriate, has commenced
proceedings to have such decree or order dismissed, discharged or stayed
within the initial 60-day period and has diligently pursued, and is
continuing to pursue, such discharge, dismissal or stay;
(vii) the Master Servicer or the Special Servicer consents to the
appointment of a receiver, liquidator, trustee or similar official
relating to it or of or relating to all or substantially all of its
property;
(viii) the Master Servicer or the Special Servicer admits in writing
its inability to pay its debts or takes other actions indicating its
insolvency or inability to pay its obligations;
(ix) Xxxxx'x has (A) qualified, downgraded or withdrawn its rating
or ratings of one or more Classes of Certificates, or (B) placed one or
more Classes of Certificates on "watch status" in contemplation of
possible rating downgrade or withdrawal (and such "watch status" placement
shall not have been withdrawn by Xxxxx'x within 60 days of such
placement), and, in case of either of clause (A) or (B), citing servicing
concerns with the Master Servicer or Special Servicer as the sole or a
material factor in such rating action;
(x) the Master Servicer is removed from S&P's Select Servicer List
as a U.S. Commercial Mortgage Master Servicer, or the Special Servicer is
removed from S&P's Select Servicer List as a U.S. Commercial Mortgage
Special Servicer, and the Master Servicer or the Special Servicer, as the
case may be, is not reinstated to such status on such list within 60 days
after its removal therefrom; or
(xi) subject to Section 12.16(c), the Master Servicer or Special
Servicer shall fail to deliver any Exchange Act reporting items required
to be delivered by such servicer under Article XII (other than items to be
delivered by a Loan Seller Sub-Servicer) by the time required under
Article XII after any applicable grace periods (and with respect to any
primary servicer, sub-servicer or Servicing Function Participant (such
entity, the "Sub-Servicing Entity") retained by the Master Servicer or
Special Servicer, as applicable (but excluding any Loan Seller
Sub-Servicer), the Master Servicer or Special Servicer, as applicable,
will be in default if such Sub-Servicing Entity defaults (beyond the
applicable grace period) in accordance with the provision of this clause
(xi)).
If any Event of Default shall have occurred with respect to the
Master Servicer or Special Servicer and a Responsible Officer has actual
knowledge of such Event of Default, the Trustee, shall provide notice of such
Event of Default to each affected Junior Loan Holder to the extent the Trustee
has actual knowledge of that holder's identity.
(b) If any Event of Default with respect to the Master Servicer or
Special Servicer (in either case, for purposes of this Section 7.01(b), the
"Defaulting Party") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Trustee may (and shall at the written direction of the Depositor with respect to
clause (xi) above) and at the written direction of the Holders of Certificates
entitled to at least 25% of the Voting Rights, shall terminate, by notice in
writing to the Defaulting Party (a "Termination Notice"), with a copy of such
notice to the Depositor and the Certificate Registrar and, with respect to any
Mortgage Loan Combination, each related Junior Loan Holder, all of the rights
and obligations of the Defaulting Party under this Agreement and in and to the
Mortgage Loans and the proceeds thereof (other than any rights the Defaulting
Party may have as a Holder of any Certificate or as a B Loan Holder); provided,
however, that the Defaulting Party shall be entitled to the payment of accrued
and unpaid compensation and reimbursement through the date of such termination,
as well as amounts due to it thereafter, if any, including with respect to the
Excess Servicing Strip and Assignable Primary Servicing Fees, as provided for
under this Agreement for services rendered and expenses incurred; provided,
further, that nothing contained in this Section 7.01(b) shall terminate any
rights purchased or otherwise owned or held by the Master Servicer to primary
service any of the Mortgage Loans as a Sub-Servicer to the Trustee or any other
replacement or successor Master Servicer so long as (i) the Event of Default set
forth in Section 7.01(a)(ix) or (x) is the cause of the Master Servicer's
termination and (ii) the Master Servicer is on S&P's Select Servicer List as a
U.S. Commercial Mortgage Servicer (in which case, the Trustee or replacement or
successor Master Servicer shall retain the terminated Master Servicer as a
Sub-Servicer of all of the Mortgage Loans that are not otherwise subject to an
existing Sub-Servicing Agreement pursuant to a mutually acceptable Sub-Servicing
Agreement effective as of the date of the Master Servicer's termination);
provided, further, that nothing contained in the preceding proviso shall
prohibit the Trustee or any other replacement or successor Master Servicer, in
its discretion, from entering into a Sub-Servicing Agreement with the terminated
Master Servicer if an Event of Default set forth in Sections 7.01(a)(i)-(viii)
is the cause of the Master Servicer's termination.
From and after the receipt by the Defaulting Party of such written
notice, all authority and power of the Defaulting Party under this Agreement,
whether with respect to the Certificates (other than as a Holder of any
Certificate) or the Mortgage Loans (other than as a B Loan Holder) or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this section,
and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of and at the expense of the Defaulting Party, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise.
The Master Servicer and Special Servicer each agree that if it is
terminated pursuant to this Section 7.01(b), it shall promptly (and in any event
no later than 20 Business Days after its receipt of the notice of termination)
provide the Trustee with all documents and records requested by it to enable the
Trustee to assume the Master Servicer's or the Special Servicer's, as the case
may be, functions hereunder, and shall cooperate with the Trustee in effecting
the termination of the Master Servicer's or the Special Servicer's, as the case
may be, responsibilities and rights hereunder, including, without limitation,
the transfer within five Business Days to the Trustee for administration by it
of all cash amounts which shall at the time be or should have been credited by
the Master Servicer to the Collection Account or any Mortgage Loan Combination
Custodial Account, Servicing Account, Cash Collateral Account or Lock-Box
Account (if it is the Defaulting Party) or by the Special Servicer to the REO
Account (if it is the Defaulting Party) or may thereafter be received with
respect to the Mortgage Loans or any REO Property (provided, however, that the
Master Servicer and Special Servicer each shall, if terminated pursuant to this
Section 7.01(b), continue to be entitled to receive all amounts accrued or owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of Advances (in the case of the Master Servicer) or otherwise, as
well as amounts due to it thereafter, if any, and it and its directors,
officers, employees and agents shall continue to be entitled to the benefits of
Section 6.03 notwithstanding any such termination; provided, further, that
nothing contained in this Section 7.01(b) shall terminate any rights purchased
or otherwise owned or held by the Master Servicer to primary service any of the
Mortgage Loans as a Sub-Servicer to the Trustee or any other replacement or
successor Master Servicer so long as (i) the Event of Default set forth in
Section 7.01(a)(ix) or (x) is the cause of the Master Servicer's termination and
(ii) the Master Servicer is on S&P's Select Servicer List as a U.S. Commercial
Mortgage Servicer (in which case, the Trustee or replacement or successor Master
Servicer shall retain the terminated Master Servicer as a Sub-Servicer of all of
the Mortgage Loans that are not otherwise subject to an existing Sub-Servicing
Agreement pursuant to a mutually acceptable Sub-Servicing Agreement effective as
of the date of the Master Servicer's termination); provided, further, that
nothing contained in the preceding proviso shall prohibit the Trustee or any
other replacement or successor Master Servicer, in its discretion, from entering
into a Sub-Servicing Agreement with the terminated Master Servicer if an Event
of Default set forth in Sections 7.01(a)(i)-(viii) is the cause of the Master
Servicer's termination.
(c) Subject to the next paragraph, the Holder or Holders of
Certificates representing more than 50% of the Class Principal Balance of the
Controlling Class shall be entitled to terminate the rights and obligations of
the Special Servicer under this Agreement, with or without cause, upon 10
Business Days prior written notice to the Master Servicer, the Special Servicer
and the Trustee, and to appoint a successor Special Servicer; provided, however,
that (i) such successor shall meet the requirements set forth in Section 7.02,
(ii) as evidenced in writing by each of the Rating Agencies, the proposed
replacement of the Special Servicer shall not, in and of itself, result in a
downgrading, withdrawal or qualification of the then-current ratings provided by
the Rating Agencies with respect to any Class of then outstanding Certificates
that is rated, and (iii) the Trustee shall have received (A) an Acknowledgment
of Proposed Special Servicer in the form attached hereto as Exhibit T, executed
by the Person designated to be the successor to such terminated Special
Servicer, and (B) an Opinion of Counsel (which shall not be an expense of the
Trustee or the Trust) substantially to the effect that (1) the removal of such
terminated Special Servicer and/or the appointment of the Person designated to
serve as successor thereto is in compliance with this Section 7.01(c), (2) such
designated Person is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (3) the Acknowledgment of
Proposed Special Servicer (in the form attached hereto as Exhibit T) has been
duly authorized, executed and delivered by such designated Person and (4) upon
the execution and delivery of the Acknowledgment of Proposed Special Servicer,
such designated Person shall be bound by the terms of this Agreement and,
subject to customary bankruptcy and insolvency exceptions and customary equity
exceptions, this Agreement shall be enforceable against such designated Person
in accordance with its terms. Any Special Servicer terminated pursuant to this
Section 7.01(c) shall be deemed to have been so terminated simultaneously with
the designated successor's becoming such Special Servicer hereunder; provided
that (i) the terminated Special Servicer shall be entitled to receive, in
connection with its termination, payment out of the Collection Account and, if
and to the extent applicable, the Mortgage Loan Combination Custodial Accounts
of all of its accrued and unpaid Special Servicing Fees, as and to the extent
provided in Sections 3.05(a) and 3.04(e), and reimbursement from the successor
to such terminated Special Servicer of all outstanding Servicing Advances made
by such terminated Special Servicer and all unpaid Advance Interest accrued on
such outstanding Servicing Advances (in which case the successor to such
terminated Special Servicer shall be deemed to have made such Servicing Advances
at the same time that such terminated Special Servicer had actually made them),
(ii) such terminated Special Servicer shall thereafter be entitled to Workout
Fees, as and to the extent expressly permitted by Section 3.11(b), and (iii)
such terminated Special Servicer shall continue to be entitled to the benefits
of Section 6.03, notwithstanding any such termination; and provided, further,
that such terminated Special Servicer shall continue to be obligated to pay (and
entitled to receive) all other amounts accrued to (or owing by) it under this
Agreement on or prior to the effective date of such termination. Such terminated
Special Servicer shall cooperate with the Trustee and the replacement to such
terminated Special Servicer in effecting the transfer of such terminated Special
Servicer's responsibilities and rights hereunder to its successor, including the
transfer within two Business Days of its termination becoming effective pursuant
to this Section 7.01(c), to the replacement to such terminated Special Servicer
for administration by it of all cash amounts that at the time are or should have
been credited by such terminated Special Servicer to the REO Account or to any
Servicing Account or should have been delivered to the Master Servicer or that
are thereafter received by or on behalf of such terminated Special Servicer with
respect to any Mortgage Loan or REO Property. No penalty or fee shall be payable
to the Special Servicer with respect to any termination pursuant to this Section
7.01(c). Any expenses of the Trust as a result of any termination pursuant to
this Section 7.01(c) shall be paid by the Holders who effected such termination.
(d) The Master Servicer and Special Servicer shall, from time to
time, take all such actions as are required by them in order to maintain their
respective status as an approved servicer and special servicer, as applicable,
and as pertains to this transaction, with each of the Rating Agencies.
Section 7.02 Trustee to Act; Appointment of Successor
On and after the time the Master Servicer or the Special Servicer,
as the case may be, either resigns pursuant to clause (a) of the first sentence
of Section 6.04(a) or receives a notice of termination for cause pursuant to
Section 7.01(b); and provided that no acceptable successor has been appointed,
the Trustee shall be and become the successor to the Master Servicer or Special
Servicer, as the case may be, in all respects in its capacity as Master Servicer
or Special Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties,
liabilities and limitations on liability relating thereto and that arise
thereafter placed on or for the benefit of the Master Servicer or Special
Servicer by the terms and provisions hereof; provided, however, that any failure
to perform such duties or responsibilities caused by the terminated party's
failure under Section 7.01 to provide information or moneys required hereunder
shall not be considered a default by such successor hereunder.
The appointment of a successor Master Servicer shall not affect any
liability of the predecessor Master Servicer which may have arisen prior to its
termination as Master Servicer, and the appointment of a successor Special
Servicer shall not affect any liability of the predecessor Special Servicer
which may have arisen prior to its termination as Special Servicer. The Trustee
in its capacity as successor to the Master Servicer or the Special Servicer, as
the case may be, shall not be liable for any of the representations and
warranties of the Master Servicer or the Special Servicer, respectively, herein
or in any related document or agreement, for any acts or omissions of the
predecessor Master Servicer or Special Servicer or for any losses incurred by
the Master Servicer pursuant to Section 3.06 hereunder, nor shall the Trustee be
required to purchase any Trust Mortgage Loan hereunder.
As compensation therefor, the Trustee as successor Master Servicer
shall be entitled to the Master Servicing Fees and all fees relating to the
Mortgage Loans, which the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder (subject to Section 3.11(a) with
respect to the Excess Servicing Strip and the Assignable Primary Servicing Fee),
including but not limited to any income or other benefit from any Permitted
Investment of funds in a Master Servicer Account pursuant to Section 3.06, and
as successor to the Special Servicer shall be entitled to the Special Servicing
Fees to which the Special Servicer would have been entitled if the Special
Servicer had continued to act hereunder. Should the Trustee succeed to the
capacity of the Master Servicer or the Special Servicer, the Trustee shall be
afforded the same standard of care and liability as the Master Servicer or the
Special Servicer, as applicable, hereunder notwithstanding anything in Section
8.01 to the contrary, but only with respect to actions taken by it in its role
as successor Master Servicer or successor Special Servicer, as the case may be,
and not with respect to its role as Trustee hereunder. The Trustee shall not be
entitled to receive the Assignable Primary Servicing Fees.
Notwithstanding the above, the Trustee may, if it shall be unwilling
to act as successor to the Master Servicer or Special Servicer, or shall, if it
is unable to so act, or if the Trustee is not approved as a master servicer or
special servicer, as applicable, by each Rating Agency, or if the Holders of
Certificates entitled to a majority of the Voting Rights so request in writing
to the Trustee, promptly appoint, or petition a court of competent jurisdiction
to appoint, any established mortgage loan servicing institution which meets the
criteria set forth herein, as the successor to the Master Servicer or the
Special Servicer, as applicable, hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer or Special
Servicer hereunder. No appointment of a successor to the Master Servicer or the
Special Servicer under this Section 7.02 shall be effective (i) until each of
the Rating Agencies shall have confirmed in writing that its then-current rating
(if any) of each Class of Certificates will not be qualified (as applicable),
downgraded or withdrawn by reason thereof and (ii) until the assumption in
writing by the successor to the Master Servicer or the Special Servicer of all
its responsibilities, duties and liabilities hereunder that arise thereafter.
Pending appointment of a successor to the Master Servicer or the Special
Servicer hereunder, unless the Trustee shall be prohibited by law from so
acting, the Trustee shall act in such capacity as herein above provided.
In connection with such appointment and assumption of a successor to
the Master Servicer or Special Servicer as described herein, subject to Section
3.11(a), the Trustee may make such arrangements for the compensation of such
successor out of payments on the Trust Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation with respect to a
successor Master Servicer or successor Special Servicer, as the case may be,
shall be in excess of that permitted the terminated Master Servicer or Special
Servicer, as the case may be, hereunder, excluding the Assignable Primary
Servicing Fee except to the extent that any portion of such Assignable Primary
Servicing Fee is needed (as set forth in Section 3.11(a)) to compensate any
replacement primary servicer; provided, further, that if no successor can be
obtained for such compensation, then, subject to approval by the Rating
Agencies, additional amounts shall be paid to such successor and such amounts in
excess of that permitted the terminated Master Servicer or Special Servicer, as
the case may be, shall be treated as Additional Trust Fund Expenses. The
Trustee, the Master Servicer or the Special Servicer (whichever is not the
terminated party) and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. Any
costs and expenses associated with the transfer of the servicing function (other
than with respect to a termination without cause) under this Agreement shall be
borne by the predecessor Master Servicer or Special Servicer.
Section 7.03 Notification to Certificateholders
(a) Upon any resignation of the Master Servicer or the Special
Servicer pursuant to Section 6.04, any termination of the Master Servicer or the
Special Servicer pursuant to Section 7.01 or any appointment of a successor to
the Master Servicer or the Special Servicer pursuant to Section 7.02, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and, to the extent
that a Responsible Officer of the Trustee has actual knowledge of the identities
thereof, to each affected Junior Loan Holder, if any.
(b) Not later than the later of (i) 60 days after the occurrence of
any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) 5 days after the Trustee would be deemed
to have notice of the occurrence of such an event in accordance with Section
8.02(vii), the Trustee shall forward to the Depositor, Certificateholders, and,
to the extent that a Responsible Officer of the Trustee has actual knowledge of
the identities thereof, to each affected Junior Loan Holder, if any, notice of
such occurrence, unless such default shall have been cured.
Section 7.04 Waiver of Events of Default
The Holders of Certificates representing at least 66 2/3% of the
Voting Rights allocated to each Class of Certificates affected by any Event of
Default hereunder may waive such Event of Default within 20 days of the receipt
of notice from the Trustee of the occurrence of such Event of Default; provided,
however, that an Event of Default described in clause (i) or (ii) of Section
7.01(a) may only be waived by 100% of the Certificateholders of the affected
Classes. Upon any such waiver of an Event of Default and reimbursement by the
party requesting such waiver to the Trustee of all costs and expenses incurred
by it in connection with such Event of Default and prior to its waiver, such
Event of Default shall cease to exist and shall be deemed to have been remedied
for every purpose hereunder. No such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon except to the
extent expressly so waived. Notwithstanding any other provisions of this
Agreement, for purposes of waiving any Event of Default pursuant to this Section
7.04, Certificates registered in the name of the Depositor or any Affiliate of
the Depositor shall be entitled to the same Voting Rights with respect to the
matters described above as they would if any other Person held such
Certificates.
Section 7.05 Trustee Advances
If the Master Servicer fails to fulfill its obligations hereunder to
make any Advances, the Trustee shall perform such obligations (x) in accordance
with Section 3.03(c) with respect to Servicing Advances and (y) by 12:00 noon,
New York City time, on the related Distribution Date with respect to P&I
Advances. With respect to any such Advance made by the Trustee, the Trustee
shall succeed to all of the Master Servicer's rights with respect to Advances
hereunder, including, without limitation, the Master Servicer's rights of
reimbursement and interest on each Advance at the Reimbursement Rate, and rights
to determine that a proposed Advance is a Nonrecoverable P&I Advance or
Servicing Advance, as the case may be; provided, however, that if Advances made
by both the Trustee and the Master Servicer shall at any time be outstanding, or
any interest on any Advance shall be accrued and unpaid, all amounts available
to repay such Advances and the interest thereon hereunder shall be applied
entirely to the Advances outstanding to the Trustee, until such Advances shall
have been repaid in full, together with all interest accrued thereon, prior to
reimbursement of the Master Servicer for such Advances. The Trustee shall be
entitled to conclusively rely on any notice given with respect to a
Nonrecoverable Advance hereunder.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement and no permissive right of the Trustee shall be
construed as a duty. If an Event of Default occurs and is continuing, then
(subject to Section 8.02(vii) below) the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs. Any permissive right of the
Trustee contained in this Agreement shall not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement (other than the Mortgage Files, the review of which
is specifically governed by the terms of Article II), shall examine them to
determine whether they conform to the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall make a request to the responsible party to
have the instrument corrected, and if the instrument is not corrected to the
Trustee's reasonable satisfaction, the Trustee will provide notice thereof to
the Certificateholders. The Trustee shall not be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Depositor, the Master Servicer or the
Special Servicer, and accepted by the Trustee in good faith, pursuant to this
Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing of all such Events of Default which may have occurred, the
Trustee's duties and obligations shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates entitled to at least 25% of
the Voting Rights relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement (unless a
higher percentage of Voting Rights is required for such action); and
(iv) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 8.01, the Trustee shall have no
duty except in the capacity as successor Master Servicer or successor
Special Servicer (A) to see to any recording, filing or depositing of this
Agreement or any agreement referred to herein or any financing statement
or continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any
re-recording, refiling or redepositing of any thereof, (B) to see to any
insurance, or (C) to confirm or verify the contents of any reports or
certificates of the Master Servicer or Special Servicer delivered to the
Trustee pursuant to this Agreement reasonably believed by the Trustee to
be genuine and to have been signed or presented by the proper party or
parties.
Section 8.02 Certain Matters Affecting the Trustee
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, Appraisal, bond or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance therewith;
(iii) The Trustee shall not be under any obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless, in the Trustee's reasonable opinion,
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; the Trustee shall not be required to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default which has not been cured, to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(iv) The Trustee shall not be liable for any action reasonably
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by Holders of
Certificates entitled to at least 50% of the Voting Rights; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such
action;
(vi) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys; provided, however, that the appointment of such agents or
attorneys shall not relieve the Trustee of its duties or obligations
hereunder; provided, further, that the Trustee may not perform any duties
hereunder through any Person that is a Prohibited Party;
(vii) For all purposes under this Agreement, the Trustee shall not
be required to take any action with respect to, or be deemed to have
notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or shall
have received written notice thereof. In the absence of receipt of such
notice and such actual knowledge otherwise obtained, the Trustee may
conclusively assume that there is no default or Event of Default;
(viii) The Trustee shall not be responsible for any act or omission
of the Master Servicer, the Special Servicer or the Series 2006-C2
Directing Certificateholder (unless it is acting as the Master Servicer,
the Special Servicer or the Series 2006-C2 Directing Certificateholder, as
the case may be) or of the Depositor; and
(ix) The Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the power
granted hereunder.
Section 8.03 Trustee Not Liable for Validity or Sufficiency of
Certificates or Trust Mortgage Loans
The recitals contained herein and in the Certificates, other than
the acknowledgments and expressed intentions of the Trustee in Sections 2.01,
2.02, 2.04, 2.05, 3.01, 10.01, 11.04 and 11.07 and the representations and
warranties of the Trustee in Section 8.13, shall be taken as the statements of
the Depositor, the Master Servicer or the Special Servicer, as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
does not make any representations as to the validity or sufficiency of this
Agreement or of any Certificate or of any Trust Mortgage Loan or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates issued to it or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor
in respect of the assignment of the Trust Mortgage Loans to the Trust Fund, or
any funds deposited in or withdrawn from the Collection Account or any other
account by or on behalf of the Depositor, the Master Servicer, the Special
Servicer or the Trustee. The Trustee shall not be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Depositor, the Master Servicer or the
Special Servicer, and accepted by the Trustee, in good faith, pursuant to this
Agreement.
Section 8.04 Trustee May Own Certificates
The Trustee, in its individual capacity and not as Trustee, may
become the owner or pledgee of Certificates, and may deal with the Depositor,
the Master Servicer, the Special Servicer, the Initial Purchaser and the
Underwriters in banking transactions, with the same rights each would have if it
were not Trustee.
Section 8.05 Fees and Expenses of Trustee; Indemnification of and by
Trustee
(a) On each Distribution Date, the Trustee shall withdraw from the Distribution
Account, prior to any distributions to be made therefrom to Certificateholders
on such date, and pay to itself all earned but unpaid Trustee Fees in respect of
the Trust Mortgage Loans and any REO Trust Mortgage Loans through the end of the
most recently ended calendar month, as compensation for all services rendered by
the Trustee in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties of the Trustee. As to each Trust
Mortgage Loan and REO Trust Mortgage Loan, the Trustee Fee, shall accrue during
each calendar month, commencing with May 2006, at the Trustee Fee Rate on a
principal amount equal to the Stated Principal Balance of such Trust Mortgage
Loan or REO Trust Mortgage Loan immediately following the Distribution Date in
such calendar month (or, in the case of May 2006, on a principal amount equal to
the Cut-off Date Principal Balance of the particular Trust Mortgage Loan),
whether or not interest is actually collected on each Trust Mortgage Loan and
REO Trust Mortgage Loan. With respect to each Trust Mortgage Loan and REO Trust
Mortgage Loan, the Trustee Fee shall accrue from time to time on the same
Interest Accrual Period as is applicable to such Trust Mortgage Loan or REO
Trust Mortgage Loan. Except as otherwise expressly provided herein, the Trustee
Fees (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) shall constitute the Trustee's
sole compensation for such services to be rendered by it.
(b) The Trustee shall be paid or reimbursed by the Trust Fund upon
its request for all reasonable out-of-pocket expenses and disbursements incurred
by the Trustee pursuant to and in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ) to
the extent such payments are "unanticipated expenses incurred by the REMIC"
within the meaning of Treasury Regulations Section 1.860G-1(b)(iii) except any
such expense, disbursement or advance as may arise from its negligence, bad
faith or willful misconduct; provided, however, that subject to Section
8.02(iii), the Trustee shall not refuse to perform any of its duties hereunder
solely as a result of the failure to be paid the Trustee Fee or the Trustee's
expenses .
(c) The Trustee and any Affiliate, director, officer, employee or
agent of the Trustee shall be indemnified and held harmless by the Trust Fund
against any loss, liability or expense (including, without limitation, costs and
expenses of litigation, and of investigation, counsel fees, damages, judgments
and amounts paid in settlement, and expenses incurred in becoming successor
servicer, to the extent not otherwise paid hereunder) arising out of, or
incurred in connection with, this Agreement, the Mortgage Loans, the
Certificates or any act or omission of the Trustee relating to the exercise and
performance of any of the powers and duties of the Trustee hereunder; provided,
however, that neither the Trustee nor any of the other above specified Persons
shall be entitled to indemnification pursuant to this Section 8.05(c) for (i)
allocable overhead, (ii) routine expenses or disbursements incurred or made by
or on behalf of the Trustee in the normal course of the Trustee's performing its
duties in accordance with any of the provisions hereof, which are not
"unanticipated expenses of the REMIC" within the meaning of Treasury Regulations
Section 1.860G-1(b)(3)(ii), (iii) any expense or liability specifically required
to be borne thereby pursuant to the terms hereof or (iv) any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of the Trustee's obligations and duties hereunder, or by reason
of negligent disregard of such obligations or duties, or as may arise from a
breach of any representation or warranty of the Trustee made herein. The
provisions of this Section 8.05(c) shall survive any resignation or removal of
the Trustee and appointment of a successor thereto.
Section 8.06 Eligibility Requirements for Trustee
The Trustee hereunder shall at all times be, and will be required to
resign if it fails to be, (i) a corporation, bank, trust company or banking
association, organized and doing business under the laws of any state or the
United States of America or the District of Columbia, authorized under such laws
to exercise corporate trust powers and to accept the trust conferred under this
Agreement, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority and shall
not be an Affiliate of the Depositor, Master Servicer or the Special Servicer
(except during any period when the Trustee is acting as, or has become successor
to, the Master Servicer or the Special Servicer, as the case may be, pursuant to
Section 7.02), (ii) an institution insured by the Federal Deposit Insurance
Corporation and (iii) an institution whose long-term senior unsecured debt is
rated "AA-" or higher by S&P and "Aa3" or higher by Xxxxx'x (or such entity as
would not, as evidenced in writing by such Rating Agency, result in the
qualification (as applicable), downgrading or withdrawal of any of the
then-current ratings then assigned thereby to the Certificates).
If such corporation, bank, trust company or national banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
corporation, bank, trust company or national banking association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published.
Section 8.07 Resignation and Removal of the Trustee
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer, the Special Servicer, all Certificateholders and the B Loan
Holders. Upon receiving such notice of resignation, the Depositor shall promptly
appoint a successor trustee acceptable to the Master Servicer, in its reasonable
discretion, and to the Rating Agencies (as evidenced in writing by such Rating
Agency that such appointment would not result in the qualification (as
applicable), downgrading or withdrawal of any of then-current ratings then
assigned thereby to the Certificates), by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor trustee. A copy of such instrument shall be delivered to the Master
Servicer, the Special Servicer, the Certificateholders and the B Loan Holders by
the Depositor. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee. The resigning Trustee
shall be responsible for the payment of all reasonable expenses incurred in
connection with such resignation and discharge and the appointment of a
successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 or if the Depositor has received
notice from the Rating Agencies that failure to remove the Trustee will result
in a downgrade or withdrawal of the then-current rating assigned to any Class of
Certificates, and shall fail to resign after written request therefor by the
Depositor or the Master Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee acceptable to the Master
Servicer and the Rating Agencies (as evidenced in writing by such Rating Agency
that such removal and appointment would not result in the qualification (as
applicable), downgrading or withdrawal of any of then-current ratings then
assigned thereby to the Certificates), by written instrument, in duplicate,
which instrument shall be delivered to the Trustee so removed and to the
successor trustee. A copy of such instrument shall be delivered to the Master
Servicer, the Special Servicer, the Certificateholders and the B Loan Holders by
the Depositor.
(c) The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Depositor, the Special Servicer, the
remaining Certificateholders and the B Loan Holders by the Master Servicer at
the expense of the Trust Fund. The Trustee shall be reimbursed for all
reasonable costs and expenses incurred by it in connection with such removal
within 30 days of demand therefor from amounts on deposit in the Distribution
Account (provided the Trustee is removed without cause).
Any resignation or removal of the Trustee and appointment of a
successor trustee or pursuant to any of the provisions of this Section 8.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 8.08.
Within 30 days following any succession of the Trustee under this
Agreement, the predecessor Trustee shall be paid all accrued and unpaid
compensation and reimbursement as provided for under this Agreement for services
rendered and expenses incurred. No Trustee shall be liable for any action or
omission of any successor trustee.
Section 8.08 Successor Trustee
(a) Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor, the Master Servicer,
the Special Servicer and to its predecessor Trustee, an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee, shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all Mortgage Files and related documents
and statements held by it hereunder, and the Depositor, the Master Servicer, the
Special Servicer and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and certainly vest and confirm in the successor trustee all such rights, powers,
duties and obligations, and to enable the successor trustee to perform its
obligations hereunder.
(b) No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
is or shall be eligible under the provisions of Section 8.06 and is not a
Prohibited Party.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Master Servicer shall, at the expense of the
Trust Fund (if in connection with the first paragraph of Section 8.07(c)), or
otherwise at the expense of the successor trustee, mail notice of the succession
of such Trustee hereunder to the Depositor, the Certificateholders and the B
Loan Holders. If the Master Servicer fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, such successor trustee
shall cause such notice to be mailed at the expense of the successor trustee.
Section 8.09 Merger or Consolidation of Trustee
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any Person resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee, hereunder (provided that such successor
Person shall be eligible under the provisions of Section 8.06), without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee
(a) Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so (which failure shall not constitute an
Event of Default hereunder), or in case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer or the Special Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then-separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) The appointment of a co-trustee or separate trustee under this
Section 8.10 shall not relieve the Trustee of its duties and responsibilities
hereunder.
Section 8.11 Access to Certain Information
(a) On or prior to the date of the first sale of any Non-Registered
Certificate to an Independent third party, the Depositor shall provide to the
Trustee a copy of any private placement memorandum or other disclosure document
used by the Depositor or its Affiliate in connection with the offer and sale of
the Class of Certificates to which such Non-Registered Certificate relates. In
addition, if any such private placement memorandum or disclosure document is
revised, amended or supplemented at any time following the delivery thereof to
the Trustee, the Depositor promptly shall inform the Trustee of such event and
shall deliver to the Trustee a copy of the private placement memorandum or
disclosure document, as revised, amended or supplemented.
The Trustee shall maintain at its offices primarily responsible for
administering the Trust Fund and shall, upon reasonable advance written notice,
make available during normal business hours for review by any Holder of a
Certificate, each B Loan Holder and its designees, the Depositor, the Master
Servicer, the Special Servicer, the Series 2006-C2 Directing Certificateholder,
any Rating Agency, the Underwriters or any other Person to whom the Trustee
believes such disclosure is appropriate, originals or copies of the following
items to the extent such documents have been delivered to the Trustee: (i) in
the case of a Holder or prospective transferee of a Non-Registered Certificate,
any private placement memorandum or other disclosure document relating to the
Class of Certificates to which such Non-Registered Certificate belongs, in the
form most recently provided to the Trustee and (ii) in all cases, (A) this
Agreement and any amendments hereto entered into pursuant to Section 11.01, (B)
the Prospectus and any amendments or supplements thereto, (C) the respective
Mortgage Loan Purchase Agreements and any amendments thereto, (D) all statements
required to be delivered, or otherwise required to be made available, to
Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, (E) all Officer's Certificates delivered to the Trustee since the
Closing Date pursuant to Section 12.11 or 12.12, (F) all accountants' reports
delivered to the Trustee since the Closing Date pursuant to Section 12.13, (G)
any and all modifications, waivers and amendments of the terms of a Mortgage
Loan entered into by the Master Servicer or the Special Servicer and delivered
to the Trustee pursuant to Section 3.20 (but only for so long as the affected
Trust Mortgage Loan is part of the Trust Fund), (H) any and all Officer's
Certificates delivered to the Trustee to support the Master Servicer's
determination that any P&I Advance or Servicing Advance was or, if made, would
be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, as the case
may be, (I) any and all of the Mortgage Loan Documents contained in the Mortgage
Files, (J) information regarding the occurrence of Servicing Transfer Events as
to the Trust Mortgage Loans and (K) any and all Sub-Servicing Agreements and any
amendments thereto and modifications thereof.
Copies of any and all of the foregoing items will be available from
the Trustee upon written request; provided, however, that the Trustee shall be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing such copies, except in the case of copies provided to
the Rating Agencies and, so long as the requests are not excessive or
duplicative, to the Series 2006-C2 Directing Certificateholder, which shall be
free of charge. In addition, without limiting the generality of the foregoing,
any Requesting Subordinate Certificateholder may upon written request from the
Trustee obtain a copy of any report delivered to the Rating Agencies under this
Agreement.
(b) Notwithstanding anything to the contrary herein, in addition to
the reports and information made available and distributed pursuant to the terms
of this Agreement (including the information set forth in Section 8.11(a)), the
Trustee shall, in accordance with such reasonable rules and procedures as it may
adopt (which may include the requirement that an agreement that provides that
such information shall be kept confidential and used solely for purposes of
evaluating the investment characteristics of the Certificates be executed), also
make the reports available to Certificateholders pursuant to Section 4.02, and,
with respect to any Mortgage Loan Combination, the related Junior Loan
Holder(s), as well as certain additional information received by the Trustee to
any Certificateholder, the Underwriters, the Initial Purchasers, any Certificate
Owner, any Junior Loan Holder or any prospective investor identified as such by
a Certificate Owner or the Underwriters or Initial Purchasers or, with respect
to any Mortgage Loan Combination, a related Junior Loan Holder, as applicable,
that requests such reports or information; provided that the Trustee shall be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing copies of such reports or information; and provided,
further, that no Junior Loan Holder or prospective investor in a Junior Loan
shall be entitled to any such report or information except to the extent that it
relates to the subject Mortgage Loan Combination.
(c) With respect to any information furnished by the Trustee
pursuant to this Section 8.11, the Trustee shall be entitled to indicate the
source of such information and the Trustee may affix thereto any disclaimer it
deems appropriate in its discretion. The Trustee shall notify Certificateholders
of the availability of any such information in any manner as it, in its sole
discretion, may determine. In connection with providing access to or copies of
the items described above in this Section 8.11 to Certificateholders,
Certificate Owners, prospective purchasers of Certificates or interests therein
or licensed or registered investment advisors of any of the foregoing, the
Trustee may require: (i) in the case of Certificateholders and Certificate
Owners, a confirmation executed by the requesting Person substantially in form
and substance reasonably acceptable to the Trustee generally to the effect that
such Person is a registered or beneficial holder of Certificates or an
investment advisor representing such Person and is requesting the information
solely for use in evaluating such Person's investment in the Certificates and
will otherwise keep such information confidential; and (ii) in the case of a
prospective purchaser or a licensed or registered investment advisor
representing such Person, confirmation executed by the requesting Person in form
and substance reasonably acceptable to the Trustee generally to the effect that
such Person is a prospective purchaser of a Certificate or an interest therein
or a licensed or registered investment advisor representing such Person, and is
requesting the information solely for use in evaluating a possible investment in
Certificates and will otherwise keep such information confidential. The Trustee
shall not be liable for the dissemination of information in accordance with this
Agreement.
Section 8.12 Appointment of Custodians
The Trustee may, with the consent of the Master Servicer, appoint at
the Trustee's own expense one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee; provided that if the Custodian is an
Affiliate of the Trustee such consent of the Master Servicer need not be
obtained and the Trustee shall inform the Master Servicer of such appointment.
Each Custodian shall be a depositary institution supervised and regulated by a
federal or state banking authority, shall have combined capital and surplus of
at least $10,000,000, shall be qualified to do business in the jurisdiction in
which it holds any Mortgage File, shall not be the Depositor, any Mortgage Loan
Seller or any Affiliate of the Depositor or any Mortgage Loan Seller, and shall
have in place a fidelity bond and errors and omissions policy, each in such form
and amount as is customarily required of custodians acting on behalf of FHLMC or
FNMA. Each Custodian shall be subject to the same obligations, standard of care,
protection and indemnities as would be imposed on, or would protect, the Trustee
hereunder in connection with the retention of Mortgage Files directly by the
Trustee. The appointment of one or more Custodians shall not relieve the Trustee
from any of its obligations hereunder, and the Trustee shall remain responsible
for all acts and omissions of any Custodian.
Section 8.13 Representations, Warranties and Covenants of the
Trustee
The Trustee hereby represents and warrants to the Depositor, the
Master Servicer and the Special Servicer and for the benefit of the
Certificateholders and the B Loan Holders, as of the Closing Date, that:
(i) The Trustee is a national banking association, duly organized,
validly existing and in good standing under the laws of the United States;
(ii) The execution and delivery of this Agreement by the Trustee,
and the performance and compliance with the terms of this Agreement by the
Trustee, will not violate the Trustee's organizational documents or
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party or which is
applicable to it or any of its assets;
(iii) The Trustee has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;
(iv) This Agreement, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a valid, legal
and binding obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to (a) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and the rights of creditors of
banks specifically and (b) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law;
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or
demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely the ability of the
Trustee to perform its obligations under this Agreement;
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the Trustee
from entering into this Agreement or, in the Trustee's good faith and
reasonable judgment, is likely to materially and adversely affect the
ability of the Trustee to perform its obligations under this Agreement;
and
(vii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Trustee, or compliance by the Trustee with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for any consent, approval, authorization or order which
has not been obtained or cannot be obtained prior to the actual
performance by the Trustee of its obligations under this Agreement, and
which, if not obtained would not have a materially adverse effect on the
ability of the Trustee to perform its obligations hereunder.
ARTICLE IX
TERMINATION
Section 9.01 Termination Upon Repurchase or Liquidation of All Trust
Mortgage Loans
Subject to Section 9.02, the Trust Fund and the respective
obligations and responsibilities under this Agreement of the Depositor, the
Master Servicer, the Special Servicer and the Trustee (other than the
obligations of the Trustee to provide for and make payments to
Certificateholders as hereafter set forth) shall terminate upon payment (or
provision for payment) to the Certificateholders of all amounts held by or on
behalf of the Trustee and required hereunder to be so paid on the Distribution
Date following the earliest to occur of (i) the purchase by the Holders of a
majority of the Percentage Interests of the Controlling Class, the Special
Servicer or the Master Servicer of all the Trust Mortgage Loans and each REO
Property remaining in the Trust Fund at a price (the "Termination Price") equal
to (a) the sum of (1) the aggregate Purchase Price of all the Trust Mortgage
Loans (exclusive of REO Trust Mortgage Loans) included in the Trust Fund and (2)
the Appraised Value of each REO Property, if any, included in the Trust Fund
(such Appraisals in this subclause (2) to be conducted by an Appraiser selected
and mutually agreed upon by the Master Servicer, the Special Servicer and the
Trustee), minus (b) (1) solely in the case where the Master Servicer is
effecting such purchase, the aggregate amount of unreimbursed Advances, together
with any interest accrued and payable to the Master Servicer in respect of such
Advances in accordance with Sections 3.03(d) and 4.03(d) and any unpaid Master
Servicing Fees (including Excess Servicing Strip), and Primary Servicing Fees,
remaining outstanding (which items shall be deemed to have been paid or
reimbursed to the Master Servicer in connection with such purchase) or (2)
solely in the case where the Special Servicer is effecting such purchase, the
aggregate amount of unreimbursed Advances, together with any interest accrued
and payable to the Special Servicer in respect of such Advances in accordance
with Section 3.03(d) and any unpaid Special Servicing Fees remaining outstanding
(which items shall be deemed to have been paid or reimbursed to the Special
Servicer in connection with such purchase), and (ii) the final payment or other
liquidation (or any advance with respect thereto) of the last Trust Mortgage
Loan or REO Property remaining in the Trust Fund; provided, however, that in no
event shall the trust created hereby continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late ambassador of the United States to the Court of St. James's, living on the
date hereof.
The Holders of a majority of the Percentage Interests of the
Controlling Class may, at their option, elect to purchase all of the Trust
Mortgage Loans and each REO Property remaining in the Trust Fund as contemplated
by clause (i) of the preceding paragraph by giving written notice to the Trustee
and the other parties hereto within 60 days of the first Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Pool is less than
1.0% of the aggregate Cut-off Date Principal Balance of the Original Trust
Mortgage Loans. If the Holders of a majority of the Percentage Interests of the
Controlling Class do not exercise such option within 60 days after it becomes
exercisable by the Holders of a majority of the Percentage Interests of the
Controlling Class, the Special Servicer may notify the Holders of a majority of
the Percentage Interests in the Controlling Class and the Trustee of its
intention to exercise such option and if the Holders of a majority of the
Percentage Interests of the Controlling Class do not exercise such option within
ten Business Days thereafter, the Special Servicer shall be entitled to exercise
such option. If the Special Servicer does not exercise such option within 60
days after it becomes exercisable by it, the Master Servicer may notify the
Special Servicer, the Holders of the Controlling Class and the Trustee of the
Master Servicer's intention to exercise such option, and if none of the Special
Servicer or the Holders of a majority of the Percentage Interests in the
Controlling Class exercise such option within ten Business Days thereafter, the
Master Servicer will be entitled to exercise such option.
If the Holders of the Controlling Class, the Special Servicer or the
Master Servicer purchases all of the Trust Mortgage Loans and each REO Property
remaining in the Trust Fund in accordance with the preceding paragraph, the
Holders of the Controlling Class, the Special Servicer or the Master Servicer,
as applicable, shall remit to the Trustee for deposit in the Distribution
Account not later than the Master Servicer Remittance Date relating to the
Distribution Date on which the final distribution on the Certificates is to
occur, an amount in immediately available funds equal to the Termination Price
(exclusive of (i) any portion thereof payable to any Person other than the
Certificateholders pursuant to Section 3.05(a), which portion shall be deposited
in the Collection Account, (ii) any portion thereof that is payable to a B Loan
Holder in connection with an REO Property in accordance with the related
intercreditor, co-lender or similar agreement, which portion is to be remitted
to such B Loan Holder, and (iii) any portion thereof representing accrued and
unpaid Excess Interest, which shall be deposited in the Excess Interest
Distribution Account). In addition, the Master Servicer shall transfer to the
Distribution Account all amounts required to be transferred thereto on such
Master Servicer Remittance Date from the Collection Account pursuant to the
first paragraph of Section 3.04(b), together with any other amounts on deposit
in the Collection Account that would otherwise be held for future distribution.
Upon confirmation that such final deposits have been made, the Trustee shall
release or cause to be released to the Holders of the Controlling Class, the
Special Servicer or the Master Servicer, as applicable, the Mortgage Files for
the remaining Trust Mortgage Loans, and the Trustee shall execute all
assignments, endorsements and other instruments furnished to it by Holders of
the Controlling Class, the Special Servicer or the Master Servicer, as
applicable, as shall be necessary to effectuate transfer of the Trust Mortgage
Loans and REO Properties remaining in the Trust Fund and its rights under the
Mortgage Loan Purchase Agreement.
For purposes of this Section 9.01, the Series 2006-C2 Directing
Certificateholder, with the consent of the Holders of the Controlling Class,
shall act on behalf of the Holders of the Controlling Class in purchasing the
assets of the Trust Fund and terminating the Trust.
Notice of any termination pursuant to this Section 9.01 shall be
given promptly by the Trustee by letter to the Certificateholders, the B Loan
Holders and each Rating Agency and, if not previously notified pursuant to this
Section 9.01, to the other parties hereto mailed (a) in the event such notice is
given in connection with the purchase of all of the Trust Mortgage Loans and
each REO Property remaining in the Trust Fund, not earlier than the 15th day and
not later than the 25th day of the month next preceding the month of the final
distribution on the Certificates, or (b) otherwise during the month of such
final distribution on or before the related Determination Date in such month, in
each case specifying (i) the Distribution Date upon which the Trust Fund will
terminate and final payment of the Certificates will be made, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the offices of the Trustee or
such other location therein designated.
Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to each Certificateholder so presenting and surrendering its Certificates such
Certificateholder's Percentage Interest of that portion of the amounts then on
deposit in the Distribution Account and/or the Excess Interest Distribution
Account that are allocable to payments on the Class of Certificates so presented
and surrendered. Amounts distributed from the Distribution Account as of the
Final Distribution Date shall be allocated for the purposes, in the amounts and
in accordance with the priority set forth in Sections 4.01(a), 4.01(b), 4.01(c),
4.01(d) and 4.01(e). Anything in this Section 9.01 to the contrary
notwithstanding, the Holders of the Class V Certificates shall receive that
portion, if any, of the proceeds of a sale of the assets of the Trust Fund
allocable to accrued and unpaid Excess Interest. Any funds not distributed on
such Distribution Date shall be set aside and held uninvested in trust for the
benefit of Certificateholders not presenting and surrendering their Certificates
in the aforesaid manner and shall be disposed of in accordance with this Section
9.01 and Section 4.01(i).
Section 9.02 Additional Termination Requirements
If Holders of the Controlling Class, the Special Servicer or the
Master Servicer purchases all of the Trust Mortgage Loans and each REO Property
remaining in the Trust Fund as provided in Section 9.01, the Trust Fund shall be
terminated in accordance with the following additional requirements, which meet
the definition of a "qualified liquidation" of each REMIC Pool, within the
meaning of Section 860F(a)(4) of the Code:
(i) the Trustee shall specify the first day in the 90-day
liquidation period in a statement attached to each REMIC Pool's final Tax
Returns pursuant to Treasury Regulations Section 1.860F-1;
(ii) within such 90-day liquidation period and at or prior to the
time of the making of the final payment on the Certificates, the Trustee
shall sell all of the assets of REMIC I to the Holders of the Controlling
Class, the Special Servicer or the Master Servicer, as the case may be,
for cash; and
(iii) immediately following the making of the final payment on the
Uncertificated REMIC I Interests and the Certificates, the Trustee shall
distribute or credit, or cause to be distributed or credited, to the
Holders of the Class R or Class LR Certificates, in respect of the related
REMIC Pool, all cash on hand (other than cash retained to meet claims), in
the Trust Fund and each REMIC Pool shall terminate at that time.
ARTICLE X
ADDITIONAL TAX PROVISIONS
Section 10.01 Tax Administration
(a) The Trustee shall make or cause to be made elections to treat
each of the REMIC Pools as a REMIC under the Code and if necessary, under State
Tax Laws. Each such election will be made on Internal Revenue Service Form 1066
or other appropriate federal tax or information return or any appropriate state
Tax Return for the taxable year ending on the last day of the calendar year in
which the Certificates are issued, which in each case shall be signed by the
Trustee. The Trustee shall designate the "regular interests" and the "residual
interests," within the meaning of the REMIC Provisions, in each REMIC Pool as
set forth in the Preliminary Statement hereto. To the extent the affairs of the
Trust Fund are within their control, the Master Servicer, the Special Servicer
and the Trustee shall not permit the creation of any "interests" (within the
meaning of Section 860G of the Code) in either REMIC Pool other than those
interests outstanding on the Closing Date.
(b) The Closing Date is hereby designated as the "startup day,"
within the meaning of Section 860G(a)(9) of the Code, of REMIC I and REMIC II.
(c) The Holder of the largest Percentage Interest of the Class LR
Certificates is hereby designated, and by the acceptance of its Class LR
Certificate agrees to act, as Tax Matters Person for REMIC I. The Holder of the
largest Percentage Interest of the Class R Certificates is hereby designated,
and by the acceptance of its Class R Certificate agrees to act, as Tax Matters
Person for REMIC II. The Trustee is hereby designated as the agent and
attorney-in-fact of the Tax Matters Person of each REMIC Pool and shall perform
all the functions thereof, and the Holders of the Class LR and Class R
Certificates, by their acceptance of such Certificates, agree to such
designation.
(d) The Trustee shall prepare or cause to be prepared all of the Tax
Returns that it reasonably determines are required with respect to each REMIC
Pool and, as specified in Section 2.05, the grantor trust created hereunder and
shall sign and file or cause to be filed such Tax Returns in a timely manner.
The expenses of preparing such returns shall be borne by the Trustee without any
right of reimbursement therefor.
(e) The Trustee shall provide (i) upon request by any Transferor of
a Class LR or Class R Certificate, such information to such Transferor and the
IRS as is (x) reasonably necessary for the application of any tax relating to
the transfer of a Class LR or Class R Certificate to any Person who is not a
Disqualified Organization or (y) otherwise required to be provided by Treasury
Regulations Section 1.860E-2 (and in the time and manner required to be provided
to such person under such Regulations), (ii) to the Certificateholders such
information or reports as are required by the Code, the REMIC Provisions or
State Tax Laws including reports relating to interest, original issue discount
and market discount or premium (using the Prepayment Assumption) and (iii)
pursuant to Section 10.01(m), to the Internal Revenue Service the name, title,
address and telephone number of the person who will serve as the representative
of each of the REMIC Pools.
(f) The Trustee shall take such actions and shall cause the Trust
Fund to take such actions as are reasonably within the Trustee's control and the
scope of its duties more specifically set forth herein as shall be necessary to
maintain the status of each REMIC Pool as a REMIC under the REMIC Provisions
(and the Master Servicer and Special Servicer shall assist the Trustee, to the
extent reasonably requested by the Trustee to do so). None of the Master
Servicer, the Special Servicer or the Trustee shall knowingly or intentionally
take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, could be reasonably
expected to (i) cause either REMIC Pool to fail to qualify as a REMIC or (ii)
result in the imposition of a tax under the REMIC Provisions upon either REMIC
Pool (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set
forth in Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless such party receives an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense,
and such party determines that taking such action is in the best interest of the
Trust Fund and the Certificateholders, at the expense of the Trust Fund, but in
no event at the expense of such party) to the effect that the contemplated
action will not, with respect to either REMIC Pool, cause either REMIC Pool to
fail to qualify as a REMIC or, unless such party determines (which determination
is acceptable to the Trustee) that the monetary expense to either REMIC Pool is
not material and in its sole discretion to indemnify (to the extent reasonably
acceptable to the Trustee) the Trust Fund against such tax, result in the
imposition of such a tax. Wherever in this Agreement a contemplated action may
not be taken because the timing of such action might result in the imposition of
a tax on the Trust Fund, or may be taken only pursuant to an Opinion of Counsel
that such action would impose a tax on the Trust Fund, such action may
nonetheless be taken so long as (x) the indemnity given in the preceding
sentence with respect to any taxes that might be imposed on the Trust Fund has
been given and (y) all other preconditions to the taking of such action have
been satisfied. The Trustee shall not take any action (whether or not authorized
hereunder) as to which the Master Servicer has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to the Trust Fund or its assets, or causing the Trust Fund to take any
action, which is not expressly permitted under the terms of this Agreement, each
of the parties hereto will consult with the Trustee or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to either REMIC Pool, and such party shall not take any such
action, or cause the Trust Fund to take any such action, as to which the Trustee
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
may consult with counsel to make such written advice, and the cost of same shall
be borne by the party seeking to take the action not expressly permitted by this
Agreement. At all times as may be required by the Code, the Trustee will to the
extent within its control and the scope of its duties as specifically set forth
herein, maintain substantially all of the assets of the Trust Fund as "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited
transactions" of either REMIC Pool as defined in Section 860F(a)(2) of the Code,
on "contributions" to a REMIC Pool after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed by the Code or any applicable
provisions of state or local tax laws, other than a tax on "net income from
foreclosure property" pursuant to Section 860G(c) of the Code or similar
provisions of state or local tax laws, such tax shall be charged (i) to the
Master Servicer, if such tax arises out of or results from a breach, which
breach constitutes negligence or willful misconduct of the Master Servicer, by
the Master Servicer of any of its obligations under this Agreement and such
breach is not caused by the breach of another party, (ii) to the Trustee, if
such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement and such breach is not caused by the breach of
another party, (iii) to the Special Servicer, if such tax arises out of or
results from a breach, which breach constitutes negligence or willful misconduct
of the Special Servicer, by the Special Servicer of any of its obligations under
this Agreement and such breach is not caused by the breach of another party and
(iv) otherwise, against amounts on deposit in the Collection Account in
accordance with Section 3.05(a), and on the Distribution Date(s) following such
reimbursement the aggregate of such taxes shall be allocated in reduction of the
Optimal Interest Distribution Amount on each Class entitled thereto in the same
manner as if such taxes constituted an Uncovered Prepayment Interest Shortfall
Amount.
(h) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each of the REMIC Pools on a calendar year and
on an accrual basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, none of the Master Servicer, the
Special Servicer, the Trustee shall (except as contemplated by Section 2.03)
accept any contributions of assets to either REMIC Pool unless the Master
Servicer, the Special Servicer and the Trustee shall have received an Opinion of
Counsel (at the expense of the party seeking to make such contribution) to the
effect that the inclusion of such assets in either REMIC Pool will not cause
either REMIC Pool to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject either REMIC Pool created hereunder to
any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(j) None of the Master Servicer, the Special Servicer or the Trustee
shall enter into any arrangement by which either REMIC Pool created hereunder
will receive a fee or other compensation for services nor, to the extent
reasonably within their control, permit either REMIC Pool to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k) For the purposes of Treasury Regulations Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" of the Uncertificated
REMIC I Interests, the Class V-2 Certificates and the Regular Certificates is
the Rated Final Distribution Date.
(l) Within 30 days after the Closing Date, the Trustee shall obtain
a taxpayer identification number for each REMIC Pool on Form SS-4 and shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" (or applicable successor form) for each REMIC
Pool created hereunder.
(m) None of the Trustee, the Master Servicer or the Special Servicer
shall sell or dispose of or substitute for any of the Trust Mortgage Loans
(except in connection with (i) the default, imminent default or foreclosure of a
Trust Mortgage Loan, including but not limited to, the acquisition or sale of a
Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy
of the Trust Fund, (iii) the termination of the Trust Fund created hereunder
pursuant to Article X of this Agreement or (iv) a purchase of Trust Mortgage
Loans pursuant to Article II, Section 3.18 of this Agreement) nor acquire any
assets for the Trust Fund or either REMIC Pool, nor sell or dispose of any
investments in the Collection Account for gain, nor accept any contributions to
either REMIC Pool after the Closing Date, unless it has received an Opinion of
Counsel (which opinion shall be the expense of the Trust Fund) that such sale or
disposition will not affect adversely the status of either REMIC Pool as a REMIC
or cause either REMIC Pool to be subject to a tax on "prohibited transactions"
or "contributions" pursuant to the REMIC Provisions.
(n) The Depositor shall provide or cause to be provided to the
Trustee, within ten (10) days after the Closing Date, and thereafter on an
ongoing basis, all information or data requested by the Trustee that the Trustee
reasonably determines to be relevant for tax purposes as to the valuations and
Issue Prices of the Certificates, including without limitation, the price,
yield, original issue discount, issue premium and projected cash flow of the
Certificates. In addition, the Master Servicer, the Special Servicer and the
Depositor shall provide on a timely basis to the Trustee or its designee such
information with respect to the Trust Fund as is in its possession and
reasonably requested by the Trustee to enable it to perform its obligations
under this Section. The Trustee shall be entitled to rely conclusively upon all
such information so provided to it without recalculation or other investigation.
The Trustee shall be entitled to reasonable compensation and to the
reimbursement of its reasonable expenses incurred in the performance of its
duties under this Section 10.01 as may be agreed upon by the Trustee and the
Depositor; provided, however, that the Trustee shall pay out of its own funds,
without any right of reimbursement, any and all ordinary expenses of the Trust
Fund incurred in the performance of its duties under this Section but shall be
reimbursed, except as otherwise expressly provided for herein, by the Trust Fund
for any of its extraordinary expenses, including any taxes or tax-related
payments including any expenses involved in any tax examination, audit or
proceeding.
(o) The Master Servicer and the Special Servicer each shall furnish
such reports, certifications and information in its possession, and access to
such books and records maintained thereby, as may be related to the Certificates
or the Trust Fund and as shall be reasonably requested by the Trustee in order
to enable it to perform its duties under this Article X.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment
(a) This Agreement may be amended from time to time by the mutual
agreement of the parties hereto, without the consent of any of the
Certificateholders or any of the B Loan Holders, (i) to cure any ambiguity, (ii)
to correct, modify or supplement any provision herein which may be inconsistent
with any other provision herein or to correct any error, (iii) to make any other
provisions with respect to matters or questions arising hereunder which shall
not be inconsistent with the then existing provisions hereof, (iv) as evidenced
by an Opinion of Counsel delivered to the Trustee, the Master Servicer and the
Special Servicer, to relax or eliminate (A) any requirement hereunder imposed by
the REMIC Provisions (if the REMIC Provisions are amended or clarified such that
any such requirement may be relaxed or eliminated) or (B) any transfer
restriction imposed on the Certificates pursuant to Section 5.02(b) or Section
5.02(c) (if applicable law is amended or clarified such that any such
restriction may be relaxed or eliminated), (v) as evidenced by an Opinion of
Counsel delivered to the Trustee, either (X) to comply with any requirements
imposed by the Code or any successor or amendatory statute or any temporary or
final regulation, revenue ruling, revenue procedure or other written official
announcement or interpretation relating to federal income tax laws or any such
proposed action which, if made effective, would apply retroactively to either
REMIC Pool or Grantor Trust V-1 at least from the effective date of such
amendment, (Y) to avoid the occurrence of a prohibited transaction or to reduce
the incidence of any tax that would arise from any actions taken with respect to
the operation of either REMIC Pool or Grantor Trust V-1 or (Z) to comply with
any requirements imposed by the Commission with respect to any proposed or
adopted temporary or final regulation or other written official announcement or
interpretation relating to the securities laws which, would apply retroactively
to the Depositor, any Underwriter or the Trust Fund, (vi) subject to Section
5.02(d)(iv), to modify, add to or eliminate any of the provisions of Section
5.02(d)(i), (ii) or (iii), or (vii) to avoid an Adverse Rating Event with
respect to any Class of Rated Certificates; provided that no such amendment may
significantly change the activities of the Trust; and provided, further, that
any such amendment for the specific purposes described in clause (iii), (iv) or
(vii) above shall not adversely affect in any material respect the interests of
any Certificateholder, any B Loan Holder or any third-party beneficiary to this
Agreement or any provision hereof, as evidenced by the Trustee's receipt of an
Opinion of Counsel to that effect (or, alternatively, in the case of a Class of
Rated Certificates, written confirmation from each applicable Rating Agency to
the effect that such amendment shall not result in an Adverse Rating Event with
respect to any Class of Rated Certificates); and provided, further, that with
respect to any such amendment for the specific purposes described in clause
(iii) above, the Trustee shall receive written confirmation from each applicable
Rating Agency to the effect that such amendment shall not result in an Adverse
Rating Event with respect to any Class of Rated Certificates.
(b) This Agreement may also be amended from time to time by the
mutual agreement of the parties hereto, with the consent of the Holders of
Certificates entitled to not less than 51% of the Voting Rights allocated to all
of the Classes that are materially affected by the amendment, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments received or
advanced on Mortgage Loans and/or REO Properties which are required to be
distributed on any Certificate, without the consent of the Holder of such
Certificate, or which are required to be distributed to any B Loan Holder,
without the consent of such B Loan Holder, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates or the
interests of any B Loan Holder in a manner other than as described in clause (i)
above, without the consent of the Holders of all Certificates of such Class or
the consent of any such B Loan Holder, as applicable, (iii) modify the
provisions of this Section 11.01 or the definition of "Servicing Standard,"
without the consent of the Holders of all Certificates then outstanding and the
consent of the B Loan Holders, (iv) significantly change the activities of the
Trust, without the consent of the Holders of Certificates entitled to not less
than 66 2/3% of all the Voting Rights (not taking into account Certificates held
by the Depositor or any of its Affiliates or agents), or (v) adversely affect in
any material respect the interests of any third-party beneficiary to this
Agreement or any provision herein, without the consent of such third-party
beneficiary. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or any Affiliate of the
Depositor shall be entitled to the same Voting Rights with respect to the
matters described above as they would if registered in the name of any other
Person.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee, the Master Servicer and the Special Servicer shall not consent to any
amendment to this Agreement unless each of them shall first have obtained or
been furnished with an Opinion of Counsel to the effect that neither such
amendment nor the exercise of any power granted to any party hereto in
accordance with such amendment will result in an Adverse REMIC Event with
respect to either REMIC Pool or an Adverse Grantor Trust Event with respect to
Grantor Trust V-1.
(d) Promptly after the execution and delivery of any amendment by
all parties thereto, the Trustee shall send a copy thereof to each
Certificateholder and each B Loan Holder and to each Rating Agency.
(e) It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization, execution and delivery thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(f) The Trustee may but shall not be obligated to enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.
(g) The cost of any Opinion of Counsel to be delivered pursuant to
Section 11.01(a) or (c) shall be borne by the Person seeking the related
amendment, except that if the Trustee requests any amendment of this Agreement
that it reasonably believes protects or is in furtherance of the rights and
interests of Certificateholders, the cost of any Opinion of Counsel required in
connection therewith pursuant to Section 11.01(a) or (c) shall be payable out of
the Distribution Account.
(h) [Reserved]
(i) Notwithstanding the foregoing, absent a material adverse effect
on any Certificateholder, this Agreement may be amended by the parties hereto
without the consent of any of the Certificateholders to the extent necessary for
any Mortgage Loan Seller and their Affiliates to obtain accounting "sale"
treatment for the Mortgage Loans under FAS 140.
Section 11.02 Recordation of Agreement; Counterparts
(a) To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Depositor on direction by
the Trustee, but only upon direction accompanied by an Opinion of Counsel (the
cost of which shall be paid by the Depositor or, to the extent that it benefits
any B Loan Holder, by such B Loan Holder) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders
and/or the B Loan Holders.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders and B Loan
Holders
(a) The death or incapacity of any Certificateholder or any B Loan
Holder shall not operate to terminate this Agreement or the Trust Fund, nor
entitle such Certificateholder's or B Loan Holder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Certificateholder or B Loan Holder shall have any right to
vote (except as expressly provided for herein) or in any manner otherwise
control the operation and management of the Trust Fund, or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders and/or the B Loan Holders from time to time as partners or
members of an association; nor shall any Certificateholder or any B Loan Holder
be under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder or B Loan Holder shall have any right by
virtue of any provision of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Mortgage Loan, unless, in the case of a Certificateholder, with respect
to any suit, action or proceeding upon or under or with respect to this
Agreement, such Holder previously shall have given to the Trustee a written
notice of default hereunder, and of the continuance thereof, as hereinbefore
provided, and unless also (except in the case of a default by the Trustee) the
Holders of Certificates of any Class evidencing not less than 25% of the Voting
Rights shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding. The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it hereunder or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Holders of Certificates unless such Holders have offered to the
Trustee reasonable security against the costs, expenses and liabilities which
may be incurred therein or hereby.
It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner
whatsoever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
which priority or preference is not otherwise provided for herein, or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 11.03(c), each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04 Governing Law
This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely in said State, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws. The
parties hereto intend that the provisions of Section 5-1401 of the New York
General Obligations Law shall apply to this Agreement.
Section 11.05 Notices
Any communications provided for or permitted hereunder shall be in
writing (including by telecopy) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given when delivered to or, in the case of
telecopy notice, when received: (i) in the case of the Depositor, Credit Suisse
First Boston Mortgage Securities Corp., 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx, telecopy number: (000) 000-0000 (with
a copy to Xxxxx XxXxxxxxxx, telecopy number: (000) 000-0000); (ii) in the case
of the Master Servicer, Wachovia Bank, National Association, NC 1075, 0000
Xxxxxxxx Xxxxx XXX0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention Credit
Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through
Certificates Series 2006-C2, telecopy number: (000) 000-0000; (iii) in the case
of the Special Servicer, ARCap Servicing, Inc., 0000 X. X'Xxxxxx Xxxx., Xxxxx
000, Xxxxxx XX 00000, Attention: Xxxxx X. Xxxxxxx, telecopy number: (972)
868-5490 (with a copy to Xxxxx Xxxxxx, telecopy number: (000) 000-0000); (iv) in
the case of the Trustee, Xxxxx Fargo Bank, N.A., to the Corporate Trust Office,
telecopy number (000) 000-0000; (v) in the case of the Rating Agencies, (A)
Xxxxx'x Investors Service Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Commercial MBS Monitoring Department, telecopy number: (212)
553-0300; and (B) Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: CMBS Surveillance Department, telecopy number: (000) 000-0000; (vi)
in the case of the Mortgage Loan Seller, the address for notices to the Mortgage
Loan Seller under the Mortgage Loan Purchase Agreement; (vii) in the case of the
Performance Guarantor, the address for notices to the Performance Guarantor
under the Performance Guarantee; and (viii) in the case of a Junior Loan Holder,
at the address set forth in the related Intercreditor Agreement; or as to each
such Person such other address and/or telecopy number as may hereafter be
furnished by such Person to the parties hereto in writing. Any communication
required or permitted to be delivered to a Certificateholder shall be deemed to
have been duly given when mailed first class, postage prepaid, to the address of
such Holder as shown in the Certificate Register.
Section 11.06 Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Grant of a Security Interest
The Depositor and the Trustee intend that the conveyance of the
Depositor's right, title and interest in and to the Trust Mortgage Loans
pursuant to this Agreement shall constitute a sale and not a pledge of security
for a loan. If such conveyance is deemed to be a pledge of security for a loan,
however, the Depositor and the Trustee intend that the rights and obligations of
the parties to such loan shall be established pursuant to the terms of this
Agreement. The Depositor also intends and agrees that, in such event, (i) the
Depositor shall be deemed to have granted to the Trustee (in such capacity) a
first priority security interest in the Depositor's entire right, title and
interest in and to the assets comprising the Trust Fund, including without
limitation, the Trust Mortgage Loans, all principal and interest received or
receivable with respect to the Trust Mortgage Loans (other than principal and
interest payments due and payable prior to the Cut-off Date and Principal
Prepayments received prior to the Cut-off Date), all amounts held from time to
time in the Collection Account, any Mortgage Loan Combination Custodial Account
(insofar as such amounts relate to the related Trust Mortgage Loan or any
successor REO Trust Mortgage Loan with respect thereto), the Distribution
Account and, if established, the REO Account, and all reinvestment earnings on
such amounts, and all of the Depositor's right, title and interest in and to the
proceeds of any title, hazard or other Insurance Policies related to such Trust
Mortgage Loans and (ii) this Agreement shall constitute a security agreement
under applicable law. This Section 11.07 shall constitute notice to the Trustee
pursuant to any of the requirements of the applicable UCC.
Section 11.08 Successors and Assigns; Beneficiaries
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
all such provisions shall inure to the benefit of the Certificateholders, the B
Loan Holders and the other Persons referred to in Section 6.03. Each Mortgage
Loan Seller is an intended third party beneficiary in respect of the rights
afforded it hereunder. No other person, including, without limitation, any
Borrower, shall be entitled to any benefit or equitable right, remedy or claim
under this Agreement.
Section 11.09 Article and Section Headings
The article and Section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 11.10 Notices to Rating Agencies
(a) The Trustee shall use reasonable efforts promptly to provide
notice to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not been cured;
(iii) the resignation or termination of the Master Servicer or the
Special Servicer;
(iv) any change in the location of the Distribution Account, the
Excess Interest Distribution Account, the Excess Liquidation Proceeds
Account or the Interest Reserve Account;
(v) the repurchase of Trust Mortgage Loans by or on behalf of any
Mortgage Loan Seller pursuant to Section 7 of the Mortgage Loan Purchase
Agreement or the Performance Guarantee; and
(vi) the final payment to any Class of Certificateholders.
(b) The Master Servicer shall use reasonable efforts promptly to
provide notice to each Rating Agency with respect to each of the following of
which it has actual knowledge:
(i) the resignation or removal of the Trustee; and
(ii) any change in the location of the Collection Account or any
Mortgage Loan Combination Custodial Account.
(c) Each of the Master Servicer and the Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
(i) all reports and other items for Trust Mortgage Loans delivered
by each of the Master Servicer and Special Servicer pursuant to Section
3.12 (to the extent requested by such Rating Agency);
(ii) each waiver and consent provided pursuant to Section 3.08 for
Trust Mortgage Loans that, in each case, represent 2% or more of the
aggregate principal balance of the Mortgage Pool;
(iii) any officers' certificates delivered by the Master Servicer
and the Special Servicer to the Trustee (to the extent requested by such
Rating Agency);
(iv) all site inspections (to the extent requested by such Rating
Agency);
(v) all operating statements (to the extent requested by such Rating
Agency);
(vi) all rent rolls and sales reports to the extent provided by the
Borrowers and requested by such Rating Agency;
(vii) any proposed no downgrade request;
(viii) any extension or modification of the Maturity Date of any
Trust Mortgage Loan;
(ix) any modification, waiver or amendment of any material term of
any Trust Mortgage Loan with a Stated Principal Balance in excess of
$5,000,000; and
(x) any other document that shall be reasonably requested by any
Rating Agency.
(d) The Trustee shall promptly after each Distribution Date make
available to each Rating Agency a copy of the related Trustee Report.
ARTICLE XII
EXCHANGE ACT REPORTING AND REGULATION AB COMPLIANCE
Section 12.01 Intent of the Parties; Reasonableness. Except with
respect to Section 12.11, Section 12.12 and Section 12.13, the parties hereto
acknowledge and agree that the purpose of Article XII of this Agreement is to
facilitate compliance by the Depositor with the provisions of Regulation AB and
related rules and regulations of the Commission. The Depositor shall not
exercise its rights to request delivery of infor