UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report July 27, 1999
COMMERCIAL MORTGAGE ACCEPTANCE CORP.
(Exact name of registrant as specified in its charter)
Missouri 333-60749-02 43-1681393
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification)
210 West 10th Street, 6th Floor, Kansas City Missouri 64105
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 816-435-5000
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
Exhibit 1.1 Underwriting Agreement dated as of July 15, 1999 by and among
Commercial Mortgage Acceptance Corp, Midland Loan Services, Inc.,
Morgan Stanley & Co. Incorporated, Deutsche Bank Securities Inc.,
CIBC World Markets Corp., PNC Capital Markets, Inc., and
Residential Funding Securities Corporation.
Exhibit 4.1 Pooling and Servicing Agreement dated as of July 1, 1999 by and
between Commercial Mortgage Acceptance Corp, Midland Loan
Services, Inc., ORIX Real Estate Capital Markets, LLC, LaSalle
Bank National Association, and ABN AMRO Bank, N.V.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
COMMERCIAL MORTGAGE ACCEPTANCE CORP.
By: /s/ Leon E. Bergman
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Name: Leon E. Bergman
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Title: Executive Vice President
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Date: August 9, 1999
COMMERCIAL MORTGAGE ACCEPTANCE CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1999-C1
UNDERWRITING AGREEMENT
as of July 15, 1999
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, New York 10019
CIBC World Markets Corp.
CIBC Oppenheimer Tower
World Financial Center, 19th Floor
200 Liberty Street
New York, New York 10281
PNC Capital Markets, Inc.
One PNC Plaza, 19th Floor
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Residential Funding Securities Corporation
8400 Normandale Lake Blvd., Suite 600
Minneapolis, Minnesota 55437
Ladies and Gentlemen:
Commercial Mortgage Acceptance Corp., a Missouri corporation (the
"Depositor"), proposes to sell to Morgan Stanley & Co. Incorporated, Deutsche
Bank Securities Inc., CIBC World Markets Corp., PNC Capital Markets, Inc. and
Residential Funding Securities Corporation (together, the "Underwriters") the
Commercial Mortgage Pass-Through Certificates identified in Schedule I hereto
(the "Certificates") pursuant to this Underwriting Agreement, dated July 15,
1999 (this "Agreement"), between the Depositor and the Underwriters. The
Certificates will evidence beneficial ownership interests in a trust fund (the
"Trust Fund") to be formed by the Depositor and consisting primarily of a pool
(the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans").
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The Mortgage Loans will be acquired by the Depositor as follows:
(1) Certain of the Mortgage Loans (the "RFC Loans") will be acquired
by the Depositor from Morgan Stanley Mortgage Capital Inc. ("MSMC") (which
acquired the RFC Loans from Residential Funding Corporation ("RFC")
pursuant to a mortgage loan purchase agreement dated June 30, 1999 (the
"RFC Purchase Agreement")) pursuant to a separate mortgage loan purchase
agreement, dated July 15, 1999 (the "MS/RFC Purchase Agreement") between
the Depositor and MSMC.
(2) Certain of the Mortgage Loans (the "Midland Loans") will be
acquired by the Depositor from MSMC (which acquired the Midland Loans from
Midland Loan Services, Inc. ("MLS") pursuant to a mortgage loan purchase
agreement dated June 30, 1999 (the "MLS Purchase Agreement")) pursuant to a
separate mortgage loan purchase agreement dated July 15, 1999 (the "MS/MLS
Purchase Agreement") between the Depositor and MSMC.
(3) On June 30, 1999, MSMC acquired the certificates representing all
of the ownership interests in the Midland Commercial Mortgage Owner Trust I
(the "Owner Trust") from PNC Bank, National Association ("PNC") and
Anthracite Capital, Inc. ("Anthracite") pursuant to an Owner Trust
Certificate Purchase Agreement dated as of June 30, 1999 among MSMC, PNC,
Anthracite and MLS (the "Owner Trust Purchase Agreement"). MSMC
subsequently exercised its right as owner of a majority of the Owner Trust
certificates to purchase all of the mortgage loans owned by the Owner Trust
(the "Owner Trust Loans"). Under the Owner Trust Purchase Agreement, MLS
made the representations and warranties regarding the Owner Trust Loans and
has the obligation to effect a cure with respect to, repurchase or
substitute an Owner Trust Loan in the event of a material breach of a
representation or warranty. The Owner Trust Loans will be acquired by the
Depositor from MSMC pursuant to a separate mortgage loan purchase
agreement, dated July 15, 1999 (the "MS/OT Purchase Agreement") between the
Depositor and MSMC.
(4) Certain Mortgage Loans (the "Additional Midland Loans") will be
acquired by the Depositor from Midland pursuant to the mortgage loan
purchase agreement, dated July 15, 1999 (the "Additional Midland Purchase
Agreement"), between the Depositor and Midland.
(5) Certain Mortgage Loans (the "CIBC Loans") will be acquired by the
Depositor from CIBC Inc. ("CIBC") pursuant to the mortgage loan purchase
agreement, dated July 15, 1999 (the "CIBC Purchase Agreement"), between the
Depositor and CIBC.
MLS, CIBC and RFC collectively constitute the "Mortgage Loan Sellers".
Since MLS (and not MSMC) is responsible to the Trust Fund in respect of the
representations and warranties that relate to the MLS Loans and the Owner Trust
Loans and RFC (and not MSMC) is responsible to the Trust Fund in respect of the
representations and warranties that relate to the RFC Loans, MLS and RFC are
referred to as the Mortgage Loan Sellers for those Mortgage
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Loans. The RFC Purchase Agreement, the MLS Purchase Agreement, the Owner Trust
Purchase Agreement, the Additional Midland Purchase Agreement and the CIBC
Purchase Agreement, are individually referred to as a "Mortgage Loan Purchase
Agreement" and are collectively referred to as the "Mortgage Loan Purchase
Agreements". Capitalized terms used herein but not otherwise defined herein
shall have the meanings set forth in the Mortgage Loan Purchase Agreements.
The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (No. 333-60749) on Form S-3 for the
registration of the Certificates under the Securities Act of 1933, as amended
(the "1933 Act"), which registration statement has become effective and copies
of which have heretofore been delivered to each Underwriter. The Depositor
proposes to file with the Commission pursuant to Rule 424(b) under the 1933 Act
a supplement to the form of prospectus included in such registration statement
relating to the Certificates and the plan of distribution thereof. Such
registration statement, including the exhibits thereto, as amended at the date
hereof, is hereinafter called the "Registration Statement"; the prospectus
included in the Registration Statement, at the time the Registration Statement
became effective, or as subsequently filed with the Commission pursuant to Rule
424(b) under the 1933 Act, is hereinafter called the "Base Prospectus"; any
supplement to the form of prospectus relating to the Certificates, in the form
in which it shall be filed with the Commission pursuant to Rule 424 (including
the Base Prospectus as so supplemented) is hereinafter called the "Prospectus
Supplement"; and the Base Prospectus and the Prospectus Supplement, together,
are hereinafter called the "Prospectus". Any preliminary form of the Prospectus
that has heretofore been filed pursuant to Rule 424(b) is hereinafter called a
"Preliminary Prospectus."
Section 1. Representations and Warranties.
(a) The Depositor represents and warrants to each Underwriter as follows:
(i) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement has been issued or is
in effect, and no proceedings for such purpose are pending or, to the
Depositor's knowledge, threatened by the Commission; the Registration Statement
as of the effective date thereof (the "Effective Date"), and the Prospectus, as
of the date of the Prospectus Supplement, complied in all material respects with
the applicable requirements of the 1933 Act and the rules and regulations
thereunder (the "1933 Act Regulations"); all conditions to the use of Form S-3
and Rule 415 under the 1933 Act have been satisfied with respect to the
Registration Statement as of the Effective Date thereof; and the information in
the Registration Statement, as of the Effective Date, did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the information in the Prospectus, as of the date of the
Prospectus Supplement, did not, and as of the Closing Date (as hereinafter
defined) will not, contain an untrue statement of a material fact and did not
and will not omit to state a material fact necessary in order to make the
information therein, in the light of the circumstances under which they were
made, not misleading, provided, however, that the Depositor makes no
representations, warranties or agreements as to (A) the information contained in
the Prospectus or any revision or amendment thereof or supplement thereto in
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reliance upon and in conformity with information furnished in writing to the
Depositor by Morgan Stanley & Co. Incorporated on behalf of itself or any other
Underwriter specifically for use in connection with the preparation of the
Prospectus or any revision or amendment thereof or supplement thereto (the
"Underwriter Information"), or (B) any information contained in or omitted from
any Computational Materials or ABS Term Sheets (each as hereinafter defined)
required to be provided by any Underwriter to the Depositor pursuant to Section
4.
(ii) There are no legal or governmental proceedings pending or, to
the knowledge of the Depositor, threatened to which the Depositor is a party or
to which any of the properties of the Depositor are subject that are required to
be described in the Registration Statement or the Prospectus and that are not so
described, nor are there any statutes, regulations, contracts or other documents
to which the Depositor is a party or to which the Depositor or any of the
properties of the Depositor are subject that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(iii) The Depositor has been duly incorporated and is a validly
existing corporation in good standing under the laws of the State of Missouri
with corporate power and authority to enter into and perform its obligations
under this Agreement and the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of July 1, 1999, between the Depositor, MLS, as
master servicer, ORIX Real Estate Capital Markets, LLC, as special servicer,
LaSalle Bank National Association, as trustee and ABN AMRO Bank N.V., as fiscal
agent.
(iv) The execution, delivery and performance of this Agreement and
the Pooling and Servicing Agreement by the Depositor and the consummation of the
transactions contemplated herein and therein by the Depositor and compliance by
the Depositor with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and will not (A) contravene any
provision of the articles of incorporation or by-laws of the Depositor or (B)
conflict with or constitute a breach of or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Depositor pursuant to, any provision of applicable law or
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Depositor is a party or by which it may be bound or to which any of
the property or assets of the Depositor is subject, which conflict, breach,
default, lien, charge or encumbrance is reasonably likely to materially and
adversely affect the Depositor's ability to perform its obligations under this
Agreement or the Pooling and Servicing Agreement.
(v) The Certificates have been duly authorized for issuance and sale
(or will have been so authorized prior to the issuance thereof) pursuant to this
Agreement and the Pooling and Servicing Agreement. When issued, authenticated
and delivered pursuant to the provisions of this Agreement and of the Pooling
and Servicing Agreement against payment of the consideration therefor in
accordance with this Agreement, the Certificates will be duly and validly issued
and outstanding and entitled to the benefits provided by the Pooling and
Servicing Agreement, except as such enforceability may be limited by the effect
of (A) bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the
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enforcement of the rights of creditors generally, and (B) general principles of
equity, whether enforcement is sought in a proceeding in equity or at law. The
Certificates and the Pooling and Servicing Agreement conform in all material
respects to all statements relating thereto contained in the Prospectus.
(vi) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the offering,
issuance or sale of the Certificates hereunder, except such as have been, or as
of the Closing Date will have been, obtained or such as may otherwise be
required under applicable state securities laws in connection with the purchase
and offer and sale of the Certificates by the Underwriters and any recordation
of the respective assignments of the Mortgage Loans to the Trustee pursuant to
the Pooling and Servicing Agreement that have not yet been completed.
(vii) This Agreement has been, and as of the Closing Date the Pooling
and Servicing Agreement will be, duly authorized, executed and delivered by the
Depositor. This Agreement constitutes, and as of the Closing Date the Pooling
and Servicing Agreement will constitute, a legal, valid and binding agreement
enforceable against the Depositor in accordance with its terms, except as such
enforceability may be limited by the effect of (A) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws affecting the
enforcement of the rights of creditors generally, (B) general principles of
equity, whether enforcement is sought in a proceeding in equity or at law, and
(C) public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement that purport or are construed to provide
indemnification from securities law liabilities.
(viii) At the time of the execution and delivery of the Pooling and
Servicing Agreement, the Depositor (A) will convey to the Trustee, or cause to
be conveyed to the Trustee, all of the Depositor's right, title and interest in
and to the Mortgage Loans free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest (collectively "Liens")
granted by or imposed upon the Depositor, (B) will not have assigned to any
person any of its right, title or interest in the Mortgage Loans or in the
Pooling and Servicing Agreement or the Certificates, and (C) will have the power
and authority to transfer or cause to be transferred the Mortgage Loans to the
Trustee and to sell the Certificates to the Underwriters. Upon execution and
delivery of the Pooling and Servicing Agreement by the Trustee, the Trustee will
have acquired ownership of all of the Depositor's right, title and interest in
and to the Mortgage Loans, and upon delivery to the Underwriters of the
Certificates pursuant hereto, each Underwriter will have good title to the
Certificates purchased by such Underwriter, in each case free of Liens granted
by or imposed upon the Depositor.
(ix) The Depositor is not, and the issuance and sale of the
Certificates in the manner contemplated by the Prospectus will not cause the
Depositor or the Trust Fund to be, subject to registration or regulation as an
"investment company" under the Investment Company Act of 1940, as amended (the
"1940 Act").
(x) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Depositor will report the transfer of the
Mortgage Loans to the Trustee
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in exchange for the Certificates and the sale of the Certificates to the
Underwriters pursuant to this Agreement as a sale of the interest in the
Mortgage Loans evidenced by the Certificates. The consideration received by the
Depositor upon the sale of the Certificates to the Underwriters will constitute
reasonably equivalent value and fair consideration for the Certificates. The
Depositor will be solvent at all relevant times prior to, and will not be
rendered insolvent by, the sale of the Certificates to the Underwriters. The
Depositor is not selling the Certificates to the Underwriters with any intent to
hinder, delay or defraud any of the creditors of the Depositor.
(xi) At the Closing Date, the respective classes of Certificates
shall have been assigned ratings no lower than those set forth in Schedule I
hereto by the nationally recognized statistical rating organizations identified
in Schedule I hereto (the "Rating Agencies").
(xii) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of this Agreement, the Pooling and
Servicing Agreement and the Certificates payable by the Depositor (other than
income taxes) have been paid or will be paid at or prior to the Closing Date.
(xiii) The Trust Fund will qualify as three separate real estate
mortgage investment conduits (each, a "REMIC") for federal income tax purposes
pursuant to Section 860D of the Internal Revenue Code of 1986, as amended (the
"Code"); the REMIC III Regular Certificates will constitute "regular interests"
in a REMIC; and the Class R-I, Class R-II and Class R-III Interests will each
constitute the sole class of "residual interests" in the related REMIC.
(b) MLS represents and warrants to each Underwriter as follows:
(i) MLS has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to enter into and perform its obligations under
this Agreement.
(ii) The execution, delivery and performance of this Agreement by MLS
and the consummation of the transactions contemplated herein and therein by MLS
and compliance by MLS with its obligations hereunder and thereunder have been
duly authorized by all necessary corporate action and will not (A) contravene
any provision of the certificate of incorporation or by-laws of MLS or (B)
conflict with or constitute a breach of or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of MLS pursuant to, any provision of applicable law or contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
MLS is a party or by which it may be bound or to which any of the property or
assets of MLS is subject, which conflict, breach, default, lien, charge or
encumbrance is reasonably likely to materially and adversely affect MLS's
ability to perform its obligations under this Agreement .
(iii) This Agreement has been duly authorized, executed and delivered
by MLS.
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(c) Each Underwriter represents and warrants to the Depositor that, as of
the date hereof and as of the Closing Date, such Underwriter has complied with
all of its obligations hereunder.
Section 2. Purchase and Sale.
Subject to the terms and conditions herein set forth and in reliance upon
the representations and warranties herein contained, the Depositor shall sell to
the several Underwriters, and each Underwriter shall, severally and not jointly,
purchase from the Depositor, at the related purchase price set forth on Schedule
I hereto, Certificates of each class thereof having an actual or notional amount
as set forth on Schedule I hereto opposite their names. There will be added to
the purchase price of the Certificates an amount equal to interest accrued
thereon pursuant to the terms thereof from the Cut-off Date to but excluding the
Closing Date.
Section 3. Delivery and Payment.
Payment of the aggregate purchase price for, and delivery of, the
Certificates shall be made at 10:00 a.m. New York City time on July 27, 1999,
which date and time may be postponed by agreement between the Underwriters and
the Depositor (such time and date of payment and delivery, the "Closing Date").
Payment shall be made to the Depositor by the Underwriters of the purchase
prices of the Certificates as set forth in Schedule I in immediately available
Federal funds wired to such bank as may be designated by the Depositor, against
delivery of the Certificates. Delivery of the Certificates will be made in
book-entry form through the facilities of The Depository Trust Company ("DTC").
Each class of Certificates will be represented by one or more definitive global
Certificates to be deposited by or on behalf of the Depositor with DTC or the
Trustee. The Certificates will be made available for examination by the
Underwriters not later than 10:00 a.m. New York City time on the last business
day prior to the Closing Date. The closing of the transactions contemplated
hereby shall be made at the offices of Morrison & Hecker L.L.P., 2600 Grand
Avenue, Kansas City, Missouri 64108, or at such other place as shall be agreed
upon by the Underwriters and the Depositor.
Section 4. Offering by Underwriter.
(a) The Underwriters shall provide written information in respect of the
plan of distribution to the Depositor expressly for use in the Preliminary
Prospectus and the Prospectus.
(b) It is understood that the Underwriters propose to offer the
Certificates for sale as set forth in the Prospectus. It is further understood
that the Depositor, in reliance upon Policy Statement 105, has not and will not
file an offering statement pursuant to Section 352-c of the General Business Law
of the State of New York with respect to the Certificates. Each Underwriter
therefore agrees that sales of the Certificates made by such Underwriter in and
from the State of New York will be made only to institutional investors within
the meaning of Policy Statement 105.
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(c) In connection with the offering of the Certificates, the Underwriters
may prepare and provide to prospective investors (x) computational materials
("Computational Materials") as defined in the No-Action Letter of May 20, 1994
issued by the Commission to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated and Kidder Structured Asset Corporation, as made
applicable to other issuers and underwriters by the Commission in response to
the request of the Public Securities Association dated May 24, 1994, as well as
the PSA Letter referred to below and (y) ABS term sheets ("ABS Term Sheets"),
each as defined in the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (the "PSA Letter", and, together
with the No-Action Letters described in clause (x) above, collectively, the
"No-Action Letters"), subject to the following conditions (to which such
conditions each Underwriter agrees, severally and not jointly, with respect to
those Computational Materials, and ABS Term Sheets prepared by such
Underwriter):
(i) All Computational Materials and ABS Term Sheets provided to
prospective investors that are required to be filed pursuant to the No-Action
Letters shall bear a legend substantially in the form attached hereto as Exhibit
A. The Depositor shall have the right to require additional specific legends or
notations to appear on any Computational Materials or ABS Term Sheets, the right
to require changes regarding the use of terminology and the right to determine
the types of information appearing therein. Notwithstanding the foregoing, this
subsection (i) will be satisfied if all Computational Materials and ABS Term
Sheets referred to herein bear a legend in a form previously approved in writing
by the Depositor.
(ii) Each Underwriter shall provide the Depositor with representative
forms of all Computational Materials and ABS Term Sheets prior to their first
use, to the extent such forms have not previously been approved by the Depositor
for use by such Underwriter. Each Underwriter shall provide to the Depositor,
for filing on Form 8-K as provided in Section 5(k), copies (in such format as
required by the Depositor) of all Computational Materials and ABS Term Sheets
that are required to be filed with the Commission pursuant to the No-Action
Letters. Such Underwriter may provide copies of the foregoing in a consolidated
or aggregated form including all information required to be filed if filing in
such format is permitted by the No-Action Letters. All Computational Materials
and ABS Term Sheets described in this subsection (ii) must be provided to the
Depositor not later than 10:00 a.m. New York City time one business day before
filing thereof is required pursuant to the terms of this Agreement and in
accordance with the No-Action Letters. No Underwriter shall provide to any
investor or prospective investor in the Certificates any Computational Materials
or ABS Term Sheets on or after the day on which Computational Materials or ABS
Term Sheets are required to be provided to the Depositor pursuant to this
subsection (ii) (other than copies of Computational Materials or ABS Term Sheets
previously submitted to the Depositor in accordance with this subsection (ii)
for filing pursuant to Section 5(k)), unless such Computational Materials or ABS
Term Sheets are preceded or accompanied by the delivery of a Prospectus to such
investor or prospective investor.
(iii) All information included in the Computational Materials and ABS
Term Sheets shall be generated based on substantially the same methodology and
assumptions that are used to generate the information in the Prospectus
Supplement as set forth therein; provided that the Computational Materials and
ABS Term Sheets may include information based on alternative methodologies or
assumptions if specified therein. If any Computational Materials or ABS Term
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Sheets that are required to be filed were based on assumptions with respect to
the mortgage pool that differ from the mortgage pool information as reflected in
the Final Offering Document Information (as defined in the Indemnification
Certificates, as amended or supplemented, between the respective Mortgage Loan
Seller and the Depositor (collectively, the "Indemnification Certificates")) in
any material respect, or on Certificate structuring terms that were revised in
any material respect prior to the printing of the Prospectus, the Underwriter
shall prepare revised Computational Materials or ABS Term Sheets, as the case
may be, based on the Final Offering Document Information, (as defined in the
Indemnification Certificates) and structuring assumptions used in the
Prospectus, circulate such revised Computational Materials and ABS Term Sheets
to all recipients of the preliminary versions thereof that indicated orally to
the Underwriter they would purchase all or any portion of the Certificates, and
include such revised Computational Materials and ABS Term Sheets (marked, "as
revised") in the materials delivered to the Depositor pursuant to subsection
(ii) above.
(iv) The Depositor shall not be obligated to file any Computational
Materials or ABS Term Sheets that have been determined to contain any material
error or omission, provided that, at the request of the related Underwriter, the
Depositor will file Computational Materials or ABS Term Sheets that contain a
material error or omission if clearly marked "superseded by materials dated
____________" and accompanied by corrected Computational Materials or ABS Term
Sheets that are marked, "material previously dated ___________ as corrected."
If, within the period during which the Prospectus relating to the Certificates
is required to be delivered under the 1933 Act, any Computational Materials or
ABS Term Sheets are determined, in the reasonable judgment of the Depositor or
the related Underwriter, to contain a material error or omission, the
Underwriter shall prepare a corrected version of such Computational Materials or
ABS Term Sheets, shall circulate such corrected Computational Materials or ABS
Term Sheets to all recipients of the prior versions thereof that either
indicated orally to the Underwriter they would purchase all or any portion of
the Certificates, or actually purchased all or any portion thereof, and shall
deliver copies of such corrected Computational Materials or ABS Term Sheets
(marked, "as corrected") to the Depositor for filing with the Commission in a
subsequent Form 8-K submission (subject to the Depositor's obtaining an
accountant's comfort letter in respect of such corrected Computational Materials
and ABS Term Sheets, which the parties acknowledge shall be at the expense of
the Mortgage Loan Sellers under each of the Mortgage Loan Purchase Agreements
between the related Mortgage Loan Seller and the Depositor, (including in the
case of (a) the RFC Loans, under the RFC Purchase Agreement, (b) the MLS Loans,
under the MLS Purchase Agreement and (c) the Owner Trust Loans, under the Owner
Trust Purchase Agreement)). As of the date that any Underwriter disseminates any
Computational Materials or ABS Term Sheets, such Underwriter shall not have any
knowledge or reason to believe that such Computational Materials or ABS Term
Sheets contained any material error or omission and each Underwriter agrees to
promptly notify the Depositor of any such material error or omission of which
such Underwriter becomes aware. Notwithstanding the foregoing, the Underwriters
make no representation or warranty as to whether any Computational Materials or
ABS Term Sheets (or any written or electronic materials furnished to prospective
investors on which the Computational Materials or ABS Term Sheets are based)
included or will include any inaccurate statement resulting directly from any
error
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contained in the Final Offering Document Information, Preliminary Offering
Document Information and Computational Information, each as defined in the
Indemnification Certificates.
(v) Each Underwriter shall be deemed to have represented, as of the
Closing Date, that, except for Computational Materials and ABS Term Sheets
provided to the Depositor pursuant to subsection (ii) above, such Underwriter
did not provide any prospective investors with any information in written or
electronic form in connection with the offering of the Certificates that is
required to be filed with the Commission in accordance with the No-Action
Letters, and each Underwriter shall provide the Depositor with a certification
to that effect on the Closing Date.
(vi) In the event of any delay in the delivery by any Underwriter to
the Depositor of Computational Materials and ABS Term Sheets required to be
delivered in accordance with subsection (ii) above, or in the delivery of the
accountant's comfort letter in respect thereof pursuant to Section 5(k), the
Depositor shall have the right to delay the release of the Prospectus to
investors or to the Underwriters, to delay the Closing Date and to take other
appropriate actions in each case as necessary in order to allow the Depositor to
comply with its agreement set forth in Section 5(k) to file the Computational
Materials and ABS Term Sheets by the time specified therein.
(d) Each Underwriter further represents and warrants that, if and to the
extent it has provided any prospective investors with any Computational
Materials or ABS Terms Sheets prior to the date hereof in connection with the
offering of the Certificates, all of the conditions set forth in subsection (c)
above have been satisfied with respect thereto.
Section 5. Covenants of the Depositor.
The Depositor covenants with each Underwriter as follows:
(a) The Depositor will give the Underwriters notice of its intention to
file or prepare (i) any amendment to the Registration Statement at any time
prior to the Closing Date or (ii) any amendment or supplement to the Prospectus
(including any revised prospectus that the Depositor proposes for use by the
Underwriters in connection with the offering of the Certificates and that
differs from the prospectus on file at the Commission at the time the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) at
any time during the period when a prospectus relating to the Certificates is
required to be delivered under the 1933 Act, and the Depositor will furnish the
Underwriters with copies of any such amendment or supplement a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement or use any such prospectus to which the
Underwriters shall reasonably object.
(b) The Depositor will promptly give each Underwriter notice of (i) any
request by the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information relating to the Certificates, (ii)
any written notification received by the Depositor of suspension of
qualification of the Certificates for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (iii) the issuance by the
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Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or, to the knowledge of the Depositor, threatening
of any proceeding for that purpose. The Depositor will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(c) The Depositor will cause the Prospectus to be transmitted to the
Commission for filing pursuant to Rule 424(b) under the 1933 Act by means
reasonably calculated to result in filing with the Commission pursuant to said
rule and, if necessary, within 15 days of the Closing Date, will transmit for
filing by means reasonably calculated to result in filing with the Commission a
report on Form 8-K for purposes of filing the Pooling and Servicing Agreement,
and will promptly advise each Underwriter when the Prospectus Supplement or Form
8-K, as applicable has been so filed.
(d) The Depositor will deliver to each Underwriter and counsel to each
Underwriter, without charge, a copy of the Registration Statement as originally
filed and of each amendment thereto prior to the date hereof (including exhibits
filed therewith or incorporated by reference therein).
(e) The Depositor will furnish to each Underwriter, from time to time
during the period when a prospectus relating to the Certificates is required to
be delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(f) If, during the period after the first date of the public offering of
the Certificates in which a Prospectus relating to the Certificates is required
to be delivered under the 1933 Act, any event shall occur as a result of which
it is necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Depositor will forthwith amend or supplement
the Prospectus so that, as so amended or supplemented, the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Depositor will furnish to each Underwriter a reasonable
number of copies of such amendment or supplement.
(g) The Depositor will endeavor to arrange for the qualification of the
Certificates for sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriters may reasonably
designate and will maintain such qualification in effect so long as required for
the initial distribution of Certificates; provided, however, that the Depositor
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or to file a general consent to service of
process in any jurisdiction.
(h) The Depositor will use the net proceeds received by it from the sale
of the Certificates in the manner specified in the Prospectus under "Use of
Proceeds".
(i) Whether or not the transactions contemplated in the Pooling and
Servicing
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Agreement are consummated or this Agreement is terminated, the Depositor will
pay or cause to be paid all expenses incident to the performance of the
obligations of the Depositor under this Agreement, including, without
limitation, (i) the fees, disbursements and expenses of the Depositor's counsel
in connection with the purchase of the Mortgage Loans and the issuance and sale
of the Certificates, (ii) all fees and expenses incurred in connection with the
registration and delivery of the Certificates under the 1933 Act, and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (iii) all
costs and expenses related to the transfer and delivery of the Certificates to
the Underwriters, including any transfer or other taxes payable thereon, (iv)
the costs of printing or producing any "blue sky" memorandum in connection with
the offer and sale of the Certificates under state securities laws and all
expenses in connection with the qualification of the Certificates for the offer
and sale under state securities laws as provided in Section 6(b)(i)(I),
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the "blue sky" memorandum, (v) the cost of printing the Certificates, (vi) the
costs and charges of any transfer agent, registrar or depository, (vii) the fees
and expenses of the rating agencies incurred in connection with the issuance and
sale of the Certificates and (viii) all other costs and expenses incident to the
performance of the obligations of the Depositor hereunder for which provision is
not otherwise made in this Section.
Except as herein provided, the Underwriters shall be responsible for the
payment of all costs and expenses incurred by them, including, without
limitation, (i) the fees and disbursements of counsel of the Underwriters and
(ii) such additional costs arising out of any Computational Materials and ABS
Term Sheets prepared and/or distributed by the Underwriters, in connection with
the purchase and sale of the Certificates.
(j) So long as any Certificates are outstanding, upon request of an
Underwriter, the Depositor will, or will cause the Master Servicer or Special
Servicer to, furnish to such Underwriter a copy of (i) the annual statement of
compliance delivered by the Master Servicer or the Special Servicer to the
Trustee under the Pooling and Servicing Agreement, (ii) the annual independent
public accountants' servicing report furnished to the Trustee pursuant to the
Pooling and Servicing Agreement, (iii) each report of the Depositor regarding
the Certificates filed with the Commission under the 1934 Act or mailed to the
holders of the Certificates and (iv) from time to time, such other information
concerning the Certificates which may be furnished by the Depositor, the Master
Servicer or the Special Servicer without undue expense and without violation of
applicable law or the Pooling and Servicing Agreement.
(k) The Depositor will file with the Commission within fifteen days of the
issuance of the Certificates a report on Form 8-K setting forth specific
information concerning the Certificates and the Mortgage Pool to the extent that
such information is not set forth in the Prospectus. The Depositor will also
file with the Commission a report on Form 8-K setting forth all Computational
Materials and ABS Term Sheets (as such terms are defined herein) provided to the
Depositor by any Underwriter and identified by it as such within the time period
allotted for such filing pursuant to the No-Action Letters; provided, however,
that prior to such filing of the
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Computational Materials and ABS Term Sheets by the Depositor, such Underwriter
must comply with its obligations pursuant to Section 4 and the Depositor must
receive a letter from Deloitte & Touche LLP, certified public accountants,
satisfactory in form and substance to the Depositor, to the effect that such
accountants have performed certain specified procedures, all of which have been
agreed to by the Depositor, as a result of which they have determined that the
information included in the Computational Materials and ABS Term Sheets (if
any), provided by such Underwriter to the Depositor for filing on Form 8-K
pursuant to Section 4 and this subsection (k), and that the accountants have
examined in accordance with such agreed upon procedures, is accurate except as
to such matters that are not deemed by the Depositor to be material. The
Depositor shall file any corrected Computational Materials or ABS Term Sheets
described in Section 4(c)(iv) as soon as practicable following receipt thereof.
Section 6. Conditions of Underwriters' Obligations.
Each Underwriter's obligation to purchase the Certificates allocated to it
as set forth on Schedule I hereto shall be subject to the accuracy in all
material respects of the representations and warranties on the part of the
Depositor contained herein as of the date hereof and as of the Closing Date, to
the performance by the Depositor in all material respects of its obligations
hereunder and to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending or, to the Depositor's knowledge, threatened by the Commission and the
Prospectus Supplement shall have been filed or transmitted for filing by means
reasonably calculated to result in a filing with the Commission pursuant to Rule
424(b) under the Act.
(b) On the Closing Date, such Underwriter shall have received:
(i) One or more opinions, dated the Closing Date, of counsel to the
Depositor, in form and substance satisfactory to such Underwriter, substantially
to the effect that:
(A) The Depositor is a corporation in good standing under the
laws of the State of Missouri.
(B) The Depositor has corporate power and authority to enter
into and perform its obligations under this Agreement and the Pooling and
Servicing Agreement.
(C) Each of this Agreement and the Pooling and Servicing
Agreement has been duly authorized, executed and delivered by the
Depositor. Upon due authorization, execution and delivery by the other
parties thereto, the Pooling and Servicing Agreement will constitute a
valid, legal and binding agreement of the Depositor, enforceable against
the Depositor in accordance with its terms, except as enforceability may be
limited by (1) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the enforcement
of the rights of creditors generally and (2) general principles of equity,
whether enforcement is sought in a proceeding in equity or at law.
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(D) When the Certificates, together with the other certificates
issued under the Pooling and Servicing Agreement, have been duly and
validly authorized, executed, authenticated, issued and delivered in
accordance with the Pooling and Servicing Agreement and paid for in
accordance with this Agreement and the certificate purchase agreement of
even date herewith between the Depositor and the Underwriters with respect
to the sale of the privately offered certificates to the Underwriters and
the Pooling and Servicing Agreement, the Certificates will be validly
issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement.
(E) The Registration Statement and any amendments thereto have
become effective under the 1933 Act and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act, and no proceedings for that purpose have
been initiated or threatened by the Commission.
(F) At the time it became effective, the Registration Statement
and each amendment thereto (other than any financial or statistical
information included or incorporated by reference therein, as to which no
opinion need be rendered), and at the time filed with the Commission, the
Prospectus and each supplement thereto (other than any financial or
statistical information included or incorporated by reference therein as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(G) To such counsel's knowledge, there are no material
contracts, indentures, or other documents of the Depositor required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto and other than any
documents required to be filed on Form 8-K within 15 days of the closing.
(H) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and the
issuance and sale of the Certificates in the manner contemplated by the
Prospectus will not cause the Depositor or the Trust Fund to be subject to
registration or regulation as an "investment company" under the Investment
Company Act of 1940, as amended.
(I) No consent, approval, authorization, or order of any New
York, Missouri or federal court or governmental agency or body is required
for the consummation by the Depositor of the transactions contemplated
herein, except (1) such as have been obtained, (2) such as may be required
under the blue sky or real estate syndication laws of any jurisdiction in
connection with the purchase and sale of the Certificates by the
Underwriters, as to which no opinion need be expressed and (3) any
recordation of the assignments of the Mortgage Loans to the Trustee
pursuant to the Pooling and Servicing Agreement that has not yet been
completed.
(J) Neither the sale of the Certificates to the Underwriters
pursuant to this Agreement, nor the consummation by the Depositor of any
other of the transactions
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contemplated by, or the fulfillment by the Depositor of the terms of, this
Agreement or the Pooling and Servicing Agreement, will conflict with or
result in a breach or violation of any term or provision of, or constitute
a default (or an event which with the passing of time or notification or
both, would constitute a default) under, (1) the articles of incorporation
or by-laws of the Depositor or, (2) to the knowledge of such counsel, any
indenture or other agreement or instrument to which the Depositor is a
party or by which it is bound, or (3) any New York, Missouri or federal
statute or regulation applicable to the Depositor or, (4) to the knowledge
of such counsel, any order of any New York, Missouri or federal court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor except, in the case of any of (2), (3) or
(4), for any conflict, breach, violation or default that, in the judgment
of such counsel, is not reasonably likely to materially and adversely
affect the Depositor's ability to perform its obligations under this
Agreement or the Pooling and Servicing Agreement.
(K) The statements set forth in the Prospectus Supplement under
the headings "DESCRIPTION OF THE CERTIFICATES" AND "THE POOLING AND
SERVICING AGREEMENT", insofar as such statements purport to summarize
certain provisions of the Certificates and the Pooling and Servicing
Agreement, provide a fair summary of such provisions.
(ii) An opinion, dated the Closing Date, of counsel to the
Underwriters, reasonably acceptable to the Underwriters.
(iii) In giving their opinions required by the foregoing subsections
(i) and (ii) of this Section, counsel to the Depositor and the Underwriters,
respectively, shall in each case additionally state that nothing has come to
such counsel's attention that would lead it to believe that the Prospectus
(other than any financial statements and supporting schedules and statistical
and/or accounting information included therein, as to which such counsel need
not comment), as of the date thereof or as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such statement shall be based upon,
among other things, conferences and telephone conversations with representatives
of the parties hereto, the Mortgage Loan Sellers, the Master Servicer, the
Special Servicer, the Trustee and the Fiscal Agent and such statement may be
qualified that, with limited exception, such counsel will not have reviewed any
loan documents.
(iv) Such opinion(s) may express its (their) reliance as to factual
matters on the representations and warranties made by, and on certificates or
other documents furnished by officers and/or authorized representatives of, the
parties to this Agreement and the Pooling and Servicing Agreement and on
certificates furnished by public officials. Such opinion(s) may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the party on behalf of which such
opinion is being rendered. Such opinion(s) may be qualified as an opinion only
on the General Corporation Law of the State of Delaware (if applicable to an
Underwriter), the laws of the State of New York, the laws of the State of
Missouri (if applicable to the Depositor) and the federal law of the United
States. Such opinion(s) may contain such other assumptions and qualifications
reasonably
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satisfactory to the Underwriters as counsel to the Depositor or an Underwriter,
as applicable, customarily makes in similar types of opinions relating to
similar transactions.
(c) On the Closing Date, each Underwriter shall have received a favorable
opinion, dated the Closing Date, of special tax and ERISA counsel to the
Depositor (i) regarding the qualification of each of REMIC I, REMIC II and REMIC
III as a real estate mortgage investment conduit within the meaning of Sections
860A through 860G of the Internal Revenue Code of 1986 and (ii) to the effect
that the statements in the Base Prospectus and the Prospectus Supplement under
the headings "Material Federal Income Tax Consequences" and "ERISA
Considerations", to the extent that they constitute matters of state or federal
law or legal conclusions with respect thereto, while not purporting to discuss
all possible consequences of investment in the Certificates, are correct in all
material respects with respect to those consequences or matters that are
discussed therein. Such opinion(s) may express its (their) reliance as to
factual matters on the representations and warranties made by, and on
certificates or other documents furnished by officers and/or authorized
representatives of, the parties to this Agreement and the Pooling and Servicing
Agreement and on certificates furnished by public officials. Such opinion(s) may
assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the party on
behalf of which such opinion is being rendered. Such opinion(s) may be qualified
as an opinion only on the federal tax and ERISA law of the United States. Such
opinion(s) may contain such other assumptions and qualifications reasonably
satisfactory to the Underwriters as such counsel customarily makes in similar
types of opinions relating to similar transactions.
(d) The Depositor shall have delivered to each Underwriter a certificate,
dated the Closing Date, of the President, an Executive Vice President or other
Vice President on behalf of the Depositor to the effect that the signer of such
certificate has examined, or has relied upon an examination conducted by
appropriate persons authorized by him or her of, this Agreement, the Prospectus,
the Pooling and Servicing Agreement and various other closing documents, and
that, to the best of his or her knowledge after reasonable investigation:
(i) the representations and warranties of the Depositor in this
Agreement and the Pooling and Servicing Agreement are true and correct in all
material respects;
(ii) the Depositor has, in all material respects, complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(iii) since the date of this Agreement, there has been no material
adverse change in the financial condition of the Depositor;
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission; and
(v) nothing has come to the attention of such person that would lead
the signer to believe that the Prospectus (other than any Computational
Materials or ABS Term Sheets
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incorporated therein by reference, as to which no opinion need be expressed)
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Each Mortgage Loan Seller shall have delivered to each Underwriter a
certificate, dated the Closing Date, of the President, a Senior or Executive
Vice President or other Vice President on its behalf to the effect that the
signer of such certificate has examined, or has relied upon an examination
conducted by appropriate persons authorized by him or her of, the Prospectus,
the Pooling and Servicing Agreement, the respective Mortgage Loan Purchase
Agreement, and various other closing documents, and that, to the best of his or
her knowledge after reasonable investigation:
(i) the representations and warranties of Mortgage Loan Seller in
the respective Mortgage Loan Purchase Agreement are true and correct in all
material respects;
(ii) Mortgage Loan Seller has, in all material respects, complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied under the respective Mortgage Loan Purchase Agreement at
or prior to the Closing Date; and
(iii) since the date of its respective Mortgage Loan Purchase
Agreement, there has been no material adverse change in the financial condition
of Mortgage Loan Seller.
(f) The Depositor and each Underwriter shall have received from Deloitte &
Touche LLP, certified public accountants, a letter dated the Closing Date, in
form and substance satisfactory to the Depositor and each Underwriter, stating
in effect that:
(i) they have performed certain specified procedures, as a result of
which they have determined that certain information of an accounting, financial
or statistical nature set forth in the Prospectus Supplement agrees with the
data sheet or computer tape prepared by or on behalf of each Mortgage Loan
Seller, unless otherwise noted in such letter; and
(ii) they have compared the data contained in the data sheet or
computer tape of RFC and CIBC referred to in the immediately preceding clause
(i) to information contained in the Mortgage Loan files of RFC and CIBC and in
such other sources as shall be specified by them, and found such data and
information to be in agreement unless otherwise noted in such letter.
(g) The Depositor and each Underwriter shall have received from Ernst and
Young, certified public accountants, a letter dated the Closing Date, in form
and substance satisfactory to the Depositor and each Underwriter, stating in
effect that they have compared the data contained in the data sheet or computer
tape of MLS to information contained in the Mortgage Loan files of MLS and in
such other sources as shall be specified by them, and found such data and
information to be in agreement unless otherwise noted in such letter.
(h) Each Underwriter shall have received, with respect to each of the
Master Servicer, the Special Servicer, the Fiscal Agent and the Trustee, a
favorable opinion of counsel, dated the Closing Date, addressing the valid
existence of such party under the laws of the jurisdiction of its
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organization, the due authorization, execution and delivery of the Pooling and
Servicing Agreement by such party, (subject to the same limitations as set forth
in Section 6(b)(i)(C)) the enforceability of the Pooling and Servicing Agreement
against such party and such other opinions as shall be reasonably requested by
such Underwriter. Such opinion may express its reliance as to factual matters on
representations and warranties made by, and on certificates or other documents
furnished by, officers and/or authorized representatives of parties to, the
Pooling and Servicing Agreement and on certificates furnished by public
officials. Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties thereto
other than the party on behalf of which such opinion is being rendered. Such
opinion may contain such other assumptions and qualifications reasonably
satisfactory to the Underwriters as counsel to such party customarily makes in
similar types of opinions relating to similar transactions.
(i) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of the Depositor or a Mortgage Loan Seller which such
Underwriter concludes, in the reasonable judgment of such Underwriter,
materially impairs the investment quality of the Certificates so as to make it
impractical or inadvisable to proceed with the public offering or the delivery
of the Certificates as contemplated by the Prospectus.
(j) The Mortgage Loan Sellers shall have sold the Mortgage Loans to
the Depositor pursuant to the Mortgage Loan Purchase Agreements.
(k) The Certificates shall have been assigned ratings no less than
those set forth on Schedule I and such ratings shall not have been withdrawn,
suspended or qualified.
(l) The Depositor shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriters may
reasonably have requested, and all proceedings in connection with the
transactions contemplated by this Agreement and all documents incident hereto
shall be in all material respects reasonably satisfactory in form and substance
to the Underwriters and their counsel.
Section 7. Indemnification.
(a) MLS and the Depositor shall indemnify and hold harmless each
Underwriter, its directors and officers and each person, if any, who controls
such Underwriter within the meaning of either Section 15 of the 1933 Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
from and against any and all expenses, losses, claims, damages and other
liabilities (including without limitation the reasonable costs of investigation
and legal defense) (the "Liabilities") to the extent caused by any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Preliminary Prospectus or the Prospectus or any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, insofar as the Liabilities are caused by
any such untrue statement or omission or alleged untrue statement or omission
with respect to any information in the Prospectus as to which such Underwriter
has agreed to indemnify the Depositor pursuant to
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Section 7(b), MLS and the Depositor shall have no obligation to so indemnify and
hold harmless.
(b) Each Underwriter shall, severally and not jointly, indemnify and hold
harmless the Depositor and MLS, their respective directors and officers who sign
the Registration Statement and each person, if any, who controls the Depositor
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all Liabilities, but only with respect to (i) untrue
statements or alleged untrue statements, or omissions or alleged omissions to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in the Underwriter
Information, (ii) any Liabilities arising out of or relating to claims asserted
by any person who purchased Certificates that are the subject thereof if such
person did not receive a copy of the Prospectus with the confirmation of the
sale of such Certificates to such person in any case where the untrue statement
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and the Prospectus was furnished to such
Underwriter, and (iii) untrue statements or alleged untrue statements, or
omissions or alleged omissions to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in the Computational Materials or ABS Term Sheets delivered to
purchasers of the Certificates by such Underwriter, to the extent that such
Computational Materials and ABS Term Sheets were prepared by such Underwriter
and incorporated by reference into the Registration Statement or the Prospectus
as a result of any filing pursuant to Section 5(k); provided, however, that such
Computational Materials shall not include any Computational Information (as
defined in the Indemnification Certificates) or any errors in the mathematical
calculations reflected in such Computational Materials to the extent such errors
result from such Computational Information; and provided, further, that any such
omission or alleged omission relating to the Computational Materials shall be
determined by reading such Computational Materials in conjunction with the
Prospectus as an integral document and in light of the circumstances under which
such statements in the Computational Materials and the Prospectus were made.
(c) Each indemnified party shall give notice in writing as promptly as
reasonably practicable to each party against whom such indemnity may be sought
(the "indemnifying party") of any action commenced against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve the indemnifying party, except to the
extent that the indemnifying party was prejudiced by such failure. However, the
failure to so notify an indemnifying party shall not relieve the indemnifying
party from any liability which it may have otherwise than on account of this
Agreement. Upon request of the indemnified party, the indemnifying party shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding as incurred. If any action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party may participate at its own expense in the defense of any such
action. To the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from the
indemnified party, the indemnifying party may elect to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party. In any
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the
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expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying party shall
have failed to designate within a reasonable period of time counsel reasonably
satisfactory to the indemnified party (in which case the fees and expenses shall
be paid as incurred by the indemnifying party). In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. An
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent. However, if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party shall
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel for which the
indemnifying party is obligated under this subsection, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. If an
indemnifying party assumes the defense of any proceeding, it shall be entitled
to settle such proceeding with the prior written consent of the indemnified
party or, if such settlement provides for an unconditional release of the
indemnified party in connection with all matters relating to the proceeding that
have been asserted against the indemnified party in such proceeding by the other
parties to such settlement, without the consent of the indemnified party.
(d) If the indemnification provided for in this Section 7 is due in
accordance with its terms but is for any reason held by a court to be
unavailable to an indemnified party under subsection (a) or (b) on grounds of
public policy or otherwise, then the indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Depositor on the one hand and the Underwriters on the other from the
offer and sale of the Certificates pursuant hereto or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Depositor on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or other liabilities,
as well as any other relevant equitable considerations. The relative benefits
received by the Depositor on the one hand, and the Underwriters on the other, in
connection with the offering of the Certificates shall be deemed to be in the
same respective proportions that the total net proceeds from the sale of the
Certificates (before deducting expenses) received by the Depositor and the total
underwriting discounts and commissions received by the Underwriters in
connection with the offering of the Certificates, bear to the aggregate offering
price of the Certificates. The relative fault of the Depositor on the one hand
and of such Underwriter on the
20
<PAGE>
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Depositor or by such Underwriter, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The parties hereto agree that it would not be just and equitable if
contribution, as determined by subsection (d) above, were determined by pro rata
allocation or by any other method of allocation that does not take account of
the considerations referred to in subsection (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
other liabilities referred to in this Section 7 shall be deemed to include any
legal fees and disbursements or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such claim.
In the event that any expenses so paid by the indemnifying party are
subsequently determined to not be required to be borne by the indemnifying party
hereunder, the party which received such payment shall promptly refund the
amount so paid to the party which made such payment. Notwithstanding the
provisions of this Section 7, such Underwriter shall not be required to
contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter in connection with the
offering of the Certificates exceeds the amount of damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies that may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution agreements contained in this Section 7
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Depositor, any
Underwriter, any of their respective directors or officers, or any person
controlling the Depositor or such Underwriter, and (iii) acceptance of and
payment for any of the Certificates.
(g) The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective amount of
Certificates they have purchased hereunder, and not joint.
(h) Each Underwriter will indemnify and hold harmless any other
Underwriter and each person, if any, who controls such other Underwriter within
the meaning of either the 1933 Act or the 1934 Act (the "Non-Indemnifying
Underwriter") from and against any and all losses, claims, damages or
liabilities, joint or several, to which the Non-Indemnifying Underwriter becomes
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement of material fact contained in any computational or
other written materials developed by, mailed or otherwise transmitted by such
indemnifying Underwriter, or any member of its selling group, in connection with
the Certificates or in any revision or amendment thereof or supplement thereto
or (ii) the
21
<PAGE>
failure of such indemnifying Underwriter, or any member of its selling group, to
comply with any provision of Section 9, and agrees to reimburse such
Non-Indemnifying Underwriter, as incurred for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. This agreement will be in
addition to any liability that any indemnifying Underwriter may otherwise have.
Section 8. Representations and Warranties to Survive Delivery.
All representations and warranties of the Depositor contained in this
Agreement shall remain operative and in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of any
Underwriter or any controlling person in respect of such Underwriter, and shall
survive delivery of the Certificates to the Underwriters.
Section 9. Defaulting Underwriter. If, on the Closing Date, any of the
Underwriters shall fail or refuse to purchase Certificates that it has agreed to
purchase hereunder on such date, and the aggregate principal amount of
Certificates which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Certificates to be purchased on such date, the other Underwriter(s) shall be
obligated to purchase the Certificates which such defaulting Underwriter agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Certificates that any Underwriter has agreed to purchase
pursuant to Section 3 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such principal amount of Certificates, without the
written consent of such Underwriter.
If, on the Closing Date, any of the Underwriters shall fail or refuse to
purchase Certificates that it has agreed to purchase hereunder on such date and
the aggregate principal amount of Certificates with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Certificates to be purchased on such date and arrangements satisfactory to the
non-defaulting Underwriter(s) and the Depositor for the purchase of such
Certificates are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or of the Depositor. In any such case any such non-defaulting Underwriter or the
Depositor shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
Section 10. Termination of Agreement.
(a) Any Underwriter may terminate its obligations under this Agreement,
by notice to the Depositor, at any time at or prior to the Closing Date if the
sale of the Certificates provided for herein is not consummated because of any
failure or refusal on the part of the Depositor to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Depositor shall be unable to perform its obligations under this Agreement.
(b) Any Underwriter may terminate its obligations under this Agreement in
the
22
<PAGE>
absolute discretion of such Underwriter, by notice given to the Depositor, if
(A) after the execution and delivery of this Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on or
by, as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Depositor or Mortgage Loan
Sellers or their respective affiliates shall have been suspended on any exchange
or in any over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
State of New York authorities, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of such Underwriter, is material and adverse and
(B) in the case of any of the events specified in clauses (A)(i) through (iv)
above, such event singly or together with any other such event, makes it, in the
judgment of such Underwriter, impracticable to market the Certificates on the
terms and in the manner contemplated in the Prospectus.
(c) If any Underwriter terminates its obligations under this Agreement in
accordance with Section 10(a), the Depositor shall reimburse such Underwriter
for all reasonable out-of pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by such Underwriter in
connection with this Agreement or the proposed purchase and sale of the
Certificates.
Section 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed duly given if sent by facsimile or delivered by courier, in
either case with appropriate confirmation of receipt. Notices to Morgan Stanley
& Co. Incorporated shall be directed to Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, Attention: Andrew Berman; notices to
Residential Funding Securities Corporation shall be directed to Residential
Funding Securities Corporation, 8400 Normandale Lake Blvd., Suite 600,
Minneapolis, Minnesota 55437, Attention: President; notices to Deutsche Bank
Securities Inc. shall be directed to Deutsche Bank Securities Inc., 31 West 52nd
Street, New York, New York 10019; notices to CIBC World Markets Corp. shall be
directed to CIBC Oppenheimer Tower, World Financial Center, 19th Floor, 200
Liberty Street, New York, New York 10281, Attention: Brian Jay Neilinger;
notices to PNC Capital Markets, Inc. shall be directed to One PNC Plaza, 26th
Floor, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2707, Attention: Craig
Grenci; notices to the Depositor shall be directed to Commercial Mortgage
Acceptance Corp., 210 West 10th Street, 6th Floor, Kansas City, Missouri 64105;
notices to MLS shall be directed to Midland Loan Services, Inc., 210 West 10th
Street, 6th Floor, Kansas City, Missouri 64105; and as to any party, to such
other address as may hereafter be furnished by such party to the others in
writing.
Section 12. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters and the Depositor and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or entity, other than the Underwriters and the Depositor and
their respective successors and the controlling persons and officers and
directors
23
<PAGE>
referred to in Sections 7 and 8 and their respective successors, heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Depositor and their respective
successors, and said controlling persons and officers and directors and their
respective successors, heirs and legal representatives, and for the benefit of
no other person or entity. No purchaser of Certificates from the Underwriters
shall be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said State.
Section 14. Miscellaneous.
This Agreement supersedes all prior or contemporaneous agreements and
understandings relating to the subject matter hereof. Neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated except by a
writing signed by the party against whom enforcement of such amendment, waiver,
discharge or termination is sought. This Agreement may be signed in any number
of duplicate originals, each of which shall be deemed an original, which taken
together shall constitute one and the same instrument.
24
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Depositor a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Depositor in accordance with its terms.
Very truly yours,
COMMERCIAL MORTGAGE
ACCEPTANCE CORP.
By: /s/ Leon E. Bergman
_______________________________________
Name: Leon E. Bergman
Title: Executive Vice President
MIDLAND LOAN SERVICES, INC.
By: /s/ Douglas D. Danforth
_______________________________________
Name: Douglas D. Danforth
Title: Executive Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Andrew Berman
_____________________________
Name: Andrew Berman
Title: Vice President
DEUTSCHE BANK SECURITIES INC.
By: /s/ Christopher Tognola /s/ Greg B. Hartch
_____________________________ ___________________________
Name: Christopher Tognola Name: Greg B. Hartch
Title: Vice President Title: Vice President
CIBC WORLD MARKETS CORP.
By: /s/ Brian Jay Neilinger
_____________________________
Name: Brian Jay Neilinger
Title: Executive Director
25
<PAGE>
PNC CAPITAL MARKETS, INC.
By: /s/ Craig Grenci
-------------------------------
Name: Craig Grenci
Title: Managing Director
RESIDENTIAL FUNDING SECURITIES CORPORATION
By: /s/ Lisa Lundster
_____________________________
Name: Lisa Lundster
Title: Director
26
<PAGE>
EXHIBIT A
_________
FORM OF LEGEND TO
COMPUTATIONAL MATERIALS AND ABS TERM SHEETS
This information is being delivered to a specific number of prospective
sophisticated investors in order to assist them in determining whether they have
an interest in the type of security described herein. It has been prepared
solely for informational purposes and is not an offer to buy or sell or a
solicitation of an offer to buy or sell any security or instrument or to
participate in any trading strategy. No representation or warranty can be given
with respect to the accuracy or completeness of the information, or with respect
to the terms of any future offer of securities conforming to the terms hereof.
Any such offer of securities would be made pursuant to a definitive Prospectus
or Private Placement Memorandum, as the case may be, prepared by the issuer
which could contain material information not contained herein and to which the
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded, amended and supplemented in its entirety
by such Prospectus or Private Placement Memorandum. Such Prospectus or Private
Placement Memorandum will contain all material information in respect of any
securities offered thereby and any decision to invest in such securities should
be made solely in reliance upon such Prospectus or Private Placement Memorandum.
Certain assumptions may have been made in this analysis which have resulted in
any returns detailed herein. No representation is made that any returns
indicated will be achieved. Changes to the assumptions may have a material
impact on any returns detailed. Morgan Stanley & Co. Incorporated, Deutsche Bank
Securities Inc., CIBC World Markets Corp., PNC Capital Markets, Inc. and
Residential Funding Securities Corporation (collectively the "Underwriters")
disclaim any and all liability relating to this information, including without
limitation any express or implied representations and warranties for, statements
contained in, and omissions from, this information. Additional information is
available upon request. The Underwriters and others associated with them may
have positions in, and may effect transactions in, securities and instruments of
issuers mentioned herein and may also perform or seek to perform investment
banking services for the issuers of such securities and instruments. Past
performance is not necessarily indicative of future results. Price and
availability are subject to change without notice. This material may be filed
with the Securities and Exchange Commission (the "SEC") and incorporated by
reference into an effective registration statement previously filed with the SEC
under Rule 415 of the Securities Act of 1933, including in cases where the
material does not pertain to securities that are ultimately offered for sale
pursuant to such registration statement. To Morgan Stanley's readers worldwide:
In addition, please note that this publication has been issued by Morgan Stanley
& Co. Incorporated, approved by Morgan Stanley International Limited, a member
of The Securities and Futures Authority, and by Morgan Stanley Japan Ltd. Morgan
Stanley recommends that such readers obtain the advice of their Morgan Stanley &
Co. Incorporated, Morgan Stanley International or Morgan Stanley Japan Ltd.
representative about the investments concerned.
27
<PAGE>
SCHEDULE 1
__________
Commercial Mortgage Acceptance Corp. Commercial Mortgage Pass-Through
Certificates, Series 1999-C1
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Underwriter Class A-1 Class A-2 Class B Class C Class D Class E Class F Class X
----------- --------- --------- ------- ------- ------- ------- ------- -------
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley &
Co. Incorporated $88,000,000 $292,013,000 $33,021,000 $34,856,000 $11,007,000 $23,848,000 $12,842,000 $733,801,915
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank $13,000,000 $40,000,000 $0 $0 $0 $0 $0 $0
Securities Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
CIBC World $10,000,000 $30,000,000 $0 $0 $0 $0 $0 $0
Markets Corp.
- ------------------------------------------------------------------------------------------------------------------------------------
PNC Capital $10,000,000 $10,000,000 $0 $0 $0 $0 $0 $0
Markets, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Residential $12,500,000 $37,500,000 $0 $0 $0 $0 $0 $0
Funding Securities
Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
Total $133,500,000 $409,513,000 $33,021,000 $34,856,000 $11,007,000 $23,848,000 $12,842,000 $733,801,915
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1
----------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Initial Aggregate
Principal (or, in the case of Initial
Class Class X Certificates, Pass-Through Purchase
Designation Notional) Amount of Class<F1> Rate Price<F2> Rating<F3>
----------- --------------------------- ---- ------- --------
- ----------------------------------------------------------------------------------------------------
A-1 $133,500,000 6.86% 100.0340% AAA/Aaa
- ----------------------------------------------------------------------------------------------------
A-2 $409,513,000 7.28% 100.0431% AAA/Aaa
- ----------------------------------------------------------------------------------------------------
B $33,021,000 7.43% 100.0352% AA/Aa2
- ----------------------------------------------------------------------------------------------------
C $34,856,000 NWAC - 0.17% 99.9844% A/A2
- ----------------------------------------------------------------------------------------------------
D $11,007,000 NWAC 100.0005% A-/A3
- ----------------------------------------------------------------------------------------------------
E $23,848,000 NWAC 99.4418% BBB/Baa2
- ----------------------------------------------------------------------------------------------------
F $12,842,000 NWAC 94.6146% BBB-/Baa3
- ----------------------------------------------------------------------------------------------------
X $733,801,915 NWAC 4.1518% BBB-/Baa3
- ----------------------------------------------------------------------------------------------------
- --------
<FN>
<F1> Subject to a variance of plus or minus 5.0%
<F2> Expressed as a percentage of the aggregate stated or notional amount, as
applicable, of the relevant class of Certificates to be purchased. The
purchase price for each class of the Certificates will include accrued
interest at the initial Pass-Through Rate therefor on the aggregate stated
or notional amount, as applicable, thereof to be purchased from the
Cut-Off Date to but not including the Closing Date.
<F3> By each of DCR and Moody's.
</FN>
</TABLE>
CONFORMED COPY
COMMERCIAL MORTGAGE ACCEPTANCE CORP.,
DEPOSITOR
MIDLAND LOAN SERVICES, INC.,
MASTER SERVICER
ORIX REAL ESTATE CAPITAL MARKETS, LLC
SPECIAL SERVICER
LASALLE BANK NATIONAL ASSOCIATION,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 1999
Commercial Mortgage Pass-Through Certificates
Series 1999-C1
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms ..............................................4
SECTION 1.2. Certain Calculations ......................................48
SECTION 1.3. Certain Constructions .....................................48
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of Mortgage Loans ...............49
SECTION 2.2. Acceptance by the Custodian and the Trustee ...............53
SECTION 2.3. Seller's Repurchase of Mortgage Loans for Document Defaults
and Breaches of Representations and Warranties. ...........55
SECTION 2.4. Representations and Warranties of the Depositor ...........56
SECTION 2.5. Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer .........................59
SECTION 2.6. Execution and Delivery of Certificates; Issuance of REMIC I
Regular Interests and REMIC II Regular Interests ..........62
SECTION 2.7. Documents Not Delivered to Custodian. .....................63
ARTICLE III
ADMINISTRATION AND SERVICING
SECTION 3.1. Master Servicer to Act as Master Servicer; Special Servicer to
Act as Special Servicer; Administration of the Mortgage Loans
63
SECTION 3.2 Sub-Servicing .............................................65
SECTION 3.3. Collection of Certain Mortgage Loan Payments ..............67
SECTION 3.4. Collection of Taxes, Assessments and Similar Items ........67
SECTION 3.5. Collection Account; Distribution Account ..................69
SECTION 3.6. Permitted Withdrawals from the Collection Account .........70
SECTION 3.7. Investment of Funds in the Collection Account, the
Distribution Account and the Reserve Accounts .............72
SECTION 3.8. Maintenance of Insurance Policies and Errors and Omissions and
Fidelity Coverage .........................................73
i
<PAGE>
SECTION 3.9. Enforcement of Due-On-Sale Clauses; Assumption Agreements..77
SECTION 3.10 Realization Upon Mortgage Loans............................78
SECTION 3.11 Trustee to Cooperate; Release of Mortgage Files............82
SECTION 3.12 Servicing Compensation.....................................82
SECTION 3.13 Reports to the Trustee; Collection Account Statements......85
SECTION 3.14 Annual Statement as to Compliance..........................85
SECTION 3.15 Annual Independent Public Accountants' Servicing Report....86
SECTION 3.16 Access to Certain Documentation............................86
SECTION 3.17 Title and Management of REO Properties.....................86
SECTION 3.18 Sale of Specially Serviced Mortgage Loans
and REO Properties.........................................91
SECTION 3.19 Inspections................................................93
SECTION 3.20 Available Information and Notices..........................94
SECTION 3.21 Reserve Accounts...........................................96
SECTION 3.22 Servicing Advances.........................................96
SECTION 3.23 Appraisal Reductions.......................................97
SECTION 3.24 Transfer of Servicing Between Master Servicer and Special
Servicer; Record Keeping...................................98
SECTION 3.25 Adjustment of Servicing Compensation in Respect of
Prepayment Interest Shortfalls............................100
SECTION 3.26 Operating Advisor; Elections..............................100
SECTION 3.27 Appointment of Special Servicer; Duties of
Operating Adviser.........................................101
SECTION 3.28 Modifications, Waivers, Amendments, Extensions and
Consents, Defeasance......................................103
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1 Distributions of REMIC I ..................................107
SECTION 4.2 Distributions of REMIC II .................................108
SECTION 4.3 Distributions of REMIC III ................................114
SECTION 4.4. Statements to Rating Agencies and Certificateholders;
Available Information ....................................121
SECTION 4.5. Remittances; P&I Advances ................................124
SECTION 4.6. Allocation of Realized Losses and Expense Losses .........125
SECTION 4.7. Distributions in General .................................126
ii
<PAGE>
SECTION 4.8. Compliance with Withholding Requirements .................128
ARTICLE V
THE CERTIFICATES
SECTION 5.1 The Certificates .........................................129
SECTION 5.2. Registration, Transfer and Exchange of Certificates.......130
SECTION 5.3. Book-Entry Certificates ..................................135
SECTION 5.4. Mutilated, Destroyed, Lost or Stolen Certificates.........136
SECTION 5.5. Appointment of Paying Agent ..............................136
SECTION 5.6. Access to Certificateholders' Names and Addresses.........137
SECTION 5.7. Actions of Certificateholders ............................137
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master Servicer and the
Special Servicer .........................................138
SECTION 6.2. Merger or Consolidation of the Master Servicer and Special
Servicer .................................................138
SECTION 6.3. Limitation on Liability of the Depositor, the Master Servicer
and Others ...............................................139
SECTION 6.4. Limitation on Resignation of the Master Servicer and of the
Special Servicer .........................................140
SECTION 6.5. Rights of the Depositor and the Trustee in Respect of the
Master Servicer and the Special Servicer .................141
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default ........................................141
SECTION 7.2. Trustee to Act; Appointment of Successor .................144
SECTION 7.3. Notification to Certificateholders .......................145
SECTION 7.4. Other Remedies of Trustee ................................145
SECTION 7.5. Waiver of Past Events of Default; Termination ............146
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee ........................................146
SECTION 8.2. Certain Matters Affecting the Trustee ....................148
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage Loans.....150
iii
<PAGE>
SECTION 8.4. Trustee May Own Certificates .............................151
SECTION 8.5. Payment of Trustee Fees and Expenses; Indemnification.....151
SECTION 8.6. Eligibility Requirements for Trustee .....................153
SECTION 8.7. Resignation and Removal of the Trustee ...................153
SECTION 8.8. Successor Trustee ........................................154
SECTION 8.9. Merger or Consolidation of Trustee .......................155
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.............156
SECTION 8.11 Authenticating Agent......................................157
SECTION 8.12 Appointment of Custodians.................................158
SECTION 8.13 Fiscal Agent Appointed; Concerning the Fiscal Agent.......158
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust .....................................162
SECTION 9.2. Procedure Upon Termination of Trust ......................163
SECTION 9.3. Additional Trust Termination Requirements ................164
ARTICLE X
REMIC ADMINISTRATION
SECTION 10.1 REMIC Election............................................165
SECTION 10.2 REMIC Compliance..........................................166
SECTION 10.3 Imposition of Tax on the Trust Fund.......................168
SECTION 10.4 Prohibited Transactions and Activities....................169
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 Counterparts..............................................169
SECTION 11.2 Limitation on Rights of Certificateholders................169
SECTION 11.3 Governing Law.............................................170
SECTION 11.4 Notices...................................................170
SECTION 11.5 Severability of Provisions................................173
SECTION 11.6 Notice to the Depositor, the Operating Adviser and
Each Rating Agency........................................173
SECTION 11.7 Amendment.................................................175
SECTION 11.8 Confirmation of Intent....................................178
iv
<PAGE>
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class X Certificate
Exhibit A-4 Form of Class B Certificate
Exhibit A-5 Form of Class C Certificate
Exhibit A-6 Form of Class D Certificate
Exhibit A-7 Form of Class E Certificate
Exhibit A-8 Form of Class F Certificate
Exhibit A-9 Form of Class G Certificate
Exhibit A-10 Form of Class H Certificate
Exhibit A-11 Form of Class J Certificate
Exhibit A-12 Form of Class K Certificate
Exhibit A-13 Form of Class L Certificate
Exhibit A-14 Form of Class M Certificate
Exhibit A-15 Form of Class N Certificate
Exhibit A-16 Form of Class O Certificate
Exhibit A-17 Form of Class P Certificate
Exhibit A-18 Form of Class R-I Certificate
Exhibit A-19 Form of Class R-II Certificate
Exhibit A-20 Form of Class R-III Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Form of Custodial Agreement
Exhibit G Privately Placed Securities Legend
Exhibit H Form of Monthly Distribution Statement
v
<PAGE>
Pooling and Servicing Agreement, dated as of July 1, 1999 among
Commercial Mortgage Acceptance Corp., as Depositor, Midland Loan Services, Inc.,
as Master Servicer, ORIX Real Estate Capital Markets, LLC (formerly known as
Banc One Mortgage Capital Markets, LLC), as Special Servicer, LaSalle Bank
National Association, as Trustee, and ABN AMRO Bank N.V., as Fiscal Agent.
PRELIMINARY STATEMENT:
Terms used but not defined in this Preliminary Statement shall have
the meanings specified in Article I.
The Depositor intends to sell pass-through certificates to be issued
hereunder in multiple classes which in the aggregate will evidence the entire
beneficial ownership interest in the Trust Fund consisting primarily of the
Mortgage Loans. On the Closing Date, the Depositor will acquire (i) the REMIC I
Regular Interests and the Class R-I Certificates as consideration for its
transfer to the Trust Fund of the Mortgage Loans and the other property
constituting the Trust Fund described in the definition of "REMIC I"; (ii) the
REMIC II Regular Interests and the Class R-II Certificates as consideration for
its transfer of the REMIC I Regular Interests to the Trust Fund; and (iii) the
REMIC III Certificates as consideration for its transfer of the REMIC II Regular
Interests to the Trust Fund. The Depositor has duly authorized the execution and
delivery of this Agreement to provide for the foregoing and the issuance of (a)
the REMIC I Regular Interests and the Class R-I Certificates representing in the
aggregate the entire beneficial ownership of REMIC I, (b) the REMIC II Regular
Interests and the Class R-II Certificates representing in the aggregate the
entire beneficial ownership of REMIC II and (c) the REMIC III Certificates
representing in the aggregate the entire beneficial ownership of REMIC III.
REMIC I
As provided herein, the Trustee will make the election described in
Section 10.1 hereof for the segregated pool of assets consisting of the Mortgage
Loans and certain related assets to be treated for federal income tax purposes
as a real estate mortgage investment conduit (a "REMIC" and, such particular
segregated pool of assets, "REMIC I"). The REMIC I Regular Interests will be
designated as the "regular interests" in REMIC I and the Class R-I Certificates
will be designated as the sole class of "residual interests" in REMIC I.
A separate uncertificated REMIC I Regular Interest will be issued
with respect to each Mortgage Loan. Each REMIC I Regular Interest will represent
the right to receive principal corresponding to the initial Stated Principal
Balance of a related Mortgage Loan and interest thereon at a remittance rate
(the "REMIC I Remittance Rate") equal to the Net Mortgage Rate of the related
Mortgage Loan in effect as of the Closing Date. For purposes of Treasury
Regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each REMIC I Regular Interest shall be the Rated Final Distribution Date. The
Class R-I Certificates will represent the sole class of residual interests in
REMIC I for purposes of the REMIC Provisions and will have no principal balances
and no remittance rate, but will be entitled to receive on each Distribution
Date any portion of the Available Funds for such Distribution Date not otherwise
deemed distributed on the REMIC I Regular Interests.
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The Class R-I Certificates will be designated as the sole class of
residual interests in REMIC I and will have no principal balance and no
pass-through rate, but will be entitled to receive on each Distribution Date any
portion of the Available Funds for such Distribution Date not otherwise deemed
distributed on the REMIC I Regular Interests.
REMIC II
As provided herein, the Trustee will make the election described in
Section 10.1 hereof for the segregated pool of assets consisting of the REMIC I
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC II"). The REMIC II Regular
Interests will be designated as representing the "regular interests" in REMIC II
and the Class R-II Certificates will be designated as representing the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
Sixteen separate uncertificated classes of REMIC II Regular Interests
will be issued and are designated as the "regular interests" in REMIC II. The
following table irrevocably sets forth the designation and initial
Uncertificated Principal Balance for each REMIC II Regular Interest.
REMIC II Regular Interests
-------------------------------------------------
Initial Uncertificated
Designation Principal Balance
-------------------------------------------------
Class A-1-II Interest $133,500,000
-------------------------------------------------
Class A-2-II Interest 409,513,000
-------------------------------------------------
Class B-II Interest 33,021,000
-------------------------------------------------
Class C-II Interest 34,856,000
-------------------------------------------------
Class D-II Interest 11,007,000
-------------------------------------------------
Class E-II Interest 23,848,000
-------------------------------------------------
Class F-II Interest 12,842,000
-------------------------------------------------
Class G-II Interest 1,834,000
-------------------------------------------------
Class H-II Interest 12,842,000
-------------------------------------------------
Class J-II Interest 20,179,000
-------------------------------------------------
Class K-II Interest 5,504,000
-------------------------------------------------
Class L-II Interest 7,338,000
-------------------------------------------------
Class M-II Interest 9,172,000
-------------------------------------------------
Class N-II Interest 5,504,000
-------------------------------------------------
Class O-II Interest 3,669,000
-------------------------------------------------
Class P-II Interest 9,172,915
-------------------------------------------------
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For purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" of each REMIC II Regular Interest shall be the
Rated Final Distribution Date. The Class R-II Certificate will be designated as
the sole class of residual interests in REMIC II and will have no scheduled
principal balance and no pass-through rate, but will be entitled to receive on
each Distribution Date any portion of the REMIC II Distribution Amount for such
Distribution Date not otherwise deemed distributed on the REMIC II Regular
Interests.
REMIC III
As provided herein, the Trustee will make the election described in
Section 10.1 for the segregated pool of assets hereof consisting of the REMIC II
Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC III"). The REMIC III Regular
Certificates will be designated as representing the "regular interests" in REMIC
III and the Class R-III Certificates will be designated as representing the sole
class of "residual interests" in REMIC III for purposes of the REMIC Provisions.
Seventeen separate Classes of REMIC III Regular Certificates will be
issued. The following table irrevocably sets forth the designation, the initial
pass-through rate (the "Pass-Through Rate"), and the initial aggregate
certificate principal balance or notional amount for each Class of REMIC III
Regular Certificates.
REMIC III Regular Certificates
Initial Aggregate Certificate
Designation Initial Pass-Through Rate(1) Balance or Notional Amount
Class A-1 6.790% $133,500,000
Class A-2 7.030% $409,513,000
Class X 0.838% $733,801,915
Class B 7.200% $33,021,000
Class C 7.526% $34,856,000
Class D 7.626% $11,007,000
Class E 7.886% $23,848,000
Class F 7.886% $12,842,000
Class G 6.790% $1,834,000
Class H 6.790% $12,842,000
Class J 6.790% $20,179,000
Class K 6.790% $5,504,000
Class L 6.790% $7,338,000
Class M 6.790% $9,172,000
Class N 6.790% $5,504,000
Class O 6.790% $3,669,000
Class P 6.790% $9,172,915
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(1)On each Distribution Date after the initial Distribution Date, the
Pass-Through Rate for each Class of REMIC III Regular Certificates will be
determined as described herein under the definition of "Pass-Through Rate."
For purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii), the
"latest possible maturity date" of each Class of REMIC III Regular Certificates
shall be the Rated Final Distribution Date. The Class R-III Certificates will
have no principal balances and no pass-through rate, but will be entitled to
receive on each Distribution Date any portion of the REMIC III Distribution
Amount for such Distribution Date not otherwise deemed distributed on the REMIC
III Regular Certificates.
The Certificate Balance of any Class of Certificates outstanding at
any time represents the maximum amount which holders thereof are entitled to
receive as distributions allocable to principal from the cash flow on the
Mortgage Loans and the other assets in the Trust Fund.
As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to approximately $733,801,916.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Special Servicer, the Trustee and the Fiscal
Agent agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article.
"Accrued Certificate Interest": With respect to any Class of REMIC
III Regular Certificates (other than the class X Certificates) for any
Distribution Date, the amount of interest for the applicable Interest Accrual
Period accrued at the applicable Pass-Through Rate on the aggregate Certificate
Balance of such Class of Certificates as of the close of the preceding
Distribution Date (or, in the case of the first Distribution Date, as of the
Cut-off Date). Accrued Certificate Interest on the Class X Certificates for each
Distribution Date will equal the Class X Interest Amount. The Accrued
Certificate Interest in respect of each Class of REMIC III Regular Certificates
for each Distribution Date shall accrue on the basis of a 360-day year
consisting of twelve 30-day months.
"Additional Midland Mortgage Loan Purchase Agreement": The
Mortgage Loan Purchase and Sale Agreement, dated July 15, 1999, between Midland
and Depositor.
"Additional MLS Loans": The Mortgage Loans transferred and
assigned to Depositor by Midland pursuant to the Additional Midland Mortgage
Loan Purchase Agreement.
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"Additional Trust Fund Expense": Any of the following items: (a)
Special Servicing Fees, Disposition Fees and Workout Fees; (b) Advance Interest
Amounts not paid out of Default Interest or late payment charges; (c) amounts
paid by the Trust to indemnify the Depositor, the Master Servicer, the Special
Servicer, the Trustee, the Fiscal Agent or any other Person pursuant to the
terms of this Agreement; (d) the items described in Section 3.10(e); (e) to the
extent not covered by indemnification by one of the parties hereto or paid by a
source other than the Trust Fund, any federal, state or local taxes imposed on
the Trust Fund or any of its assets or transactions; (f) the cost of all
Opinions of Counsel required or permitted hereunder to be obtained in connection
with the servicing of the Mortgage Loans and the administration of the Trust
Fund and not otherwise required hereunder to be paid by a source other than the
Trust Fund; and (g) to the extent not included in the calculation of a Realized
Loss and not covered by indemnification by one of the parties hereto or
otherwise, any other unanticipated cost, liability, or expense of the Trust
which the Trust has not recovered, and in the judgment of the Master Servicer
(or, in the case of a Specially Serviced Mortgage Loan, the Special Servicer)
will not recover, from the related Mortgagor or Mortgaged Property or otherwise.
"Advance": Any P&I Advance or Servicing Advance.
"Advance Interest Amount": The sum for all Mortgage Loans as to which
any Advance remains unreimbursed of interest at the related Advance Rate on the
amount of any P&I Advances and Servicing Advances for which the Master Servicer,
the Trustee or the Fiscal Agent, as applicable, has not been paid or reimbursed
for the number of days from the date on which such Advance was made or, if
interest has been previously paid on such Advance, from the date on which
interest was last paid, through the date of payment or reimbursement of the
related Advance (which in no event shall be later than the Determination Date
following the date on which funds are available to reimburse such Advance with
interest thereon at the Advance Rate); provided, however, that neither the
Master Servicer nor any other party shall be entitled to interest accrued on the
amount of any P&I Advance with respect to Loan Numbers 56, 131, and 192, for the
period commencing on the date of such P&I Advance and ending on the day on which
the grace period applicable to the related Borrower's obligation to make the
related Monthly Payment expires pursuant to the related Mortgage Loan Documents.
"Advance Rate": A per annum rate equal to the Prime Rate (as
published in The Wall Street Journal, or, if The Wall Street Journal is no
longer published, such other publication determined by the Trustee (with the
concurrence of the Master Servicer) in its reasonable discretion from time to
time).
"Adverse REMIC Event": As defined in Section 10.2(d).
"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.
The Trustee may obtain and rely on an
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Officer's Certificate of the Master Servicer, the Special Servicer or the
Depositor to determine whether any Person is an Affiliate of such party.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Applicable Monthly Payment": As defined in Section 4.5(a).
"Applicant": As defined in Section 5.6(a).
"Appraisal Reduction Event": With respect to the first Distribution
Date following the earliest of (i) the third anniversary of the date on which an
extension of the maturity date of a Mortgage Loan becomes effective as a result
of a modification of such Mortgage Loan by the Special Servicer, which extension
does not change the amount of Monthly Payments on the Mortgage Loan, (ii) 90
days after an uncured delinquency occurs in respect of a Mortgage Loan, (iii) 45
days after the date on which a reduction in the amount of Monthly Payments on a
Mortgage Loan, or a change in any other material economic term of the Mortgage
Loan, becomes effective as a result of a modification of such Mortgage Loan by
the Special Servicer, (iv) 30 days after a receiver has been appointed or after
the commencement of an involuntary bankruptcy proceeding, (v) immediately after
a borrower declares bankruptcy, and (vi) immediately after a Mortgage Loan
becomes an REO Mortgage Loan. The Special Servicer shall notify the Master
Servicer and the Master Servicer shall notify the Special Servicer, as
applicable, promptly upon receiving notice of the occurrence of any of the
foregoing events.
"Appraisal Reduction": For any Mortgage Loan as to which any
Appraisal Reduction Event has occurred, an amount equal to (a) the outstanding
Stated Principal Balance of such Mortgage Loan as of the last day of the related
Collection Period less (b) the excess of (i) 90% of the sum of the appraised
values of the related Mortgaged Properties as determined by independent MAI
appraisals (the costs of which shall be paid by the Master Servicer as an
Advance) over (ii) the sum of (A) to the extent not previously advanced by the
Master Servicer, the Trustee or the Fiscal Agent, all unpaid interest on such
Mortgage Loan at a per annum rate equal to the Mortgage Rate, (B) all
unreimbursed Advances and interest thereon at the Advance Rate in respect of
such Mortgage Loan, (C) all currently due and unpaid real estate taxes and
assessments and insurance premiums and all other amounts, including, if
applicable, ground rents, due and unpaid under the Mortgage Loan (which taxes,
premiums and other amounts have not been escrowed or the subject of an Advance),
(D) unpaid compensation owed to the Special Servicer, and (E) the Special
Servicer's good faith estimate of the items in clauses (B), (C) and (D) that
will be incurred during the next 12 months.
"Asset Status Report": As defined in Section 3.24(e).
"Assignment of Leases, Rents and Profits": With respect to any
Mortgaged Property, any assignment of leases, rents and profits or similar
agreement executed by the Borrower, assigning to the 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
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<PAGE>
form which was duly executed, acknowledged and delivered by the Borrower, as
amended, modified, renewed or extended through the date hereof and from time to
time hereafter.
"Assignment of Mortgage": An assignment of mortgage without recourse,
notice of transfer or equivalent instrument, in recordable form, which is
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect of record the sale of the related Mortgage, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages encumbering Mortgaged
Properties located in the same jurisdiction, if permitted by law and acceptable
for recording; provided, however, that none of the Trustee, the Fiscal Agent,
the Custodian, the Special Servicer or the Master Servicer shall be responsible
for determining whether any assignment is legally sufficient or in recordable
form.
"Assumed Monthly Payment": (a) with respect to any Balloon Mortgage
Loan (other than a Balloon Mortgage Loan that has become a REO Mortgage Loan)
for its Stated Maturity Date (provided that such Mortgage Loan has not been paid
in full, and no other Liquidation Event has occurred in respect thereof, on or
before the end of the Collection Period in which such Stated Maturity Date
occurs) and for any subsequent Due Date therefor as of which such Mortgage Loan
remains outstanding and part of the Trust Fund, if no Monthly Payment (other
than the related delinquent Balloon Payment) is otherwise due for such Due Date,
the scheduled monthly payment of principal and/or interest deemed to be due in
respect thereof for such Due Date equal to the Monthly Payment (other than any
related delinquent Balloon Payment) that would have been due in respect of such
Mortgage Loan on such Due Date if it had been required to continue to accrue
interest in accordance with its terms, and to pay principal in accordance with
the amortization schedule (if any), in effect immediately prior to, and without
regard to the occurrence of, its most recent scheduled Maturity Date; and (b)
with respect to any REO Mortgage Loan, for any Due Date therefor as of which the
related REO Property remains part of the Trust Fund, the scheduled monthly
payment of principal and/or interest deemed to be due in respect thereof on such
Due Date equal to the Monthly Payment (or, in the case of a Balloon Mortgage
Loan described in clause (a) of this definition, the Assumed Monthly Payment)
that was due in respect of the subject Mortgage Loan for the last Due Date prior
to its becoming an REO Mortgage Loan.
"Authenticating Agent": Any authenticating agent appointed by the
Trustee pursuant to Section 8.11.
"Available Funds": (x) With respect to REMIC I and each
Distribution Date, (a) the Master Servicer Remittance Amount, plus
(b) if the Distribution Date occurs during March of any year, the Interest
Reserve Amounts in the Interest Reserve Account; less
(c) if the Distribution Date occurs during February of any year or January of
any non-leap year, the Interest Reserve Amounts for the Interest Reserve Loans
to be deposited in the Interest Reserve Account;
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(y) with respect to REMIC II and any Distribution Date, all amounts distributed
on the REMIC I Regular Interests; and
(z) with respect to REMIC III and any Distribution Date, all amounts distributed
on the REMIC II Regular Interests.
"Balloon Loan": A Mortgage Loan which provides for monthly payments
of principal based on an amortization schedule longer than its remaining term,
thereby leaving substantial principal amounts due and payable on its Maturity
Date.
"Balloon Payment": With respect to each Balloon Loan, the scheduled
payment of principal and interest due on the Maturity Date of such Balloon Loan
which, pursuant to the related Note, is equal to the entire remaining principal
balance of such Balloon Loan, plus accrued interest thereon.
"Borrower": With respect to each Mortgage Loan, any obligor on any
related Note.
"Book-Entry Certificate": Any Certificate registered in the name
of the Securities Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day
on which banking institutions in the States of New York, Illinois or Missouri
are authorized or obligated by law, executive order or governmental decree to
be closed.
"Cash Deposit": An amount equal to all cash payments of principal and
interest received by the applicable Seller in respect of the Mortgage Loans two
or more Business Days prior to the Closing Date which are due after the Cut-off
Date, which amount is to be deposited in the Collection Account by the Depositor
pursuant to Section 2.1.
"CEDEL": Citibank, N.A., as depositary for CEDEL Bank, S.A., or
its successor in such capacity.
"Certificate": Any Class A-1, Class A-2, Class X, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M,
Class N, Class O, Class P, Class R-I, Class R-II or Class R-III Certificate
issued, authenticated and delivered hereunder.
"Certificate Balance": With respect to any Class of REMIC III Regular
Certificates (other than the Class X Certificates) (a) on or prior to the first
Distribution Date, an amount equal to the aggregate initial Certificate Balance
of such Class, as specified in the Preliminary Statement hereto, and (b) as of
any date of determination after the first Distribution Date, the Certificate
Balance of such Class of Certificates on the Distribution Date immediately prior
to such date of determination, after application of the distributions and
Realized Losses and Expense Losses made thereon on such prior Distribution Date.
The Class X Certificates have no Certificate Balance.
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"Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate as reflected on the books
of the Securities Depository or on the books of a Securities Depository
Participant or on the books of an indirect participating brokerage firm for
which a Securities Depository Participant acts as agent.
"Certificate Register" and "Certificate Registrar": The register
maintained and the registrar appointed pursuant to Section 5.2(a).
"Certificate Purchase Agreement": means the Certificate Purchase
Agreement dated July 15, 1999 between Depositor, Midland and Morgan Stanley &
Co. Incorporated, as the initial purchaser.
"Certificateholder": With respect to any Certificate, the Person
whose name is registered in the Certificate Register; provided, however, that,
except to the extent provided in the next proviso, solely for the purpose of
giving any consent or taking any action pursuant to this Agreement, any
Certificate beneficially owned by the Depositor, the Master Servicer, the
Special Servicer, the Trustee, a Manager of a Mortgaged Property, a Borrower or
any Person known to a Responsible Officer of the Certificate Registrar to be an
Affiliate of the Depositor, the Trustee, the Master Servicer or the Special
Servicer 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 or take any
such action has been obtained; provided, however, that (i) for purposes of
obtaining the consent of Certificateholders to an amendment of this Agreement,
any Certificates beneficially owned by the Master Servicer or the Special
Servicer or an Affiliate thereof shall be deemed to be outstanding, provided,
that, such amendment does not relate to compensation of the Master Servicer or
the Special Servicer or benefit the Master Servicer or the Special Servicer (in
its capacity as such) or any Affiliate thereof (other than solely in its
capacity as Certificateholder) in any material respect, in which case such
Certificate shall be deemed not to be outstanding; and (ii) for purposes of
obtaining the consent of Certificateholders to any action proposed to be taken
by the Special Servicer with respect to a Specially Serviced Mortgage Loan, any
Certificates beneficially owned by the Master Servicer, the Special Servicer or
an Affiliate thereof shall be deemed to be outstanding. For purposes of
obtaining the consent of Certificateholders to any action with respect to a
particular Mortgage Loan proposed to be taken by the Master Servicer or Special
Servicer, any Certificates beneficially owned by the Affiliates of the related
Borrower, the related Manager, or Affiliates of the related Manager shall not be
deemed to be outstanding.
Notwithstanding the foregoing, solely for purposes of providing or
distributing any reports, statements or other information required or permitted
to be provided to a Certificateholder hereunder, a Certificateholder shall
include any Certificate Owner, or any Person identified by a Certificate Owner
as a prospective transferee of a Certificate beneficially owned by such
Certificate Owner but only if the Trustee or another party hereto furnishing
such report, statement or information has been provided with the name and
address of the Certificate Owner of the related Certificate or the Person
identified as a prospective transferee thereof by the Depositor or a
Certificateholder. For purposes of the foregoing, the Depositor, the Master
Servicer, the Special Servicer, the Trustee, the Paying Agent or other such
Person may rely, without limitation, on a participant listing from the
Securities Depository or statements furnished
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by a Person that on their face appear to be statements from a participant in the
Securities Depository to such Person indicating that such Person beneficially
owns Certificates.
All references herein to "Holders" or "Certificateholders" shall reflect
the rights of Certificate Owners as they may indirectly exercise such rights
through the Securities Depository and the Securities Depository Participants,
except as otherwise specified herein.
"CIBC": CIBC Inc., a Delaware corporation.
"CIBC Loans": The Mortgage Loans transferred and assigned by CIBC to
the Depositor pursuant to the CIBC Mortgage Loan Purchase Agreement.
"CIBC Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase and Sale Agreement dated as of July 15, 1999, between Depositor and
CIBC.
"Class": With respect to Certificates or REMIC II Regular
Interests, all of the Certificates or REMIC II Regular Interests bearing the
same alphabetical and numerical class designation.
"Class A Certificates": The Class A-1 Certificates and Class A-2
Certificates, collectively.
"Class A-1 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-1 hereto.
"Class A-1 Pass-Through Rate": A per annum rate equal to 6.79%,
not to exceed the Weighted Average REMIC I Remittance Rate with respect to
any Distribution Date.
"Class A-2 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-2 hereto.
"Class A-2 Pass-Through Rate": A per annum rate equal to 7.03%,
not to exceed the Weighted Average REMIC I Remittance Rate with respect to
any Distribution Date.
"Class B Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-4 hereto.
"Class B Pass-Through Rate": A per annum rate equal to 7.20%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class C Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-5 hereto.
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"Class C Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to the Weighted Average REMIC I Remittance Rate
minus 0.36%.
"Class D Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-6 hereto.
"Class D Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal the Weighted Average REMIC I Remittance Rate
minus 0.26%.
"Class E Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-7 hereto.
"Class E Pass-Through Rate": With respect to any Distribution
Date, a per annum rate equal to the Weighted Average REMIC I Remittance Rate.
"Class F Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-8 hereto.
"Class F Pass-Through Rate": With respect to any Distribution Date,
a per annum rate equal to the Weighted Average REMIC I Remittance Rate.
"Class G Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-9 hereto.
"Class G Pass-Through Rate": With respect to any Distribution Date,
a per annum rate equal to the Weighted Average REMIC I Remittance Rate.
"Class H Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-10 hereto.
"Class H Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class Interest Shortfall": With respect to any Class of Principal
Balance Certificates and any Distribution Date (except the initial Distribution
Date, with respect to which the Class Interest Shortfall for each such Class
will equal zero), the sum of (a) the excess, if any, of (i) all Distributable
Certificate Interest in respect of such Class of Certificates for the
immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
4.3 and (b), to the extent permitted by applicable law,
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interest for the related Interest Accrual Period accrued at the applicable
Pass-Through Rate on the amount of any such excess described in the immediately
preceding clause (a). With respect to any Class of Principal Balance
Certificates, the interest referred to in clause (b) of the preceding sentence
shall accrue on the basis of a 360-day year consisting of twelve 30-day months.
"Class J Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-11 hereto.
"Class J Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class K Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-12 hereto.
"Class K Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class L Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-13 hereto.
"Class L Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class M Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-14 hereto.
"Class M Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class N Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-15 hereto.
"Class N Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class O Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-16 hereto.
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"Class O Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class P Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-17 hereto.
"Class P Pass-Through Rate": A per annum rate equal to 6.79%, not
to exceed the Weighted Average REMIC I Remittance Rate with respect to any
Distribution Date.
"Class Prepayment Percentage": With respect to any Prepayment Premium
paid with respect to any Mortgage Loan on any Distribution Date and any of the
Class A-1, Class A-2, Class B, Class C, Class D, Class E and Class F
Certificates, the percentage obtained by dividing the portion, if any, of the
Principal Distribution Amount distributed to the respective Class of
Certificates on such Distribution Date by the total Principal Distribution
Amount distributed to all such Classes of Certificates on such Distribution
Date.
"Class R-I Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-18 hereto. The
Class R-I Certificates have no Pass-Through Rate or Certificate Balance.
"Class R-II Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-19 hereto. The
Class R-II Certificates have no Pass-Through Rate or Certificate Balance.
"Class R-III Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-20 hereto. The
Class R-III Certificates have no Pass-Through Rate or Certificate Balance.
"Class X Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-3 hereto.
"Class X Interest Amount": means, with respect to any Distribution
Date and the related Interest Accrual Period, interest equal to the product of
(i) one-twelfth of the Class X Pass-Through Rate for any Distribution Date, and
(ii) the Class X Notional Amount for such Distribution Date.
"Class X Pass-Through Rate" means, for any Distribution Date, a per
annum rate equal to the weighted average of the Class X Strip Rates for the
Class A-1 Certificates, Class A-2 Certificates, Class B Certificates, Class C
Certificates, Class D Certificates, Class E Certificates, Class F Certificates,
Class G Certificates, Class H Certificates, Class J Certificates, Class K
Certificates, Class L Certificates, Class M Certificates, Class N Certificates,
Class O Certificates
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and Class P Certificates, weighted on the basis of the respective Certificate
Balances of such Classes of Certificates.
"Class X Notional Amount" means, with respect to any Distribution
Date, the aggregate of the Certificate Balances of the REMIC III Regular
Certificates as of the close of business on the related Distribution Date.
"Class X Strip Rate" means, for any Distribution Date, with respect
to any Class of Certificates (other than the Class X Certificates and the
Residual Certificates), the excess, if any, of the Weighted Average REMIC I
Remittance Rate for such Distribution Date over (i) the Pass-Through Rate for
such Class of Certificates.
"Closing Date": July 27, 1999.
"Code": The Internal Revenue Code of 1986, as amended from time to
time, any successor statute thereto, and any temporary or final regulations
of the United States Department of the Treasury promulgated pursuant thereto.
"Collection Account": The segregated account or accounts created and
maintained by the Master Servicer pursuant to Section 3.5(a), which shall be
entitled "LaSalle Bank National Association, as Trustee, in trust for Holders of
Commercial Mortgage Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1999-C1, Collection Account," and which
shall be an Eligible Account.
"Collection Period": With respect to any Distribution Date and any
Mortgage Loan, the period beginning on the first day following the Determination
Date in the month preceding the month in which such Distribution Date occurs
(or, in the case of the Distribution Date occurring in August 1999, on the day
after the Cut-off Date) and ending on the Determination Date in the month in
which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission of the United
States of America.
"Compensating Interest Payments": With respect to any Distribution
Date, any payments required to be made by the Master Servicer pursuant to
Section 3.25 to cover Prepayment Interest Shortfalls.
"Controlling Class": The most subordinate Class of Principal Balance
Certificates outstanding at any time of determination (or, if the then aggregate
Certificate Balance of such Class of Certificates is less than 25% of the
initial aggregate Certificate Balance thereof and there is a more senior Class
of Principal Balance Certificates then outstanding, the next most subordinate
Class of Principal Balance Certificates). For purposes of determining the
Controlling Class, the Class A Certificates will be treated as a single Class of
Certificates, the Subordinate Certificates will be subordinate to the Class A
Certificates, and each Class of Subordinate Certificates will be subordinate to
each other Class of Subordinate Certificates, if
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any, with an earlier alphabetical Class designation. As of the Closing Date, the
Controlling Class will be the Class P Certificates.
"Corporate Trust Office": With respect to the presentment and
surrender of Certificates for the final distribution thereon or the presentment
and surrender of Certificates for any other purpose, the principal corporate
trust office of the Trustee or the New York Presenting Office (if any). The
principal corporate trust office of the Trustee is presently located at 135
South LaSalle Street, Suite 1625, Chicago, Illinois 60674, Attention:
Asset-Backed Securities Trust Services Group - Commercial Mortgage Acceptance
Corp. Series 1999-C1, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders, the Depositor, the Master
Servicer and the Special Servicer.
"Corrected Mortgage Loan": Any Mortgage Loan which is no longer a
Specially Serviced Mortgage Loan pursuant to the first proviso to the definition
of the term "Specially Serviced Mortgage Loan" as a result of the curing of any
event of default under such Specially Serviced Mortgage Loan through a written
modification, restructuring or workout negotiated by the Special Servicer.
"CPR": An assumed constant rate of prepayment each month (which is
quoted on a per annum basis) relative to the then-outstanding principal
balance of a pool mortgage loans for the life of such mortgage loans.
"Cross-Collateralized Loans": Any two or more Mortgage Loans that
are cross-collateralized and cross-defaulted with each other.
"CSSA": The Commercial Real Estate Secondary Market and
Securitization Association, or any association or organization that is a
successor thereto.
"CSSA SIP": Shall include five electronic files ((1) Loan Set-up
File, (2) Loan Periodic File, (3) Property File, (4) Bond File and (5)
Collateral File) and eight supplement reports ((1) Servicer Watch List, (2)
Delinquent Loan Status Report, (3) REO Status Report, (4) Comparative Financial,
(5) Historical Loan Modification Report, (6) Historical Loss Estimate Report,
(7) Operating Statement Analysis Report and (8) NOI Adjustment Worksheet).
"Current Principal Distribution Amount": With respect to the
Mortgage Loans for any Distribution Date, an amount equal to the aggregate of:
(a) the principal portions of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments due or deemed due, as the
case may be, in respect of the Mortgage Loans, including without limitation any
REO Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b)..that portion of all payments (including without limitation
Principal Prepayments and Balloon Payments), Liquidation Proceeds, Insurance
Proceeds, any payments of Repurchase Price, payments of Substitution Shortfall
Amounts, Net REO Proceeds and other collections that were received on or in
respect of the Mortgage Loans (including without
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limitation any REO Mortgage Loans) or received on or in respect of any related
REO Properties, during the related Collection Period and were identified and
applied by the Master Servicer in accordance with Section 1.2 as payments or
other recoveries of principal of such Mortgage Loans, in each case net of any
portion of such amounts that represents (i) a payment or other recovery of the
principal portion of any Monthly Payment (other than a Balloon Payment) due, or
of the principal portion of any Assumed Monthly Payment deemed due, in respect
of any such Mortgage Loan on a Due Date during or prior to the related
Collection Period and not previously paid or recovered or (ii) an early payment
(other than in the form of a Principal Prepayment) of the principal portion of
any Monthly Payment due in respect of any such Mortgage Loan on a Due Date
subsequent to the end of the related Collection Period.
"Custodial Agreement": The Custodial Agreement, if any, in effect
from time to time between the Custodian named therein, the Master Servicer and
the Trustee, substantially in the form of Exhibit F hereto, as the same may be
amended or modified from time to time in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to Section 8.12 and,
unless the Trustee is Custodian, named pursuant to any Custodial Agreement. The
Custodian may (but need not) be the Trustee or the Master Servicer or any
Affiliate of the Trustee or the Master Servicer, but may not be the Depositor.
"Cut-off Date": July 1, 1999.
"DCR": Duff & Phelps Credit Rating Co.
"Default Interest": With respect to any Mortgage Loan, interest
accrued on such Mortgage Loan at the excess of the Default Rate over the
Mortgage Rate.
"Default Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan following any event of default
on such Mortgage Loan, including a default in the payment of a Monthly Payment
or a Balloon Payment, as such rate is set forth in the Mortgage Loan Schedule.
"Deferred Interest": With respect to each Mortgage Loan, interest
accrued on such Mortgage Loan at the related Excess Rate plus interest thereon
to the extent permitted by applicable law at the related Revised Interest Rate.
"Definitive Certificate": As defined in Section 5.3(a).
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan.
"Depositor": Commercial Mortgage Acceptance Corp., a Missouri
corporation and its successors and assigns.
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"Determination Date": With respect to each Distribution Date, the
fifth Business Day prior to such Distribution Date.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof that are not customarily
provided to tenants in connection with the rental of space for occupancy only
within the meaning of Treasury Regulations Section 1.512(h)-1(c)(5), the
management or operation of such REO Property, the holding of such REO Property
primarily for sale to customers or any use of such REO Property in a trade or
business conducted by the Trust Fund other than through an Independent
Contractor; provided, however, that the Special Servicer, on behalf of the Trust
Fund, shall not be considered to Directly Operate an REO Property solely because
the Special Servicer, on behalf of the Trust Fund, establishes rental terms,
chooses tenants, enters into or renews leases, deals with taxes and insurance,
or makes decisions as to repairs or capital expenditures with respect to such
REO Property.
"Discount Rate": The rate which, when compounded monthly, is
equivalent to the Treasury Rate when compounded semi annually. The "Treasury
Rate" is the yield calculated by the linear interpolation of the yields, as
reported in Federal Reserve Statistical Release H.15 Selected Interest Rates
under the heading "U.S. government securities/Treasury constant maturities" for
the week ending prior to the date of the relevant Principal Prepayment, of U.S.
Treasury constant maturities with a maturity date (one longer and one shorter)
most nearly approximating the maturity date (or the Hyper-Amortization Date, if
applicable) of the Mortgage Loan prepaid. If Release H.15 is no longer
published, the Trustee shall select a comparable publication to determine the
Treasury Rate.
"Disposition Fee": With respect to any Specially Serviced Mortgage
Loan or REO Property which is sold or transferred or otherwise liquidated
(except in connection with a repurchase under Section 2.3), an amount equal to
the product of (I) the excess, if any of (a) the Liquidation Proceeds of such
Specially Serviced Mortgage Loan or REO Property over (b) any broker's
commission and related brokerage referral fees, and (II) 1%.
"Disqualified Non-U.S. Person": With respect to a Class R-I, Class
R-II or Class R-III Certificate, any Non-U.S. Person or agent thereof other than
(i) a Non-U.S. Person that holds the Class R-I, Class R-II or Class R-III
Certificate in connection with the conduct of a trade or business within the
United States and has furnished the transferor and the Certificate Registrar
with an effective IRS Form 4224 or (ii) a Non-U.S. Person that has delivered to
both the transferor and the Certificate Registrar an Opinion of Counsel to the
effect that the transfer of the Class R-I, Class R-II or Class R-III Certificate
to it is in accordance with the requirements of the Code and the regulations
promulgated thereunder and that such transfer of the Class R-I, Class R-II or
Class R-III Certificate will not be disregarded for federal income tax purposes.
"Disqualified Organization": Either (a) the United States, a State or
any 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 a majority
of its board of directors is not selected by any such governmental unit), (b) a
foreign government, International Organization or agency or instrumentality of
either
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of the foregoing, (c) an organization that is exempt from tax imposed by Chapter
1 of the Code (including the tax imposed by Code Section 511 on unrelated
business taxable income) on any excess inclusions (as defined in Code Section
860E(c)(1)) with respect to the Class R-I, Class R-II or Class R-III
Certificates (except certain farmers' cooperatives described in Code Section
521), (d) rural electric and telephone cooperatives described in Code Section
1381(a)(2), or (e) any other Person so designated by the Certificate Registrar
based upon an Opinion of Counsel to the effect that any Transfer to such Person
may cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that the Certificates are outstanding. The terms "United States," "State"
and "International Organization" shall have the meanings set forth in Code
Section 7701 or successor provisions.
"Distributable Certificate Interest": With respect to any Class of
REMIC III Regular Certificates for each Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below, and increased
by any Class Interest Shortfall in respect of such Class of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if any,
for each Distribution Date shall be allocated on such Distribution Date among
the respective Classes of REMIC III Regular Certificates, pro rata, in the ratio
that the Accrued Certificate Interest with respect to any such Class of
Certificates for such Distribution Date bears to the total Accrued Certificate
Interest with respect to all Classes of REMIC III Regular Certificates.
"Distribution Account": The segregated account or accounts created
and maintained as a separate trust account or accounts by the Trustee pursuant
to Section 3.5(b), which shall be entitled "LaSalle Bank National Association,
as Trustee, in trust for Holders of Commercial Mortgage Acceptance Corp.
Commercial Mortgage Pass-Through Certificates, Series 1999-C1, Distribution
Account" and which shall be an Eligible Account.
"Distribution Date": The 15th day of any month, or if such 15th
day is not a Business Day, the Business Day immediately following such 15th
day, commencing in August, 1999.
"Due Date": With respect to any Collection Period and any Mortgage
Loan, the date on which scheduled payments are due on such Mortgage Loan
(without regard to grace periods), such date being for all Mortgage Loans the
first day of each month.
"Eligible Account": Either (i) a segregated account or accounts
maintained with a federally or state-chartered depository institution or trust
company of which (a) the short term senior unsecured debt obligations are rated
at least "P1" by Moody's and the long term senior unsecured debt obligations are
rated at least "Aa2" by Moody's and (b) the short term senior unsecured debt
obligations are rated at least "D-1" by DCR and the long term senior unsecured
debt obligations are rated at least "A" by DCR or (ii) a segregated trust
account or accounts maintained with a federally or state-chartered depository
institution or trust company acting in its fiduciary capacity, having, in either
case, a combined capital and surplus of at least $50,000,000 and (a) subject to
supervision or examination by federal or state authority and subject to
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regulations regarding fiduciary funds on deposit substantially similar to 12
C.F.R. 9.10(b), or (b) otherwise subject to a Rating Agency Confirmation.
Eligible Accounts may bear interest.
"Eligible Investor": (i) A Qualified Institutional Buyer that is
purchasing Privately Placed Certificates for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the offer, sale
or transfer is being made in reliance on Rule 144A promulgated under the 1933
Act or (ii) with respect to Privately Placed Certificates, an Institutional
Accredited Investor.
"Environmental Report": With respect to each Mortgaged Property,
the report or reports of the environmental site assessment or assessments
performed in connection with the origination of the related Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"Escrow Account": As defined in Section 3.4(b).
"Escrow Payment": Any payment made by any Borrower to the Master
Servicer for the account of such Borrower for application toward the payment of
taxes, insurance premiums, assessments and similar items in respect of the
related Mortgaged Property.
"Euroclear": Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System, or its successor in such capacity.
"Event of Default": As defined in Section 7.1.
"Excess Rate": With respect to each Mortgage Loan, the excess of the
related Revised Interest Rate over the related Mortgage Rate.
"Expense Loss": A loss realized upon payment by the Trust Fund of an
Additional Trust Fund Expense that was not otherwise subject to a Servicing
Advance or was the subject of a determination that such Servicing Advance, if
made, would be a Nonrecoverable Advance.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHA": The Federal Housing Administration.
"FHLMC": The Federal Home Loan Mortgage Corporation, or any
successor thereto.
"Final Recovery Determination": With respect to any REO Mortgage
Loan, Specially Serviced Mortgage Loan or Mortgage Loan subject to repurchase by
the Seller pursuant to Section 2.3, the recovery of all Insurance Proceeds,
Liquidation Proceeds, the related Repurchase Price and other payments or
recoveries (including proceeds of the final sale of any related REO Property)
which the Special Servicer, in its reasonable judgment as evidenced by a
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certificate of a Servicing Officer delivered to the Trustee, the Custodian and
the Operating Adviser, expects to be finally recoverable. The Master Servicer
shall maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination until the earlier of (i) its termination as Master Servicer
hereunder and the transfer of such records to a successor servicer and (ii) five
years following the termination of the Trust Fund.
"Fiscal Agent": ABN AMRO Bank N.V. in its capacity as fiscal agent
of the Trustee, or its successor in interest, or any successor fiscal agent
appointed as herein provided.
"FNMA": The Federal National Mortgage Association, or any
successor thereto.
"Hazardous Materials": Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., or any other environmental
laws now existing, and specifically including, without limitation, 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.
"Holder": With respect to any Certificate, a Certificateholder;
with respect to any REMIC I Regular Interest or REMIC II Regular Interest,
the Trustee.
"Hyper-Amortization Date": As to any Mortgage Loan, the date prior
to the Stated Maturity Date that the Mortgage Rate and the rate of principal
amortization increases.
"Indemnified Party": As defined in Section 8.5(c).
"Independent": When used with respect to any specified Person, any
other Person who (i) does not have any direct financial interest, or any
material indirect financial interest, in any of the Manager, the Depositor, the
Master Servicer, the Special Servicer, any Borrower or any Affiliate thereof,
and (ii) is not connected with any such specified Person as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"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 tests 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 or 35% or more of the aggregate value of all Classes of
Certificates), provided that the Trust Fund does not receive or derive any
income from such Person and 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 Special Servicer shall not be considered to be an
Independent Contractor under the definition in this clause (i) unless an Opinion
of Counsel (obtained at the expense of the Special Servicer) addressed to the
Special Servicer and the Trustee has been delivered to the Trustee to the effect
that the Special Servicer meets the
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requirements of such definition) or (ii) any other Person (including the Special
Servicer) if the Special Servicer, on behalf of itself and the Trustee, has
received an Opinion of Counsel (obtained 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 (determined
without regard to the exception applicable for purposes of Section 860D(a) of
the Code) or cause any income realized with respect of such REO Property to fail
to qualify as Rents from Real Property (provided that such income would
otherwise so qualify).
"Individual Certificate": Any Certificate in definitive, fully
registered form without interest coupons.
"Initial Subservicer": With respect to each Mortgage Loan that is
subject to a subservicing agreement with the Master Servicer as of the Closing
Date, the subservicer under any such subservicing agreement.
"Institutional Accredited Investor": An entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the 1933 Act and which is not otherwise a Qualified Institutional Buyer.
"Insurance Proceeds": Proceeds of any fire and hazard insurance
policy, title policy or other insurance policy relating to a Mortgage Loan
and/or the Mortgaged Property securing any Mortgage Loan (including any amounts
paid by the Master Servicer or the Special Servicer pursuant to Section 3.8), to
the extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Borrower in accordance with the express
requirements of the related Mortgage or Note or other documents included in the
related Mortgage File or in accordance with the Servicing Standard.
"Interest Accrual Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
Interest for each Interest Accrual Period shall be calculated based on a 360-day
year consisting of twelve 30-day months.
"Interest Only Certificates": The Class X Certificates.
"Interest Reserve Account": The segregated account or accounts
created and maintained as a separate trust account or accounts by the Trustee
pursuant to Section 3.29, which shall be entitled "LaSalle Bank National
Association, as Trustee, in trust for Holders of Commercial Mortgage Acceptance
Corp. Commercial Mortgage Pass-Through Certificates, Series 1999-C1, Interest
Reserve Account" and which shall be an Eligible Account.
"Interest Reserve Amount": As defined in Section 3.29(a).
"Interest Reserve Loan": A Mortgage Loan that bears interest
computed on an actual/360 basis.
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"Interested Person": As of any date of determination, the Depositor,
the Master Servicer, the Special Servicer, the Trustee, any Borrower, any
Manager of a Mortgaged Property, any Independent Contractor engaged by the
Special Servicer pursuant to Section 3.17, or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.7(a).
"Investment Representation Letter": As defined in Section
5.2(c)(i).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the Special Servicer and
the Trustee in connection with the liquidation of any Specially Serviced
Mortgage Loan or property acquired in respect thereof (including, without
limitation, legal fees and expenses, committee or referee fees, and, if
applicable, brokerage commissions, and conveyance taxes).
"Liquidation Event": With respect to any Mortgage Loan (other than an
REO Mortgage Loan), any of the following events: (i) such Mortgage Loan is paid
in full; (ii) a Final Recovery Determination is made with respect to such
Mortgage Loan; (iii) such Mortgage Loan is repurchased or replaced by a Seller
pursuant to Section 3(b) of the related Mortgage Loan Purchase Agreement and
Section 2.3 of this Agreement; (iv) such Mortgage Loan is sold pursuant to
Section 3.18; or (v) such Mortgage Loan is purchased by any Person entitled to
effect an optional termination of the Trust pursuant to Section 9.1. With
respect to any REO Property (and the related REO Mortgage Loan), any of the
following events: (i) a Final Recovery Determination is made with respect to
such REO Property; (ii) such REO Property is sold pursuant to Section 3.18; or
(iii) such REO Property is purchased by any Person entitled to effect an
optional termination of the Trust pursuant to Section 9.1.
"Liquidation Proceeds": All cash amounts including REO Proceeds
(other than Insurance Proceeds) including all partial and/or unscheduled
collections received in connection with (i) the taking of a Mortgaged Property
by exercise of the power of eminent domain or condemnation, (ii) the full or
partial liquidation of a Mortgaged Property or other collateral that constituted
security for a Specially Serviced Mortgage Loan through a trustee's sale,
foreclosure sale or otherwise, (iii) the sale of a Specially Serviced Mortgage
Loan or an REO Property in accordance with Section 3.18, (iv) the sale of all of
the Mortgage Loans in accordance with Section 9.1 or (v) the realization upon
any deficiency judgment obtained against a Borrower or guarantor of any Mortgage
Loan.
"Loan Agreement": With respect to any Mortgage Loan, the loan
agreement, if any, between the Originator and the Borrower, pursuant to which
such Mortgage Loan was made.
"Loan Number": With respect to any Mortgage Loan, the loan number by
which such Mortgage Loan was identified on the books and records of the Master
Servicer or any Sub-Servicer for the Master Servicer, as set forth in the
Mortgage Loan Schedule.
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"Loan Service Transaction Fees": With respect to any Mortgage Loan,
any fees payable by or on behalf of a Borrower other than (i) fees payable in
connection with or related to an assumption, modification or extension or a
consent to any of the foregoing or (ii) any fees received in connection with a
default.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, as of any
date of determination, the fraction, expressed as a percentage, the numerator of
which is the then-unpaid principal balance of such Mortgage Loan (or, if part of
a group of Cross-Collateralized Loans, of such group), and the denominator of
which is the appraised value of the related Mortgaged Property (or, in the case
of a group of Cross-Collateralized Loans, of all the Mortgaged Properties
securing such group) as determined by an Updated Appraisal thereof.
"MAI": Member of the Appraisal Institute.
"Majority Certificateholder": With respect to any particular Class
or Classes of Certificates, any Certificateholder entitled to a majority of
the Voting Rights allocated to such Class or Classes, as the case may be.
"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.
"Master Servicer": Midland or any successor Master Servicer
appointed as herein provided.
"Master Servicer Mortgage File": With respect to any Mortgage Loan,
all documents related to such Mortgage Loan that are not required to be
delivered to the Trustee pursuant to Section 2.1 or to be maintained as part of
the Trustee Mortgage File, including, without limitation:
(i) a copy of the Management Agreement, if any, for the related
Mortgaged Property;
(ii) a copy of the related ground lease, as amended, if any, for
such Mortgaged Property;
(iii) any and all amendments, modifications and supplements to, and
waivers related to, any of the foregoing;
(iv) copies of the related appraisals, surveys, environmental
insurance agreements, environmental reports and other similar documents; and
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(v) any other written agreements related to such Mortgage Loan;
together with copies of all documents that are required to be maintained as a
part of the Trustee Mortgage File.
"Master Servicer Remittance Amount": For each Distribution Date, (a)
all amounts on deposit in the Collection Account as of the close of business on
the related Determination Date (including Deferred Interest), exclusive of any
portion thereof that represents one or more of the following:
(i) Monthly Payments collected, but due on a Due Date occurring in
a Collection Period subsequent to the related Collection Period;
(ii) Prepayment Premiums;
(iii) amounts that are payable or reimbursable to any Person other
than a Certificateholder (including amounts payable to the Master Servicer, the
Special Servicer, the Trustee or the Fiscal Agent as compensation or in
reimbursement of outstanding Advances and amounts payable in respect of
Additional Trust Fund Expenses); and
(iv) amounts deposited in the Collection Account in error,
plus (b) to the extent not already included in clause (a), any P&I Advances and
Compensating Interest Payments made with respect to such Distribution Date;
"Master Servicing Fee": With respect to each Mortgage Loan and for
any Distribution Date, an amount per calendar month equal to the product of (i)
one-twelfth of the related Master Servicing Fee Rate and (ii) the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month
preceding the month in which such Distribution Date occurs.
"Master Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate set forth in the Mortgage Loan Schedule as the "Administrative
Cost Rate" less the Trustee Fee Rate. The Master Servicing Fee Rate will be
calculated on the same basis as the related Mortgage Rate (e.g., "Actual/360" or
"30/360").
"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 Mortgage Note.
"Midland": Midland Loan Services, Inc., a Delaware corporation, or
its successor in interest.
"Midland Loans": means MLS Loans, PNC Anthracite Loans and
Additional MLS Loans.
"Midland Mortgage Loan Purchase Agreement": The Mortgage Loan
Purchase and Sale Agreement, dated as of June 30, 1999, between MSMC and
Midland.
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"Midland Owner Trust Certificate Purchase Agreement": The Owner Trust
Certificate Purchase Agreement, dated as of June 30, 1999, among MSMC, Midland
and the owners of the Midland Commercial Mortgage Owner Trust I certificates.
"Minimum Master Servicing Fee Rate": A rate of .015% per annum.
"MLS Loans": The Mortgage Loans transferred and assigned to MSMC
pursuant to the Midland Mortgage Loan Purchase Agreement, which Mortgage Loans
were subsequently transferred and assigned to the Depositor by MSMC on the
Closing Date pursuant to the Mortgage Loan Purchase Agreement dated July 15,
1999 between MSMC and the Depositor, relating to such Mortgage Loans.
"Money Term": With respect to any Mortgage Loan, the Maturity Date,
Mortgage Rate, principal balance, amortization term or payment frequency thereof
(and shall not include late fees or Default Interest provisions).
"Monthly Payment": With respect to any Mortgage Loan (other than any
REO Mortgage Loan) and any Due Date, the scheduled monthly payment of principal
and/or interest, excluding any Balloon Payment, Default Interest and Deferred
Interest on such Mortgage Loan which is payable by the related Borrower on such
Due Date under the related Note (taking into account any waiver, modification or
amendment of the terms of such Mortgage Loan, whether agreed to by the Master
Servicer or Special Servicer or in connection with a bankruptcy or similar
proceeding involving the related Borrower).
"Moody's": Moody's Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in a Mortgaged
Property securing the related Note.
"Mortgage File": With respect to any Mortgage Loan, the mortgage
documents required to be maintained in either the Trustee Mortgage File or
the Master Servicer Mortgage File.
"Mortgage Loan": Each of the mortgage loans transferred and assigned
to the Trustee pursuant to Section 2.1 and from time to time held in the Trust
Fund, such mortgage loans originally so transferred, assigned and held being
identified on the Mortgage Loan Schedule as of the Cut-off Date. Such term shall
include any REO Mortgage Loan, any Qualified Substitute Mortgage Loan or
defeased Mortgage Loan.
"Mortgage Loan Documents": Any and all documents contained in the
Trustee Mortgage File and the Master Servicer Mortgage File.
"Mortgage Loan Purchase Agreement": With respect to the MLS Loans,
the Midland Mortgage Loan Purchase Agreement. With respect to the Additional
MLS Loans, the Additional Midland Mortgage Loan Purchase Agreement. With
respect to the PNC Anthracite Loans, the Midland Owner Trust Certificate
Purchase Agreement. With respect to the RFC
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Loans, the RFC Mortgage Loan Purchase Agreement. With respect to the CIBC
Loans, the CIBC Mortgage Loan Purchase Agreement. The term "Mortgage Loan
Purchase Agreements" shall mean all of such agreements.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in the Trust Fund on such date, such list as of the Closing
Date being attached hereto as Exhibit B.
"Mortgage Pool": Collectively, all of the Mortgage Loans
(including without limitation REO Mortgage Loans and Qualified Substitute
Mortgage Loans, but excluding Deleted Mortgage Loans).
"Mortgage Rate": With respect to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan (in the absence of a default and
without giving effect to any Revised Interest Rate), as set forth in the
Mortgage Loan Schedule.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of a fee simple or leasehold estate
in a parcel of land improved by a commercial property, together with any
personal property, fixtures, leases and other property or rights pertaining
thereto.
"MSMC": Morgan Stanley Mortgage Capital Inc.
"Net Aggregate Prepayment Interest Shortfall": With respect to any
Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on the
Mortgage Loans during the related Collection Period, and (ii) the Compensating
Interest Payment deposited by the Master Servicer in the Distribution Account
for such Distribution Date pursuant to Section 3.25 in connection with such
Prepayment Interest Shortfalls.
"Net Collections": With respect to any Corrected Mortgage Loan, an
amount equal to all payments on account of interest and principal on such
Mortgage Loan and all Prepayment Premiums.
"Net Liquidation Proceeds": The excess of Liquidation Proceeds
received with respect to any Mortgage Loan over the amount of Liquidation
Expenses incurred with respect thereto.
"Net Mortgage Rate": With respect to any Mortgage Loan, the Mortgage
Rate for such Mortgage Loan minus the Master Servicing Fee Rate and the Trustee
Fee Rate; provided, that for purposes of calculating Pass-Through Rates,
Prepayment Interest Excesses and Prepayment Interest Shortfalls, the Net
Mortgage Rate for any Mortgage Loan will be determined without regard to any
post-Closing Date modification, waiver or amendment of the terms of such
Mortgage Loan; provided further, that for purposes of calculating Pass-Through
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Rates, Prepayment Interest Excesses and Prepayment Interest Shortfalls, the Net
Mortgage Rate (and related Master Servicing Fee Rate and Trustee Fee Rate) of
each Mortgage Loan will be adjusted, if necessary, to a rate providing an
equivalent yield which accrues on the basis of a 360-day year consisting of
twelve 30-day months.
"Net REO Proceeds": With respect to each REO Property, REO Proceeds
with respect to such REO Property net of any insurance premiums, taxes,
assessments and other costs and expenses permitted to be paid therefrom pursuant
to Section 3.17(b).
"New Lease": Any lease of REO Property entered into on behalf of the
Trust Fund, including any lease renewed or extended on behalf of the Trust Fund
if the Trust Fund has the right to renegotiate the terms of such lease.
"New York Presenting Office": Any office of an agent of the Trustee
or the Certificate Registrar, located in New York, New York, as the Trustee or
the Certificate Registrar, as the case may be, may designate from time to time
by written notice to the Depositor and the Certificateholders.
"No Downgrade Confirmation": A written confirmation from DCR that the
taking of the proposed action (including consents, waivers and approvals), in
and of itself, will not result in a downgrade or withdrawal of the then current
rating on any Class of Certificates.
"Nonrecoverable Advance": Any portion of an Advance proposed to be
made or previously made which has not been previously reimbursed to the Master
Servicer, the Trustee or the Fiscal Agent, as applicable, and which the Master
Servicer, the Trustee or the Fiscal Agent has determined (based on, among other
things, an Updated Appraisal) in its good faith business judgment will not or,
in the case of a proposed Advance, would not, be ultimately recoverable by the
Master Servicer, the Trustee or the Fiscal Agent, as applicable, from late
payments, Insurance Proceeds, Liquidation Proceeds and other collections on or
in respect of the related Mortgage Loan. To the extent that any Borrower is not
obligated under the related Mortgage Loan Documents to pay or reimburse any
portion of any Advances that are outstanding with respect to the related
Mortgage Loan as a result of a modification of such Mortgage Loan by the Special
Servicer which forgives unpaid Monthly Payments or other amounts which the
Master Servicer, the Trustee or the Fiscal Agent had previously advanced, and
the Master Servicer, the Trustee or the Fiscal Agent determines that no other
source of payment or reimbursement for such advances is available to it, such
Advances shall be deemed to be nonrecoverable; provided, however, that in
connection with the foregoing the Master Servicer, the Trustee or the Fiscal
Agent, shall provide an Officer's Certificate as described below. The
determination by the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance shall be evidenced
by a certificate of a Servicing Officer, Responsible Officer or Vice President
or equivalent or senior officer of the Master Servicer, Trustee or Fiscal Agent,
as appropriate, delivered to the Master Servicer, Trustee, the Fiscal Agent, the
Special Servicer, the Operating Adviser and the Depositor setting forth such
determination and the procedures and considerations of the Master Servicer, the
Trustee or Fiscal Agent, as applicable, forming the basis of such determination,
which shall include a copy of the Updated Appraisal and any other information or
reports
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obtained by the Master Servicer, the Trustee or the Fiscal Agent, such as
property operating statements, rent rolls, property inspection reports and
engineering reports, which may support such determinations. Notwithstanding the
above, the Trustee and the Fiscal Agent shall be entitled to rely upon any
determination by the Master Servicer that any Advance previously made is a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance.
"Non-U.S. Person": A person that is not (i) a citizen or resident of
the United States; (ii) a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof; (iii) an estate whose income is subject to United States federal income
tax regardless of its sources; or (iv) a trust as to which a court within the
United States is able to exercise primary jurisdiction over the administration
of the trust and one or more U.S. Persons have the authority to control all
substantial decisions of the trust.
"Note": With respect to any Mortgage Loan as of any date of
determination, the note or other evidence of indebtedness and/or agreements
evidencing the indebtedness of the related Borrower or obligor under such
Mortgage Loan, in each case, including any amendments or modifications, or any
renewal or substitution notes, as of such date.
"Notional Amount": means, as of any date of determination: (i) with
respect to all of the Class X Certificates as a Class, the Class X Notional
Amount as of such date of determination; and (ii) with respect to any Class X
Certificate, the product of the Percentage Interest evidenced by such
Certificate and the Class X Notional Amount as of such date of determination.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), the Treasurer, the Secretary, one of the Assistant Treasurers or
Assistant Secretaries or any other officer of the Master Servicer or Special
Servicer customarily performing functions similar to those performed by any of
the above designated officers and also with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject, or an authorized
officer of the Depositor, and delivered to the Depositor, the Trustee, the
Special Servicer or the Master Servicer, as the case may be.
"Operating Advisor": As defined in Section 3.26.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Depositor, the Special Servicer or the Master
Servicer, as the case may be, acceptable to the Trustee, except that any opinion
of counsel relating to (a) qualification of REMIC I, REMIC II or REMIC III as a
REMIC or the imposition of tax under the REMIC Provisions on any income or
property of any REMIC, (b) compliance with the REMIC Provisions (including
application of the definition of "Independent Contractor"), or (c) a resignation
of the Master Servicer or the Special Servicer pursuant to Section 6.4, must be
an
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opinion of counsel who is Independent of the Depositor, the Special Servicer
and the Master Servicer.
"Optional Termination Notice Date": Any date as of which the
aggregate Certificate Balance of all Classes of Principal Balance Certificates
then outstanding is less than 1% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date.
"Originator": With respect to a Mortgage Loan, the originator of
such Mortgage Loan, as identified in the Mortgage Loan Schedule.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner
or as pledgee.
"P&I Advance": As to any Mortgage Loan, any advance made by the
Master Servicer, the Trustee, or the Fiscal Agent pursuant to Section
4.5(b)(iii) or 4.5(d).
"Pass-Through Rate" or "Pass-Through Rates": Any one of the Class
A-1, Class A-2, Class X, Class B, Class C, Class D, Class E, Class F, Class G,
Class H, Class J, Class K, Class L, Class M, Class N, Class O or Class P
Pass-Through Rates as defined herein. The Residual Certificates do not have
Pass-Through Rates.
"Paying Agent": The paying agent appointed pursuant to Section 5.5.
"Percentage Interest": (i) With respect to any REMIC III Regular
Certificate, the portion of the relevant Class evidenced by such Certificate,
expressed as a percentage, the numerator of which is the Certificate Balance or
the Notional Amount, as the case may be, of such Certificate as of the Closing
Date, as specified on the face thereof, and the denominator of which is the
initial aggregate Certificate Balance or the initial aggregate Notional Amount,
as the case may be, of the relevant Class as of the Closing Date; and (ii) with
respect to the Residual Certificates, the percentage interest in distributions
to be made with respect to the relevant Class, as stated on the face of such
Certificate.
"Percentage Premium": With respect to any Distribution Date, any
amount received as a Prepayment Premium, other than a Yield Maintenance
Payment, that is calculated as a percentage of the principal amount prepaid.
"Permitted Investments": Any one or more of the following obligations
or securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the date on which such funds are required to be drawn,
regardless of whether issued by the Depositor, the Master Servicer, the Special
Servicer, the Trustee or any of their respective Affiliates, and having at all
times the required ratings, if any, provided for in this definition (provided
that no Permitted Investment, if downgraded, shall be required to be sold at a
loss, except if the remaining term to maturity at the time of such downgrading
is greater than 30 days), unless Rating Agency Confirmation is received with
respect to a lower rating:
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(i) direct obligations of, or obligations guaranteed as to full
and timely payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided that such obligations are backed by the
full faith and credit of the United States of America, including, without
limitation, U.S. Treasury Obligations, Farmers Home Administration certificates
of beneficial interest, General Services Administration participation
certificates and Small Business Administration guaranteed participation
certificates or guaranteed pool certificates;
(ii) direct obligations of FHLMC (debt obligations only), FNMA
(debt obligations only), the Federal Farm Credit System (consolidated systemwide
bonds and notes only), the Federal Home Loan Banks (consolidated debt
obligations only), the Student Loan Marketing Association (debt obligations
only), the Financing Corp. (consolidated debt obligations only), and the
Resolution Funding Corp. (debt obligations only);
(iii) Federal funds, time deposits in, or certificates of deposit
of, or bankers' acceptances, or repurchase obligations, all having maturities of
not more than 365 days, issued by, any bank or trust company, savings and loan
association or savings bank, depository institution or trust company having a
short term debt obligation rating that is in the highest short-term unsecured
rating category of each Rating Agency;
(iv) commercial paper having a maturity of 365 days or less
(including (A) both non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof and (B) demand notes that
constitute vehicles for investment in commercial paper) that is rated by each
Rating Agency in its highest short-term unsecured rating category;
(v) shares of taxable money market funds or mutual funds that
seek to maintain a constant net asset value and have been rated AAA by DCR or
Aaa by Moody's;
(vi) if each of the Rating Agencies has issued a Rating Agency
Confirmation to the Trustee with respect to the holding of such demand, money
market or time deposit, demand obligation or any other obligation, security or
investment, any other demand, money market or time deposit, demand obligation or
any other obligation, security or investment, as may be acceptable to each
Rating Agency as a permitted investment of funds backing securities having
ratings equivalent to its initial rating of the Class A-1 and Class A-2
Certificates; and
(vii) such other obligations for which a Rating Agency Confirmation
has been obtained;
provided, however, that (a) except with respect to units of money market funds
pursuant to clause (v) above, each such obligation or security shall have a
fixed dollar amount of principal due at maturity which cannot vary or change;
and (b) except with respect to units of money market funds pursuant to clause
(v) above, if any such obligation or security provides for a variable rate of
interest, interest shall be tied to a single interest rate index plus a single
fixed spread (if any) and move proportionately with that index; and provided,
further, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section
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860G(a)(6) earning a passive return in the nature of interest and that no
instrument or security shall be a Permitted Investment if (i) such instrument or
security evidences a right to receive only interest payments, (ii) the right to
receive principal and interest payments derived from the underlying investment
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment as of the date of its acquisition; or (iii) may be
purchased at a price greater than par if such investment may be prepaid or
called at a price less than its purchase price prior to stated maturity.
"Permitted Transferee": With respect to a Class R-I, Class R-II or
Class R-III Certificate, any Person or agent thereof that is a Qualified
Institutional Buyer, Institutional Accredited Investor or any other Person
designated by the Certificate Registrar based upon an Opinion of Counsel
(provided at the expense of such Person or the Person requesting the Transfer)
to the effect that the Transfer of an Ownership Interest in any Class R-I, Class
R-II or Class R-III Certificate to such Person will not cause REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC at any time that the Certificates are
outstanding other than (a) a Disqualified Organization or (b) a Person that is a
Disqualified Non-U.S. Person.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Placement Agents": Morgan Stanley & Co. Incorporated, Deutsche Bank
Securities Inc., CIBC World Markets Corp., PNC Capital Markets, Inc. and
Residential Funding Securities Corporation or any of their successors in
interest.
"PNC Anthracite Loans": The Mortgage Loans transferred and assigned to
MSMC pursuant to the Midland Owner Trust Certificate Purchase Agreement, which
Mortgage Loans were subsequently transferred and assigned to the Depositor by
MSMC on the Closing Date pursuant to the Mortgage Loan Purchase Agreement dated
July 15, 1999 between MSMC and Depositor relating to such Mortgage Loans.
"Plan": As defined in Section 5.2(i).
"Prepayment Assumption": A CPR of 0%, applied to each Mortgage Loan
during any period that the related Borrower is permitted to make voluntary
Principal Prepayments without a Prepayment Premium, calculated on the basis of a
yield maintenance formula used for determining the accrual of original issue
discount, market discount and premium, if any, on the REMIC I Regular Interests,
the REMIC II Regular Interests or the REMIC III Regular Certificates for federal
income tax purposes.
"Prepayment Interest Excess": With respect to any Distribution Date
and any Mortgage Loan as to which a Principal Prepayment was made by the related
Borrower during the related Collection Period but following the Due Date
occurring in such Collection Period, the amount by which (i) the amount of
interest received from the related Borrower in respect of such Mortgage Loan
during such Collection Period exceeds (ii) 30 full days of interest at the
related
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Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the beginning of the related Interest Accrual Period.
"Prepayment Interest Shortfall": With respect to any Distribution
Date and any Mortgage Loan as to which a Principal Prepayment was made by the
related Borrower during the related Collection Period but prior to the Due Date
occurring in such Collection Period, the amount by which (i) 30 full days of
interest at the related Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan in respect of which interest would have been due in the
absence of such Principal Prepayment on the Due Date next succeeding the date of
such Principal Prepayment exceeds (ii) the amount of interest received from the
related Borrower in respect of such Mortgage Loan during such Collection Period.
"Prepayment Premium": Payments received on a Mortgage Loan as the
result of a Principal Prepayment thereon, not otherwise due thereon in
respect of principal or interest, which are intended to be a disincentive to
prepayment.
"Primary Servicing Fees": The monthly fee payable by the Master
Servicer from the Master Servicing Fee to each Initial Subservicer, which
monthly fee accrues at the rate per annum specified as such in the Mortgage Loan
Schedule.
"Principal Balance Certificates": Each Class of REMIC III Regular
Certificates, excluding the Class X Certificates.
"Principal Distribution Amount": For any Distribution Date, the
aggregate of (i) the Current Principal Distribution Amount for such Distribution
Date, and (ii) if such Distribution Date is subsequent to the initial
Distribution Date, the excess, if any, of the Principal Distribution Amount for
the preceding Distribution Date, over the aggregate distributions of principal
made on the Principal Balance Certificates in respect of such Principal
Distribution Amount on the preceding Distribution Date.
"Principal Prepayment": With respect to any Mortgage Loan, any
payment of principal made by the related Borrower which is received in advance
of its scheduled Due Date and which is not accompanied by an amount of interest
representing the full amount of scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
"Privately Placed Certificates": The Class G Certificates, the Class
H Certificates, the Class J Certificates, the Class K Certificates, the Class L
Certificates, the Class M Certificates, the Class N Certificates, the Class O
Certificates, the Class P Certificates, the Class R-I Certificates, the Class
R-II Certificates and the Class R-III Certificates.
"Prospectus Supplement": The Prospectus Supplement dated July 15,
1999, relating to the Publicly Offered Certificates.
"Publicly Offered Certificates": The Class A-1 Certificates, the
Class A-2 Certificates, the Class X Certificates, the Class B Certificates,
the Class C Certificates, the Class D Certificates, the Class E Certificates
and the Class F Certificates.
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"Qualified Institutional Buyer": A qualified institutional buyer
within the meaning of Rule 144A.
"Qualified Insurer": An insurance company or security or bonding
company qualified to write the related insurance policy in the relevant
jurisdiction, which (i) except as provided in clause (iii) below, shall have a
claims paying ability rating (or in the case of Moody's, an insurance financial
strength rating) of "AA" (or "Aa2", in the case of Moody's) or better by each of
the Rating Agencies, (ii) in the case of public liability insurance policies
required to be maintained with respect to REO Properties in accordance with
Section 3.8(a), shall have a claims paying ability rating (or in the case of
Moody's, an insurance financial strength rating) of "AA" or better by DCR and
"Aa2" or better by Moody's, or (iii) in the case of the fidelity bond and errors
and omissions insurance required to be maintained pursuant to Section 3.8(c),
shall have a claims paying ability rating (or in the case of Moody's, an
insurance financial strength rating) of "A" or better by DCR and "Aa2" or better
by Moody's, unless in the case where such insurance company or security or
bonding company is not so rated by such Rating Agency, Rating Agency
Confirmation has been obtained from such Rating Agency with respect to the lower
claims paying ability.
"Qualified Mortgage": A Mortgage Loan that is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code (but without regard to the
rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage), or any substantially similar successor
provision.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such 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 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 Mortgage Loan; (iii) have the same Due Date as
the Deleted Mortgage Loan; (iv) accrue interest on the same basis as the Deleted
Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve
30-day months); (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 Mortgage Loan; (vi) have an original Loan-to-Value Ratio not higher
than that of the Deleted Mortgage Loan and a current Loan-to-Value Ratio not
higher than the then-current Loan-to-Value Ratio of the Deleted Mortgage Loan;
(vii) comply as of the date of substitution with all of the representations and
warranties set forth in the applicable Mortgage Loan Purchase and Sale
Agreement, (viii) have an Environmental Report with respect to the related
Mortgaged Property which will be delivered as a part of the related Mortgage
File; (ix) have an original debt service coverage ratio not lower than the
original debt service coverage ratio of the Deleted Mortgage Loan; and (x) be
determined by an Opinion of Counsel (at the expense of the applicable Seller) to
be a "qualified replacement mortgage" within the meaning of Section 860G(a)(4)
of the Code; provided that no such mortgage loan may have a maturity date after
the date three years prior to the Rated Final Distribution Date; and provided,
further, that no such mortgage loan shall be substituted for a Deleted Mortgage
Loan unless the Trustee has received Rating Agency Confirmation (the cost, if
any, of obtaining such
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confirmation to be paid by the applicable Seller) with respect to such
substitution; and provided, further that no such mortgage loan shall be
substituted for a Deleted Mortgage Loan if it would result in an Adverse REMIC
Event in respect of REMIC I, REMIC II, or REMIC III; and provided, further that
no such mortgage loan shall be substituted for a Deleted Mortgage Loan unless
the Operating Adviser shall have approved of such substitution based upon an
engineering report and the Environmental Report obtained with respect to such
Mortgage Loan (provided, however, that such approval of the Operating Adviser
may not be unreasonably withheld, as determined by the Special Servicer). In the
event that one or more mortgage loans are substituted for one or more Deleted
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. Whenever a Qualified Substitute
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the Seller effecting such substitution shall certify that such
Mortgage Loan meets all of the requirements of this definition and shall send
such certification to the Trustee.
"Rated Final Distribution Date": The Distribution Date in June
2031.
"Rating Agency": Each of Moody's and DCR. References herein to the
highest long-term senior unsecured debt rating category of each Rating Agency
shall mean "Aaa" with respect to Moody's and "AAA" with respect to DCR.
References herein to the highest short-term senior unsecured debt rating
category of each Rating Agency shall mean "P1" with respect to Moody's and
"D-1+" with respect to DCR.
"Rating Agency Confirmation": With respect to any matter, where
required under this Agreement, (a) with respect to Moody's, a written
confirmation that a proposed action, failure to act, or other event specified
herein will not in and of itself result in Moody's withdrawal, downgrade, or
qualification of the then-current rating assigned to any Class of Certificates
then rated by Moody's (the placing of a Class of Certificates on "watch" status
shall be considered a "qualification" of a rating); and (b) with respect to DCR,
a No Downgrade Confirmation.
"Real Property": Land or improvements thereon such as buildings or
other inherently permanent structures (including items that are structural
components of such buildings or structures), in each such case as such terms are
used in the REMIC Provisions.
"Realized Loss": (x) With respect to each defaulted Mortgage Loan as
to which a Final Recovery Determination has been made, or with respect to any
REO Mortgage Loan as to which a Final Recovery Determination has been made as to
the related REO Property, an amount (not less than zero) equal to (i) the unpaid
principal balance of such Mortgage Loan (or, in the case of an REO Property, the
related REO Mortgage Loan) as of the commencement of the Collection Period in
which the Final Recovery Determination was made, plus (ii) all accrued but
unpaid interest on such Mortgage Loan (or, in the case of an REO Property, the
related REO Mortgage Loan) at the related Mortgage Rate to but not including the
Due Date in the Collection Period in which the Final Recovery Determination was
made, in any event determined without taking into account the amounts described
in subclause (iv) of this sentence, plus (iii) any related
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unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period and all unpaid
Advance Interest Amounts, minus (iv) all related Liquidation Proceeds (net of
any related Liquidation Expenses paid therefrom); (y) with respect to any
Mortgage Loan as to which any portion of the outstanding principal or accrued
interest owed thereunder was forgiven in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 3.28, the amount of such principal or
interest so forgiven; and (z) with respect to any Mortgage Loan as to which the
Mortgage Rate thereon has been permanently reduced for any period in connection
with a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 3.28, the amount of
the consequent reduction in the interest portion of each successive Monthly
Payment due thereon. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
"Record Date": With respect to each Distribution Date, the last
Business Day of the month preceding the month in which such Distribution Date
occurs.
"Regulation D": Regulation D under the 1933 Act.
"Related Certificate" and "Related REMIC II Regular Interest": For
any Class of REMIC II Regular Interest, the related class of Certificates set
forth below and for any Class of Certificates (other than the Class X, Class
R-I, Class R-II or Class R-III Certificates), the related Class of REMIC II
Regular Interests set forth below:
Related REMIC II
Related Certificate Regular Interest
------------------- ----------------
Class A-1 Class A-1-II Interest
Class A-2 Class A-2-II Interest
Class B Class B-II Interest
Class C Class C-II Interest
Class D Class D-II Interest
Class E Class E-II Interest
Class F Class F-II Interest
Class G Class G-II Interest
Class H Class H-II Interest
Class J Class J-II Interest
Class K Class K-II Interest
Class L Class L-II Interest
Class M Class M-II Interest
Class N Class N-II Interest
Class O Class O-II Interest
Class P Class P-II Interest
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"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"REMIC I": The segregated pool of assets included in the Trust Fund
created hereby and to be administered hereunder, consisting of the Mortgage
Loans, as from time to time are subject to this Agreement, the Mortgage Files
relating thereto, all proceeds of and payments under such Mortgage Loans
received after the Cut-off Date, such amounts in respect thereof as shall from
time to be held in the Collection Account, the Distribution Account, the
Interest Reserve Account and the REO Account, and any REO Properties acquired in
respect of any Mortgage Loan, for which a REMIC election is to be made pursuant
to Section 10.1 hereof.
"REMIC I Interests": Collectively, the REMIC I Regular Interests
and the Class R-I Certificates.
"REMIC I Regular Interest": With respect to each Mortgage Loan
(including, without limitation, each REO Mortgage Loan), the separate
uncertificated interest in REMIC I issued in respect of such Mortgage Loan
hereunder and designated as a "regular interest" in REMIC I. Each REMIC I
Regular Interest shall represent a right to receive interest at the related
REMIC I Remittance Rate and distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance (which shall equal the principal balance of the related
Mortgage Loan as of the Cut-off Date). The designation for each REMIC I Regular
Interest shall be the loan number for the related Mortgage Loan set forth in the
Mortgage Loan Schedule as of the Closing Date. If a Qualified Substitute
Mortgage Loan or Loans are substituted for any Deleted Mortgage Loan, the REMIC
I Regular Interest that related to the Deleted Mortgage Loan shall thereafter
relate to such Qualified Substitute Mortgage Loan(s).
"REMIC I Remittance Rate": With respect to any REMIC I Regular
Interest for any Distribution Date, a rate per annum equal to the Net Mortgage
Rate in effect for the related Mortgage Loan (including without limitation an
REO Mortgage Loan) as of the Closing Date. If any Mortgage Loan included in the
Trust Fund as of the Closing Date is replaced by a Qualified Substitute Mortgage
Loan or Loans, the REMIC I Remittance Rate for the related REMIC I Regular
Interest shall still be calculated in accordance with the preceding sentence
based on the Net Mortgage Rate for the Deleted Mortgage Loan.
"REMIC II": The segregated pool of assets consisting of the REMIC I
Regular Interests and all distributions thereon conveyed to the Trustee for the
benefit of REMIC III and for which a separate REMIC election is to be made
pursuant to Section 10.1 hereof.
"REMIC II Distribution Amount": As defined in Section 4.1(c).
"REMIC II Interests": Collectively, the REMIC II Regular Interests
and the Class R-II Certificates.
"REMIC II Regular Interest": Any of the 16 separate uncertificated
beneficial interests in REMIC II issued hereunder and designated as a
"regular interest" in REMIC II. Each
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REMIC II Regular Interest shall represent a right to receive interest at the
related REMIC II Remittance Rate in effect from time to time and shall be
entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto. The designations for
the respective REMIC II Regular Interests are set forth in the Preliminary
Statement hereto.
"REMIC II Remittance Rate": With respect to each REMIC II Regular
Interest, the Weighted Average REMIC I Remittance Rate.
"REMIC III Certificate": Any Certificate, other than a Class R-I
or Class R-II Certificate.
"REMIC III Distribution Amount": As defined in Section 4.2(d).
"REMIC III Regular Certificate": Any REMIC III Certificate, other
than a Class R-III Certificate.
"REMIC Pool": Each of the three segregated pools of assets
designated as a REMIC pursuant to Section 10.1 hereof.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations (including any applicable proposed regulations) and rulings
promulgated thereunder, as the foregoing may be in effect from time to time.
"Remittance Date": The Business Day preceding each Distribution
Date.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code, which income,
subject to the terms and conditions of that Section of the Code in its present
form, does not include:
(i) except as provided in Section 856(d)(4) or (6) of the Code,
any amount received or accrued, directly or indirectly, with respect to such REO
Property, if the determination of such amount depends in whole or in part on the
income of profits derived by any Person from such property (unless such amount
is a fixed percentage or percentages of receipts or sales and otherwise
constitutes Rents from Real Property);
(ii) any amount received or accrued, directly or indirectly, from
any Person if the Trust Fund owns directly or indirectly (including by
attribution) a 10% or greater interest in such Person determined in accordance
with Sections 856(d)(2)(B) and (d)(5) of the Code;
(iii) any amount received or accrued, directly or indirectly, with
respect to such REO Property if any Person Directly Operates such REO Property;
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(iv) any amount charged for services that are not
customarily furnished in connection with the rental of property to tenants in
buildings of a similar class in the same geographic market as such REO Property
within the meaning of Treasury Regulation Section 1.856-4(b)(1) (whether or not
such charges are separately stated); and
(v) rent attributable to personal property unless such
personal property is leased under, or in connection with, the lease of such REO
Property and, for any taxable year of the Trust Fund, such rent is no greater
than 15% of the total rent received or accrued under, or in connection with, the
lease.
"REO Account": As defined in Section 3.17(b).
"REO Extension Period": As defined in Section 3.17(a).
"REO Grace Period": As defined in Section 3.17(a).
"REO Mortgage Loan": Any Mortgage Loan as to which the related
Mortgaged Property has become an REO Property.
"REO Proceeds": With respect to any REO Property and the related REO
Mortgage Loan, all revenues received by the Master Servicer with respect to such
REO Property or REO Mortgage Loan that do not constitute Liquidation Proceeds.
"REO Property": A Mortgaged Property title to which has been acquired
by the Master Servicer on behalf of the Trust Fund through foreclosure, deed in
lieu of foreclosure or otherwise.
"Repurchase Price": With respect to any Mortgage Loan to be
repurchased, or any Deleted Mortgage Loan to be replaced by the substitution of
one or more Qualified Substitute Mortgage Loans, pursuant to Section 2.3 or any
Specially Serviced Mortgage Loan or any REO Property to be sold or repurchased
pursuant to Section 3.18, an amount, calculated by the Master Servicer equal to:
(i) The unpaid principal balance of such Mortgage Loan (or, in
the case of any REO Property, the related REO Mortgage Loan) (after application
of all principal payments (including prepayments) collected and other principal
amounts recovered on such Mortgage Loan) as of the date of receipt of the
Repurchase Price or the date of substitution, as the case may be, hereunder;
plus
(ii) Unpaid interest accrued on such Mortgage Loan or REO
Mortgage Loan, as applicable, at the related Mortgage Rate (after application of
all interest payments collected and other amounts recovered (and applied to
accrued interest) on such Mortgage Loan) to, but not including, the date of
receipt of the Repurchase Price or the date of substitution, as the case may be,
hereunder; plus
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(iii) Any unreimbursed Servicing Advances, all accrued and
unpaid interest on Advances (including P&I Advances) at the Advance Rate, any
unpaid Servicing Compensation (other than Master Servicing Fees) and any unpaid
or unreimbursed expenses of the Trust Fund allocable to such Mortgage Loan or
REO Mortgage Loan, as applicable, as of the date of receipt of the Repurchase
Price or the date of substitution, as the case may be, hereunder; plus
(iv) In the event that such Mortgage Loan or REO Mortgage Loan,
as applicable, is required to be repurchased or replaced pursuant to Section
2.3, expenses reasonably incurred or to be incurred by the Master Servicer, the
Special Servicer or the Trustee in respect of the breach or defect giving rise
to the repurchase or replacement obligation, including any expenses arising out
of the enforcement of the repurchase or replacement obligation.
"Request for Release": A request for release signed by a Servicing
Officer, substantially in the form of Exhibit E hereto.
"Required Appraisal Loan": Any Mortgage Loan (including without
limitation any REO Mortgage Loan) as to which an Appraisal Event has occurred
and is continuing.
"Reserve Accounts": With respect to any Mortgage Loan, reserve or
escrow accounts, if any, established pursuant to the related Mortgage Loan
Documents and any Escrow Account. Each Reserve Account shall be an Eligible
Account except to the extent precluded by applicable law and the related
Mortgage Loan Documents. Any Reserve 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 related Mortgage Loan
Documents and Section 3.7.
"Residual Certificate": A Class R-I, Class R-II or Class R-III
Certificate.
"Responsible Officer": Any officer of the Asset-Backed Securities
Trust Services Group of the Trustee (and, in the event that the Trustee is the
Certificate Registrar or the Paying Agent, an officer of the Certificate
Registrar or the Paying Agent, as applicable) assigned to the Corporate Trust
Office with direct responsibility for the administration of this Agreement and
also, with respect to a particular matter, any other officer or any employee
with responsibilities similar to those of an officer of the Asset-Backed
Securities Trust Services Group of the Trustee to whom such matter is referred
because of such officer's or employee's knowledge of and familiarity with the
particular subject, and, in the case of any certification required to be signed
by a Responsible Officer, such an officer or employee whose name and specimen
signature appears on a list of corporate trust officers and employees furnished
to the Master Servicer by the Trustee, as such list may from time to time be
amended.
"Review Threshold": A Mortgage Loan having a current outstanding
principal balance equal to or exceeding 2% of the then current aggregate
principal balance of all Mortgage Loans in the Mortgage Pool. For this purpose,
in connection with any direct or indirect transfer of an ownership interest in a
Borrower and any assumption of a Mortgage Loan, groups of cross-collateralized
Mortgage Loans and groups of Mortgage Loans with the same or affiliated
Borrowers will be aggregated and treated as one.
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"Revised Interest Rate": Any increased Mortgage Rate after a
Hyper-Amortization Date.
"RFC": Residential Funding Corporation, a Delaware corporation.
"RFC Loans": The Mortgage Loans transferred and assigned by RFC to
MSMC pursuant to the RFC Mortgage Loan Purchase Agreement; which Mortgage Loans
were subsequently transferred to the Depositor by MSMC on the Closing Date
pursuant to a Mortgage Loan Purchase and Sale Agreement dated as of July 15,
1999 between MSMC and Depositor relating to such Mortgage Loans.
"RFC Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
and Sale Agreement dated as of June 30, 1999 between MSMC and RFC.
"Rule 144A": Rule 144A, under the 1933 Act.
"Scheduled Final Distribution Date": With respect to any Class of
Certificates, the Distribution Date on which the aggregate Certificate Balance
or aggregate Notional Amount, as the case may be, of such Class of Certificates
would be reduced to zero based on the Prepayment Assumption. Such Distribution
Date shall in each case be as follows:
Scheduled
Class Designation Final Distribution Date
Class A-1 August 2008
Class A-2 May 2009
Class X May 2019
Class B June 2009
Class C June 2009
Class D June 2009
Class E June 2009
Class F June 2009
Class G June 2009
Class H July 2009
Class J July 2009
Class K October 2009
Class L April 2011
Class M May 2013
Class N April 2014
Class O May 2014
Class P May 2019
"Securities Depository": The Depository Trust Company, or any
successor Securities Depository hereafter named. The nominee of the initial
Securities Depository, for purposes of registering those Certificates that
are to be Book-Entry Certificates, is Cede & Co.
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The Securities 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 1934 Act.
"Securities Depository Participant": A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository.
"Securities Legend": With respect to each Residual Certificate and
any Individual Certificate (other than a Residual Certificate) that is a
Privately Placed Certificate the legend set forth in, and substantially in
the form of, Exhibit G hereto.
"Seller": With respect to the Midland Loans, Midland; with respect
to the RFC Loans, RFC; and with respect to the CIBC Loans, CIBC.
"Senior Certificates": The Class A-1, Class A-2 and Class X
Certificates.
"Servicer Remittance Report": A report prepared by the Master
Servicer in such media and in CSSA format as may be agreed upon by the Master
Servicer and the Trustee containing such information regarding the Mortgage
Loans as will permit the Trustee to calculate the amounts to be distributed
pursuant to Section 4.3 and to furnish statements to Certificateholders pursuant
to Section 4.4 and containing such additional information as the Master Servicer
and the Trustee may from time to time agree.
"Servicing Advance": As to any Mortgage Loan, any advance made by the
Master Servicer, the Trustee or the Fiscal Agent in respect of costs and
expenses incurred pursuant to Sections 3.9, 3.10, 3.17, 3.23 and 3.28 or any
expenses incurred to protect and preserve the security for such Mortgage Loan or
taxes and assessments or insurance premiums, pursuant to Section 3.4, 3.8 or
Section 3.22, as applicable, or any other item designated as such hereunder.
"Servicing Compensation": With respect to each Mortgage Loan, the
Master Servicing Fee and the Special Servicing Fee which shall be due to the
Master Servicer and the Special Servicer, as applicable, and such other
compensation of the Master Servicer and Special Servicer specified in Section
3.12, as adjusted pursuant to Section 3.25.
"Servicing Officer": Any officer or employee of the Master Servicer
or the Special Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans or this Agreement and also, with respect to a
particular matter, any other officer or employee to whom such matter is referred
because of such officer's or employee's knowledge of and familiarity with the
particular subject, and, in the case of any certification required to be signed
by a Servicing Officer, such an officer or employee whose name and specimen
signature appears on a list of servicing officers furnished to the Trustee by
the Master Servicer or the Special Servicer, as applicable, as such list may
from time to time be amended, together with, in the case of a certificate or
other writing executed by an employee who constitutes a Servicing Officer
because of such employee's knowledge and familiarity with a particular subject,
a
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countersignature of an officer of the Master Servicer or of an officer of the
Special Servicer, as appropriate.
"Servicing Standard": The standards for the conduct of the Master
Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement as set forth in Section 3.1(a).
"Similar Law": As defined in Section 5.2(i).
"Single Purpose Entity": Any Person, other than an individual, whose
organizational documents provide that it is formed solely for the purpose of
owning and holding United States Treasury obligations required or permitted to
be pledged in lieu of prepayment in accordance with the defeasance provisions of
one or more Mortgage Loan as provided in Section 3.28(f) that (a) does not
engage in any business unrelated to such property and the financing thereof; (b)
does not have any assets other than those related to its interest in the United
States Treasury obligations pledged as defeasance collateral; (c) maintains its
own books, records and accounts, in each case which are separate and apart from
the books, records and accounts of any other person; (d) conducts business in
its own name and uses separate stationary, invoices and checks; (e) does not
guarantee or assume the debts or obligations of any other person; (f) does not
commingle its assets or funds with those of any other person; (g) transacts
business with affiliates on an arm's length basis pursuant to written
agreements; (h) holds itself out as being a legal entity, separate and apart
from any other Person; (i) such documents may not be amended with respect to the
Single Purpose Entity requirements while it holds any of the defeasance
collateral; and (j) any dissolution or winding up or insolvency filing for such
entity requires the unanimous consent of all partners or members, as applicable.
"Special Servicer": ORIX Real Estate Capital Markets, LLC (formerly
known as Banc One Mortgage Capital Markets, LLC), a Delaware limited liability
company, or its successor in interest, or any successor Special Servicer
appointed as herein provided.
"Special Servicing Fee": With respect to any Specially Serviced
Mortgage Loan or REO Mortgage Loan and for any Distribution Date, an amount per
calendar month equal to the product of (i) one-twelfth of the Special Servicing
Fee Rate and (ii) the Stated Principal Balance of such Specially Serviced
Mortgage Loan or REO Mortgage Loan, as applicable, as of the Due Date in the
month preceding the month in which such Distribution Date occurs.
"Special Servicing Fee Rate": A rate equal to .25%.
"Specially Serviced Mortgage Loan": Subject to Section 3.24, any
Mortgage Loan with respect to which:
(i) the related Borrower is 60 or more days delinquent (without
giving effect to any grace period permitted by the related Note) in the payment
of a Monthly Payment or other obligation (regardless of whether, in respect
thereof, P&I Advances have been reimbursed);
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(ii) such Borrower has expressed to the Master Servicer an inability
to pay or a hardship in paying such Mortgage Loan in accordance with its terms;
(iii) the Master Servicer or the Special Servicer has received notice
that such Borrower has become the subject of any bankruptcy, insolvency or
similar proceeding, admitted in writing the inability to pay its debts as they
come due or made an assignment for the benefit of creditors;
(iv) the Master Servicer has received notice of a foreclosure or
threatened foreclosure of any lien on the related Mortgaged Property;
(v) a default, of which the Master Servicer has notice (other than a
failure by such Borrower to pay principal or interest) and which in the judgment
of the Master Servicer materially and adversely affects the interests of the
Certificateholders, has occurred and remained unremedied for the applicable
grace period specified in such Mortgage Loan (or, if no grace period is
specified, 60 days); provided, however, that a default requiring a Servicing
Advance shall be deemed to materially and adversely affect the interests of the
Certificateholders;
(vi) such Borrower has failed to make a Balloon Payment as and when
due (except in the case where the Master Servicer and the Special Servicer agree
in writing that such Mortgage Loan is likely to be paid in full within 30 days
after such default);
(vii) the Master Servicer proposes to commence foreclosure or other
workout arrangements; or
(viii) three consecutive P&I Advances have been made on such Mortgage
Loan (regardless of whether reimbursed); provided, however, that a Mortgage Loan
will cease to be a Specially Serviced Mortgage Loan:
(a) with respect to the circumstances described in clause (i)
and (vi) above, when the related Borrower has brought such Mortgage Loan current
(with respect to the circumstances described in clause (vi), pursuant to any
workout implemented by the Special Servicer) and thereafter made three
consecutive full and timely Monthly Payments;
(b) with respect to the circumstances described in clauses (ii),
(iv) and (viii) above, when such circumstances cease to exist in the good faith
judgment of the Special Servicer, and with respect to the circumstances
described in clauses (iii) and (vii), when such circumstances cease to exist; or
(c) with respect to the circumstances described in clause (v)
above, when such default is cured; provided, however, in each case that at the
time no circumstance identified in clauses (i) through (viii) above exists that
would cause the Mortgage Loan to continue to be characterized as a Specially
Serviced Mortgage Loan.
"Startup Day": The day designated as such pursuant to Section
10.1(c).
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"Stated Maturity Date": With respect to any Mortgage Loan, the Due
Date on which the last payment of principal is due and payable under the terms
of the related Mortgage Note as in effect on the Closing Date, without regard to
any change in or modification of such terms in connection with a bankruptcy or
similar proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 3.28.
"Stated Principal Balance": As of any date of determination, with
respect to any Mortgage Loan (including without limitation any REO Mortgage
Loan), an amount equal to (a) the unpaid principal balance of such Mortgage Loan
as of the Cut-off Date (or, in the case of a Qualified Substitute Mortgage Loan,
as of the related date of substitution), after application of all payments due
on or before such date, whether or not received, reduced on a cumulative basis
on each subsequent Distribution Date (to not less than zero) by (b) the sum of
(i) all payments (or P&I Advances in lieu thereof) of, and all other collections
allocated as provided in Section 1.2 to, principal of or with respect to such
Mortgage Loan that are (or, if they had not been applied to cover any Additional
Trust Fund Expense, would have been) distributed to Certificateholders on such
Distribution Date, and (ii) the principal portion of any Realized Loss incurred
in respect of such Mortgage Loan during the related Collection Period, provided
that, notwithstanding the foregoing, if a Liquidation Event occurs in respect of
such Mortgage Loan (or any related REO Property), then the "Stated Principal
Balance" of such Mortgage Loan shall be zero commencing as of the Distribution
Date in the Collection Period next following the Collection Period in which such
Liquidation Event occurred.
"Subordinate Certificates": Any one or more of the Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M,
Class N, Class O and Class P Certificates.
"Sub-Servicer": Any person with which the Master Servicer or the
Special Servicer has entered into a Sub-Servicing Agreement, which shall
include any Initial Sub-Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer or the Special Servicer and any Sub-Servicer relating to servicing and
administration of Mortgage Loans as provided in Section 3.2, which shall include
any sub-servicing agreement with an Initial Sub-Servicer.
"Substitution Shortfall Amount": In connection with the substitution
of one or more Qualified Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the amount, if any, by which the Repurchase Price or aggregate
Repurchase Price, as the case may be, for such Deleted Mortgage Loan(s) as of
the date of substitution exceeds the Stated Principal Balance or aggregate
Stated Principal Balance, as the case may be, of such Qualified Substitute
Mortgage Loan(s) as of the date of substitution.
"Tax Returns": The federal income tax return on IRS Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss
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Allocation, or any successor forms, to be filed on behalf of each of REMIC I,
REMIC II and REMIC III under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the IRS or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"Termination Date": The Distribution Date on which the Trust Fund
is terminated pursuant to Section 9.1.
"Transfer": Any direct or indirect transfer or other form of
assignment of any Ownership Interest in a Class R-I, Class R-II or Class
R-III Certificate.
"Transferable Servicing Interest": Subject to reduction by the
Trustee pursuant to Section 3.12(a), the amount by which the Master Servicing
Fees otherwise payable to the Master Servicer hereunder exceed the sum of (i)
the Primary Servicing Fees and (ii) the amount of such Master Servicing Fees
calculated using the Minimum Master Servicing Fee Rate.
"Transferee Affidavit": As defined in Section 5.2(j)(ii).
"Transferor Letter": As defined in Section 5.2(j)(ii).
"Trust Fund": The corpus of the trust created hereby and to be
administered hereunder, consisting of: (i) such Mortgage Loans as from time to
time are subject to this Agreement, together with the Mortgage Files relating
thereto; (ii) all payments on or collections in respect of such Mortgage Loans
due after the Cut-off Date; (iii) any REO Property; (iv) all revenues received
in respect of REO Property; (v) the Master Servicer's, the Special Servicer's
and the Trustee's rights under the insurance policies with respect to such
Mortgage Loans required to be maintained pursuant to this Agreement and any
proceeds thereof; (vi) any Assignments of Leases, Rents and Profits, and any
security agreements and pledges; (vii) any indemnities or guaranties given as
additional security for such Mortgage Loans; (viii) the Trustee's right, title
and interest in and to the Reserve Accounts; (ix) the Collection Account; (x)
the Distribution Account, the Interest Reserve Account and the REO Account; (xi)
any environmental indemnity agreements relating to such Mortgaged Properties;
(xii) the rights and remedies of Depositor under each Mortgage Loan Purchase
Agreement; (xiii) the Cash Deposit; and (xiv) the proceeds of any of the
foregoing (other than any interest earned on deposits in any Reserve Account, to
the extent such interest belongs to the related Borrower).
"Trust REMICs": REMIC I, REMIC II and REMIC III.
"Trustee": LaSalle Bank National Association, in its capacity as
trustee, or its successor in interest, or any successor trustee appointed as
herein provided.
"Trustee Fee": With respect to each Mortgage Loan and for any
Distribution Date, an amount per calendar month equal to the product of (i)
one-twelfth of the Trustee Fee Rate and (ii) the Stated Principal Balance of
such Mortgage Loan as of the Due Date in the month preceding the month in which
such Distribution Date occurs. The Trustee Fee shall be paid out of the
Collection Account by the Master Servicer on or before each Remittance Date.
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"Trustee Fee Rate": A rate equal to .003%.
"Trustee Mortgage File": With respect to any Mortgage Loan, the
documents listed in Section 2.1(i) through (xv) pertaining to such Mortgage
Loan, the documents listed in the third paragraph of Section 2.1 and any
additional documents required to be deposited with the Trustee pursuant to the
express provisions of this Agreement.
"Uncertificated Accrued Interest": With respect to any class of
uncertificated REMIC I Regular Interests or REMIC II Regular Interests for any
Distribution Date, the product of the Uncertificated Principal Balance of such
class as of the close of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Cut-off Date) and one-twelfth of the
applicable REMIC I Remittance Rate or REMIC II Remittance Rate. The
Uncertificated Accrued Interest in respect of each class of REMIC I Regular
Interests and REMIC II Regular Interests shall accrue on the basis of a 360-day
year consisting of twelve 30-day months.
"Uncertificated Distributable Interest": With respect to any REMIC I
Regular Interest or REMIC II Regular Interest for any Distribution Date, an
amount equal to: (a) the Uncertificated Accrued Interest in respect of such
REMIC I Regular Interest or REMIC II Regular Interest, as the case may be, for
such Distribution Date; reduced (to not less than zero) by (b) the portion of
any Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, as set forth below; and increased by (c) any Uncertificated
Distributable Interest in respect of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, for the immediately preceding Distribution
Date that was not deemed paid on the immediately preceding Distribution Date
pursuant to Section 4.1 or 4.2, as applicable, together with one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months) on such unpaid Uncertificated Distributable Interest at the REMIC I
Remittance Rate or the REMIC II Remittance Rate, as the case may be, applicable
to such REMIC I Regular Interest or REMIC II Regular Interest, as the case may
be, for the current Distribution Date. The Net Aggregate Prepayment Interest
Shortfall for any Distribution Date shall be allocated: (i) among the respective
REMIC I Regular Interests, pro rata in accordance with the respective amounts of
Uncertificated Accrued Interest with respect thereto for such Distribution Date;
and (ii) among the respective REMIC II Regular Interests, pro rata in accordance
with the respective amounts of Uncertificated Accrued Interest with respect
thereto for such Distribution Date.
"Uncertificated Principal Balance": The principal amount of any REMIC
I Regular Interest or REMIC II Regular Interest outstanding as of any date of
determination. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC I Regular Interest shall equal the principal balance of the related
Mortgage Loan as of the Cut-off Date. On each Distribution Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced by all distributions of principal deemed to have been made thereon on
such Distribution Date pursuant to Section 4.1 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 4.6. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC II Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each
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Distribution Date, the Uncertificated Principal Balance of each REMIC II Regular
Interest shall be calculated as set forth in the Preliminary Statement. For
purposes of this Agreement, the Uncertificated Principal Balances of the REMIC
II Regular Interests shall be expressed in eight decimal places.
"Underwriting Agreement" The Underwriting Agreement dated July 15,
1999 among the Depositor, Midland, Morgan Stanley & Co. Incorporated,
Deutsche Bank Securities Inc., CIBC World Markets Corp., PNC Capital Markets,
Inc. and Residential Funding Securities Corporation, as underwriters.
"Unscheduled Payments": With respect to a Mortgage Loan and a
Collection Period, all Liquidation Proceeds and Insurance Proceeds payable under
such Mortgage Loan, the Repurchase Price of such Mortgage Loan if it is
repurchased or purchased pursuant to Sections 2.3 and the price specified in
Section 9.1 if such Mortgage Loan is purchased or repurchased pursuant thereto,
draws on any letters of credit issued with respect to such Mortgage Loan and any
other payments under or with respect to such Mortgage Loan not scheduled to be
made, including Principal Prepayments (but excluding Prepayment Premiums)
received during such Collection Period.
"Updated Appraisal": With respect to any Mortgage Loan, (i) a fair
market value appraisal of the related Mortgaged Property or REO Property from an
independent appraiser who is a member of the Appraisal Institute, which
appraisal shall be conducted in accordance with MAI standards by an appraiser
with at least 5 years experience in the related property type and in the
jurisdiction where the property is located or (ii) an internal property
valuation performed by the Special Servicer at its discretion in accordance with
the servicing standard set forth herein with respect to any Mortgage Loan with
an outstanding principal balance equal to or less than $1,000,000, in each case
conducted subsequent to any appraisal performed on or prior to the Cut-off Date.
"Voting Rights": The voting rights to which the Certificateholders
are entitled hereunder. At all times during the term of this Agreement, 97% of
the Voting Rights shall be allocated among the Holders of the various
outstanding Classes of Principal Balance Certificates in proportion to the
respective aggregate Certificate Balances of their Certificates less any
Appraisal Reductions allocated to a Class, 2% of the Voting Rights shall be
allocated to the Holders of the Interest Only Certificates, and the remaining
Voting Rights shall be allocated equally among the Holders of the respective
Classes of the Residual Certificates. Voting Rights allocated to a Class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests in such Class evidenced by their
respective Certificates.
"Weighted Average REMIC I Remittance Rate": With respect to each
Distribution Date, the weighted average of the REMIC I Remittance Rates for the
REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal
Balances of the REMIC I Regular Interest related to each Mortgage Loan as of the
close of the preceding Distribution Date (or, in the case of the first
Distribution Date, as of the Cut-off Date).
"Workout Fee": As defined in Section 3.12(b).
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"Yield Maintenance Payment": With respect to any Distribution Date,
any amount received as a Prepayment Premium which is calculated based upon a
yield maintenance formula.
"1933 Act": The Securities Act of 1933, as it may be amended from
time to time.
"1934 Act": The Securities Exchange Act of 1934, as it may be
amended from time to time.
SECTION 1.2. Certain Calculations.
Unless otherwise specified herein, the following provisions shall
apply:
(a) All calculations of interest (excluding interest on the Mortgage
Loans, which shall be calculated pursuant to the related Mortgage Loan
Documents) provided for herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
(b) The portion of any Insurance Proceeds, Liquidation Proceeds,
Repurchase Price, Substitution Shortfall Amounts or Net REO Proceeds in respect
of a Mortgage Loan allocable to principal and Prepayment Premiums shall equal
the total amount of such proceeds minus (a) first, any portion thereof payable
to the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent
pursuant to the provisions of this Agreement and (b) second, any portion thereof
equal to interest on the unpaid principal balance of such Mortgage Loan at the
related Net Mortgage Rate from the Due Date as to which interest was last paid
by the related Borrower up to but not including the Due Date in the Collection
Period in which such proceeds are received. Allocation of such amount between
principal and Prepayment Premium shall be made first to principal and second to
Prepayment Premium.
(c) Any Mortgage Loan payment is deemed to be received on the date
such payment is actually received by the Master Servicer, the Special Servicer
or the Trustee; provided, however, that for purposes of calculating
distributions on the Certificates, Principal Prepayments with respect to any
Mortgage Loan are deemed to be received on the date they are applied in
accordance with Section 3.1(b) to reduce the outstanding principal balance of
such Mortgage Loan on which interest accrues.
SECTION 1.3. Certain Constructions.
(a) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under United States
generally accepted accounting principles or regulatory accounting principles, as
applicable.
(b) The words "hereof," "herein" and "hereunder," and words of similar
import when used in this Agreement, shall refer to this agreement as a whole and
not to any particular provision of this Agreement, and references to Sections,
Schedules and Exhibits
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contained in this Agreement are references to Sections, Schedules and Exhibits
in or to this Agreement unless otherwise specified.
(c) Whenever a term is defined herein, the definition ascribed to
such term shall be equally applicable to both the singular and plural forms of
such term and to masculine, feminine and neuter genders of such term.
(d) This Agreement is the result of arm's-length negotiations between
the parties and has been reviewed by each party hereto and its counsel. Each
party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby establish a trust, appoint the Trustee to serve as trustee of such
trust and sell, transfer, assign, set over and otherwise convey to the Trustee
without recourse (except to the extent herein provided) all the right, title and
interest of the Depositor in and to the Mortgage Loans, including all rights to
payment in respect thereof, except as set forth below, and any security interest
thereunder (whether in real or personal property and whether tangible or
intangible) in favor of the Depositor, and all Reserve Accounts and all other
assets included or to be included in the Trust Fund for the benefit of the
Certificateholders. Such transfer and assignment includes all scheduled payments
of interest and principal due after the Cut-off Date (whether or not received)
and all payments of interest and principal received by the Depositor or the
Master Servicer on or with respect to the Mortgage Loans after the Cut-off Date,
other than any such payments of interest or principal which were due on or prior
to the Cut-off Date. In connection with such transfer and assignment of all
interest and principal due with respect to the Mortgage Loans after the Cut-off
Date, the Depositor shall make a cash deposit to the Collection Account on the
Closing Date in an amount equal to the Cash Deposit. The Depositor, concurrently
with the execution and delivery hereof, does also hereby sell, transfer, assign,
set over and otherwise convey to the Trustee without recourse (except to the
extent provided herein) all the right, title and interest of the Depositor in,
to and under the Mortgage Loan Purchase Agreements (other than the right to
recovery or payment of certain transaction expenses, including certain estimated
expenses, to the extent provided in each such Mortgage Loan Purchase Agreement
and the right to receive certain indemnification payments under the
Indemnification Certificate required of the applicable Seller under each such
Mortgage Loan Purchase Agreement). The Depositor shall cause the Reserve
Accounts to be transferred to and held in the name of the Master Servicer on
behalf of the Trustee.
In connection with the transfer and assignment of its right, title
and interest in the Mortgage Loans, the Depositor does hereby deliver to, and
deposit with, the Trustee, with a copy
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to the Master Servicer, the following documents or instruments with respect to
each such Mortgage Loan:
(i) the original of the related Note, endorsed by the applicable
Seller in blank in the following form: "Pay to the order of ________________,
without recourse" which the Trustee or its designee is authorized to complete
and which Note and all endorsements thereof shall show a complete chain of
endorsement from the Originator to the applicable Seller;
(ii) the related original recorded Mortgage or a copy thereof
certified by the related title insurance company, public recording office or
closing agent to be in the form in which executed or submitted for recording,
each related original recorded Assignment of Mortgage which, together with other
such Assignments of Mortgage, shows a complete chain of assignment of the
related Mortgage from the applicable Originator to the applicable Seller or a
copy thereof certified by the related title insurance company, public recording
office or closing agent to be in the form in which executed or submitted for
recording and the related original Assignment of Mortgage executed by the
applicable Seller in blank which the Trustee or its designee is authorized to
complete (and but for the insertion of the name of the assignee and any related
recording information which is not yet available to the applicable Seller, is in
suitable form for recordation in the jurisdiction in which the related Mortgaged
Property is located);
(iii) if the related security agreement is separate from the
Mortgage, the original security agreement or a counterpart thereof, and if the
security agreement is not assigned under the Assignments of Mortgage described
in clause (ii) above, the related original assignment of such security agreement
to the applicable Seller or a counterpart thereof and the related original
assignment of such security agreement executed by the applicable Seller in blank
which the Trustee or its designee is authorized to complete;
(iv) the acknowledgement copy of each Form UCC-1 financing
statement (file stamped to show the filing or recording thereof in the
applicable public filing or recording office), if any, filed or recorded with
respect to personal property or fixtures constituting a part of the related
Mortgaged Property, or a copy thereof in the form submitted for filing or
recording, together with a copy of each Form UCC-2 or UCC-3 assignment (file
stamped to show the filing or recording thereof in the applicable public filing
or recording office), if any, filed or recorded with respect to such financing
statement which, together with other such assignments, shows a complete chain of
assignment of such financing statement from the applicable Originator to the
applicable Seller, or a copy thereof in the form submitted for filing or
recording, and a copy of each Form UCC-2 or UCC-3 assignment, if any, of such
financing statement executed by the applicable Seller in blank which the Trustee
or its designee is authorized to complete (and but for the insertion of the name
of the assignee and any related filing or recording information which is not yet
available to the applicable Seller, is in suitable form for filing or recording
in the filing or recording office in which such financing statement was filed or
recorded);
(v) the related original of the Loan Agreement, if any, relating
to such Mortgage Loan or a counterpart thereof;
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(vi) the related original lender's title insurance policy (or
the original pro forma or specimen title insurance policy or the original
marked, redated and recertified commitment for lender's title insurance policy
issued with respect to the related Mortgage for the purpose of closing),
together with any endorsements or riders thereto that were issued with or
subsequent to the issuance of such policy;
(vii) if any related Assignment of Leases, Rents and Profits is
separate from the Mortgage, the original recorded Assignment of Leases, Rents
and Profits or a copy thereof certified by the related title insurance company,
public recording office or closing agent to be in the form in which executed or
submitted for recording, each related original recorded reassignment of such
instrument, if any, which, together with other such reassignments, shows a
complete chain of assignment of such instrument from the applicable Originator
to the applicable Seller or a copy thereof certified by the related title
insurance company, public recording office or closing agent to be in the form in
which executed or submitted for recording and the related original reassignment
of such instrument, if any, executed by the applicable Seller in blank which the
Trustee or its designee is authorized to complete (and but for the insertion of
the name of the assignee and any related recording information which is not yet
available to the applicable Seller, is in suitable form for recordation in the
jurisdiction in which the related Mortgaged Property is located) (any of which
reassignments, however, may be included in a related Assignment of Mortgage and
need not be a separate instrument);
(viii) the original or a counterpart of each environmental
warranty or indemnity agreement, if any, with respect to such Mortgage Loan;
(ix) if any related assignment of contracts is separate from the
Mortgage, the original assignment of contracts or a counterpart thereof, and if
the assignment of contracts is not assigned under the Assignments of Mortgage
described in clause (ii) above, the related original reassignment of such
instrument to the applicable Seller or a counterpart thereof and the related
original reassignment of such instrument executed by the applicable Seller in
blank which the Trustee or its designee is authorized to complete;
(x) with respect to the related Reserve Accounts, if any, a copy
of the original of any separate agreement with respect thereto between the
related Borrower and the Originator (and, if the Seller is not the Originator,
together with an assignment of the agreement to the Seller);
(xi) the original of any other written agreement, instrument
or document securing such Mortgage Loan, including, without limitation,
originals of any guaranties with respect to such Mortgage Loan or the original
letter of credit, if any, with respect thereto, together with any and all
amendments thereto, including, without limitation, any amendment which entitles
the Master Servicer to draw upon such letter of credit on behalf of the Trustee
for the benefit of the Certificateholders, and the original of each instrument
or other item of personal property given as security for a Mortgage Loan
possession of which by a secured party is necessary to a secured party's valid,
perfected, first priority security interest therein, together with all
assignments or endorsements thereof necessary to entitle the Master Servicer to
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enforce a valid, perfected, first priority security interest therein on
behalf of the Trustee for the benefit of the Certificateholders;
(xii) with respect to the related Reserve Accounts, if any, the
acknowledgement copy of each UCC-1 financing statement (file stamped to show the
filing thereof in the applicable public filing office), if any, filed with
respect to the security interest of the applicable Originator in such Reserve
Accounts and all funds contained therein, or a copy thereof in the form
submitted for filing, together with a copy of each Form UCC-2 or UCC-3
assignment (file stamped to show the filing thereof in the applicable public
filing office), if any, filed with respect to such financing statement, which
assignment, together with all other such assignments, shows a complete chain of
assignment of such financing statement from the applicable Originator to the
applicable Seller, or a copy thereof in the form submitted for filing, and a
copy of each Form UCC-2 or UCC-3 assignment, if any, of such financing statement
executed by the applicable Seller in blank which the Trustee or its designee is
authorized to complete (and but for the insertion of the name of the assignee
and any related filing information which is not yet available to the applicable
Seller is in suitable form for filing in the filing office in which such
financing statement was filed);
(xiii) the original of each assumption, consolidation or substi-
tution agreement, if any, with evidence of recording thereon, where appropriate
(or a copy thereof certified by the related title insurance company, public
recording office or closing agent to be in the form in which executed or
submitted for recording);
(xiv) if any document or instrument described above is signed by
an attorney in fact or similar agent on behalf of the related Borrower or
another party, the original of the applicable power of attorney or a counterpart
thereof; and
(xv) originals or copies of any and all amendments, modifica-
tions and supplements to, and waivers related to, any of the foregoing.
On or promptly following the Closing Date, the Trustee or its
designee or the Custodian, as applicable, shall at the expense of the Sellers,
to the extent possession thereof has been delivered to it, complete any
Assignment of Mortgage delivered in blank pursuant to clause (ii) above, any
assignment of security agreement delivered in blank pursuant to clause (iii)
above, any Form UCC-2 or UCC-3 assignment delivered in blank pursuant to clause
(iv) or (xii) above, any reassignment of Assignment of Leases, Rents and Profits
delivered in blank pursuant to clause (vii) above and any reassignment of
assignment of contracts delivered in blank pursuant to clause (ix) above, in
each case, by inserting the name of the Trustee as assignee and delivering to
the Master Servicer (1) for recordation, (a) each Assignment of Mortgage
referred to in clause (ii) above which has not yet been submitted for
recordation and (b) each reassignment of Assignment of Leases, Rents and Profits
referred to in clause (vii) above (if not otherwise included in the related
Assignment of Mortgage) which has not yet been submitted for recordation; and
(2) for filing or recordation, each Form UCC-1 financing statement and Form
UCC-2 or UCC-3 financing statement assignment referred to in clause (iv) or
(xii) above which has not yet been submitted for filing or recordation. On or
promptly following the Closing Date (but in no event more than 60 days after the
Closing Date), the Trustee or Custodian, as
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applicable, shall, to the extent possession thereof has been delivered to it,
complete the endorsement of the Note by inserting the name of the Trustee as
endorsee. The Master Servicer shall, upon receipt, promptly submit (or cause a
third party contractor to promptly submit) for recording or filing, as the case
may be, in the appropriate public recording or filing office, each such document
(other than the Notes) at the expense of the applicable Seller. In the event
that any such document is lost or returned unrecorded or unfiled because of a
defect therein, the Master Servicer shall use its best efforts to promptly
prepare (or cause the applicable Seller or a qualified third party contractor to
promptly prepare) a substitute document for signature by the Depositor or the
applicable Seller, as applicable, and thereafter the Master Servicer (or such
third party) shall cause each such document to be duly recorded or filed at the
expense of the applicable Seller. The Master Servicer shall, promptly upon
receipt of the original of each such recorded or filed document, deliver such
original to the Custodian. Notwithstanding anything to the contrary contained in
this Section 2.1, in those instances where the public recording office retains
the original Assignment of Mortgage or reassignment of Assignment of Leases,
Rents and Profits, if applicable, after any such document has been recorded, the
obligations hereunder of the Depositor shall be deemed to have been satisfied
upon delivery to the Custodian of a copy of such Assignment of Mortgage or
reassignment of Assignment of Leases, Rents and Profits certified by the public
recording office to be a true and complete copy of the recorded original
thereof. If a pro forma or specimen title insurance policy or a marked, redated
and recertified commitment for lender's title insurance policy has been
delivered to the Custodian in lieu of an original title insurance policy, the
Depositor or the Master Servicer will promptly deliver to the Custodian the
related original title insurance policy upon receipt thereof.
All original documents relating to the Mortgage Loans to the extent
delivered by the Depositor which are not delivered to the Custodian are and
shall be held by the Trustee or the Master Servicer, as the case may be, in
trust for the benefit of the Certificateholders. In the event that any such
original document is required pursuant to the terms of this Section to be a part
of a Trustee Mortgage File, such document shall be delivered promptly to the
Custodian.
If the Depositor cannot deliver any original or certified recorded or
filed document described in this Section 2.1 on the Closing Date, the Depositor
shall use its best efforts, promptly upon receipt thereof and in any case not
later than 45 days from the Closing Date, to deliver or cause to be delivered
such original or certified recorded or filed documents to the Custodian (unless
the Depositor is delayed in making such delivery by reason of the fact that such
documents shall not have been returned by the appropriate recording or filing
office, in which case the Depositor or the Master Servicer shall notify the
Custodian and the Trustee in writing of such delay and shall deliver such
documents to the Custodian promptly upon the Depositor's or the Master
Servicer's receipt thereof).
SECTION 2.2. Acceptance by the Custodian and the Trustee.
By its execution and delivery of this Agreement, the Trustee
acknowledges the assignment to it of the Mortgage Loans in good faith without
notice of adverse claims and declares that the Custodian holds and will hold
such documents and all others delivered to it constituting the Trustee Mortgage
File (to the extent the documents constituting the Trustee Mortgage File are
actually delivered to the Custodian) for any Mortgage Loan assigned to the
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Trustee hereunder in trust, upon the conditions herein set forth, for the use
and benefit of all present and future Certificateholders. Upon execution and
delivery of this Agreement, the Trustee shall examine the Trustee Mortgage Files
in its possession, and shall deliver to the Depositor, the Master Servicer and
the Special Servicer a certification to the effect that: (A) all documents
pursuant to clause (i) of Section 2.1 are in its possession for each Mortgage
Loan listed on the Mortgage Loan Schedule, (B) such documents have been reviewed
by it and have not been materially mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
and (C) each Mortgage Note has been endorsed as provided in clause (i) of
Section 2.1, which certification shall be subject to any exceptions noted on any
exception report prepared by the Trustee and included with such certification.
The Trustee agrees to review each Trustee Mortgage File within 60 days after the
later of (a) the Trustee's receipt of such Trustee Mortgage File or (b)
execution and delivery of this Agreement, to ascertain that all documents
referred to in clauses (i), (ii) and (vi) of Section 2.1 above, any other
documents referred to in the other clauses of Section 2.1 and identified to the
Trustee by the applicable Seller as relating to a Mortgage File and any original
recorded documents referred to in the last sentence of Section 2.1 to be
included in the delivery of a Trustee Mortgage File, have been received, have
been executed, have been endorsed or assigned to the extent required, appear on
their face to be what they purport to be, purport to be recorded or filed (as
applicable) and have not been torn, mutilated or otherwise defaced, and that
such documents relate to the Mortgage Loans identified in the Mortgage Loan
Schedule. In so doing, the Trustee may rely on the purported due execution and
genuineness of any such document and on the purported genuineness of any
signature thereon. If, at the conclusion of such review, any document or
documents constituting a part of a Trustee Mortgage File have not been executed
or received, have not been endorsed or assigned to the extent required, have not
been recorded or filed (if required), are unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, appear on their face not to be what
they purport to be or have been torn, mutilated or otherwise defaced, the
Trustee shall promptly so notify the Depositor, the Operating Adviser and the
applicable Seller (with a copy to the Master Servicer or the Special Servicer,
as applicable) by providing a written report, setting forth, for each affected
Mortgage Loan, with particularity, the nature of the defective or missing
document. Neither the Master Servicer, the Special Servicer nor the Trustee
shall be responsible for any loss, cost, damage or expense to the Trust Fund
resulting from any failure to receive any document constituting a portion of a
Trustee Mortgage File noted on such a report or for any failure by the Depositor
to use its best efforts to deliver any such document, subject to Section 2.3(e)
with respect to the Master Servicer and the Special Servicer.
In reviewing any Trustee Mortgage File pursuant to the preceding
paragraph or Section 2.1, the Trustee will have no responsibility to determine
whether any document or opinion is legal, valid, binding or enforceable, whether
the text of any assignment or endorsement is in proper or recordable form
(except, if applicable, to determine whether the Trustee is the assignee or
endorsee), whether any document has been recorded in accordance with the
requirements of any applicable jurisdiction, whether a blanket assignment is
permitted in any applicable jurisdiction, or whether any Person executing any
document or rendering any opinion is authorized to do so or whether any
signature thereon is genuine.
The Trustee shall hold that portion of the Trust Fund delivered to
the Trustee consisting of "instruments" (as such term is defined in Section
9-105 of the Uniform Commercial
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Code as in effect in Illinois on the date hereof) in Illinois and, except as set
forth in Section 3.11 or as otherwise specifically provided in this Agreement,
shall not remove such instruments from Illinois unless it receives an Opinion of
Counsel (obtained and delivered at the expense of the Person requesting the
removal of such instruments from Illinois) that in the event the transfer of the
Mortgage Loans to the Trustee is deemed not to be a sale, after such removal,
the Trustee will possess a first priority perfected security interest in such
instruments.
SECTION 2.3. Seller's Repurchase of Mortgage Loans for Document
Defaults and Breaches of Representations and Warranties.
(a) Upon discovery by the Depositor, the Custodian, the Master
Servicer, the Special Servicer or the Trustee of a breach of any representation
or warranty of Midland under the Additional Midland Mortgage Loan Purchase
Agreement, the Midland Mortgage Loan Purchase Agreement or the Midland Owner
Trust Certificate Purchase Agreement, RFC under the RFC Mortgage Loan Purchase
Agreement or CIBC under the CIBC Mortgage Loan Purchase Agreement with respect
to any Mortgage Loan, or that any document required to be included in the
Trustee Mortgage File with respect to a Mortgage Loan does not conform to the
requirements of Section 2.1, such Person shall give prompt notice thereof to the
applicable Seller, the Operating Adviser and the Rating Agencies and such Seller
shall (to the extent such Seller is so obligated under the terms of the
applicable Mortgage Loan Purchase Agreement) either (i) cure such breach or
defect, (ii) substitute a Qualified Substitute Mortgage Loan for the related
Deleted Mortgage Loan and deposit a cash amount equal to the applicable
Substitution Shortfall Amount into the Collection Account, subject to the terms
of the applicable Mortgage Loan Purchase Agreement and this Agreement, or (iii)
repurchase such Mortgage Loan at the Repurchase Price within 90 days after the
discovery of such breach or defect (or after notice thereof is received by the
Seller, if permitted by the terms of the applicable Mortgage Loan Purchase
Agreement), as the same may be extended, all pursuant to and as more
particularly described in the applicable Mortgage Loan Purchase Agreement; it
being understood and agreed that none of the Depositor, the Custodian, the
Master Servicer, the Special Servicer and the Trustee has an obligation to
conduct any investigation with respect to such matters (except, in the case of
the Trustee Mortgage Files, to the extent provided in Sections 2.1 and 2.2).
(b) Upon receipt by the Master Servicer from the applicable Seller
of the Repurchase Price for a repurchased Mortgage Loan, the Master Servicer
shall deposit such amount in the Collection Account, and the Trustee, pursuant
to Section 3.11, shall, upon receipt of a certificate of a Servicing Officer
certifying as to the receipt by the Master Servicer of the Repurchase Price and
the deposit of the Repurchase Price into the Collection Account pursuant to this
Section 2.3(b), release or cause to be released to the applicable Seller the
related Mortgage File and shall, at the expense of the applicable Seller,
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest in
the applicable Seller the legal and beneficial ownership of any Mortgage Loan
released pursuant hereto, and the Trustee, Special Servicer and the Master
Servicer shall have no further responsibility with regard to such Mortgage File
or the related Mortgage Loan.
(c) In connection with any substitution by a Seller of one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans
pursuant to Section
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2.3(a)(ii), the Master Servicer will determine the applicable Substitution
Shortfall Amount. Upon receipt by the Master Servicer from the applicable Seller
of the Mortgage File(s) (including a Trustee Mortgage File or Files which comply
with Section 2.1) for the related Qualified Substitute Mortgage Loan(s) and an
amount equal to the applicable Substitution Shortfall Amount, the Master
Servicer shall deliver such Mortgage File(s) to the Custodian and deposit such
amount in the Collection Account, and the Trustee, pursuant to Section 3.11,
shall, upon receipt of a certificate of a Servicing Officer certifying as to the
receipt of the applicable Substitution Shortfall Amount, the delivery of such
Mortgage File(s) to the Custodian and the deposit of the Substitution Shortfall
Amount into the Collection Account pursuant to this Section 2.3(c), release or
cause to be released to the applicable Seller the Mortgage File(s) of the
Deleted Mortgage Loan(s) and, at the expense of the applicable Seller, shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest in
the applicable Seller the legal and beneficial ownership of each Deleted
Mortgage Loan released pursuant hereto and the Trustee, the Special Servicer and
the Master Servicer shall have no further responsibility with regard to such
Mortgage File(s) or the related Deleted Mortgage Loan(s). No substitution may be
made in any calendar month after the Determination Date for such month. Monthly
Payments due with respect to Qualified Substitute Mortgage Loans after the
related date of substitution, shall be part of the Trust Fund. Monthly Payments
due with respect to Qualified Substitute Mortgage Loans on or prior to the
related date of substitution shall not be part of the Trust Fund and will be
remitted by the Master Servicer to the applicable Seller promptly following
receipt.
(d) In the event that the applicable Seller incurs any expense in
connection with curing a breach of a representation or warranty pursuant to
Section 2.3(a) which also constitutes a default under the related Mortgage Loan,
the applicable Seller shall have a right, and the applicable Seller 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. The Master
Servicer or Special Servicer, as applicable, shall use reasonable efforts in
recovering, or assisting the applicable Seller in recovering, from such Borrower
the amount of any such expenses.
(e) The Master Servicer or the Special Servicer, as applicable, shall
use its best efforts, in accordance with the Servicing Standard, to enforce the
obligations of each Seller to cure, substitute for or repurchase any Mortgage
Loan which is discovered to be a "Defective Mortgage Loan" (as such term is
defined in the applicable Mortgage Loan Purchase Agreement) under the terms of
the applicable Mortgage Loan Purchase Agreement.
SECTION 2.4. Representations and Warranties of the Depositor.
(a) The Depositor hereby represents and warrants as of the Closing
Date that:
(i) The Depositor is a corporation duly organized validly exist-
ing and in good standing under the laws of the State of Missouri;
(ii) The Depositor has taken all necessary 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,
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including, but not limited to, the power and authority to sell, assign and
transfer its right, title and interest in the Mortgage Loans in accordance with
this Agreement;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor and 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 in accordance with
the terms of this Agreement, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(iv) The execution and delivery of this Agreement and the per-
formance of its obligations hereunder by the Depositor will not conflict with
any provision of its articles of incorporation or bylaws, or any law or
regulation to which the Depositor is subject, or conflict with, result in a
breach of or constitute a default under (or an event which, with notice or lapse
of time or both, would constitute a default under) any of the terms, conditions
or provisions of any 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, with respect to any of the above events, would
materially and adversely affect the ability of the Depositor to carry out its
obligations under this Agreement. The Depositor is not in default in any
material respect with respect to any agreement to which the Depositor is a
party. 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;
(v) The articles of incorporation of the Depositor provides that
the Depositor is permitted to engage in only the following activities:
(A) To acquire, own, hold, sell, transfer, assign, pledge,
finance, refinance and otherwise deal with (i) loans secured by (x) first or
second mortgages, deeds of trust or similar liens on multi-family residential,
commercial or mixed commercial and multi-family residential properties, and (y)
related assets, and (ii) any participation interest in, security (in bond or
pass-through form) or funding agreement based on, backed or collateralized by,
directly or indirectly, any of the foregoing (the loans and related assets
described in clause (A)(i) and the participation interests, securities and
funding agreements described in clause (A)(ii), collectively, "Mortgage Loans");
(B) To establish and fund one or more trusts (the "Trusts")
and to authorize such Trusts to engage in one or more of the activities
described in immediately preceding clause (A) and to issue certificates (the
"Certificates") in one or more classes pursuant to pooling and servicing
agreements (each, a "Pooling and Servicing Agreement"), with each class having
the characteristics specified in the related Pooling and Servicing Agreement,
representing ownership interests in the Mortgage Loans;
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(C) To acquire, own, hold, invest in, offer, sell, trans-
fer, assign, pledge, finance and deal in and with any Certificates issued by a
Trust established by the corporation pursuant to immediately preceding clause
(B); and
(D) To engage in any other acts and activities and to
exercise any powers permitted to corporations under the laws of the State of
Missouri which are incidental to, or connected with the foregoing, and
necessary, suitable or convenient to accomplish any of the foregoing; and
(vi) There is no action, suit or proceeding pending or, to the
best knowledge of the Depositor, threatened against the Depositor in any court
or by or before any other governmental agency or instrumentality which would
materially and adversely affect the ability of the Depositor to carry out its
obligations under this Agreement.
(b) The Depositor hereby represents and warrants with respect to each
Mortgage Loan as of the Closing Date that:
(i) Immediately prior to the transfer and assignment to the
Trustee, the related Note and the related Mortgage were not subject to an
assignment or pledge created by it or attributable to its ownership; and the
Depositor had full right to transfer and sell its right, title and interest in
such Mortgage Loan to the Trustee free and clear of any encumbrance, lien,
pledge, charge, claim or security interest encumbering such Mortgage Loan
created by it or attributable to its ownership;
(ii) Each related Assignment of Mortgage constitutes the legal,
valid and binding assignment of the related Mortgage from the Depositor to the
Trustee, and each related reassignment of Assignment of Leases, Rents and
Profits constitutes the legal, valid and binding assignment of the related
Assignment of Leases, Rents and Profits from the Depositor to the Trustee; and
(iii) No claims have been made by the Depositor under the related
lender's title insurance policy, and the Depositor has not done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy.
(c) It is understood and agreed that the representations and war-
ranties set forth in this Section 2.4 shall survive delivery of the respective
Trustee Mortgage Files to the Trustee until the termination of this Agreement,
and shall inure to the benefit of the Certificateholders, the Master Servicer
and the Special Servicer.
(d) In the event that any litigation is commenced which alleges facts
which, in the judgment of the Depositor, could constitute a breach of any of the
Depositor's representations and warranties relating to the Mortgage Loans, the
Depositor hereby reserves the right to conduct the defense of such litigation at
its expense, except to the extent such action would materially and adversely
affect the interests of the Certificateholders.
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SECTION 2.5. Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer.
(a) The Master Servicer hereby represents, warrants and covenants that
as of the Closing Date:
(i) The Master Servicer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all licenses necessary to carry on its business as now being conducted, and is
in compliance with the laws of each state in which any Mortgaged Property is
located, to the extent necessary to ensure the enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power, authority
and legal right to execute and deliver this Agreement and to perform in
accordance herewith; the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this Agreement do
not violate the Master Servicer's certificate of incorporation or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or which
may be applicable to the Master Servicer or any of its assets, which default or
breach would 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 impair the ability of the Trust Fund to realize on the Mortgage
Loans;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Master Servicer and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation, receivership,
moratorium or other laws relating to or affecting creditors' rights generally,
or by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) The Master Servicer is not in violation of, and the execu-
tion and delivery of this Agreement by the Master Servicer and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction, or
result in the creation or imposition of any lien, charge or encumbrance which,
in any such event, would 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 impair the ability of the Trust Fund to realize
on the Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Master Servicer, threatened, against the Master Servicer
which, either in any one instance or in the aggregate, would result in any
material adverse change in the business, operations or financial condition of
the Master Servicer or would materially impair the ability of
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the Master Servicer to perform under the terms of this Agreement or draw into
question the validity of this Agreement or the Mortgage Loans or of any action
taken or to be taken in connection with the obligations of the Master Servicer
contemplated herein;
(vi) No consent, approval, authorization or order of, or regis-
tration or filing with, or notice to 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, if required, such
approval has been obtained prior to the Closing Date, except to the extent that
the failure of the Master Servicer to be qualified as a foreign corporation or
licensed in one or more states is not necessary for the enforcement of the
Mortgage Loans;
(vii) The Master Servicer has examined each Sub-Servicing
Agreement, will examine each future Sub-Servicing Agreement and will be familiar
with the terms thereof. Any Sub-Servicing Agreements will comply with the
provisions of Section 3.2;
(viii) Each officer or employee of the Master Servicer that has
responsibilities concerning the servicing and administration of Mortgage Loans
is covered by errors and omissions insurance in the amounts and with the
coverage required by Section 3.8. Neither the Master Service nor, to the best of
the Master Servicer's knowledge, any of its officers or employees that is
involved in the servicing or administration of Mortgage Loans has been refused
such coverage or insurance. The Master Servicer has a fidelity bond meeting the
requirements of Section 3.8; and
(ix) Any custom-made software or hardware designed or purchased
or licensed by the Master Servicer and used by the Master Servicer in the course
of the operation or management of, or the compiling, reporting or generation of
data required by this Agreement, will not contain any material deficiency (x) in
the ability of such software or hardware to identify correctly or perform
calculations or other processing with respect to dates after December 31, 1999
or (y) that would cause such software or hardware to be fit no longer for the
purpose for which it was intended by reason of the changing of the date of 1999
to 2000. The foregoing matters extend and relate only to the internal
functioning of the software and hardware maintained by the Master Servicer, and
the Master Servicer shall not be responsible for the accuracy or integrity of
any data or calculations provided to the Master Servicer by any third party.
(b) The Special Servicer hereby represents, warrants and covenants
that as of the Closing Date:
(i) The Special Servicer is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all licenses necessary to carry on its business as now being
conducted, and is in compliance with the laws of each state in which any
Mortgaged Property is located, to the extent necessary to ensure the
enforceability of each Specially Serviced Mortgage Loan in accordance with the
terms of this Agreement;
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(ii) The Special Servicer has the full corporate power, authority
and legal right to execute and deliver this Agreement and to perform in
accordance herewith; the execution and delivery of this Agreement by the Special
Servicer and its performance and compliance with the terms of this Agreement do
not violate the Special Servicer's certificate of incorporation or constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Special Servicer is a party or which
may be applicable to the Special Servicer or any of its assets, which default or
breach would 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 impair the ability of the Trust Fund to realize on the
Specially Serviced Mortgage Loans;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Special Servicer and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of the Special Servicer, enforceable against it in
accordance with the terms of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, liquidation, receivership,
moratorium or other laws relating to or affecting creditors' rights generally,
or by general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) The Special Servicer is not in violation of, and the execu-
tion and delivery of this Agreement by the Special Servicer and its performance
and compliance with the terms of this Agreement will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of
any federal, state, municipal or governmental agency having jurisdiction, or
result in the creation or imposition of any lien, charge or encumbrance which,
in any such event, would 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 impair the ability of the Trust Fund to realize
on the Specially Serviced Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Special Servicer, threatened, against the Special Servicer
which, either in any one instance or in the aggregate, would result in any
material adverse change in the business, operations or financial condition of
the Special Servicer or would materially impair the ability of the Special
Servicer to perform under the terms of this Agreement or draw into question the
validity of this Agreement or the Specially Serviced Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the Special
Servicer contemplated herein;
(vi) No consent, approval, authorization or order of, or regis-
tration or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Special Servicer of,
or compliance by the Special Servicer with, this Agreement or, if required, such
approval has been obtained prior to the Closing Date, except to the extent that
the failure of the Special Servicer to be qualified as a foreign corporation or
licensed in one or more states is not necessary for the enforcement of the
Specially Serviced Mortgage Loans;
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(vii) Each officer or employee of the Special Servicer that has
or will have responsibilities concerning the servicing and administration of
Mortgage Loans is covered by errors and omissions insurance in the amounts and
with the coverage required by Section 3.8. Neither the Special Servicer nor, to
the best of the Special Servicer's knowledge, any of its officers or employees
that is or will be involved in the servicing or administration of Mortgage Loans
has been refused such coverage or insurance. The Special Servicer has a fidelity
bond meeting the requirements of Section 3.8; and
(viii) All mission critical software or hardware designed or
purchased or licensed by the Special Servicer and used by the Special Servicer
in the course of the operation or management of, or the compiling, reporting or
generation of data required by this Agreement are Year 2000 Compliant. As used
herein "Year 2000 Compliant" shall mean that any electronic components, date
based functionality or programming logic of mission critical software must be
capable of, as applicable, recording, storing, processing, providing and
inserting true and accurate days, dates, numbers and calculations for specific
dates or days, or for spans of dates or days, prior to, including and following
the turn of the century from December 31, 1999 to January 1, 2000, and any leap
year dates, including February 29, 2000; except where either (i) the failure or
lack of such capability will not have a material adverse effect upon performance
of the Special Servicer's obligations under this Agreement, or (ii) Special
Servicer provides a sufficient "work around" or alternate procedure to address
any deficiency detected in the related software, or (iii) adverse events beyond
the control of Special Servicer, occur to disrupt such functionality.
(c) It is understood and agreed that the representations and war-
ranties set forth in this Section shall survive delivery of the Trustee Mortgage
Files to the Trustee or the Custodian on behalf of the Trustee until the
termination of this Agreement, and shall inure to the benefit of the Trustee and
the Depositor. Upon discovery by the Depositor, the Master Servicer, the Special
Servicer or a Responsible Officer of the Trustee (or upon written notice thereof
from any Certificateholder) of a breach of any of the representations and
warranties set forth in this Section which materially and adversely affects the
interests of the Certificateholders, the Master Servicer, the Special Servicer
or the Trustee with respect to any Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties hereto and to the
Rating Agencies.
SECTION 2.6. Execution and Delivery of Certificates; Issuance of
REMIC I Regular Interests and REMIC II Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Trustee Mortgage Files to the Custodian (to the
extent the documents constituting the Trustee Mortgage Files are actually
delivered to the Custodian), subject to the provisions of Section 2.1 and
Section 2.2 and, concurrently with such delivery, (i) acknowledges the issuance
of and hereby declares that it holds the REMIC I Regular Interests on behalf of
REMIC II and the Holders of the Class R-II Certificates; (ii) acknowledges the
issuance of and hereby declares that it holds the REMIC II Regular Interests on
behalf of REMIC III and the Holders of the REMIC III Regular Certificates and
the Class R-III Certificates; and (iii) has caused to be executed and caused to
be authenticated and delivered to or upon the order of the
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Depositor, or as directed by the terms of this Agreement, Class A-1, Class A-2,
Class X, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O, Class P, Class R-I, Class R-II and
Class R-III Certificates in authorized denominations, in each case registered in
the names set forth in such order of the Depositor or as so directed in this
Agreement and duly authenticated by the Authenticating Agent, which Certificates
(described in the preceding clause (iii)) evidence ownership of the entire Trust
Fund.
SECTION 2.7. Documents Not Delivered to Custodian.
All original documents relating to the Mortgage Loans which are part
of the Master Servicer Mortgage File are and shall be held by the Master
Servicer, in trust for the benefit of the Trustee on behalf of the
Certificateholders. The legal ownership of all records and documents with
respect to each Mortgage Loan prepared by or which come into the possession of
the Master Servicer shall immediately vest in the Trustee, in trust for the
benefit of the Certificateholders.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Master Servicer to Act as Master Servicer; Special
Servicer to Act as Special Servicer; Administration of the Mortgage Loans.
(a) The Master Servicer and the Special Servicer, each as an
independent contractor, shall service and administer the Mortgage Loans (or in
the case of the Special Servicer, the Specially Serviced Mortgage Loans and the
REO Mortgage Loans) on behalf of the Trust Fund solely in the best interests of,
and for the benefit of, all of the Certificateholders and the Trustee (as
trustee for the Certificateholders) in accordance with the terms of this
Agreement and the respective Mortgage Loans. In furtherance of, and to the
extent consistent with, the foregoing, and except to the extent that this
Agreement provides for a contrary specific course of action, each of the Master
Servicer and the Special Servicer shall service and administer each Mortgage
Loan (x) in the same manner in which, and with the same care, skill, prudence
and diligence with which, it services and administers similar mortgage loans for
other third-party portfolios, giving due consideration to customary and usual
standards of practice of prudent institutional commercial mortgage loan
servicers used with respect to loans comparable to the Mortgage Loans, or (y) in
the same manner in which, and with the same care, skill, prudence and diligence
with which, it services and administers similar mortgage loans which it owns,
whichever standard of care is higher, and taking into account its other
obligations hereunder, but without regard to:
(i) any other relationship that the Master Servicer, the Special
Servicer, any Sub-Servicer or any Affiliate of the Master Servicer, the Special
Servicer or any Sub-Servicer may have with the related Borrower or any Affiliate
of such Borrower;
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(ii) the ownership of any Certificate by the Master Servicer,
the Special Servicer or any Affiliate of either;
(iii) the Master Servicer's, the Trustee's or the Fiscal Agent's
obligation to make P&I Advances or Servicing Advances or to incur servicing
expenses with respect to such Mortgage Loan;
(iv) the Master Servicer's, the Special Servicer's or any Sub-Servicer's right
to receive compensation for its services hereunder or with respect to any
particular transaction;
(v) the ownership or servicing or management for others by the
Master Servicer, the Special Servicer or any Sub-Servicer, of any other mortgage
loans or property; or
(vi) any obligation of the Master Servicer, the Special
Servicer, any Sub-Servicer or any affiliate of the Master Servicer, the Special
Servicer or any Sub-Servicer to repurchase or substitute a Mortgage Loan as a
Seller if required by a Mortgage Loan Purchase Agreement.
The standards set forth above with respect to the conduct of the
Master Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement is herein referred to as the "Servicing
Standard."
The Master Servicer's or the Special Servicer's liability for actions
and omissions in its capacity as Master Servicer or Special Servicer, as the
case may be, hereunder is limited as provided herein (including, without
limitation, pursuant to Section 6.3). To the extent consistent with the
foregoing and subject to any express limitations set forth in this Agreement,
the Master Servicer and the Special Servicer shall use its best efforts to seek
to maximize the timely and complete recovery of principal and interest on the
Notes; provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Special Servicer of
the collectability of the Mortgage Loans. Subject only to the above-described
Servicing Standard and the terms of this Agreement and of the respective
Mortgage Loans, the Master Servicer and the Special Servicer shall have full
power and authority, acting alone or through Sub-Servicers (subject to Section
3.2), to do or cause to be done any and all things in connection with such
servicing and administration which they may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer and the Special
Servicer shall, and each is hereby authorized and empowered by the Trustee to,
with respect to each Mortgage Loan and the related Mortgaged Property, prepare,
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien on the related Mortgaged
Property and related collateral; any modifications, waivers, consents or
amendments to or with respect to any Mortgage Loan or 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, if, in its reasonable judgment, such action is in the
best interests of the Certificateholders and is in accordance with, or is
required by, this Agreement. The Master Servicer and the Special Servicer shall
service and administer
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the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Borrowers any reports required to be provided to them thereby.
Subject to Section 3.11, the Trustee shall, upon the receipt of a written
request of a Servicing Officer, execute and deliver to the Master Servicer and
the Special Servicer any powers of attorney and other documents prepared by the
Master Servicer or the Special Servicer and necessary or appropriate (as
certified in such written request) to enable the Master Servicer and the Special
Servicer to carry out their servicing and administrative duties hereunder;
provided, however, that the Trustee shall not be liable for any actions of the
Master Servicer or Special Servicer under any such powers of attorney.
(b) Unless otherwise provided in the related Note, the Master Servicer
shall apply any partial Principal Prepayment received on a Mortgage Loan on a
date other than a Due Date to the principal balance of such Mortgage Loan as of
the Due Date immediately following the date of receipt of such partial Principal
Prepayment.
SECTION 3.2. Sub-Servicing.
(a) The Master Servicer or the Special Servicer may enter into Sub-
Servicing Agreements with third parties with respect to any of its respective
obligations hereunder, provided that (1) any such agreement shall be consistent
with the provisions of this Agreement and (2) no Sub-Servicer retained by the
Master Servicer or the Special Servicer shall grant any modification, waiver or
amendment to any Mortgage Loan without the approval of the Master Servicer or
the Special Servicer, as applicable. 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
consistent with the provisions of this Section 3.2(a).
Any Sub-Servicing Agreement entered into by the Master Servicer or
the Special Servicer, shall provide that it may be assumed or terminated by the
Trustee or successor Master Servicer or Special Servicer if the Trustee or a
successor Master Servicer or Special Servicer has assumed the duties of the
Master Servicer or the Special Servicer, as applicable, without cost or
obligation to the assuming or terminating party or the Trust Fund, upon the
assumption by the Trustee or a successor Master Servicer or Special Servicer of
the obligations of the Master Servicer or the Special Servicer, as applicable,
pursuant to Section 7.2; provided, however, that the Trustee or successor Master
Servicer may not terminate any Sub-Servicing Agreement entered into by the
Master Servicer as of the Closing Date with respect to any of the RFC Loans
unless the related Sub-Servicer is in default under such Sub-Servicing
Agreement, which Sub-Servicing Agreement must provide that (i) the Sub-Servicer
is in default if it causes the Master Servicer to be in default under this
Agreement and (ii) the related Sub-Servicer is required to perform its servicing
obligations in a manner consistent with the Servicing Standard.
Any Sub-Servicing Agreement, and any other transactions or services
relating to the Mortgage Loans involving a Sub-Servicer, shall be deemed to be
between the Master Servicer or the Special Servicer, as applicable, and such
Sub-Servicer alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights,
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obligations, duties or liabilities with respect to the Sub-Servicer, including
the Depositor acting in such capacity, except as set forth in Section 3.2(c).
(b) The Master Servicer and the Special Servicer shall each pay the
respective fees of any Sub-Servicer retained by it thereunder from its own funds
in accordance with the applicable Sub-Servicing Agreement.
(c) If the Trustee or any successor Master Servicer or Special
Servicer assumes the obligations of the Master Servicer or the Special Servicer,
as applicable, in accordance with Section 7.2, the Trustee or such successor
Master Servicer or Special Servicer, to the extent necessary to permit the
Trustee or such successor Master Servicer or Special Servicer to carry out the
provisions of Section 7.2, shall, without act or deed on the part of the Trustee
or such successor Master Servicer or Special Servicer, succeed to all of the
rights and obligations of the Master Servicer or Special Servicer under any
Sub-Servicing Agreement entered into by the Master Servicer or Special Servicer
pursuant to Section 3.2(a), subject to the right of termination by the Trustee
set forth in Section 3.2(a). In such event, the Trustee or such successor Master
Servicer or Special Servicer shall be deemed to have assumed all of the Master
Servicer's or Special Servicer's interest therein (but not any liabilities or
obligations in respect of acts or omissions of the Master Servicer or Special
Servicer prior to such deemed assumption) and to have replaced the Master
Servicer or the Special Servicer, as applicable, as a party to such
Sub-Servicing Agreement to the same extent as if such Sub-Servicing Agreement
had been assigned to the Trustee or such successor Master Servicer, except that
the Master Servicer or the Special Servicer shall not thereby be relieved of any
liability or obligations under such Sub-Servicing Agreement that accrued prior
to the assumption of duties hereunder by the Trustee or such successor Master
Servicer or Special Servicer.
In the event that the Trustee or any successor Master Servicer or
Special Servicer assumes the servicing obligations of the Master Servicer or the
Special Servicer, as the case may be, upon request of the Trustee or such
successor Master Servicer or Special Servicer, as the case may be, the Master
Servicer or Special Servicer shall, at its own expense, deliver to the Trustee
or such successor Master Servicer or Special Servicer (as the case may be) all
documents and records relating to any Sub-Servicing Agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected and
held by it, if any, and the Master Servicer will otherwise use its best efforts
to effect the orderly and efficient transfer of any Sub-Servicing Agreement to
the Trustee or such successor Master Servicer.
(d) Notwithstanding any Sub-Servicing Agreement, any of the provi-
sions of this Agreement relating to agreements or arrangements between the
Master Servicer or Special Servicer and any Person acting as Sub-Servicer (or
its agents or subcontractors) or any reference to actions taken through any
Person acting as Sub-Servicer or otherwise, the Master Servicer or the Special
Servicer, as applicable, shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Depositor or any Person
acting as Sub-Servicer (or its agents or subcontractors) to the same extent and
under the same terms and conditions as if the Master Servicer or Special
Servicer, as
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applicable, were servicing and administering the Mortgage Loans alone. The
Master Servicer or the Special Servicer, as applicable, shall be entitled to
enter into an agreement with any Sub-Servicer providing for indemnification of
the Master Servicer or the Special Servicer, as applicable, by such
Sub-Servicer, and nothing contained in this Agreement shall be deemed to limit
or modify such indemnification, but no such agreement for indemnification shall
be deemed to limit or modify this Agreement.
SECTION 3.3. Collection of Certain Mortgage Loan Payments.
The Master Servicer and the Special Servicer shall make best efforts
to collect all payments called for under the terms and provisions of the
Mortgage Loans when the same shall be due and payable, and shall follow such
collection procedures as are consistent with the Servicing Standard, including
using its best efforts in accordance with the Servicing Standard to collect
income statements and rent rolls from the related Borrowers as required by the
related Mortgage Loan Documents and providing (in the case of the Master
Servicer only) reasonable advance notice to such Borrowers of Balloon Payments
due with respect to such Mortgage Loans. Consistent with the foregoing, the
Master Servicer or the Special Servicer, as applicable, may in its discretion
waive any late payment charge, Default Interest or penalty fees in connection
with any delinquent Monthly Payment or Balloon Payment with respect to any
Mortgage Loan.
SECTION 3.4. Collection of Taxes, Assessments and Similar Items.
(a) With respect to each Mortgage Loan (other than REO Mortgage
Loans), the Master Servicer shall maintain accurate records with respect to each
related Mortgaged Property reflecting the status of taxes, assessments and other
similar items that are or may become a lien on such related Mortgaged Property,
the status of insurance premiums payable with respect thereto and the amounts of
Escrow Payments, if any, required in respect thereof. From time to time, the
Master Servicer shall (i) obtain all bills for the payment of such items
(including renewal premiums), and (ii) effect payment of all such bills with
respect to each such Mortgaged Property prior to the applicable penalty or
termination date, in each case employing for such purpose Escrow Payments as
allowed under the terms of such Mortgage Loan. If a Borrower fails to make any
such Escrow Payment on a timely basis or collections from such Borrower are
insufficient to pay any such item before the applicable penalty or termination
date, the Master Servicer shall (in accordance with Section 3.8 with respect to
the payment of insurance premiums) advance the amount necessary to effect
payment of any such item, unless the Master Servicer, in its good faith business
judgment, determines that such Advance would be a Nonrecoverable Advance. With
respect to any Mortgage Loan as to which the related Borrower is not required to
make Escrow Payments, if such Borrower fails to effect payment of any such bill,
then, the Master Servicer shall (in accordance with Section 3.8 with respect to
the payment of insurance premiums) advance the amount necessary to effect
payment of any such bill on or before the applicable penalty or termination
date; provided, that, with respect to the payment of taxes and assessments, the
Master Servicer shall make such advance within five Business Days after the
Master Servicer has received confirmation that such item has not been paid. The
Master Servicer shall be entitled to reimbursement of Servicing Advances that it
makes pursuant to the preceding sentence, with interest thereon at the Advance
Rate, from
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amounts received on or in respect of the Mortgage Loan respecting which such
Servicing Advance was made or if such Servicing Advance has become a
Nonrecoverable Advance, to the extent permitted by Section 3.6 of this
Agreement. No costs incurred by the Master Servicer in effecting the payment of
taxes and assessments on the Mortgaged Properties shall, for the purpose of
calculating distributions to Certificateholders, be added to the amount owing
under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.
(b) The Master Servicer shall segregate and hold all funds
collected and received pursuant to any Mortgage Loan constituting Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain one or more segregated custodial accounts which are
Eligible Accounts (each, an "Escrow Account") into which all Escrow Payments
shall be deposited within one Business Day after receipt. The Master Servicer
shall also deposit into each Escrow Account any amounts representing losses on
Permitted Investments in which amounts on deposit in such Escrow Account have
been invested pursuant to Section 3.7(b) and any Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds which are required to be applied
to the restoration or repair of the related Mortgaged Property pursuant to the
related Mortgage Loan. Escrow Accounts shall be entitled, "Midland Loan
Services, Inc., as Master Servicer, in trust for LaSalle Bank National
Association as Trustee in trust for Holders of Commercial Mortgage Acceptance
Corp. Commercial Mortgage Pass-Through Certificates, Series 1999-C1, and Various
Borrowers." Withdrawals from an Escrow Account may be made by the Master
Servicer only:
(i) to effect timely payments of items with respect to which
Escrow Payments are required pursuant to the related Mortgage;
(ii) to transfer funds to the Collection Account to reimburse
the Master Servicer, the Trustee or the Fiscal Agent, as applicable, for any
Advance relating to Escrow Payments, but only from amounts received with respect
to the related Mortgage Loan which represent late collections of Escrow Payments
thereunder;
(iii) for application to the restoration or repair of the related
Mortgaged Property in accordance with the related Mortgage Loan and the
Servicing Standard;
(iv) to clear and terminate such Escrow Account upon the termina-
tion of this Agreement;
(v) to pay from time to time to the Master Servicer any interest
or investment income earned on funds deposited in such Escrow Account pursuant
to Section 3.7(b) to the extent (a) permitted by law and (b) not required to be
paid to the related Borrower under the terms of the related Mortgage Loan or by
law, or to pay such interest or income to the related Borrower if such income is
required to paid to the related Borrower under law or by the terms of the
related Mortgage Loan; and
(vi) to remove any funds deposited in such Escrow Account that
were not required to be deposited therein.
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SECTION 3.5.....Collection Account and Distribution Account.
(a) The Master Servicer shall establish and maintain the Collection
Account in the Trustee's name, for the benefit of the Certificateholders. The
Collection Account shall be established and maintained as an Eligible Account.
The Master Servicer shall deposit or cause to be deposited in the Collection
Account within one Business Day following receipt the following payments and
collections received or made by it on or with respect to the Mortgage Loans:
(i) all payments on account of principal on the Mortgage Loans,
including the principal component of Unscheduled Payments on the Mortgage Loans;
(ii) all payments on account of interest and Default Interest
on the Mortgage Loans and the interest portion of all Unscheduled Payments and
all Prepayment Premiums as well as all payments on account of late payment
charges on the Mortgage Loans;
(iii) any amounts required to be deposited pursuant to Sec-
tion 3.7(b) in connection with losses realized on Permitted Investments with
respect to funds held in the Collection Account and pursuant to Section 3.25 in
connection with Prepayment Interest Shortfalls;
(iv) (x) all Net REO Proceeds transferred from an REO Account
pursuant to Section 3.17(b) and (y) all, Insurance Proceeds and Net Liquidation
Proceeds not required to be applied to the restoration or repair of the related
Mortgaged Property;
(v) any amounts received from Borrowers which represent recov-
eries of Servicing Advances made pursuant to Section 3.4; and
(vi) any other amounts required by the provisions of this Agree-
ment to be deposited into the Collection Account by the Master Servicer or the
Special Servicer, including, without limitation, proceeds of any purchase or
repurchase of a Mortgage Loan pursuant to Section 2.3, Section 3.18 or Section
9.1.
In the event that the Master Servicer deposits in the Collection
Account any amount not required to be deposited therein, the Master Servicer may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the Distribution
Account in the name of the Trustee, in trust for the benefit of the
Certificateholders. The Distribution Account shall be established and maintained
as an Eligible Account.
(c) Funds in the Collection Account and the Distribution Account may
be invested in Permitted Investments in accordance with the provisions of
Section 3.7. The Master Servicer shall give written notice to the Trustee of the
location and account number of the Collection Account and shall notify the
Trustee in writing prior to any subsequent change thereof.
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SECTION 3.6. Permitted Withdrawals from the Collection Account.
The Master Servicer may make withdrawals from the Collection Account
only as described below (the order set forth below not constituting an order of
priority for such withdrawals):
(i) to remit to the Trustee, for deposit in the Distribution
Account, the amounts required to be deposited in the Distribution Account
pursuant to Section 4.5;
(ii) to pay or reimburse the Fiscal Agent, the Trustee or the
Master Servicer, in that order of priority for Advances; provided, however, the
right of the Master Servicer, the Trustee or the Fiscal Agent to reimburse
itself pursuant to this clause (ii) being limited to either (x) any collections
on or in respect of the particular Mortgage Loan or REO Property respecting
which each such Advance was made, or (y) any other amounts in the Collection
Account in the event that such Advances have been deemed to be Nonrecoverable
Advances or are not recovered from recoveries in respect of the related Mortgage
Loan or REO Property after a Final Recovery Determination;
(iii) to pay to the Fiscal Agent, the Trustee or the Master
Servicer, in that order of priority, the Advance Interest Amount first out of
Default Interest and late payment charges actually collected in respect of the
related Mortgage Loan and, to the extent such amounts are insufficient, in
connection with or at any time following the reimbursement of such Advance from
any other amounts in the Collection Account;
(iv) to pay on or before each Remittance Date to the Master
Servicer, Special Servicer and Trustee, as applicable, as compensation, the
unpaid Master Servicing Fee, Special Servicing Fee, and Trustee Fee,
respectively (in the case of the Master Servicer, reduced up to the amount of
any Prepayment Interest Shortfalls with respect to such Distribution Date, in
accordance with Section 3.25), to be paid, in the case of the Master Servicing
Fee, from interest received or advanced on the related Mortgage Loans, and to
pay to the Master Servicer or the Special Servicer, as applicable, any other
amounts constituting Servicing Compensation;
(v) to pay on or before each Distribution Date to the Depositor,
the applicable Seller or the purchaser of any Specially Serviced Mortgage Loan
or REO Property, as the case may be, with respect to each Mortgage Loan, Deleted
Mortgage Loan or REO Property that has previously been repurchased, replaced or
purchased by it pursuant to Section 2.3, Section 3.18 or Section 9.1, all
amounts received thereon during the related Collection Period and subsequent to
the effective date of such purchase or repurchase.
(vi) to the extent not reimbursed or paid pursuant to any other
clause of this Section 3.6, to reimburse or pay the Master Servicer, the Special
Servicer, the Trustee, the Depositor and/or the Fiscal Agent for unpaid items
incurred by or on behalf of such Person pursuant to Section 3.7(c), Section
3.10, Section 3.17(a), (b) and (c), Section 3.18(a), 6.3, 7.4, 8.5(d), 9.1 or
Section 11.7, or any other provision of this Agreement pursuant to which such
Person is entitled to reimbursement or payment from the Trust Fund, in each case
only to the extent reimbursable under such Section, it being acknowledged that
this clause (vi) shall not be
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deemed to modify the substance of any such Section, including the provisions of
such Section that set forth the extent to which one of the foregoing Persons is
or is not entitled to payment or reimbursement;
(vii) to deposit in one or more separate, non-interest bearing
accounts any amount reasonably determined by the Trustee to be necessary to pay
any applicable federal, state or local taxes imposed on REMIC I, REMIC II and
REMIC III under the circumstances and to the extent described in Section 10.3;
(viii) to withdraw any amount deposited into the Collection
Account that was not required to be deposited therein; and
(ix) to clear and terminate the Collection Account pursuant to
Section 9.1.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to subclauses (ii) - (viii)
above.
The Master Servicer shall pay to the Trustee, the Fiscal Agent or the
Special Servicer from the Collection Account (to the extent permitted by clauses
(i)-(viii) above) amounts permitted to be paid to the Trustee, the Fiscal Agent
or the Special Servicer therefrom, promptly upon receipt of a certificate of a
Responsible Officer of the Trustee, an officer of the Fiscal Agent or a
Servicing Officer of the Special Servicer, as applicable, describing the item
and amount to which the Trustee, the Fiscal Agent or the Special Servicer is
entitled. The Master Servicer may rely conclusively on any such certificate and
shall have no duty to recalculate the amounts stated therein.
The Trustee, the Fiscal Agent, the Special Servicer and the Master
Servicer shall in all cases have a right prior to the Certificateholders to any
funds on deposit in the Collection Account from time to time for the
reimbursement or payment of unpaid or unreimbursed Trustee Fees, Servicing
Compensation, Advances (subject to the limitation set forth in Section 3.6(ii))
and their respective expenses (including Advance Interest Amounts) hereunder to
the extent such expenses, fees, compensation and Advances are to be reimbursed
or paid from amounts on deposit in the Collection Account pursuant to this
Agreement.
The Trustee shall, upon receipt, deposit in the Distribution Account
any and all amounts received by the Trustee in accordance with Section 3.6(i).
If, as of 3:00 p.m., New York City time, on any Remittance Date or on such other
date as any amount referred to in Section 3.6(i) is required to be delivered
hereunder, the Master Servicer shall not have delivered to the Trustee for
deposit in the Distribution Account the amounts required to be deposited therein
pursuant to Section 3.6(i), then the Trustee shall, to the extent that a
Responsible Officer of the Trustee has such knowledge, provide notice of such
failure to the Master Servicer by facsimile transmission sent to telecopy no.
(816) 435-2326 (or such alternative number provided by the Master Servicer to
the Trustee in writing) and by telephone at telephone no. (816) 435-
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5000 (or such alternative number provided by the Master Servicer to the Trustee
in writing) as soon as possible, but in any event before 5:00 p.m., New York
City time, on such day.
SECTION 3.7. Investment of Funds in the Collection Account, the
Distribution Account and the Reserve Accounts.
(a) The Master Servicer (or with respect to any REO Account, the
Special Servicer) may direct (or, with respect to the Distribution Account,
cause the Trustee to direct) any depository institution maintaining the
Collection Account, the Distribution Account, any REO Account or (subject to
applicable laws and the related Mortgage Loan Documents) any Reserve Accounts
(each, for purposes of this Section 3.7, an "Investment Account") to invest the
funds in such Investment Account in one or more Permitted Investments that bear
interest or are sold at a discount, and that mature, unless payable on demand,
no later than the Business Day preceding the date on which such funds are
required to be withdrawn from such Investment Account pursuant to this
Agreement; provided, however, that all investments in the Distribution Account,
including those payable on demand, shall mature no later than the Business Day
prior to the next Distribution Date. Any direction by the Master Servicer (or
with respect to an REO Account, the Special Servicer) to invest funds on deposit
in an Investment Account shall be in writing and shall certify that the
requested investment is a Permitted Investment which matures at or prior to the
time required hereby or is payable on demand. In the case of any Reserve
Account, the Master Servicer shall act upon the written request of the related
Borrower or Manager to the extent the Master Servicer is required to do so under
the terms of the related Mortgage Loan, provided that in the absence of
appropriate written instructions from such Borrower or Manager meeting the
requirements of this Section 3.7, the Master Servicer shall have no obligation
to, but will be entitled to, direct the investment of funds in such Reserve
Accounts. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee (in its capacity as such) or in the name of a
nominee of the Trustee. The Trustee shall have sole control (except with respect
to investment direction which shall be in the sole control of the Master
Servicer or the Special Servicer, as applicable, (subject, in the case of
Reserve Accounts, to the rights of the related Borrower or Manager under the
related Mortgage Loan Documents) as an independent contractor to the Trust Fund)
over each such investment and any certificate or other instrument evidencing any
such investment shall be delivered directly to the Trustee or its nominee (which
shall initially be the Master Servicer), together with any document of transfer,
if any, necessary to transfer title to such investment to the Trustee or its
nominee. The Trustee shall have no responsibility or liability with respect to
the investment directions of the Master Servicer or the Special Servicer or any
losses resulting therefrom, whether from Permitted Investments or otherwise. In
the event amounts on deposit in an Investment Account are at any time invested
in a Permitted Investment payable on demand, the Master Servicer or the Special
Servicer, as applicable, shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted Investment
may otherwise mature hereunder in an amount equal to the lesser of (1) all
amounts then payable thereunder and (2) the amount required to be withdrawn on
such date; and
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(y) demand payment of all amounts due thereunder promptly upon
determination by the Master Servicer or the Special Servicer, as applicable,
that such Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the related Investment Account.
(b) All income and gain realized from investment of funds deposited
in the Collection Account, the Distribution Account and any Reserve Account as
to which the related Borrower is not entitled to interest thereon shall be for
the benefit of the Master Servicer (other than income or gain realized from
investment of funds on deposit in the Distribution Account made by the Trustee
on the Business Day prior to any Distribution Date that matures on such
Distribution Date) and all income and gain realized from investment of funds
deposited in any REO Account shall be for the benefit of the Special Servicer
and, other than with respect to the Distribution Account, may be withdrawn by
the Master Servicer or the Special Servicer, as applicable, from time to time in
accordance with Section 3.6 and Section 3.17(b), as applicable. The Master
Servicer may request that the Trustee withdraw and remit to the Master Servicer
all amounts due to it with respect to the Distribution Account pursuant to the
preceding sentence. The Master Servicer shall deposit from its own funds into
the Collection Account and the Distribution Account, as the case may be, the
amount of any loss incurred in respect of any such Permitted Investment
immediately upon realization of such loss and the Special Servicer shall deposit
from its own funds into any REO Account the amount of any loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss. The Master Servicer shall also deposit into each Reserve Account any
amounts representing losses on Permitted Investments in which such Reserve
Accounts have been invested, except to the extent that amounts are invested for
the benefit of the Borrower under applicable law or the terms of the related
Mortgage Loan. The income and gain realized from investment of funds deposited
in any Reserve Account shall be paid from time to time to the related Borrower
to the extent required under the Mortgage Loan or applicable law.
(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 upon the request of Holders of Certificates
representing a majority of the aggregate Voting Rights of any Class shall, take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. In the
event the Trustee takes any such action, the Trust Fund shall pay or reimburse
the Trustee for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in connection therewith. In the event
that the Trustee does not take any such action, the Master Servicer may take
such action at its own cost and expense.
SECTION 3.8. Maintenance of Insurance Policies and Errors and
Omissions and Fidelity Coverage.
(a) The Master Servicer on behalf of the Trustee, as mortgagee, shall
use its best efforts in accordance with the Servicing Standard to cause the
related Borrower to maintain, to the extent required or permitted to be required
by each Mortgage Loan (other than REO Mortgage Loans), and if the Borrower does
not so maintain, shall itself maintain (subject to the
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provisions of this Agreement concerning Nonrecoverable Advances) to the extent
the Trustee as mortgagee has an insurable interest and to the extent available
at commercially reasonable rates, (A) fire and hazard insurance from a Qualified
Insurer with extended coverage on the related Mortgaged Property in an amount
which is at least equal to the lesser of (i) 100% of the then "full replacement
cost" of the improvements and equipment (excluding foundations, footings and
excavation costs), without deduction for physical depreciation, and (ii) the
outstanding principal balance of the related Mortgage Loan or such other amount
as is necessary to prevent any reduction in such policy by reason of the
application of co-insurance and to prevent the Trustee thereunder from being
deemed to be a co-insurer, in each case with a replacement cost rider, (B)
insurance providing coverage against 18 months of rent interruptions and (C)
such other insurance (including public liability insurance). The Special
Servicer shall maintain, to the extent available at commercially reasonable
rates, fire and hazard insurance from a Qualified Insurer with extended coverage
on each REO Property in an amount which is at least equal to 100% of the then
"full replacement cost" of the improvements and equipment (excluding
foundations, footings and excavation costs), without deduction for physical
depreciation. The Special Servicer shall maintain, to the extent available at
commercially reasonable rates, from a Qualified Insurer, with respect to each
REO Property (A) public liability insurance providing such coverage against such
risks as the Special Servicer determines, consistent with the related Mortgage
and the Servicing Standard, to be in the best interests of the Trust Fund, and
shall cause to be maintained with respect to each REO Property (B) insurance
providing coverage against 18 months of rent interruptions, and (C) such other
insurance, in each case as required in the related Mortgage Loan Documents. In
the case of any insurance otherwise required to be maintained pursuant to this
section that is not being so maintained because the Master Servicer or the
Special Servicer, as applicable, has deemed that it is not available at
commercially reasonable rates, the Master Servicer or the Special Servicer, as
applicable, shall deliver an Officer's Certificate to the Trustee detailing the
steps that the Master Servicer or the Special Servicer, as applicable, took in
seeking such insurance and the factors which led to its determination that such
insurance is not so available. Any amounts collected by the Master Servicer or
the Special Servicer, as applicable, under any such policies (other than amounts
to be applied to the restoration or repair of the related Mortgaged Property or
amounts to be released to the Borrower in accordance with the terms of the
related Mortgage) shall be deposited into the Collection Account pursuant to
Section 3.5, subject to withdrawal pursuant to Section 3.6. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance other than flood insurance is to be required of
any Borrower or to be maintained by the Master Servicer or the Special Servicer
other than pursuant to the terms of the related Mortgage Loan Documents and
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged Property
is located in a federally designated special flood hazard area, the Master
Servicer will use its best efforts in accordance with the Servicing Standard to
cause the related Borrower to maintain, or will itself obtain (subject to the
provisions of this Agreement concerning Nonrecoverable Advances), flood
insurance in respect thereof to the extent available at commercially reasonable
rates, to the extent required under the related Mortgage Loan Documents. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum
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amount of such insurance required by the terms of the related Mortgage and as is
available for the related property under the national flood insurance program
(assuming that the area in which such property is located is participating in
such program). If an REO Property is located in a federally designated special
flood hazard area, the Special Servicer will obtain flood insurance in respect
thereof providing substantially the same coverage as described in the preceding
sentences. If at any time during the term of this Agreement a recovery under a
flood or fire and hazard insurance policy in respect of an REO Property is not
available but would have been available if such insurance were maintained
thereon in accordance with the standards applied to Mortgaged Properties
described herein, the Special Servicer shall either (i) immediately deposit into
the Collection Account from its own funds the amount that would have been
recovered or (ii) apply to the restoration and repair of the property from its
own funds the amount that would have been recovered, if such application would
be consistent with the servicing standard set forth in Section 3.1(a); provided,
however, that the Special Servicer shall not be responsible for any shortfall in
insurance proceeds resulting from an insurer's refusal or inability to pay a
claim. Costs to the Master Servicer of maintaining insurance policies pursuant
to this Section 3.8 shall be paid by the Master Servicer as a Servicing Advance
and shall be reimbursable to the Master Servicer with interest at the Advance
Rate, and costs to the Special Servicer of maintaining insurance policies
pursuant to this Section 3.8 shall be paid and reimbursed in accordance with
Section 3.17(b).
The Master Servicer, with respect to Mortgage Loans, and the Special
Servicer, with respect to REO Properties, agree to prepare and present, on
behalf of itself, the Trustee and the Certificateholders, claims under each
related insurance policy, including without limitation, environmental insurance
policies, maintained pursuant to this Section 3.8(a) in a timely fashion in
accordance with the terms of such policy and to take such reasonable steps as
are necessary to receive payment or to permit recovery thereunder.
The Master Servicer (or with respect to any REO Property, the Special
Servicer) shall require that all insurance policies required hereunder shall
name the Trustee or the Master Servicer (or with respect to any REO Property,
the Special Servicer), on behalf of the Trustee as the mortgagee, as loss payee
and that all such insurance policies require that 30 days' notice be given to
the Master Servicer before termination to the extent required by the related
Mortgage Loan Documents.
(b) (i) If the Master Servicer or Special Servicer, as applicable,
obtains and maintains a blanket insurance policy with a Qualified Insurer at its
own expense insuring against fire and hazard losses, 18-month rent interruptions
or other required insurance on all of the Mortgage Loans, it shall conclusively
be deemed to have satisfied its obligations concerning the maintenance of such
insurance coverage set forth in Section 3.8(a), it being understood and agreed
that such policy may contain a deductible clause, in which case the Master
Servicer or Special Servicer, as applicable, shall, in the event that (i) there
shall not have been maintained on one or more of the related Mortgaged
Properties a policy otherwise complying with the provisions of Section 3.8(a),
and (ii) there shall have been one or more losses which would have been covered
by such a policy had it been maintained, immediately deposit into the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause to the extent that any such deductible
exceeds the deductible limitation
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that pertained to the related Mortgage Loan, or, in the absence of such
deductible limitation, the deductible limitation which is consistent with the
Servicing Standard. In connection with its activities as Master Servicer or
Special Servicer hereunder, as applicable, the Master Servicer and the Special
Servicer each agrees to prepare and present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket policy which it maintains
in a timely fashion in accordance with the terms of such policy and to take such
reasonable steps as are necessary to receive payment or permit recovery
thereunder.
(ii) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
master force placed insurance policy, which policy is issued by a Qualified
Insurer and provides no less coverage in scope and amount for such Mortgaged
Property or REO Property than the insurance required to be maintained pursuant
to Section 3.8(a), the Master Servicer or Special Servicer shall conclusively be
deemed to have satisfied its obligations to maintain insurance pursuant to
Section 3.8(a). Such policy may contain a deductible clause, in which case the
Master Servicer or Special Servicer, as applicable, shall, in the event that (i)
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy otherwise complying with the provisions of Section 3.8(a), and
(ii) there shall have been one or more losses which would have been covered by
such a policy had it been maintained, immediately deposit into the Collection
Account from its own funds the amount not otherwise payable under such policy
because of such deductible to the extent that any such deductible exceeds the
deductible limitation that pertained to the related Mortgage Loan, or, in the
absence of any such deductible limitation, the deductible limitation which is
consistent with the Servicing Standard.
(c) Each of the Master Servicer and the Special Servicer shall
maintain a fidelity bond in the form and amount that would meet the servicing
requirements of prudent institutional commercial mortgage loan servicers. The
Master Servicer or the Special Servicer, as applicable, shall be deemed to have
complied with this provision if one of its respective Affiliates has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Master Servicer or the Special Servicer, as
applicable. In addition, each of the Master Servicer and the Special Servicer
shall keep in force during the term of this Agreement a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligations to service the Mortgage Loans
hereunder in the form and amount that would meet the servicing requirements of
prudent institutional commercial mortgage loan servicers. All fidelity bonds and
policies of errors and omissions insurance obtained under this Section 3.8(c)
shall be issued by a Qualified Insurer. Notwithstanding the foregoing, so long
as the long-term unsecured debt obligations of the Master Servicer or Special
Servicer, as applicable, or its respective corporate parent have been rated "A"
or better by DCR or "A2" or better by Moody's (or such lower rating for which
Rating Agency Confirmation has been obtained), the Master Servicer or Special
Servicer, as applicable, shall be entitled to provide self-insurance or obtain
from its respective corporate parent adequate insurance, as applicable, with
respect to its obligation hereunder to maintain a fidelity bond or an errors and
omissions insurance policy.
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SECTION 3.9. Enforcement of Due-On-Sale Clauses; Assumption Agree-
ments.
(a) If any Mortgage Loan contains a provision in the nature of a "due-
on-sale" clause, which, by its terms:
(i) provides that such Mortgage Loan shall (or may at the related
mortgagee's option) become due and payable upon the sale or other transfer of an
interest in the related Mortgaged Property, or
(ii) provides that such Mortgage Loan may not be assumed without
the consent of the related mortgagee in connection with any such sale or other
transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trust Fund, shall exercise or waive (subject
to Sections 3.27 and 3.28) such provision in accordance with the Servicing
Standard; provided, that if the then-outstanding principal balance of such
Mortgage Loan is within the Review Threshold, the Special Servicer shall have
first obtained Rating Agency Confirmation (the Special Servicer shall use its
reasonable efforts to have the cost, if any, of obtaining such confirmation paid
by the Borrower; if such cost is not paid by the Borrower, the Master Servicer
shall advance such amount as a Servicing Advance, unless such Advance would be a
Nonrecoverable Advance). Subject to the foregoing, the Special Servicer is
authorized to take or enter into an assumption agreement from or with the Person
to whom such Mortgaged Property has been or is about to be conveyed, or to
release the original related Borrower from liability upon such Mortgage Loan and
substitute the new Borrower as obligor thereon. To the extent permitted by law,
the Special Servicer shall enter into an assumption or substitution agreement
only if the credit status of the prospective new Borrower is in compliance with
(x) the Special Servicer's regular commercial mortgage origination or servicing
standards and criteria, (y) the terms of the related Mortgage Loan and (z) the
Servicing Standard. The Special Servicer shall notify the Trustee that any such
assumption or substitution agreement has been completed by forwarding to the
Trustee the original of such agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such assumption or
substitution agreement, the Mortgage Rate, principal amount and other material
payment terms (including any cross-collateralization and cross-default
provisions) of such Mortgage Loan pursuant to the related Note and Mortgage
shall not be changed, other than in connection with a default or reasonably
foreseeable default with respect to the Mortgage Loan. Assumption fees collected
by the Special Servicer for entering into an assumption or substitution
agreement will be retained by the Master Servicer and/or the Special Servicer as
additional servicing compensation to the extent provided in Section 3.12.
Notwithstanding the foregoing, the Special Servicer may consent to the
assumption of a Mortgage Loan by a prospective new Borrower in a bankruptcy
proceeding involving the related Mortgaged Property.
(b) If any Mortgage Loan contains a provision in the nature
of a "due-on-encumbrance" clause, which, by its terms:
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(i) provides that such Mortgage Loan shall (or may at the
related mortgagee's option) become due and payable upon the creation of any lien
or other encumbrance on such Mortgaged Property, or
(ii) requires the consent of the related mortgagee to the crea-
tion of any such lien or other encumbrance on such Mortgaged Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trust Fund, shall exercise or waive (subject
to Sections 3.27 and 3.28) the Trustee's rights under such provision to (x)
accelerate the payments due on such Mortgage Loan, or (y) withhold its consent
to the creation of any such lien or other encumbrance, as applicable, except, in
each case, to the extent that the Special Servicer acting in accordance with the
Servicing Standard, determines that such enforcement would not be in the best
interests of the Trust Fund; provided that, the Special Servicer will not
consent to the creation of any such lien or encumbrance unless it shall have
first obtained Rating Agency Confirmation (the Special Servicer shall use its
reasonable efforts to have the cost, if any, of obtaining such confirmation paid
by the Borrower; if such cost is not paid by the Borrower, the Master Servicer
shall advance such amount as a Servicing Advance, unless such Advance would be a
Nonrecoverable Advance). Notwithstanding the foregoing, the Special Servicer may
forbear from enforcing any due-on-encumbrance provision in connection with any
junior or senior lien on the Mortgaged Property imposed in connection with any
bankruptcy proceeding involving the Mortgaged Property.
(c) Nothing in this Section 3.9 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 lien or other encumbrance with respect to such Mortgaged
Property.
(d) In connection with the taking of, or the failure to take, any
action pursuant to this Section 3.9, the Special Servicer shall not agree to
modify, waive or amend, and no assumption or substitution agreement entered into
pursuant to Section 3.9(a) shall contain any terms that are different from, any
term of any Mortgage Loan or the related Note or Mortgage.
(e) If the Master Servicer receives a request from a Borrower to
waive a "due-on-sale" or "due-on-encumbrance" clause, the Master Servicer shall
promptly forward such request to the Special Servicer.
SECTION 3.10. Realization Upon Mortgage Loans.
(a) With respect to any Specially Serviced Mortgage Loan, the Special
Servicer shall determine, in accordance with the Servicing Standard, whether to
grant a modification, waiver or amendment of the terms of such Specially
Serviced Mortgage Loan, (subject to the limitations contained in Section 3.28)
commence foreclosure proceedings or attempt to sell such Specially Serviced
Mortgage Loan with reference to which course of action is reasonably likely to
produce a greater recovery on a present value basis with respect to such
Specially Serviced Mortgage Loan.
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(b) In connection with any foreclosure or other acquisition, the
Master Servicer shall, at the direction of the Special Servicer, pay the costs
and expenses in any such proceedings as an Advance.
If the Special Servicer elects to proceed with a non-judicial
foreclosure in accordance with the laws of the state where the related Mortgaged
Property is located, the Special Servicer shall not be required to pursue a
deficiency judgment against the related Borrower or any other liable party if
the laws of such state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines, in its best
judgment, that the likely recovery if a deficiency judgment is obtained will not
be sufficient to warrant the cost, time, expense and/or exposure of pursuing
such a deficiency judgment and such determination is evidenced by an Officer's
Certificate delivered to the Trustee.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee (which shall not include the
Master Servicer or the Special Servicer) or a separate trustee or co-trustee on
behalf of the Trustee, as the holder of the REMIC I Regular Interests and as
Trustee for the Certificateholders. Notwithstanding any such acquisition of
title and cancellation of the related Mortgage Loan, such Mortgage Loan shall
(except for purposes of Section 9.1) be considered to be a Mortgage Loan held in
the Trust Fund until such time as the related REO Property shall be sold by the
Trust Fund and the Stated Principal Balance of each REO Mortgage Loan shall be
reduced by any Net REO Proceeds allocated to principal. Consistent with the
foregoing, for purposes of all calculations hereunder, so long as such Mortgage
Loan shall be considered to be an outstanding Mortgage Loan:
(i) it shall be assumed that, notwithstanding that the indebted-
ness evidenced by the related Note shall have been discharged, such Note and,
for purposes of determining the Stated Principal Balance thereof, the related
amortization schedule in effect at the time of any such acquisition of title,
remain in effect; and
(ii) Net REO Proceeds received in any month shall be applied to
amounts that would have been payable under the related Note in accordance with
the terms of such Note. In the absence of such terms, Net REO Proceeds shall be
deemed to have been received first in payment of the accrued interest that
remained unpaid on the date that the related REO Property was acquired by the
Trust Fund; second in respect of the delinquent principal installments that
remained unpaid on such date; and thereafter, Net REO Proceeds received in any
month shall be applied to the payment of installments of principal and accrued
interest on such Mortgage Loan deemed to be due and payable in accordance with
the terms of such Note and such amortization schedule. If such Net REO Proceeds
exceed the Assumed Monthly Payment then payable, the excess shall be treated as
a Principal Prepayment received in respect of such Mortgage Loan.
(c) Notwithstanding any provision to the contrary, the Special
Servicer shall not acquire for the benefit of the Trust Fund any personal
property pursuant to this Section 3.10 unless either:
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(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 for the benefit of the Trust Fund; or
(ii) the Special Servicer shall have requested and received
an Opinion of Counsel (the cost of such opinion shall be advanced as a Servicing
Advance, unless such Advance would be a Nonrecoverable Advance) to the effect
that the holding of such personal property by REMIC I will not cause the
imposition of a tax on REMIC I, REMIC II or REMIC III under the REMIC Provisions
or cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificate is outstanding.
(d) Notwithstanding any provision to the contrary in this Agreement,
the Special Servicer shall not, on behalf of the Trust Fund, obtain title to any
direct or indirect partnership interest or other equity interest in any Borrower
pledged pursuant to any pledge agreement unless the Special Servicer shall have
requested and received an Opinion of Counsel (the cost of such opinion shall be
advanced as a Servicing Advance, unless such Advance would be a Nonrecoverable
Advance) to the effect that the holding of such partnership or other equity
interest by the Trust Fund will not cause the imposition of a tax on REMIC I,
REMIC II or REMIC III under the REMIC Provisions or cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
(e) Notwithstanding any provision to the contrary contained in this
Agreement, the Special Servicer shall not, on behalf of the Trust Fund, obtain
title to a Mortgaged Property as a result of or in lieu of foreclosure or
otherwise obtain title to any direct or indirect partnership interest or other
equity interest in any Borrower pledged pursuant to a pledge agreement and
thereby be the beneficial owner of a Mortgaged Property, and shall not otherwise
acquire possession of, or take any other action with respect to, any Mortgaged
Property if, as a result of any such action, the Trustee, for the Trust Fund or
the Certificateholders, 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 the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Special Servicer has previously determined in
accordance with the Servicing Standard, based on an updated environmental
assessment report prepared by an Independent Person who regularly conducts
environmental audits, that:
(A) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, after consultation with an environmental
consultant, that it would be in the best economic interest of the Trust Fund to
take such actions as are necessary to bring such Mortgaged Property in
compliance therewith, and
(B) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any Hazardous Materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any currently effective federal, state or
local law or regulation, or that, if any such Hazardous Materials are present
for which such action could be required, after consultation with an
environmental
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consultant, it would be in the best economic interest of the Trust Fund to take
such actions with respect to such Mortgaged Property.
In the event that the environmental assessment first obtained or
updated by the Special Servicer with respect to a Mortgaged Property indicates
that such Mortgaged Property may not be in compliance with applicable
environmental laws or that Hazardous Materials may be present but does not
definitively establish such fact, the Special Servicer shall cause such further
environmental tests as the Special Servicer shall deem prudent to protect the
interests of Certificateholders to be conducted by an Independent Person who
regularly conducts such tests. Any such tests shall be deemed part of the
environmental assessment obtained by the Special Servicer for purposes of this
Section 3.10.
The environmental assessment contemplated by this Section 3.10(e)
shall be prepared by any Independent Person who regularly conducts environmental
audits for purchasers of commercial properties located in the same general area
as the Mortgaged Property with respect to which the Special Servicer is ordering
such environmental assessment, as determined by the Special Servicer in a manner
consistent with the Servicing Standard. The Master Servicer shall at the
direction of the Special Servicer pay for the cost of preparation of such
environmental assessments as an Advance.
If the Special Servicer determines pursuant to Section 3.10(e)(A)
that a Mortgaged Property is not in compliance with applicable environmental
laws but that it is in the best economic interest of the Trust Fund to take such
actions as are necessary to bring such Mortgaged Property into compliance
therewith, or if the Special Servicer determines pursuant to Section 3.10(e)(B)
that the circumstances referred to therein relating to Hazardous Materials are
present but that it is in the best economic interest of the Trust Fund to take
such action with respect to the containment, clean-up or remediation of
Hazardous Materials affecting such Mortgaged Property as is required by law or
regulation, the Special Servicer shall take such action as it deems to be in the
best economic interest of the Trust Fund (with due consideration to the
avoidance of "mortgagee-in-possession," "owner" or "operator" status, as set
forth in Section 3.10(e)), but only if the Trustee has mailed notice to the
Holders of the REMIC III Regular Certificates of such proposed action, which
notice shall be prepared by the Special Servicer, and only if the Trustee does
not receive, within 30 days of such notification, instructions from the Holders
of a majority of the aggregate Voting Rights of such Classes directing the
Special Servicer not to take such action. None of the Trustee, the Master
Servicer or the Special Servicer shall be obligated to take any action or not
take any action pursuant to this Section 3.10(e) at the direction of the
Certificateholders unless the Certificateholders agree to indemnify the Trustee,
the Master Servicer and the Special Servicer with respect to such action or
inaction. None of the Special Servicer, Master Servicer or the Trustee shall be
required to advance the cost of any such compliance, containment, clean-up or
remediation and such expense shall be an expense of the Trust Fund.
(f) The Special Servicer shall report to the IRS and to the related
Borrower, in the manner required by applicable law, the information required to
be reported regarding any Mortgaged Property which is abandoned or foreclosed.
The Special Servicer shall deliver a copy of any such report to the Trustee.
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SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Trustee and the Custodian by a certification (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.5(a) have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Master Servicer or the Special
Servicer, and delivery to the Trustee and the Custodian of a Request for
Release, the Trustee shall promptly cause the Custodian to release the Mortgage
File (or any portion thereof) designated in such Request for Release to the
Master Servicer or the Special Servicer, as applicable. Upon receipt of (a) such
Mortgage File (or portion thereof) by the Custodian from the Master Servicer or
the Special Servicer, as applicable, or (b) in the event of a liquidation or
conversion of the related Mortgage Loan into an REO Property, a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation which are
required to be deposited into the Collection Account or Distribution Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
the Custodian shall return the Request for Release to the Master Servicer or the
Special Servicer, as applicable.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Special Servicer any court pleadings, requests for
trustee's sale or other documents prepared by the Special Servicer, its agents
or attorneys, necessary to the foreclosure or trustee's sale in respect of the
Mortgaged Property or to any legal action brought to obtain judgment against any
Borrower on the related Note or Mortgage or to obtain a deficiency judgment, or
to enforce any other remedies or rights provided by such Note or Mortgage or
otherwise available at law or in equity. Each such certification shall include a
request that such pleadings or documents be executed by the Trustee and a
statement as to the reason such documents or pleadings are required and that the
execution and delivery thereof by the Trustee will not invalidate or otherwise
affect the lien of the related Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
SECTION 3.12. Servicing Compensation.
(a) As compensation for its activities hereunder, the Master Servicer
shall be entitled to the Master Servicing Fee, which shall be payable solely
from receipts or Advances on the related Mortgage Loans, and may be withheld
from payments or Advances on account of interest prior to deposit in the
Collection Account, or may be withdrawn from amounts on deposit in the
Collection Account as set forth in Section 3.6(iv). The Master Servicer's rights
to
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the Master 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. In addition, the Master Servicer shall be
entitled to receive, as additional servicing compensation, any Prepayment
Interest Excess (subject to Section 3.25) and, to the extent permitted by
applicable law and the related Notes and Mortgages, any late payment charges or
late fees (to the extent not used to offset Advance Interest Amounts as provided
herein), NSF check charges (including with respect to Specially Serviced
Mortgage Loans), demand fees, Loan Service Transaction Fees, beneficiary
statement charges, or similar items (but not including any Default Interest or
Prepayment Premiums), in each case to the extent received with respect to any
Mortgage Loan that is not a Specially Serviced Mortgage Loan and 50% of any
extension fees, consent fees (other than Loan Service Transaction Fees as to
which the Master Servicer shall be entitled to 100%), modification fees or
assumption fees collected on any Mortgage Loan that is not a Specially Serviced
Mortgage Loan. The Master Servicer shall also be entitled pursuant to, and to
the extent provided in, Section 3.7(b) to withdraw from the Collection Account
and to receive from the Reserve Accounts (to the extent not required to be paid
to the related Borrower pursuant to the related Mortgage Loan Documents or
applicable law) any interest or other income earned on deposits therein.
Notwithstanding anything herein to the contrary, Midland may at its option
assign or pledge to any third party or retain for itself the Transferable
Servicing Interest; provided, however, that in the event of any resignation or
termination of Midland as Master Servicer hereunder, all or any portion of the
Transferable Servicing Interest 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 6.4(b) and who requires market
rate servicing compensation that accrues at a per annum rate in excess of the
Minimum Master Servicing Fee Rate. The Master Servicer shall pay the
Transferable Servicing Interest to the holder of the Transferable Servicing
Interest (i.e., Midland 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
hereunder, notwithstanding any resignation or termination of Midland hereunder
(subject to reduction pursuant to the preceding sentence).
Except as otherwise provided herein, the Master Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder.
The Master Servicer shall promptly pay, when due, out of its own funds, all
surveillance fees of the Rating Agencies relating to the rating of the
Certificates.
(b) As compensation for its activities hereunder, the Special Servicer
shall be entitled to the Special Servicing Fee with respect to each Specially
Serviced Mortgage Loan, which shall be payable from amounts on deposit in the
Collection Account as set forth in Section 3.6(iv). The Special Servicer's
rights to 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. The Special Servicer
shall also be entitled pursuant to, and to the extent provided in, Section
3.7(b) to withdraw from any REO Account any interest or other income earned on
deposits therein.
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In addition, the Special Servicer shall be entitled to receive, as
additional Servicing Compensation, to the extent permitted by applicable law and
the related Notes and Mortgages, any late payment charges or late fees (to the
extent not used to offset Advance Interest Amounts as provided herein), demand
fees, assumption fees, loan modification fees, extension fees, Loan Service
Transaction Fees, beneficiary statement charges, or similar items (but not
including any Default Interest or Prepayment Premiums), in each case to the
extent received with respect to any Specially Serviced Mortgage Loan. The
Special Servicer shall also be entitled to receive, as additional Servicing
Compensation, to the extent permitted by applicable law and the related Notes
and Mortgages, 50% of any assumption fees, loan modification fees, consent fees
(other than Loan Service Transaction Fees as to which the Master Servicer shall
be entitled to 100%) and extension fees on Mortgage Loans that are not Specially
Serviced Mortgage Loans.
Furthermore, the Special Servicer shall be entitled to receive, as
additional Servicing Compensation, a workout fee (the "Workout Fee") equal to
the product of 1.0% and the amount of Net Collections received by the Master
Servicer or the Special Servicer with respect to each Corrected Mortgage Loan.
If any Corrected Mortgage Loan again becomes a Specially Serviced Mortgage Loan,
any right to the Workout Fee with respect to such Mortgage Loan earned in
connection with the initial modification, restructuring or workout thereof shall
terminate, and the Special Servicer shall be entitled to a new Workout Fee for
such Mortgage Loan upon resolution or workout of the subsequent event of default
under such Mortgage Loan. If the Special Servicer is terminated for any reason
hereunder it shall retain the right to receive any Workout Fees payable in
respect of any Mortgage Loans which became Corrected Mortgage Loans during the
period that it acted as Special Servicer (and the successor Special Servicer
shall not be entitled to any portion of such Workout Fees), in each case until
the Workout Fees for any such Mortgage Loan ceases to be payable in accordance
with this paragraph.
Except as otherwise provided herein, the Special Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder.
(c) In addition to other Special Servicer compensation provided
for in this Agreement, and not in lieu thereof, the Special Servicer shall be
entitled to the Disposition Fee payable out of the Liquidation Proceeds prior to
the deposit of the related Net Liquidation Proceeds in the Collection Account.
(d) If the Master Servicer, the Special Servicer or the Trustee
receives a request or inquiry from a Borrower, any Certificateholder or any
other Person the response to which would, in the Master Servicer's, the Special
Servicer's or the Trustee's good faith business judgment, require the assistance
of Independent legal counsel or other consultant to the Master Servicer, the
Special Servicer or the Trustee, the cost of which would not be an expense of
the Trust Fund hereunder, then the Master Servicer, the Special Servicer or the
Trustee, as the case may be, shall not be required to take any action in
response to such request or inquiry unless such Borrower or such
Certificateholder or such other Person, as applicable, makes arrangements for
the payment of the Master Servicer's, the Special Servicer's or Trustee's
expenses associated with such counsel or other consultant (including, without
limitation, posting an advance payment for such expenses) satisfactory to the
Master Servicer, the Special Servicer or the Trustee, as the
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case may be, in its sole discretion. Unless such arrangements have been made,
the Master Servicer, the Special Servicer or the Trustee, as the case may be,
shall have no liability to any Person for the failure to respond to such request
or inquiry.
SECTION 3.13. Reports to the Trustee; Collection Account Statements.
(a) The Master Servicer shall deliver to the Paying Agent, with a
copy to the Trustee, the Fiscal Agent and each Rating Agency, (i) no later than
3:00 p.m. on the third Business Day preceding the related Distribution Date (A)
the Servicer Remittance Report with respect to such Determination Date (which
shall include, without limitation, the amount of the Master Servicer Remittance
Amount for the related Distribution Date) and (B) a written statement of
required P&I Advances for the related Determination Date together with the
certificate and documentation required by the definition of Nonrecoverable
Advance related to any determination that any such P&I Advance would constitute
a Nonrecoverable Advance made as of such Determination Date.
(b) For so long as the Master Servicer makes deposits into and with-
drawals from the Collection Account, not later than fifteen days after each
Distribution Date, the Master Servicer shall forward to the Trustee a statement
prepared by the Master Servicer setting forth the status of the Collection
Account as of the close of business on the last Business Day of the related
Collection Period showing the aggregate amount of deposits into and withdrawals
from the Collection Account for each category of deposit specified in Section
3.5 and each category of withdrawal specified in Section 3.6 for such Collection
Period.
(c) The Trustee shall be entitled to rely conclusively on and
shall not be responsible for the content or accuracy of any information provided
to it by the Master Servicer or the Special Servicer pursuant to this Agreement.
SECTION 3.14. Annual Statement as to Compliance.
The Master Servicer and the Special Servicer shall deliver to the
Trustee, the Rating Agencies and to the Depositor on or before March 15 of each
year, beginning with March 15, 2000, an Officer's Certificate stating, as to
each signatory thereof, (i) that a review of the activities of the Master
Servicer or the Special Servicer, as applicable, during the preceding calendar
year (or such shorter period from the Closing Date to the end of the related
calendar year) and of its performance under this Agreement has been made under
such officer's supervision, (ii) that, to the best of such officer's knowledge,
based on such review, it has fulfilled in all material respects all of its
obligations under this Agreement throughout such year (or such shorter period),
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer, the nature and status
thereof and what action it proposes to take with respect thereto, (iii) that, to
the best of such officer's knowledge, each Sub-Servicer has fulfilled its
obligations under its Sub-Servicing Agreement in all material respects, or, if
there has been a material default in the fulfillment of such obligations,
specifying each such default known to such officer and the nature and status
thereof, and (iv) whether it has received any notice regarding qualification, or
challenging the status, of REMIC I, REMIC II or REMIC III as a REMIC from the
IRS or any other governmental agency or body; provided, that
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each of the Master Servicer and the Special Servicer shall not be required to
cause the delivery of such Officer's Certificate until April 15 in any given
year so long as it has received written confirmation from the Depositor that a
Report on Form 10-K is not required to be filed in respect of the Trust Fund for
the preceding calendar year.
SECTION 3.15. Annual Independent Public Accountants' Servicing Report.
On or before March 15 of each year, beginning with March 15, 2000,
the Master Servicer and the Special Servicer at their expense shall cause a
nationally recognized firm of Independent public accountants (who may also
render other services to the Master Servicer or the Special Servicer, as
applicable) to furnish to the Trustee, the Depositor and each Rating Agency a
statement to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement or
the servicing of mortgage loans similar to the Mortgage Loans under
substantially similar agreements for the preceding 12 months and that the
assertion of management of the Master Servicer or Special Servicer, as
applicable, that it maintained an effective internal control system over the
servicing of such mortgage loans is fairly stated in all material respects,
based upon established criteria, which statement meets the standards applicable
to accountant's reports intended for general distribution; provided that each of
the Master Servicer and the Special Servicer shall not be required to cause the
delivery of such statement until April 15 in any given year so long as it has
received written confirmation from the Depositor that a Report on Form 10-K is
not required to be filed in respect of the Trust Fund for the preceding calendar
year.
SECTION 3.16. Access to Certain Documentation.
(a) The Master Servicer and the Special Servicer shall provide
to any Certificateholders that are federally insured financial institutions, the
Federal Reserve Board, the FDIC and the OTS and the supervisory agents and
examiners of such boards and such corporations, and any other governmental or
regulatory body to the jurisdiction of which any Certificateholder is subject,
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the Federal Reserve Board, FDIC, OTS or any such governmental or
regulatory body, such access being afforded only upon reasonable request and
during normal business hours at the offices of the Master Servicer or the
Special Servicer, as applicable.
(b) Nothing in this Section 3.16 shall detract from the obligation of
the Master Servicer or the Special Servicer to observe any applicable law or any
provisions of the Mortgage Loan Documents prohibiting disclosure of information
with respect to the Borrowers or the Mortgage Loans, and the failure of the
Master Servicer or the Special Servicer, as applicable, to provide access as
provided in this Section 3.16 as a result of such obligation shall not
constitute a breach of this Section 3.16.
SECTION 3.17. Title and Management of REO Properties.
(a) In the event that title to any Mortgaged Property is acquired
for the benefit of Certificateholders in foreclosure or by deed in lieu of
foreclosure, the deed or certificate of sale shall be taken in the name of the
Trustee, or its nominee (which shall not include the Master
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Servicer or the Special Servicer), or a separate trustee or co-trustee, on
behalf of the Trust Fund. The Special Servicer shall maintain accurate records
with respect to each related REO Property reflecting the status of taxes,
assessments and other similar items that are or may become a lien on such REO
Property and the status of insurance premiums payable with respect thereto. The
Special Servicer, on behalf of the Trust Fund, shall dispose of any REO Property
within three taxable years after the close of the taxable year in which the
Trust Fund acquires ownership of such REO Property (the "REO Grace Period") for
purposes of Section 860G(a)(8) of the Code, unless (i) the Special Servicer, on
behalf of REMIC I, has timely applied for and received an extension of such REO
Grace Period pursuant to Sections 856(e)(3) and 860G(a)(8)(A) of the Code, in
which case the Special Servicer shall sell such REO Property within the
applicable extension period or (ii) the Special Servicer seeks and subsequently
receives an Opinion of Counsel (the cost of such opinion shall be advanced as a
Servicing Advance, unless it would be a Nonrecoverable Advance), addressed to
the Special Servicer and the Trustee, to the effect that the holding by the
Trust Fund of such REO Property for an additional specified period will not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code) at any time
that any Certificate is outstanding, in which case the Special Servicer shall
sell such REO Property within the REO Grace Period (collectively the "REO
Extension Period") as extended by the applicable REO Extension Period subject to
any conditions set forth in such Opinion of Counsel. The Special Servicer, on
behalf of the Trust Fund, shall dispose of any REO Property held by the Trust
Fund prior to the last day of the period (taking into account extensions) within
which such REO Property is required to be disposed of pursuant to the provisions
of the immediately preceding sentence in a manner provided under Section 3.18.
The Special Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders solely for the purpose of its disposition
and sale in a manner which does not cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a)) of the Code or, except as contemplated by Section 3.19(d), result in
the receipt by REMIC I of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or in an Adverse REMIC Event in
respect of any of the REMICs.
(b) The Special Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do any
and all things in connection with any REO Property as are consistent with
Servicing Standard, all on such terms and for such period as the Special
Servicer deems to be in the best interests of Certificateholders, and, in
connection therewith, the Special Servicer shall agree to the payment of
management fees that are consistent with general market standards. The Special
Servicer shall segregate and hold all revenues received by it with respect to
any REO Property separate and apart from its own funds and general assets and
shall establish and maintain with respect to any REO Property a segregated
custodial account (each, an "REO Account"), each of which shall be an Eligible
Account and shall be entitled "LaSalle Bank National Association, as Trustee, in
trust for Holders of Commercial Mortgage Acceptance Corp., Commercial Mortgage
Pass-Through Certificates, Series 1999-C1, REO Account." The Special Servicer
shall be entitled to any interest or investment income earned on funds deposited
in an REO Account to the extent provided in Section 3.7(b). The Special Servicer
shall deposit or cause to be deposited in the
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related REO Account within one Business Day after receipt all REO Proceeds
received by it with respect to any REO Property (other than Liquidation
Proceeds), and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property, including:
(i) all insurance premiums and ground rents, if any, due and pay-
able in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of such REO
Property and such other Mortgaged Properties that may result in the imposition
of a lien thereon; and
(iii) all costs and expenses reasonable and necessary to
protect, maintain, manage, operate, repair and restore such REO Property and
such other Mortgaged Properties, including any property management fees.
To the extent that such REO Proceeds are insufficient for the
purposes set forth in clauses (i) through (iii) above, the Master Servicer shall
make an Advance equal to the amount of such shortfall unless the Master Servicer
determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. The Master Servicer shall be entitled to reimbursement
of such Advances (with interest at the Advance Rate) made pursuant to the
preceding sentence, to the extent permitted pursuant to Section 3.6. The Special
Servicer shall remit to the Master Servicer from each REO Account for deposit in
the Collection Account on a monthly basis prior to the related Remittance Date
the Net REO Proceeds received or collected from the related REO Property, except
that in determining the amount of such Net REO Proceeds, the Special Servicer
may retain in such REO Account reasonable reserves for repairs, replacements and
necessary capital improvements and other related expenses.
Notwithstanding the foregoing, the Special Servicer shall not (unless
permitted pursuant to subsection (d) below):
(i) permit the Trust Fund to enter into, renew or extend any
New Lease 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) Directly Operate or perform any construction work on, or
allow any Person (other than an Independent Contractor) to Directly Operate or
perform any
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construction work on, any REO Property on, any date more than 90 days after its
date of acquisition by the Trust Fund;
unless, in any such case, the Special Servicer has requested and received an
Opinion of Counsel addressed to the Special Servicer and the Trustee (which
opinion shall be an expense of the Trust Fund) 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 (determined without regard
to the exception applicable for purposes of Section 860D(a) 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.
The Special Servicer shall be required to contract with an
Independent Contractor for the operation and management of any REO Property
within 90 days of the Trust Fund's acquisition thereof (unless the Special
Servicer shall have provided the Trustee with an Opinion of Counsel that the
operation and management of such REO Property other than through an Independent
Contractor shall not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Code Section 860G(a)(8)) (which opinion shall be
an expense of the Trust Fund), provided that:
(i) the terms and conditions of any such contract shall be
reasonable and customary for the area and type of property and shall not be
inconsistent herewith;
(ii) the terms and conditions of any such contract shall reflect
an agreement reached at arm's length and shall be consistent with the provisions
of Treasury Regulation Section 1.856-4(b)(5);
(iii)any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and expenses incurred
in connection with the operation and management of such REO Property, including
those listed above, and remit all related revenues (net of such costs and
expenses) to the Special Servicer as soon as practicable, but in no event later
than thirty days following the receipt thereof by such Independent Contractor
but only to the extent consistent with Section 856 of the Code and Treasury
Regulation Section 1.856-4(b)(5);
(iv) none of the provisions of this Section 3.17(b) 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 to the Trust Fund or the Trustee on behalf of the Certificateholders
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
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for indemnification of the Special Servicer by such Independent Contractor, and
nothing in this Agreement shall be deemed to limit or modify such
indemnification.
(c) When and as necessary, the Special Servicer shall send to the
Trustee a statement prepared by the Special Servicer setting forth the amount of
net income or net loss, as determined for federal income tax purposes, resulting
from the operation and management of a trade or business on, the furnishing or
rendering of a non-customary service to the tenants of, or the receipt of any
other amount not constituting Rents from Real Property in respect of, any REO
Property in accordance with Section 3.17(b).
(d) The Special Servicer shall, prior to acquisitions of title to any
Mortgaged Property, review the operations of such property securing a defaulted
loan and determine the character of the income that the Trust would realize if
the Trust acquired title to such Mortgaged Property. The Special Servicer shall
undertake this analysis with a view to retaining the status of the REO Property
as foreclosure property under the REMIC provisions while maximizing the net
after-tax REO Income received without materially adversely affecting the Special
Servicer's ability to sell such REO Property. The Special Servicer shall, in its
good faith and reasonable judgment, and as it deems appropriate after
consultation with counsel knowledgeable in such matters (with such consultation
being an expense of the Trust Fund) determine which of the following
alternatives is preferred and commercially feasible. The Special Servicer shall
avoid subjecting the income from such Mortgaged Property to tax as either "net
income from foreclosure property" or a "prohibited transaction" within the
meaning of the REMIC Provisions (an "REO Tax") to the maximum extent possible
when evaluating the following alternative courses of action:
(i)..Operate, or Directly Operate, as defined herein, the Mortgaged
Property if none of the income would be subject to an REO tax; or
(ii).Contract for operation of the Mortgaged Property through a lease
to another party, by contract with an independent Contractor who Directly
Operates such property or such other method pursuant to which the Special
Servicer would not Directly Operate the Mortgaged Property if the income from
the Mortgaged Property could otherwise be subject to a REO tax; or
(iii)Directly Operate the mortgaged property if there are no other
commercially feasible means of operating such mortgaged property as REO Property
without the Trust potentially or actually incurring an REO Tax; provided,
however, that the Special Servicer shall consult with the Trustee regarding the
plan of operations, the estimated income (and character thereof) derived
therefrom, the estimated amount of taxes payable on such income and such other
information as is necessary to make a reasoned judgment as to whether the REO
Property will remain a foreclosure property and whether such plan is likely to
maximize the net after tax REO income to the Trust.
Neither the Special Servicer nor the Trustee shall be liable to the
Certificateholders, the Trust or the other parties to this Agreement 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.
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(e) Promptly following any acquisition by the Trust Fund of
an REO Property, the Special Servicer shall obtain (i) an update of any
appraisal performed pursuant to Section 3.23 which is more than 12 months old,
or (ii) to the extent that an appraisal has not been obtained pursuant to such
Section, an appraisal of such REO Property by an Independent appraiser familiar
with the area in which such REO Property is located in order to determine the
fair market value of such REO Property and shall notify the Depositor and the
Trustee of the results of such appraisal. Any such appraisal shall be conducted
in accordance with MAI standards by an appraiser with at least 5 years
experience in the relevant property type and in the jurisdiction in which the
Mortgaged Property is located and the cost thereof shall be an expense of the
Trust Fund.
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and REO
Properties.
(a) With respect to any Specially Serviced Mortgage Loan or REO
Property which the Special Servicer has determined to sell in accordance with
Section 3.10 or otherwise, the Special Servicer shall deliver to the Trustee an
Officer's Certificate to the effect that the Special Servicer has determined to
sell such Specially Serviced Mortgage Loan or REO Property in accordance with
this Section 3.18. The Special Servicer will give the Trustee not less than 10
Business Days' prior written notice of its intention to sell any Specially
Serviced Mortgage Loan or REO Property. The Trustee shall, within 5 Business
Days after receipt of such notice, notify the Operating Adviser. The Operating
Adviser may, at its option, within 30 days after receipt of such notice,
purchase (or designate an Affiliate to purchase) any such Specially Serviced
Mortgage Loan or REO Property out of the Trust Fund at a cash price equal to the
applicable Repurchase Price. The Repurchase Price for any Specially Serviced
Mortgage Loan or REO Property purchased under this Section 3.18(a) shall be
deposited into the Collection Account, and the Trustee, upon receipt of an
Officer's Certificate from the Master Servicer to the effect that such deposit
has been made, shall release or cause to be released to the Operating Adviser
(or the designated Affiliate thereof) the related Mortgage File, and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty as shall be provided to it and are
reasonably necessary to vest in the ownership of such Mortgage Loan or REO
Property. In connection with any such purchase, the Special Servicer shall
deliver the related Servicing File to the Certificateholder effecting such
purchase.
(b) If the Operating Adviser (or a designated Affiliate thereof)
has not purchased any Specially Serviced Mortgage Loan or REO Property described
in the first sentence of Section 3.18(a) within 30 days of its having received
notice in respect thereof pursuant to Section 3.18(a) above or has specifically
waived in writing its right to purchase such Specially Serviced Mortgage Loan or
REO Property, then the Trustee shall within 5 days of the end of such 30-day
period or within 5 days following its receipt of such waiver send notice to the
Master Servicer and the Special Servicer that the Operating Adviser has not
purchased such Mortgage Loan or REO Property, and either the Special Servicer or
the Master Servicer, in that order, may, at its option, within 30 days after
receipt of such notice, purchase (or designate an Affiliate thereof to purchase)
such Mortgage Loan or REO Property out of the Trust Fund at a cash price equal
to the Repurchase Price. The Repurchase Price for any such Mortgage Loan or
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REO Property purchased under this Section 3.18(b) shall be deposited into the
Collection Account, and the Trustee, upon receipt of an Officer's Certificate
from the Master Servicer to the effect that such deposit has been made, shall
release or cause to be released to the Master Servicer or the Special Servicer
(or the designated Affiliate thereof), as applicable, the related Mortgage File,
and shall execute and deliver such instruments of transfer or assignments, in
each case without recourse, representation or warranty as shall be provided to
it and are reasonably necessary to vest in the Master Servicer or the Special
Servicer (or the designated Affiliate thereof), as applicable, the ownership of
such Mortgage Loan or REO Property. In connection with any such purchase by the
Master Servicer, the Special Servicer shall deliver the related Servicing File
to the Master Servicer.
(c) The Special Servicer may offer to sell to any Person (includ-
ing the Depositor, the Master Servicer, the Special Servicer and the Operating
Adviser) any Specially Serviced Mortgage Loan or REO Property not otherwise
purchased pursuant to Section 3.18(a) or 3.18(b) if and when the Special
Servicer determines, consistent with the Servicing Standard, that such a sale
would be in the best economic interests of the Certificateholders (as a
collective whole). The Special Servicer shall notify the Operating Adviser at
least 10 Business Days before offering to sell any Specially Serviced Mortgage
Loan or REO Property pursuant to this Section 3.18(c). Such offer shall be made
in a commercially reasonable manner (which, for purposes hereof, includes an
offer to sell without representation or warranty other than customary warranties
of title and condition, if liability for breach thereof is limited to recourse
against the Trust), but shall, in any event, so offer to sell such Specially
Serviced Mortgage Loan or REO Property no later than the time determined by the
Special Servicer to be sufficient to result in the sale of such Specially
Serviced Mortgage Loan or REO Property within the period specified in Section
3.17(a). The Special Servicer shall deliver such Officer's Certificate and give
the Trustee not less than ten Business Days prior written notice of its
intention to sell such Specially Serviced Mortgage Loan or REO Property, in
which case the Special Servicer shall accept any offer received from any Person
that is determined by the Special Servicer to be a fair price, as determined in
accordance with Section 3.18(b), for such Specially Serviced Mortgage Loan or
REO Property if the offeror is a Person other than the Special Servicer or an
Affiliate thereof, or is determined to be such a price by the Trustee if the
offeror is the Special Servicer or an Affiliate thereof; provided, however, that
the Trustee shall be entitled to engage at the expense of the Trust Fund, an
Independent appraiser to determine whether the offer is a fair price; and
provided, further, that any offer by an Interested Person in the amount of the
Repurchase Price shall be deemed to be a fair price. Notwithstanding anything to
the contrary herein, neither the Trustee in its individual capacity nor any of
its Affiliates, may make an offer or purchase any Specially Serviced Mortgage
Loan or any REO Property pursuant hereto.
In addition, in the event that the Special Servicer receives more
than one fair offer with respect to any Specially Serviced Mortgage Loan or REO
Property, the Special Servicer may accept an offer that is not the highest fair
offer if it determines, in accordance with the Servicing Standard, that
acceptance of such offer would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower offer
is more likely to perform its obligations, or the terms offered by the
prospective buyer making the lower offer are more favorable). In the event that
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
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Certificateholders and that the end of the REO Grace Period referred to in
Section 3.17(a) with respect to such REO Property is approaching, the Special
Servicer shall seek an extension of such REO Grace Period in the manner
described in Section 3.17(a); provided, however, that the Special Servicer shall
use its best efforts in accordance with the Servicing Standard, to sell any REO
Property no later than the day prior to the Determination Date immediately prior
to the Scheduled Final Distribution Date.
(d) In determining whether any offer received represents a fair price
for any Specially Serviced Mortgage Loan or any REO Property, the Special
Servicer or the Trustee may conclusively rely on the opinion of an Independent
appraiser or other expert in real estate matters retained by the Special
Servicer or the Trustee at the expense of the Trust Fund. In determining whether
any offer constitutes a fair price for any Specially Serviced Mortgage Loan or
any REO Property, the Special Servicer or the Trustee (or, if applicable, such
appraiser) shall take into account, and any appraiser or other expert in real
estate matters shall be instructed to take into account, the appraisal obtained
pursuant to Section 3.23 and, as applicable, among other factors, the period and
amount of any delinquency on such Specially Serviced Mortgage Loan, the physical
(including environmental) condition of the related Mortgaged Property or such
REO Property, the state of the local economy and the Trust Fund's obligation to
dispose of any REO Property within the time period specified in Section 3.17(a).
(e) Subject to the provisions of Section 3.17, the Special Servicer
shall act on behalf of the Trust Fund in negotiating and taking any other action
necessary or appropriate in connection with the sale of any Specially Serviced
Mortgage Loan or REO Property, including the collection of all amounts payable
in connection therewith. Any sale of a Specially Serviced Mortgage Loan or any
REO Property shall be without recourse to, or representation or warranty by, the
Trustee, the Depositor, the Master Servicer, the Special Servicer or the Trust
Fund (except that any contract of sale and assignment and conveyance documents
may contain customary warranties of title and condition, so long as the only
recourse for breach thereof is to the Trust Fund), and, if such sale is
consummated in accordance with the duties of the Special Servicer, the Master
Servicer, the Depositor and the Trustee pursuant to the terms of this Agreement,
no such Person who so performed shall have any liability to the Trust Fund or
any Certificateholder with respect to the purchase price therefor accepted by
the Special Servicer or the Trustee.
(f) Net Liquidation Proceeds related to any such sale shall be
promptly, and in any event within one Business Day following receipt thereof,
deposited in the Collection Account in accordance with Section 3.5(a)(iv).
SECTION 3.19. Inspections.
Commencing in 2000, the Master Servicer (or, with respect to
Specially Serviced Mortgage Loans and REO Properties, the Special Servicer)
shall inspect or cause to be inspected (at its own expense) each Mortgaged
Property at least once every two years; provided, however if the related
Mortgage Loan (i) has a then current principal balance of at least $2,000,000,
(ii) has a then current principal balance of at least 2% of the then outstanding
principal balance of all Mortgage Loans in the Trust Fund or (iii) is a
Specially Serviced Mortgage Loan, then in each
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such case the related Mortgaged Property will be inspected at least once every
year. Promptly after a Mortgage Loan becomes a Specially Serviced Mortgage Loan,
the Special Servicer shall inspect the related Mortgaged Property. The annual
inspections will be done at the expense of the servicer performing the
inspection. The inspection done at the time a Mortgage Loan becomes a Specially
Serviced Mortgage Loan will be an expense of the Trust. The Master Servicer and
the Special Servicer shall each prepare or cause to be prepared as soon as
reasonably possible a written report of each such inspection and shall deliver a
copy of such report to the Trustee and the Operating Adviser within 15 days
after the preparation thereof.
SECTION 3.20. Available Information and Notices.
The Master Servicer or the Special Servicer, if applicable, shall
promptly give notice or report to the Trustee, who will copy each
Certificateholder, each Rating Agency, the Operating Adviser, the Depositor, the
Placement Agents and the applicable Seller of (a) any notice from a Borrower or
insurance company regarding an upcoming voluntary or involuntary prepayment
(including that resulting from a casualty or condemnation) of all or part of the
related Mortgage Loan (provided that a request by a Borrower or other party for
a quotation of the amount necessary to satisfy all obligations with respect to a
Mortgage Loan shall not, in and of itself, be deemed to be such notice); and (b)
of any other occurrence known to it with respect to a Mortgage Loan or REO
Property that the Master Servicer or the Special Servicer determines, in
accordance with the Servicing Standard, would have a material effect on such
Mortgage Loan or REO Property, which notice shall include an explanation as to
the reason for such material effect (provided that any extension of the term of
any Mortgage Loan shall be deemed to have a material effect).
None of the Trustee, the Fiscal Agent, the Master Servicer and the
Special Servicer shall be responsible for the accuracy or completeness of any
information supplied to it by a Borrower or a third party for inclusion in any
such notice or in any other report or information furnished or provided by the
Master Servicer, the Special Servicer or the Trustee hereunder, and the Master
Servicer, the Special Servicer, the Fiscal Agent and the Trustee shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to any statement
or omission or alleged statement or omission therein, including any liability
related to the inclusion of such information in any report filed with the
Commission. Such indemnification shall survive the resignation or termination of
the foregoing parties and the termination of this Agreement.
In addition to the other reports and information made available and
distributed to the Depositor, the Placement Agents, the Trustee, the Rating
Agencies, the Operating Adviser or the Certificateholders pursuant to other
provisions of this Agreement, the Master Servicer and the Special Servicer
shall, in accordance with such reasonable rules and procedures as it may adopt
(which may include the requirement that an agreement governing the availability,
use and disclosure of such information, and which may provide indemnification to
the Master Servicer or the Special Servicer as applicable, for any liability or
damage that may arise therefrom, be executed to the extent the Master Servicer
or the Special Servicer, as applicable, deems such action to be necessary or
appropriate), also make available any information relating to the Mortgage
Loans, the Mortgaged Properties or the Borrowers for review by the Depositor,
the
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Rating Agencies, the Placement Agents, the Trustee and the Operating Adviser.
The Master Servicer and the Special Servicer, as the case may be, will also make
such information available to any Person that the Trustee at the request of the
Master Servicer or Special Servicer certifies is a Certificateholder or
potential Certificateholder. The Trustee may base the certification on any
information from the Certificateholder or the potential Certificateholder that
the Trustee may require in its sole discretion. The Trustee may require such
Certificateholder or potential Certificateholder to pay any expenses incurred by
the Trustee in making such certification.
The Trustee shall also make available at its offices primarily
responsible for administration of the Trust Fund, during normal business hours,
for review by the Depositor, the Rating Agencies, the Operating Adviser, any
Certificateholder, the Placement Agent, any Person identified to the Trustee by
a Certificateholder as a prospective transferee of a Certificate and any other
Persons to whom the Trustee believes such disclosure is appropriate, the
following items: (i) this Agreement, (ii) all monthly statements to
Certificateholders delivered since the Closing Date pursuant to Section 4.4(a),
(iii) all annual statements as to compliance delivered to the Trustee and the
Depositor pursuant to Section 3.14, (iv) all annual Independent accountants'
reports delivered to the Trustee and the Depositor pursuant to Section 3.15, and
(v) any reports or information relating to the Mortgage Loans, the Mortgaged
Properties or the Borrowers which the Trustee has received from the Master
Servicer or the Special Servicer. The Trustee shall make available at its
offices during normal business hours, for review by the Depositor, the Placement
Agent, the Master Servicer, the Special Servicer, the Rating Agencies, the
Operating Adviser, any Certificateholder, any Person identified to the Trustee
by a Certificateholder as a prospective transferee of a Certificate and any
other Persons to whom Trustee believes such disclosure is appropriate, the
following items: (i) the inspection reports prepared by or on behalf of the
Master Servicer or the Special Servicer, as applicable, in connection with the
property inspections conducted by the Master Servicer or the Special Servicer,
as applicable, pursuant to Section 3.19, (ii) 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 (iii) 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, in each case except to the extent doing so is prohibited
by applicable laws or by any documents related to a Mortgage Loan. Copies of any
and all of the foregoing items shall be available from the Master Servicer, the
Special Servicer or the Trustee, as applicable, upon request (subject to the
exception in the preceding sentence). The Master Servicer, the Special Servicer
and the Trustee shall be permitted to require payment (other than from any
Rating Agency and the Operating Adviser) of a sum sufficient to cover the
reasonable costs and expenses incurred by it in providing copies of or access to
any information requested in accordance with the previous sentence.
The Master Servicer shall, on behalf of the Trust Fund, prepare, sign
and file with the Commission any and all reports, statements and information
respecting the Trust Fund which the Master Servicer or the Depositor determines
are required to be filed with the Commission pursuant to Sections 13(a) or 15(d)
of the 1934 Act, each such report, statement and information to be filed on or
prior to the required filing date for such report, statement or information.
Notwithstanding the foregoing, the Depositor shall file with the Commission,
within fifteen days of the Closing Date, a Current Report on Form 8-K together
with this Agreement.
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SECTION 3.21. Reserve Accounts.
The Master Servicer shall administer each Reserve Account in
accordance with the related Mortgage Loan Documents.
SECTION 3.22. Servicing Advances.
(a) The Master Servicer (or, to the extent provided in Section
3.22(b), the Trustee or the Fiscal Agent) shall make any Servicing Advances as
and to the extent otherwise required pursuant to the terms hereof. For purpose
of calculating distributions to the Certificateholders, Servicing Advances shall
not be considered to increase the principal balance of any Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so provide.
(b) The Master Servicer shall notify the Trustee, the Fiscal Agent
and the Rating Agencies in writing promptly upon, and in any event within one
Business Day after, becoming aware that it will be financially unable to make
any Servicing Advance required to be made pursuant to the terms hereof, and in
connection therewith, shall set forth in such notice the amount of such
Servicing Advance, the Person to whom it should be paid, and the circumstances
and purpose of such Servicing Advance, and shall set forth therein information
and instructions for the payment of such Servicing Advance, and, on the date
specified in such notice for the payment of such Servicing Advance, or, if no
such date is specified or such date has already occurred, then within one
Business Day following such notice, the Trustee shall pay the amount of such
Servicing Advance in accordance with such information and instructions. If the
Trustee fails to make any Servicing Advance required to be made under this
Section 3.22, the Fiscal Agent shall make such Advance on the same day the
Trustee was required to make such Servicing Advance and, thereby, the Trustee
shall not be in default under this Agreement.
(c) Notwithstanding anything herein to the contrary, none of the
Master Servicer, the Trustee or the Fiscal Agent shall be obligated to make a
Servicing Advance as to any Mortgage Loan or REO Property if the Master
Servicer, the Trustee or the Fiscal Agent as applicable, determines that such
Servicing Advance, if made, would be a Nonrecoverable Advance. The Trustee and
the Fiscal Agent shall be entitled to rely, conclusively, on any determination
by the Master Servicer that a Servicing Advance, if made, would be a
Nonrecoverable Advance. The Trustee and the Fiscal Agent, in determining whether
or not a Servicing Advance previously made is, or a proposed Servicing Advance,
if made, would be, a Nonrecoverable Advance shall make such determination in
their good faith judgment.
(d) The Master Servicer, the Trustee and/or the Fiscal Agent, as
applicable, shall be entitled to, and the Master Servicer hereby covenants and
agrees to promptly seek and effect, the reimbursement of Servicing Advances to
the extent permitted pursuant to Section 3.6(ii) of this Agreement, together
with any related Advance Interest Amount in respect of such Servicing Advances
(pursuant to Section 3.6(iii)).
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SECTION 3.23. Appraisal Reductions.
(a) Within 60 days after the Special Servicer receives notice or is
otherwise aware of an Appraisal Reduction Event, the Special Servicer shall be
required to obtain an Updated Appraisal of the related Mortgaged Property or REO
Property; provided that if the Special Servicer had completed or obtained an
Updated Appraisal within the immediately preceding 12 months, the Special
Servicer may rely on such Updated Appraisal and shall have no duty to prepare a
new Updated Appraisal, unless such reliance would not be in accordance with the
Servicing Standard. The cost of any such Updated Appraisal if not an internal
valuation performed by the Special Servicer shall be paid by the Master Servicer
as a Servicing Advance, unless such Advance would be a Nonrecoverable Advance.
If no Updated Appraisal has been obtained within 12 months prior to the first
Distribution Date on or after an Appraisal Reduction Event has occurred, the
Special Servicer will be required to estimate the value of the related Mortgaged
Property or REO Property (the "Special Servicer's Appraisal Reduction Estimate")
and such estimate will be used for purposes of determining the Appraisal
Reduction.
(b) The Special Servicer, based on the Updated Appraisal or Special
Servicer's Appraisal Reduction Estimate, shall calculate any Appraisal
Reduction. If the Appraisal Reduction is calculated using the Special Servicer's
Appraisal Reduction Estimate, then on the first Distribution Date occurring
after the delivery of the Updated Appraisal, the Special Servicer will be
required to adjust the Appraisal Reduction to take into account the Updated
Appraisal (regardless of whether the Updated Appraisal is higher or lower than
the Special Servicer's Appraisal Reduction Estimate). The Master Servicer will
verify the accuracy of the mathematical computation of the Appraisal Reduction
by the Special Servicer and that the amounts used therein are consistent with
the Master Servicer's records.
(c) Annual updates of such Updated Appraisal will be obtained during
the continuance of an Appraisal Reduction Event. The cost of such annual updates
shall be paid as a Servicing Advance, unless such Advance would be a
Nonrecoverable Advance. In addition, the Operating Adviser may at any time
request the Special Servicer to obtain an Updated Appraisal at the Operating
Adviser's expense. Each time an Updated Appraisal is obtained, the Appraisal
Reduction will be adjusted by the Special Servicer based on such Updated
Appraisal. If the Master Servicer (or Trustee or Fiscal Agent, as applicable) is
required to make a material Advance that the Special Servicer did not anticipate
at the time it last calculated the Appraisal Reduction, the Special Servicer
will recalculate the Appraisal Reduction after such Advance is made. Any Updated
Appraisal obtained by the Special Servicer pursuant to this section shall be
delivered by the Special Servicer to the Master Servicer, and the Trustee within
15 days of receipt by the Special Servicer of such Updated Appraisal and the
Trustee shall deliver such Updated Appraisal to the Holders of the Privately
Offered Certificates within 15 days of receipt by the Trustee of such Updated
Appraisal from the Special Servicer. Upon payment in full or liquidation of any
Mortgage Loan for which an Appraisal Reduction has been determined, such
Appraisal Reduction will be eliminated.
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SECTION 3.24. Transfer of Servicing Between Master Servicer and
Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially
Serviced Mortgage Loan, the Master Servicer shall immediately give notice
thereof, together with a copy of the related Mortgage File, to the Special
Servicer and shall use its best efforts to provide the Special Servicer with all
information, documents (but excluding the original documents constituting such
Mortgage File) and records (including records stored electronically on computer
tapes, magnetic discs and the like) relating to such Mortgage Loan and
reasonably requested by the Special Servicer to enable it to assume its duties
hereunder with respect thereto without acting through a Sub-Servicer. The Master
Servicer shall use its best efforts to comply with the preceding sentence within
five Business Days of the date such Mortgage Loan became a Specially Serviced
Mortgage Loan and in any event shall continue to act as Master Servicer and
administrator of such Mortgage Loan until the Special Servicer has commenced the
servicing of such Mortgage Loan, which shall occur upon the receipt by the
Special Servicer of the information, documents and records referred to in the
preceding sentence. With respect to each Mortgage Loan that becomes a Specially
Serviced Mortgage Loan, the Master Servicer shall instruct the related Borrower
to continue to remit all payments in respect of such Mortgage Loan to the Master
Servicer. If Midland ceases to be the Master Servicer or the Special Servicer,
Midland and the successor Master Servicer or Special Servicer, as applicable,
may agree that, notwithstanding the preceding sentence, with respect to each
Mortgage Loan that becomes a Specially Serviced Mortgage Loan, the Master
Servicer shall instruct the related Borrower to remit all payments in respect of
such Mortgage Loan to the Special Servicer, provided that the payee in respect
of such payments shall remain the Master Servicer.
Upon determining that no event has occurred and is continuing with
respect to a Mortgage Loan that causes such Mortgage Loan to be a Specially
Serviced Mortgage Loan, the Special Servicer shall immediately give notice
thereof to the Master Servicer and upon giving such notice, such Mortgage Loan
shall cease to be a Specially Serviced Mortgage Loan pursuant to the first
proviso to the definition of Specially Serviced Mortgage Loan, the Special
Servicer's obligation to service such Mortgage Loan shall terminate and the
obligations of the Master Servicer to service and administer such Mortgage Loan
as a Mortgage Loan that is not a Specially Serviced Mortgage Loan shall resume.
In addition, if the related Borrower has been instructed, pursuant to the last
sentence of the preceding paragraph, to make payments to the Special Servicer,
upon such determination, the Special Servicer shall instruct such Borrower to
remit all payments in respect of such Mortgage Loan that is no longer a
Specially Serviced Mortgage Loan directly to the Master Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the Special
Servicer shall provide to the Trustee originals of documents included within the
definition of "Mortgage File" for inclusion in the related Mortgage File (to the
extent such documents are in the possession of the Special Servicer) and copies
of any additional related Mortgage Loan information, including correspondence
with the related Borrower, and the Special Servicer shall provide copies of the
foregoing to the Master Servicer.
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(c) Not later than the Business Day preceding each date on which
the Master Servicer is required to furnish a report under Section 3.13 to the
Trustee, the Special Servicer shall deliver to the Master Servicer a written
statement describing, on a Mortgage Loan-by-Mortgage Loan basis, the amount of
all payments on account of interest received on each Specially Serviced Mortgage
Loan; the amount of all payments on account of principal, including Principal
Prepayments, on each Specially Serviced Mortgage Loan; the amount of Insurance
Proceeds and Liquidation Proceeds received with respect to each Specially
Serviced Mortgage Loan; and the amount of net income or net loss, as determined
for management of a trade or business on, or the furnishing or rendering of a
non-customary service to the tenants of, each REO Property that previously
secured a Specially Serviced Mortgage Loan, in each case in accordance with
Section 3.17.
(d) Notwithstanding the provisions of the preceding subsection (c),
the Master Servicer shall maintain ongoing payment records with respect to each
of the Specially Serviced Mortgage Loans and shall provide the Special Servicer
with any information reasonably required by the Special Servicer to perform its
duties under this Agreement. The Special Servicer shall provide the Master
Servicer with any information reasonably required by the Master Servicer to
perform its duties under this Agreement.
(e) No later than 30 days after a transfer of servicing described
in the preceding paragraph for a Mortgage Loan, the Special Servicer shall
deliver to each Rating Agency and the Operating Adviser a report (the "Asset
Status Report") with respect to such Mortgage Loan and the related Mortgaged
Property. 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 and any negotiations with the related Borrower;
(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 and income or operating state-
ment available for the related Mortgaged Property;
(iv) the Special Servicer's recommendations on how such
Specially Serviced Mortgage Loan might be returned to performing status and
returned to the Master Servicer for regular servicing or otherwise realized
upon;
(v) the appraised value of the Mortgaged Property together with
the assumptions used in the calculation thereof; and
(vi) such other information as the Special Servicer deems rele-
vant in light of the Servicing Standard.
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SECTION 3.25. Adjustment of Servicing Compensation in Respect of
Prepayment Interest Shortfalls.
The Master Servicer shall deliver to the Trustee for deposit in the
Collection Account on each Remittance Date, without any right of reimbursement
therefor, an amount equal to the lesser of (i) the excess, if any, of all
Prepayment Interest Shortfalls over all Prepayment Interest Excesses, in each
case resulting from Principal Prepayments received in respect of the Mortgage
Pool during the most recently ended Collection Period, and (ii) an amount equal
to the aggregate Stated Principal Balance of the Mortgage Loans for which the
Master Servicer has received its Master Servicing Fee for such Distribution Date
multiplied by 1/12th of the Minimum Master Servicing Fee Rate.
SECTION 3.26. Operating Advisor; Elections.
(a) In accordance with Section 3.26(c), the Holders of Certificates
representing more than 50% of the aggregate Certificate Balance of the
Controlling Class shall be entitled to elect an operating adviser (the
"Operating Adviser") with the powers set forth in Section 3.27. An election of
an Operating Adviser may also be held upon the resignation or removal of any
Person acting as Operating Adviser. The initial election of an Operating Adviser
may be held at any time on or after the Closing Date.
(b) At the request of the Holders of Certificates representing at
least 50% of the aggregate Certificate Balance of the Controlling Class, the
Trustee shall call a meeting of the Holders of the Controlling Class for purpose
of electing an Operating Adviser. Notice of the meeting shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling Class
not less than 10 nor more than 60 days prior to the meeting. The notice shall
state the place and the time of the meeting, which may be held by telephone.
Holders of Certificates representing a majority of the aggregate Certificate
Balance of the Controlling Class, present in person or represented by proxy,
shall constitute a quorum for the nomination of an Operating Adviser. At the
meeting, each Holder shall be entitled to nominate one Person to act as
Operating Adviser. The Trustee shall cause the election of the Operating Adviser
to be held as soon thereafter as is reasonably practicable.
(c) Each Holder of Certificates of the Controlling Class shall be
entitled to vote in each election of the Operating Adviser. The voting in each
election of the Operating Adviser shall be in writing mailed, telecopied,
delivered or sent by courier and actually received by the Trustee on or prior to
the date of such election. Immediately upon receipt by the Trustee of votes
(which have not been rescinded) from the Holders of Certificates representing
more than 50% of the aggregate Certificate Balance of the Controlling Class
which are cast for a single Person, such Person shall be, upon such Person's
acceptance, the Operating Adviser. The Trustee shall act as judge of each
election and, absent manifest error, the determination of the results of any
election by the Trustee shall be conclusive. Notwithstanding any other
provisions of this Section 3.26, the Trustee may make such reasonable
regulations as it may deem advisable for any election.
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(d) The Operating Adviser may be removed at any time by the written
vote, copies of which must be delivered to the Trustee, of the Holders of the
Certificates representing more than 50% of the aggregate Certificate Balance of
the Controlling Class.
(e) For purposes of electing or removing an Operating Adviser, Certi-
ficates of the Controlling Class held by the Depositor, the Master Servicer or
the Special Servicer or by any Affiliate of any of them shall be taken into
account with the same force and effect as if any other Person held such
Certificates.
SECTION 3.27. Appointment of Special Servicer; Duties of Operat-
ing Adviser.
(a) ORIX Real Estate Capital Markets, LLC is hereby appointed as the
initial Special Servicer hereunder.
(b) The Operating Adviser shall be entitled to advise the Special
Servicer with respect to the following actions of the Special Servicer, and
subject to Section 3.27(c), the Operating Advisor may object to any of the
following actions in writing within 10 Business Days of having been notified
thereof and having been provided with all reasonably requested information with
respect thereto (provided that if such written objection has not been received
by the Special Servicer within such 10 Business Day period, then the Operating
Adviser's approval shall be deemed to have been given):
(i) any foreclosure upon or comparable conversion (which may
include acquisitions of an REO Property) of the ownership of properties securing
such of the Specially Serviced Mortgage Loans as come into and continue in
default;
(ii) any amendment, waiver or modification of a Money Term or
any other term of a Specially Serviced Mortgage Loan;
(iii)any proposed sale of a defaulted Mortgage Loan or REO
Property (other than in connection with the termination of the Trust Fund
pursuant to Section 9.1);
(iv) any acceptance of a discounted payoff;
(v) any determination to bring an REO Property into compliance
with applicable environmental laws or to otherwise address hazardous materials
located at an REO Property;
(vi) any release of collateral (other than in accordance with
the terms of, or upon satisfaction of, a Mortgage Loan);
(vii)any acceptance of substitute or additional collateral for
a Mortgage Loan;
(viii) any waiver of a "due-on-sale" or "due-on-encumbrance"
clause;
(ix) any acceptance of an assumption agreement releasing a
borrower from liability under a Mortgage Loan; and
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(x) any adoption, amendment or modification of an Asset
Status Report.
In addition, subject to Section 3.27(c), the Operating Adviser may
advise the Special Servicer to take, or to refrain from taking, such other
actions as Operating Adviser may deem advisable.
(c) Notwithstanding the provisions of Section 3.27(b), no such
advice, direction or objection contemplated by Section 3.27(b) may require or
cause the Special Servicer to violate any provision of this Agreement; including
the Special Servicer's obligation to act in accordance with the Servicing
Standard.
(d) The Operating Adviser and its officers, directors, employees and
owners shall have no liability to the Certificateholders 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, but will be liable for its own negligence
or willful misconduct. Each Certificateholder acknowledges and agrees, by its
acceptance of its Certificates, that, the Operating Adviser may have special
relationships and interests that conflict with those of holders of one or more
Classes of Certificates, that the Operating Adviser may act solely in the
interests of the holders of the Controlling Class, that the Operating Adviser
does not have any duties to the holders of any Class of Certificates other than
the Controlling Class, that the Operating Adviser 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, that the Operating Adviser shall not be
deemed to have been negligent or reckless, or to have acted in bad faith or
engaged in willful misconduct by reason of its having acted solely in the
interests of the Controlling Class, and that the Operating Adviser shall have no
liability whatsoever for having so acted, and no Certificateholder may take any
action whatsoever against the Operating Adviser for having so acted.
(e) The Operating Adviser, if any, may direct the Trustee to remove
the Special Servicer at any time effective upon the appointment and written
acceptance of such appointment by a successor to the Special Servicer appointed
by the Operating Adviser. The existing Special Servicer shall be deemed to have
resigned simultaneously with such designated successor becoming the Special
Servicer hereunder; provided, however, that (i) the resigning Special Servicer
shall continue to be entitled to receive all amounts accrued or owing to it
under this Agreement on or prior to the effective date of such resignation,
whether in respect of Servicing Compensation or otherwise, and (ii) it and its
directors, officers, employees and agents shall continue to be entitled to the
benefits of Sections 6.1 and 6.3, notwithstanding any such resignation. Such
resigning Special Servicer shall cooperate with the Trustee and the replacement
Special Servicer in effecting the termination of the resigning Special
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer within two Business Days to the replacement Special Servicer for
administration by it of all cash amounts that shall at the time be or should
have been deposited in any REO Account or delivered by the Special Servicer to
the Master Servicer or that are thereafter received with respect to Specially
Serviced Mortgage Loans and REO Properties.
(f) Notwithstanding the foregoing, the removal of the Special
Servicer and the appointment of a successor Special Servicer shall not be
effective until (i) the successor
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Special Servicer has assumed in writing all of the responsibilities, duties and
liabilities of the Special Servicer hereunder pursuant to an agreement
satisfactory to the Trustee, and (ii) Rating Agency Confirmation is obtained
with respect to such appointment (the cost, if any, of obtaining such
confirmation to be paid by the Operating Adviser).
SECTION 3.28. Modifications, Waivers, Amendments, Extensions and
Consents, Defeasance.
(a) The Master Servicer, in accordance with the Servicing Standard and
subject to the terms of this Agreement, shall have the following powers:
(i) Other than stated herein, the Master Servicer, in accord-
ance with the Servicing Standard, may (A) agree to any modification, waiver,
amendment or consent of or relating to any non-Money Term of a Mortgage Loan
that is not a Specially Serviced Mortgage Loan; provided, however, without the
consent of the Special Servicer, the Master Servicer may not modify, waive or
amend (I) any event of default provision of any Mortgage Loan and (II) any
obligation of the Borrower under the Mortgage Loan to pay any assumption fee,
modification fee or any other fees or expenses, all or part of which the Special
Servicer may be entitled to as Servicing Compensation or (B) modify or amend the
terms of any Mortgage Loan in order to (I) cure any ambiguity therein or (II)
correct or supplement any provisions therein which may be inconsistent with any
other provisions therein or correct any error, provided that in the case of
either clause (A) or (B) such modification or amendment would not cause an
Adverse REMIC Event to occur. Other than as set forth above in this Section
3.28(a)(i), the Master Servicer shall not agree to any modification or amendment
of a Mortgage Loan or any waiver or consent.
(ii) The Master Servicer shall notify the Trustee, the Special
Servicer, the Operating Adviser and the Rating Agencies of any modification,
waiver or amendment of any term of any Mortgage Loan permitted by it under this
Section and the date thereof, and shall deliver to the Trustee for deposit in
the related Mortgage File, an original counterpart of the agreement relating to
such modification, waiver or amendment, promptly following the execution thereof
except to the extent such documents have been submitted to the applicable
recording office, in which event the Master Servicer shall promptly deliver
copies of such documents to the Trustee. The Trustee shall deliver copies of
such documents to the Holders of the Privately Offered Certificates within 15
days of receipt by the Trustee thereof.
(b) The Special Servicer, in accordance with the Servicing Standard
and subject to the terms of this Agreement, shall have the following powers:
(i) The Special Servicer may enter into a modification, waiver
or amendment (including, without limitation, the substitution or release of
collateral or the pledge of additional collateral) of the terms of a Specially
Serviced Mortgage Loan, including any modification, waiver or amendment to (A)
reduce the amounts owing under any Specially Serviced Mortgage Loan by forgiving
principal, accrued interest or any Prepayment Premium, (B) reduce the amount of
the Monthly Payment on any Specially Serviced Mortgage Loan, including by way of
a reduction in the related Mortgage Rate, (C) forebear in the enforcement of any
right granted under any Note or Mortgage relating to a Specially Serviced
Mortgage Loan,
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(D) extend the Maturity Date of any Specially Serviced Mortgage Loan and/or (E)
accept a principal prepayment on any Specially Serviced Mortgage Loan during any
period during which voluntary Principal Prepayments are prohibited, provided
that (1) 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 (2) in the reasonable judgment of the Special
Servicer such modification would increase the recovery on the Mortgage Loan to
Certificateholders on a net present value basis (the relevant discounting of
amounts that will be distributable to Certificateholders to be performed at the
related Net Mortgage Rate).
In no event shall the Special Servicer (x) extend the Maturity Date
of a Specially Serviced Mortgage Loan beyond the date that is two years prior to
the Rated Final Distribution Date; or (y) if the Specially Serviced Mortgage
Loan is secured by a ground lease, extend the Maturity Date of such Specially
Serviced Mortgage Loan beyond a date which is less than 10 years prior to the
expiration of the term of such ground lease.
The determination of the Special Servicer contemplated by clause (2)
of the proviso to the first paragraph of this Section 3.28(b)(i) shall be
evidenced by an Officer's Certificate to such effect delivered to the Trustee
and the Master Servicer and describing in reasonable detail the basis for the
Special Servicer's determination. The Special Servicer shall append to such
Officer's Certificate any information, including but not limited to income and
expense statements, rent rolls, property inspection reports and appraisals, that
support such determination.
(ii) In the event the Special Servicer intends to permit a
Borrower to substitute collateral for all or any portion of a Mortgaged Property
pursuant to Section 3.28(b)(i) or pledge additional collateral for the Mortgage
Loan pursuant to Section 3.28(b)(i), if the security interest of the Trust Fund
in such collateral would be perfected by possession, or if such collateral
requires special care or protection, then prior to agreeing to such substitution
or addition of collateral, the Special Servicer shall make arrangements for such
possession, care or protection, and prior to agreeing to such substitution or
addition of collateral (or such arrangement for possession, care or protection)
shall obtain the prior written consent of the Trustee with respect thereto
(which consent shall not be unreasonably withheld, delayed or conditioned);
provided, however, that any such substitution or addition of collateral shall
require Rating Agency Confirmation (unless it meets the requirements of this
Section 3.28 with respect to defeasance); provided further, however, that the
Trustee shall not be required (but has the option) to consent to any
substitution or addition of collateral or to hold any such collateral which will
require the Trustee to undertake any additional duties or obligations or incur
any additional expense.
(iii) The Special Servicer will promptly deliver to the Master
Servicer, the Operating Adviser, the Rating Agencies and the Trustee a notice,
specifying any such modifications, waivers or amendments, such notice
identifying the affected Specially Serviced Mortgage Loan. Such notice shall set
forth the reasons for such waiver, modification, or amendment (including, but
not limited to, information such as related income and expense statements, rent
rolls, occupancy status, property inspections, and an internal or external
appraisal performed in accordance with MAI standards and methodologies (and, if
done
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externally, the cost of such appraisal shall be recoverable as a Servicing
Advance subject to the provisions of Section 3.22 hereof)). The Special Servicer
shall also deliver to the Trustee, for deposit in the related Mortgage File, an
original counterpart of the agreement relating to such modification, waiver or
amendment promptly following the execution thereof.
(c) The Master Servicer and the Special Servicer, as applicable, may
require, in its discretion, as a condition to granting any request by a Borrower
for any consent, modification, waiver or amendment, that such Borrower pay to
the Master Servicer or the Special Servicer, as applicable, a reasonable and
customary modification fee to the extent permitted by law. The Master Servicer
and the Special Servicer, as applicable, may charge the Borrower for any costs
and expenses (including attorneys' fees) incurred by the Master Servicer or the
Special Servicer, as applicable, in connection with any request for a
modification, waiver or amendment. No fee described in this Section shall be
collected by the Master Servicer or the Special Servicer, as applicable, from
the Borrower (or on behalf of the Borrower) in conjunction with any consent or
any modification, waiver or amendment of the related Mortgage Loan if the
collection of such fee would cause such consent, modification, waiver or
amendment to be a "significant modification" of the related Note within the
meaning of Treasury Regulation Section 1.860G-2(b). Subject to the foregoing,
the Master Servicer or the Special Servicer, as appropriate, shall use its
reasonable efforts, to collect any modification fees and other expenses
(including the cost of obtaining any Rating Agency Confirmation) connected with
a permitted modification, waiver or amendment of a Mortgage Loan from the
Borrower and if such amount is not paid by the Borrower, such amount shall be
Advanced as a Servicing Advance, unless such Advance would be a Nonrecoverable
Advance. The inability of the Borrower to pay any costs and expenses of a
proposed modification, waiver or amendment shall not impair the right of the
Special Servicer, the Master Servicer or the Trustee to be reimbursed by the
Trust Fund for such expenses.
(d) Notwithstanding any other provision hereof to the contrary, if the
terms of a Mortgage Loan require the related Borrower to obtain the Mortgagee's
consent before changing any franchise with respect to any hotel or motel located
on the related Mortgaged Property and the then-outstanding principal balance of
such Mortgage Loan is within the Review Threshold, the Master Servicer or
Special Servicer, as applicable, shall not consent to any such change unless it
shall have first obtained Rating Agency Confirmation.
(e) Each of the following actions, to the extent the consent of the
Mortgagee under the related Mortgage Loan is required or permitted, will be
subject to a Rating Agency Confirmation:
a. a transfer of a direct or indirect ownership interest in a Borrower,
except (i) transfers of less than a controlling interest or 49% in
the aggregate, (ii) transfers solely for estate planning purposes,
and (iii) transfers with respect to a Mortgage Loan below the Review
Threshold;
b. an assumption of a Mortgage Loan that is within the Review
Threshold.
c. the incurrence of any additional debt secured by the Mortgaged
Property.
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d. any material amendment to the Mortgage Loan documents, grant of a
material easement or encumbrance, or change in franchise affiliation,
in each case with respect to a Mortgage Loan within the Review
Threshold; and
e. any change in property manager for a Mortgaged Property secured by a
Mortgage Loan representing 5% or more of the then current aggregate
outstanding principal balance of all Mortgage Loans in the pool.
In connection with any of the foregoing requests, the Master Servicer or Special
Servicer, as applicable, shall prepare and deliver to each Rating Agency a
memorandum outlining its analysis and recommendation in accordance with Accepted
Servicing Practices, together with copies of all relevant documentation. The
Master Servicer shall also prepare and provide each Rating Agency Confirmation
with such memorandum and documentation for all consents granted by the Master
Servicer for transfers, assumptions, additional debt, material amendments,
grants of material easement or encumbrances, franchise affiliation changes and
property manager changes concerning Mortgage Loans below the Review Threshold,
but for which the Master Servicer's decision in accordance with the Servicing
Standard will be sufficient and a Rating Agency Confirmation will not be
required.
(f) With respect to each Mortgage Loan that provides for defeasance,
to the extent permitted by the terms of such Mortgage Loan, the Master Servicer
shall require the related Borrower to (i) provide replacement collateral
consisting of U.S. government securities within the meaning of Treas. Reg.
1.860G-2(a)(8)(i) in an amount sufficient to make all scheduled payments under
the Mortgage Note when due, (ii) deliver a certificate from an independent
certified public accounting firm certifying that the replacement collateral is
sufficient to make such payments, (iii) designate a Single Purpose Entity (which
may be a subsidiary of the Depositor or the Master Servicer established for the
purpose of assuming all defeased Mortgage Loans) to assume the Mortgage Loan and
own the collateral and (iv) provide an opinion of counsel that the Trustee has a
perfected security interest in the new collateral. If the terms of the Mortgage
Loan permit the Master Servicer to impose the foregoing requirements or if the
Master Servicer satisfies such requirements on its own, a Rating Agency
Confirmation is not required. In such case, the Master Servicer shall provide
the Rating Agencies with notice that the foregoing requirements have been met.
If however, the terms of the Mortgage Loan do not permit the Master Servicer to
impose such requirements or if the Master Servicer does not satisfy such
requirements on its own, then the Master Servicer shall obtain a Rating Agency
Confirmation with respect to such defeasance. All expenses of the defeasance
shall be charged to the Borrower, and not the Trust, to the extent permitted by
the terms of such Mortgage Loan, and to the extent that such expenses are not
paid by the Borrower, such expenses shall be paid as an Additional Trust Fund
Expense.
SECTION 3.29. Interest Reserve Account.
(a) On each Distribution Date relating to any Interest Accrual Period
ending in any February and on any Distribution Date relating to any Interest
Accrual Period ending in any January which occurs in a year which is not a leap
year, the Trustee shall deposit from the amount remitted to the Trustee by the
Master Servicer pursuant to Section 3.6(i), in respect of the Interest Reserve
Loans, into the Interest Reserve Account, an amount equal to one day's interest
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(assuming a 360-day year) on the Stated Principal Balance of the Interest
Reserve Loans as of the Due Date occurring in the month preceding the month in
which such Remittance Date occurs at the related Net Mortgage Rate (without
regard to adjustments for Interest Reserve Loans), to the extent a full Monthly
Payment or P&I Advance is made and received in respect thereof (all amounts so
deposited in any consecutive January and February, "Interest Reserve Amounts").
(b) On each Distribution Date occurring in March, the Trustee shall withdraw
from the Interest Reserve Account an amount equal to the Interest Reserve
Amounts from the preceding January and February, if any, and deposit such amount
into the Distribution Account.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions of REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to apply
the Available Funds as is attributable to each Mortgage Loan for such date for
the following purposes and in the following order of priority:
(i) to pay interest to REMIC II in respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance with, all
Uncertificated Distributable Interest for each such REMIC I Regular Interest for
such Distribution Date;
(ii) to pay principal to REMIC II in respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance with, the
excess, if any, of the Uncertificated Principal Balance of such REMIC I Regular
Interest outstanding immediately prior to such Distribution Date, over the
Stated Principal Balance of the related Mortgage Loan (including without
limitation an REO Mortgage Loan or, if applicable, a Qualified Substitute
Mortgage Loan) that will be outstanding immediately following such Distribution
Date;
(iii) to reimburse REMIC II for any Realized Losses and Expense
Losses previously deemed allocated to the various REMIC I Regular Interests
(with interest), up to an amount equal to, and pro rata in accordance with, (a)
the Realized Loses and Expense Losses, if any, previously allocated to such
REMIC I Regular Interests and for which no reimbursement has previously been
paid, plus (b) all unpaid interest on such amounts (compounded monthly) at the
REMIC I Remittance Rate for such REMIC I Regular Interest for such Distribution
Date; and
(iv) to the Holders of the Class R-I Certificates that portion,
if any, of the Available Funds for such date that has not otherwise been deemed
paid to REMIC II in respect of the REMIC I Regular Interests pursuant to this
Section 4.1(a).
(b) On each Distribution Date, the Trustee shall be deemed to apply
each Prepayment Premium then on deposit in the Distribution Account and received
during or prior to the related Collection Period, to pay additional interest to
REMIC II in respect of the REMIC I
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Regular Interest that relates to the Mortgage Loan (including without limitation
an REO Mortgage Loan or, if applicable, a Qualified Substitute Mortgage Loan) as
to which such Prepayment Premium was received.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC II in respect of the REMIC I Regular
Interests pursuant to this Section 4.1 on any Distribution Date is herein
referred to as the "REMIC II Distribution Amount" for such date.
SECTION 4.2. Distributions of REMIC II.
(a) On each Distribution Date, the Trustee shall be deemed to
distribute to holders of the REMIC II Regular Interests, for the following
purposes and in the following order of priority:
(i) an amount equal to the Distributable Certificate Interest for the
Class A-1 Certificates, Class A-2 Certificates and Class X Certificates to Class
A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class C-II
Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest, Class
G-II Interest, Class H-II Interest, Class J-II Interest, Class K-II Interest,
Class L-II Interest, Class M-II Interest, Class N-II Interest, Class O-II
Interest and Class P-II Interest, divided among such REMIC II Regular Interests
in proportion to (A) in the case of the Class A-1-II Interest and Class A-2-II
Interest, the related Uncertificated Accrued Interest for such Distribution Date
and (B) in the case of Class B-II Interest, Class C-II Interest, Class D-II
Interest, Class E-II Interest, Class F-II Interest, Class G-II Interest, Class
H-II Interest, Class J-II Interest, Class K-II Interest, Class L-II Interest,
Class M-II Interest, Class N-II Interest, Class O-II Interest and Class P-II
Interest, the product of the Uncertificated Principal Balance of such REMIC II
Regular Interest and the related Class X Strip Rate (if any);
(ii) to the Class A-1-II Interest, the Principal Distribution Amount for
such Distribution Date, until the Uncertificated Principal Balance of the Class
A-1-II Interest has been reduced to zero;
(iii)upon payment in full of the Uncertificated Principal Balance of the
Class A-1-II Interest, to the Class A-2-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class A-2-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest;
(iv) to Class A-1-II Interest and Class A-2-II Interest pro rata on the
basis of their respective entitlements to reimbursement described in this clause
(iv), to reimburse any Realized Losses and Expense Losses previously allocated
to Class A-1-II Interest and Class A-2-II Interest as a result of the allocation
of Realized Losses and Expense Losses to the Class A-1 and Class A-2
Certificates plus interest on such Realized Losses and Expense Losses compounded
monthly at the applicable Pass-Through Rate;
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(v) to the Class B-II Interest, the remainder of the Uncertificated
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(vi) upon payment in full of the Uncertificated Principal Balances of the
Class A-1-II Interest and the Class A-2-II Interest, to the Class B-II Interest,
the Principal Distribution Amount for such Distribution Date, until the
Uncertificated Principal Balance of the Class B-II Interest has been reduced to
zero; the Principal Distribution Amount herein will be reduced by any portion
thereof distributed to the holders of the Class A-1-II Interest and Class A-2-II
Interest;
(vii) to the Class B-II Interest, to reimburse any unreimbursed Realized
Losses and Expense Losses previously allocated thereto, plus interest on such
Realized Losses and Expense Losses compounded monthly at the applicable
Pass-Through Rate;
(viii) to the Class C-II Interest, the remainder of the Uncertificated
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(ix) upon payment in full of the Uncertificated Principal Balance of the
Class B-II Interest, to the Class C-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class C-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest and Class B-II Interest;
(x) to the Class C-II Interest, to reimburse any unreimbursed Realized
Losses and Expense Losses previously allocated thereto, plus interest on such
Realized Losses and Expense Losses compounded monthly at the applicable
Pass-Through Rate;
(xi) to the Class D-II Interest, the remainder of the Uncertificated
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xii) upon payment in full of the Uncertificated Principal Balance of the
Class C-II Interest, to the Class D-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class D-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest and
Class C-II Interest;
(xiii) to the Class D-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at the applicable
Pass-Through Rate;
(xiv) to the Class E-II Interest, the remainder of the Uncertified Accrued
Interest for such REMIC II Regular Interest for such Distribution Date to the
extent not distributed pursuant to clause (i) above;
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(xv) upon payment in full of the Uncertificated Principal Balance of the
Class D-II Interest, to the Class E-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class E-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II, Class A-2-II Interest, Class B-II Interest, Class C-II
Interest and Class D-II Interest;
(xvi) to the Class E-II Interest, to reimburse any unreimbursed Realized
Losses and Expense Losses previously allocated thereto, plus interest on such
Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xvii) to the Class F-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xviii) upon payment in full of the Uncertificated Principal Balance of
the Class E-II Interest, to the Class F-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class F-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest and Class E-II Interest;
(xix) to the Class F-II Interest, to reimburse any unreimbursed Realized
Losses and Expense Losses previously allocated thereto, plus interest on such
Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xx) to the Class G-II Interest, the remainder of the Uncertificated
Principal Balance for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xxi) upon payment in full of the Uncertificated Principal Balance of the
Class F-II Interest, to the Class G-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class G-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest and Class F-II Interest;
(xxii) to the Class G-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Lossess compounded monthly at one-twelfth
the applicable Pass-Through Rate;
(xxiii) to the Class H-II Interest, the remainder of the Uncertificated
Principal Balance for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
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(xxiv) upon payment in full of the Uncertificated Principal Balance of
the Class G-II Interest, to the Class H-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class H-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest and
Class G-II Interest;
(xxv) to the Class H-II Interest, to reimburse any unreimbursed Realized
Losses and Expense Losses previously allocated thereto, plus interest on such
Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xxvi) to the Class J-II Interest, the remainder of the Uncertificated
Principal Balance for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xxvii) upon payment in full of the Uncertificated Principal Balance of
the Class H-II Interest, to the Class J-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class J-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest and Class H-II Interest;
(xxviii) to the Class J-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xxix) to the Class K-II Interest, the remainder of the Uncertificated
Principal Balance for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xxx) upon payment in full of the Uncertificated Principal Balance of
the Class J-II Interest to the Class K-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class K-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest and Class J-II Interest;
(xxxi) to the Class K-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xxxii) to the Class L-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
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(xxxiii) upon payment in full of the Uncertificated Principal Balance of
the Class K-II Interest, to the Class L-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class L-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest, Class J-II Interest and Class K-II
Interest;
(xxxiv) to the Class L-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xxxv) to the Class M-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xxxvi) upon payment in full of the Uncertificated Principal Balance of
the Class L-II Interest, to the Class M-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class M-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest, Class J-II Interest, Class K-II
Interest and Class L-II Interest;
(xxxvii) to the Class M-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xxxviii) to the Class N-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xxxix) upon payment in full of the Uncertificated Principal Balance of
the Class M-II Interest, to the Class N-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class N-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest, Class J-II Interest, Class K-II
Interest, Class L-II Interest and Class M-II Interest;
(xl) to the Class N-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
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(xli) to the Class O-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xlii) upon payment in full of the Uncertificated Principal Balance of
the Class N-II Interest, to the Class O-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class O-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest, Class J-II Interest, Class K-II
Interest, Class L-II Interest, Class M-II Interest and Class N-II Interest;
(xliii) to the Class O-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate;
(xli) to the Class P-II Interest, the remainder of the Uncertified
Accrued Interest for such REMIC II Regular Interest for such Distribution Date
to the extent not distributed pursuant to clause (i) above;
(xlii) upon payment in full of the Uncertificated Principal Balance of
the Class O-II Interest, to the Class P-II Interest, the Principal Distribution
Amount for such Distribution Date, until the Uncertificated Principal Balance of
the Class P-II Interest has been reduced to zero; the Principal Distribution
Amount herein will be reduced by any portion thereof distributed to the holders
of the Class A-1-II Interest, Class A-2-II Interest, Class B-II Interest, Class
C-II Interest, Class D-II Interest, Class E-II Interest, Class F-II Interest,
Class G-II Interest, Class H-II Interest, Class J-II Interest, Class K-II
Interest, Class L-II Interest, Class M-II Interest, Class N-II Interest and
Class O-II Interest;
(xliii) to the Class P-II Interest, to reimburse any unreimbursed
Realized Losses and Expense Losses previously allocated thereto, plus interest
on such Realized Losses and Expense Losses compounded monthly at one-twelfth the
applicable Pass-Through Rate; and
(x1v) thereafter, to the Class R-II Certificateholders.
(b) On each Distribution Date after the aggregate Uncertificated
Principal Balance of each REMIC II Regular Interest other than the Class A-1-II
Interest and the Class A-2-II Interest has been reduced to zero, and in any
event on the final Distribution Date in connection with a termination of the
Trust Fund described in Article IX hereof, the payments of principal to be made
pursuant to Section 4.2(a)(ii) and (iii) above with respect to the Class A-1-II
Interest and the Class A-2-II Interest, will be so made to such REMIC II Regular
Interests, up to an amount equal to, and pro rata as among such REMIC II Regular
Interests in accordance with, the respective then-outstanding aggregate
Uncertificated Prinicpal Balances of such REMIC II Regular Interests.
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(c) On each Distribution Date, the Trustee shall be deemed to dis-
tribute, as holder of the REMIC II Regular Interests, any Prepayment Premiums
deemed distributed to the REMIC I Regular Interests, to be deemed distributed to
the REMIC II Regular Interest then entitled to distributions of principal from
the Principal Distribution Amount (or, if more than one Class of such REMIC II
Regular Interests is entitled to distributions of principal from the Principal
Distribution Amount, such Prepayment Premiums shall be deemed to be allocated
among such Classes on a pro rata basis in accordance with the relative amounts
of such deemed distributions of principal).
SECTION 4.3. Distributions of REMIC III.
(a) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Available Funds for such Distribution Date and shall
apply such amount for the following purposes and in the following order of
priority:
(i) to pay interest to the Holders of the respective Classes
of Senior Certificates, up to an amount equal to, and pro rata as among such
Classes in accordance with, all Distributable Certificate Interest in respect of
each such Class of Certificates for such Distribution Date,
(ii) to pay principal from the Principal Distribution Amount
for such Distribution Date, first to the Holders of the Class A-1 Certificates
and second to the Holders of the Class A-2 Certificates in each case, up to an
amount equal to the lesser of (1) the then-outstanding aggregate Certificate
Balance of such Class of Certificates and (2) the remaining portion, if any, of
such Principal Distribution Amount;
(iii) to reimburse the Holders of the respective Classes
of Class A Certificates, up to an amount equal to, and pro rata as among such
Classes in accordance with, (a) the respective amounts of Realized Losses and
Expense Losses, if any, previously allocated to such Classes of Certificates and
for which no reimbursement has previously been paid, plus (b) all unpaid
interest on such amounts (compounded monthly) at the respective Pass-Through
Rates of such Classes; and
(iv) to make payments on the Subordinate Certificates as provided
below;
provided that, on each Distribution Date after the aggregate Certificate Balance
of the Subordinate Certificates has been reduced to zero, and in any event on
the final Distribution Date in connection with a termination of the Trust Fund
described in Article IX hereof, the payments of principal to be made pursuant to
clause (ii) above with respect to the Class A Certificates, will be so made to
the Holders of the respective Classes of Class A Certificates, up to an amount
equal to, and pro rata as among such Classes in accordance with, the respective
then-outstanding aggregate Certificate Balances of such Certificates;
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(b) On each Distribution Date, following the foregoing distributions
on the Senior Certificates, the Trustee shall apply the remaining portion, if
any, of the Available Funds for such date for the following purposes and in the
following order of priority:
(i) to pay interest to the Holders of the Class B Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(ii) if the aggregate Certificate Balances of the Class A Certi-
ficates have been reduced to zero, to pay principal to the Holders of the Class
B Certificates, up to an amount equal to the lesser of (A) the then-outstanding
aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(iii) to reimburse the Holders of the Class B Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(iv) to pay interest to the Holders of the Class C Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(v) if the aggregate Certificate Balances of the Class A
and Class B Certificates have been reduced to zero, to pay principal to the
Holders of the Class C Certificates, up to an amount equal to the lesser of (A)
the then-outstanding aggregate Certificate Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution Date;
(vi) to reimburse the Holders of the Class C Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(vii) to pay interest to the Holders of the Class D Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(viii) if the aggregate Certificate Balances of the Class A,
Class B and Class C Certificates have been reduced to zero, to pay principal to
the Holders of the Class D Certificates, up to an amount equal to the lesser of
(A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
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(ix) to reimburse the Holders of the Class D Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(x) to pay interest to the Holders of the Class E Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xi) if the aggregate Certificate Balances of the Class A, Class
B, Class C and Class D Certificates have been reduced to zero, to pay principal
to the Holders of the Class E Certificates, up to an amount equal to the lesser
of (A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xii) to reimburse the Holders of the Class E Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xiii) to pay interest to the Holders of the Class F Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xiv) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D and Class E Certificates have been reduced to zero, to
pay principal to the Holders of the Class F Certificates, up to an amount equal
to the lesser of (A) the then-outstanding aggregate Certificate Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xv) to reimburse the Holders of the Class F Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xvi) to pay interest to the Holders of the Class G Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xvii) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E and Class F Certificates have been reduced to
zero, to pay principal to the Holders of the Class G Certificates, up to an
amount equal to the lesser of (A) the then-
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outstanding aggregate Certificate Balance of such Class of Certificates and (B)
the remaining Principal Distribution Amount for such Distribution Date;
(xviii) to reimburse the Holders of the Class G Certificates
up to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xix) to pay interest to the Holders of the Class H Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xx) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F and Class G Certificates have been
reduced to zero, to pay principal to the Holders of the Class H Certificates, up
to an amount equal to the lesser of (A) the then-outstanding aggregate
Certificate Balance of such Class of Certificates and (B) the remaining
Principal Distribution Amount for such Distribution Date;
(xxi) to reimburse the Holders of the Class H Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxii) to pay interest to the Holders of the Class J Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxiii) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G and Class H Certificates
have been reduced to zero, to pay principal to the Holders of the Class J
Certificates, up to an amount equal to the lesser of (A) the then-outstanding
aggregate Certificate Balance of such Class of Certificates and (B) the
remaining Principal Distribution Amount for such Distribution Date;
(xxiv) to reimburse the Holders of the Class J Certificates up
to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxv) to pay interest to the Holders of the Class K Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
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(xxvi) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J
Certificates have been reduced to zero, to pay principal to the Holders of the
Class K Certificates, up to an amount equal to the lesser of (A) the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxvii) to reimburse the Holders of the Class K Certificates up
to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxviii) to pay interest to the Holders of the Class L Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxix) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class
K Certificates have been reduced to zero, to pay principal to the Holders of the
Class L Certificates, up to an amount equal to the lesser of (A) the
then-outstanding aggregate Certificate Balance of such Class of Certificates and
(B) the remaining Principal Distribution Amount for such Distribution Date;
(xxx) to reimburse the Holders of the Class L Certificates up to
an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxxi) to pay interest to the Holders of the Class M Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxxii) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K
and Class L Certificates have been reduced to zero, to pay principal to the
Holders of the Class M Certificates, up to an amount equal to the lesser of (A)
the then-outstanding aggregate Certificate Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such Distribution Date;
(xxxiii) to reimburse the Holders of the Class M Certificates
up to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
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(xxxiv) to pay interest to the Holders of the Class N Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxxv) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L and Class M Certificates have been reduced to zero, to pay principal to
the Holders of the Class N Certificates, up to an amount equal to the lesser of
(A) the then-outstanding aggregate Certificate Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xxxvi) to reimburse the Holders of the Class N Certificates
up to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xxxvii) to pay interest to the Holders of the Class O Certifi-
cates, up to an amount equal to all Distributable Certificate Interest in
respect of such Class of Certificates for such Distribution Date;
(xxxviii) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M and Class N Certificates have been reduced to zero, to pay
principal to the Holders of the Class O Certificates, up to an amount equal to
the lesser of (A) the then-outstanding aggregate Certificate Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxxix) to reimburse the Holders of the Class O Certificates
up to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates;
(xl) to pay interest to the Holders of the Class P Certificates,
up to an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date;
(xli) if the aggregate Certificate Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K,
Class L, Class M, Class N and Class O Certificates have been reduced to zero, to
pay principal to the Holders of the Class P Certificates, up to an amount equal
to the lesser of (A) the then-outstanding aggregate Certificate Balance of such
Class of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
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(xlii) to reimburse the Holders of the Class P Certificates
up to an amount equal to (a) all Realized Losses and Expense Losses, if any,
previously allocated to such Class of Certificates and for which no
reimbursement has previously been paid, plus (b) all unpaid interest on such
amounts (compounded monthly) at the Pass-Through Rate for such Class of
Certificates; and
(xliii) to pay to the Holders of the Class R-III Certificates the
balance, if any, of the REMIC III Distribution Amount for such Distribution
Date.
(c) Any Yield Maintenance Payment collected with respect to a Mortgage
Loan during any particular Collection Period will be distributed on the
following Distribution Date as follows: The holders of the Class A, Class B,
Class C, Class D, Class E, Class F and Class G Certificates then entitled to
distributions of principal on such Distribution Date will be entitled to an
aggregate amount, allocable among such Classes, if more than one, as described
below, equal to the lesser of (a) such Yield Maintenance Payment and (b) such
Yield Maintenance Payment multiplied by a fraction, the numerator of which is
equal to the excess, if any, of the Pass-Through Rate applicable to the most
senior of such Classes of Principal Balance Certificates then outstanding (or,
in the case of the two Classes of Class A Certificates, first, the Pass-Through
Rate applicable to the Class A-1 Certificates and second, the Pass-Through Rate
applicable to the Class A-2 Certificates) over the relevant Discount Rate, and
the denominator of which is equal to the excess, if any, of the Mortgage Rate of
the Mortgage Loan that prepaid, over the relevant Discount Rate. If there is
more than one such Class of Principal Balance Certificates entitled to
distributions of principal on such Distribution Date, the aggregate amount
described in the preceding sentence will be allocated among such Classes on a
pro rata basis in accordance with the relative amounts of entitlement to such
distributions of principal.
Twenty-Five percent (25%) of any Percentage Premium collected with
respect to a Mortgage Loan during any particular Collection Period will be
distributed on the following Distribution Date to: the holders of the Class A,
Class B, Class C, Class D, Class E, Class F and Class G Certificates then
entitled to distributions of principal on such Distribution Date, allocable
among such Classes, if more than one, as described below. If there is more than
one such Class of Principal Balance Certificates entitled to distributions of
principal on such Distribution Date, the aggregate amount described in the
preceding sentence will be allocated among such Classes on a pro rata basis in
accordance with the relative amounts of entitlement to such distributions of
principal.
Any portion of any Prepayment Premium remaining after any such
payment to the holders of such Principal Balance Certificates as described above
will be distributed to the holders of the Class X Certificates.
(d) All of the foregoing distributions to be made from the Distribu-
tion Account on any Distribution Date with respect to the Regular Certificates
shall be deemed made from the payments deemed made to REMIC III in respect of
the REMIC II Regular Interests on such Distribution Date pursuant to Section
4.2.
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SECTION 4.4. Statements to Rating Agencies and Certificateholders;
Available Information.
(a) On each Distribution Date, the Trustee shall prepare and forward
by mail (or make available electronically) to each Rating Agency and each Holder
of a Certificate, with copies to the Depositor, the Operating Adviser, Paying
Agent, the Placement Agents, Master Servicer and Special Servicer, a statement
as to such distribution setting forth the information set forth on Exhibit H
hereto, and including among other things, for each Class, as applicable:
(i) The Principal Distribution Amount and the amount allocable to
principal for such class included in Available Funds;
(ii) Distributable Certificate Interest for such Class and
the amount of Available Funds allocable thereto, together with any Class
Interest Shortfall allocable to such Class;
(iii) The amount of any reimbursed and outstanding P&I Advances
by the Master Servicer, the Trustee or the Fiscal Agent included in the amounts
distributed to the Certificateholders;
(iv) The Certificate Balance of each Class of Certificates after
giving effect to the distribution of amounts in respect of the Principal
Distribution Amount on such Distribution Date;
(v) Cumulative Realized Losses and Expense Losses and their allo-
cation to the Certificate Balance of any Class of Certificates;
(vi) The Stated Principal Balance of the Mortgage Loans as of
the Due Date preceding such Distribution Date;
(vii) The number and aggregate principal balance of Mortgage
Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 or
more days, (D) as to which foreclosure proceedings have been commenced (E) as to
which bankruptcy proceeding have been commenced, and (F) that otherwise
constitute Specially Serviced Mortgage Loans, and, with respect to each
Specially Serviced Mortgage Loan, the amount of Servicing Advances made during
the related Collection Period, the amount of the P&I Advance made on such
Distribution Date, the aggregate amount of Servicing Advances theretofore made
that remain unreimbursed and the aggregate amount of P&I Advances theretofore
made that remain unreimbursed;
(viii) With respect to any Mortgage Loan that became an REO Mort-
gage Loan during the preceding calendar month, the principal balance of such
Mortgage Loan as of the date it became an REO Mortgage Loan;
(ix) As of the Due Date preceding such Distribution Date, as to
any REO Property sold during the related Collection Period, the date on which a
Final Recovery
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Determination was made and the amount of the proceeds of such sale deposited
into the Collection Account, and the aggregate amount of REO Proceeds and Net
REO Proceeds (in each case other than Liquidation Proceeds) and other revenues
collected by the Special Servicer with respect to each REO Property during the
related Collection Period and credited to the Collection Account, in each case
identifying such REO Property by name;
(x) The outstanding principal balance of each REO Mortgage Loan
as of the close of business on the immediately preceding Due Date and the
appraised value of the related REO Property per the most recent Updated
Appraisal obtained;
(xi) The amount of the Servicing Compensation paid to the Master
Servicer with respect to such Distribution Date, and the amount of the
additional servicing compensation described in Section 3.12(a) that was paid to
the Master Servicer with respect to such Distribution Date;
(xii) The amount of any Special Servicing Fee, Disposition Fee
or Workout Fee paid to the Special Servicer with respect to such Distribution
Date;
(xiii) (A) The amount of Prepayment Premiums, if any, received
during the related Collection Period, and (B) the amount of Default Interest
received during the related Collection Period;
(xiv) The Pass-Through Rate applicable to the Interest Only Cer-
tificates and the Class E Certificates for such Distribution Date;
(xv) The amount of any Appraisal Reductions effected during
the related Collection Period on a Mortgage Loan-by-Mortgage Loan basis and the
total Appraisal Reductions as of such Distribution Date;
(xvi) Any additional information regarding the Mortgage Loans,
which the Master Servicer or the Special Servicer, in its sole discretion,
delivers to the Trustee for distribution to the Certificateholders;
(xvii) Both current and cumulative prepayments; and
(xviii) Ratings from all Rating Agencies for all applicable
Classes of Certificates.
In the case of information furnished pursuant to subclauses (i),
(ii), (iii) and (xiii)(A) above, the amounts shall be expressed as a dollar
amount in the aggregate for all Certificates of each applicable Class and for
each Class of Certificates for a denomination of $1,000 initial Certificate
Balance or Notional Amount.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Holder of a Certificate (except for a Class R-I, Class R-II
or Class R-III Certificate) and to each Rating
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Agency a statement containing the information set forth in subclauses (i) and
(ii) above, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that it provided
substantially comparable information pursuant to any requirements of the Code as
from time to time in force.
On each Distribution Date, the Trustee shall forward to each Holder
of a Class R-I, Class R-II or Class R-III Certificate a copy of the reports
forwarded to the other Certificateholders on such Distribution Date and a
statement setting forth the amounts, if any, actually distributed with respect
to the Class R-I, Class R-II or Class R-III Certificates on such Distribution
Date.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was a Holder of a Class R-I, Class R-II or Class R-III Certificate
a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that it provided substantially
comparable information pursuant to any requirements of the Code as from time to
time in force.
In addition to the reports required to be delivered pursuant to this
Section 4.4(a), the Trustee shall make available upon request to each proposed
transferee of a Privately Placed Certificate such additional information, if
any, required to be delivered under Rule 144A(d)(4) and in its possession so as
to permit the proposed transfer to be effected pursuant to Rule 144A.
For investors that have obtained an account number on the Trustee's
Automatic Statements Accessed by Phone ("ASAP") System, the foregoing report or
a summary report of bond factors may be obtained from the Trustee via automated
facsimile by placing a telephone call to (714) 282-5518 and following the voice
prompts to request "statement number 427." Account numbers on the ASAP System
may be obtained by calling the same telephone number and following the voice
prompts for obtaining account numbers. Separately, bond factor information may
be obtained from the Trustee by calling 800-246-5761. In addition, if the
Depositor so directs the Trustee, and on terms acceptable to the Trustee, the
Trustee will make available through its electronic bulletin board system, on a
confidential basis, certain information related to the Mortgage Loans. The
bulletin board is located at (714) 282-3990. Investors that have an account on
the bulletin board may retrieve the loan level data file for each transaction in
the directory. An account number may be obtained by typing "new" upon logging
into the bulletin board. A directory has been set up on the bulletin board in
which an electronic file is stored containing monthly servicer data. All files
are compressed before being put into the directory. Additionally, certain
information regarding the Mortgage Loans will be made available at the website
maintained by the Trustee at www.lnbabs.com.
(b) On or within two Business Days following each Distribution Date,
the Trustee shall prepare and furnish to the Placement Agents, using the format
and media mutually agreed upon by the Trustee, and the Placement Agents, the
following information regarding each Mortgage Loan and any other information
reasonably requested by the Placement Agents and available to the Trustee:
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(i) an identifying loan number;
(ii) the Mortgage Rate; and
(iii) the principal balance as of such Distribution Date.
(c) The Trustee shall only be obligated to deliver the statements,
reports and information contemplated by Section 4.4(a) and 4.4(b) to the extent
it receives the necessary underlying information from the Master Servicer, the
Special Servicer and the Rating Agencies, as applicable, and shall not be liable
for any failure to deliver any thereof on the prescribed due dates, to the
extent such failure is caused by the Master Servicer's or the Special Servicer's
failure to deliver such underlying information in a timely manner. Absent
manifest error, the Trustee (i) may conclusively rely on any such information
forwarded to it by the Master Servicer, the Special Servicer and the Rating
Agencies, (ii) shall have no obligation to verify the same and (iii) with
respect to the information provided by Section 4.4(a)(xviii), shall not be
liable for the accuracy of, and may include a disclaimer with, such information.
Nothing herein shall obligate the Trustee, the Master Servicer or the Special
Servicer to violate (in the reasonable judgment of the Master Servicer, the
Special Servicer or the Trustee, as appropriate) any applicable law or provision
of any Mortgage Loan document prohibiting disclosure of information with respect
to any Borrower and the failure of the Trustee, the Master Servicer or the
Special Servicer to disseminate information for such reason shall not be a
breach hereof.
SECTION 4.5. Remittances; P&I Advances.
(a) For purposes of this Section 4.5, "Applicable Monthly Payment"
shall mean, for any Mortgage Loan with respect to any month, (A) if such
Mortgage Loan is delinquent as to its Balloon Payment (including any Mortgage
Loan as to which the related Mortgaged Property has become an REO Property and
for any month after the related Balloon Payment would have been due), the
related Assumed Monthly Payment and (B) if such Mortgage Loan is not described
by the preceding clause (including any such Mortgage Loan as to which the
related Mortgaged Property has become an REO Property), the Monthly Payment.
(b) On the Remittance Date immediately preceding each Distribution
Date, the Master Servicer shall:
(i) remit to the Trustee from the Collection Account for
deposit in the Distribution Account an amount equal to the Prepayment Premiums
received by the Master Servicer in the Collection Period preceding such
Remittance Date;
(ii) remit to the Trustee from the Collection Account for
deposit in the Distribution Account an amount equal to the Master Servicer
Remittance Amount for such Distribution Date (excluding P&I Advances); and
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(iii) subject to Section 4.5(c), make an advance (each, a "P&I
Advance"), by deposit into the Collection Account, and remit such amount to the
Distribution Account, in an amount equal to the sum of the Applicable Monthly
Payment for each Mortgage Loan, to the extent such amounts were not received on
such Mortgage Loans as of the close of business on the Business Day immediately
preceding the Remittance Date.
(c) Notwithstanding Section 4.5(b)(iii), upon determination of the
Appraisal Reduction with respect to any Required Appraisal Loan, the amount of
any delinquent interest required to be advanced with respect to such Required
Appraisal Loan shall be an amount equal to the product of (A) the amount of the
delinquent interest that would be required to be advanced in respect of such
Mortgage Loan without regard to the application of this sentence, multiplied by
(B) a fraction, the numerator of which is equal to the Stated Principal Balance
of such Mortgage Loan as of the immediately preceding Determination Date less
the Appraisal Reduction and the denominator of which is such Stated Principal
Balance.
(d) If, as of 3:00 p.m., New York City time, on any Remittance Date
the Master Servicer shall not (i) have made the P&I Advance required to have
been made on such date pursuant to Section 4.5(b)(iii) or (ii) delivered the
certificate and documentation related to a determination of nonrecoverability,
the Trustee shall immediately notify the Fiscal Agent by telephone promptly
confirmed in writing, and the Trustee shall no later than 10:00 a.m., New York
City time, on such Distribution Date deposit into the Distribution Account in
immediately available funds an amount equal to the P&I Advances otherwise
required to have been made by the Master Servicer. If the Trustee fails to make
any P&I Advance required to be made under this Section 4.5, the Fiscal Agent
shall make such P&I Advance not later than 12:00 p.m., New York City time, on
such Distribution Date and, thereby, the Trustee shall not be in default under
this Agreement.
(e) Anything to the contrary in this Agreement notwithstanding, none
of the Master Servicer, the Trustee or the Fiscal Agent shall be obligated to
make a P&I Advance on any date on which a P&I Advance is otherwise required to
be made by this Section 4.5 if the Master Servicer, the Trustee or the Fiscal
Agent, as applicable, determines that such Advance will be a Nonrecoverable
Advance. The Trustee and the Fiscal Agent shall be entitled to rely,
conclusively, on any determination by the Master Servicer that a P&I Advance, if
made, would be a Nonrecoverable Advance. The Trustee and the Fiscal Agent, in
determining whether or not a P&I Advance previously made is, or a proposed P&I
Advance, if made, would be, a Nonrecoverable Advance shall make such
determination in their good faith judgment.
(f) The Master Servicer, the Trustee or the Fiscal Agent, as applic-
able, shall be entitled to, and the Master Servicer hereby covenants and agrees
to promptly seek and effect, the reimbursement of P&I Advances made to the
extent permitted pursuant to Section 3.6(ii) of this Agreement together with any
related Advance Interest Amount in respect of such P&I Advances to the extent
permitted pursuant to Section 3.6(iii).
SECTION 4.6. Allocation of Realized Losses and Expense Losses.
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(a) On each Distribution Date, following the deemed distributions to
be made in respect of the REMIC I Regular Interests pursuant to Section 4.1, the
Uncertificated Principal Balance of each REMIC I Regular Interest (after taking
account of such deemed distributions) shall be reduced to equal the Stated
Principal Balance of the related Mortgage Loan (including without limitation an
REO Mortgage Loan or, if applicable, a Qualified Substitute Mortgage Loan) that
will be outstanding immediately following such Distribution Date. Such
reductions shall be deemed to be an allocation of Realized Losses and Expense
Losses.
(b) On each Distribution Date, Realized Losses and Expense Losses
that are applied to each Class of REMIC III Regular Certificates shall be
allocated to reduce the Uncertificated Principal Balance of the Related REMIC II
Regular Interest.
(c) On each Distribution Date, following the distributions to be
made to the Certificateholders on such date pursuant to Section 4.3, the Trustee
shall determine the amount, if any, by which (i) the then-aggregate Certificate
Balance of the Principal Balance Certificates, exceeds (ii) the aggregate Stated
Principal Balance of the Mortgage Pool that will be outstanding immediately
following such Distribution Date. If such excess does exist, then the respective
aggregate Certificate Balances of the Class P, Class O, Class N, Class M, Class
L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and
Class B Certificates shall be reduced sequentially, in that order, in each case,
until the first to occur of such excess being reduced to zero or the related
Class Principal Balance being reduced to zero. If, after the foregoing
reductions, the amount described in clause (i) of the second preceding sentence
still exceeds the amount described in clause (ii) of the second preceding
sentence, then the respective aggregate Certificate Balances of the Class A-1
and Class A-2 Certificates shall be reduced, pro rata in accordance with the
relative sizes of the then-outstanding aggregate Certificate Balances of such
Classes of Certificates, until the first to occur of such excess being reduced
to zero or each such aggregate Certificate Balance being reduced to zero. Such
reductions in the aggregate Certificate Balances of the respective Classes of
Principal Balance Certificates shall be deemed to be allocations of Realized
Losses and Expense Losses among the Certificates of each since Class in
proportion to their respective Percentage Interests in such Class.
SECTION 4.7. Distributions in General .
(a) All amounts distributable to a Class of Certificates pursuant to
this Article IV on each Distribution Date shall be allocated pro rata among the
outstanding Certificates in each such Class based on their respective Percentage
Interests. Such distributions shall be made on each Distribution Date other than
the Termination Date to each Certificateholder of record on the related Record
Date by check mailed by first class mail to the address set forth therefor in
the Certificate Register or, provided that such Certificateholder shall have
provided the Paying Agent with wire instructions in writing at least five
Business Days prior to the related Record Date (or upon standing instructions
given to the Trustee or the Paying Agent on the Closing Date or five Business
Days prior to any Record Date, which instructions may be revoked at any time
thereafter upon written notice to the Trustee or the Paying Agent five Business
Days prior to the related Record Date), by wire transfer of immediately
available funds to the account of such Certificateholder at a bank or other
entity located in the United States and having appropriate facilities therefor.
The final distribution on each Certificate shall be made in like manner, but
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only upon presentment and surrender of such Certificate (determined without
regard to any possible future reimbursement of any Realized Losses or Expense
Losses previously allocated to such Certificates) at the Corporate Trust Office
of the Trustee or its agent (which may be the Paying Agent or the Certificate
Registrar acting as such agent) that is specified in the notice to
Certificateholders of such final distribution. Any distribution that is to be
made with respect to a Certificate in reimbursement of a Realized Loss or
Expense Loss previously allocated thereto, which reimbursement is to occur after
the date on which such Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the Certificateholder that
surrendered such Certificate.
(b) Except as otherwise provided in Section 9.1, the Trustee shall,
no later than the 15th day of the month in the month preceding the Distribution
Date on which the final distribution with respect to any Class of Certificates
is expected to be made or such later day as the Trustee becomes aware that the
final distribution with respect to any Class of Certificates is expected to be
made on the succeeding Distribution Date, mail to each Holder of such Class of
Certificates and to the Rating Agencies, on such day a notice to the effect
that:
(i) the Trustee reasonably expects, based upon information pre-
viously provided to it, that the final distribution with respect to such Class
of Certificates will be made on such Distribution Date, but only upon
presentation and surrender of such Certificates at the office of the Trustee
therein specified; and
(ii) if such final distribution is made on such Distribution
Date, no interest shall accrue on such Certificates from and after such
Distribution Date;
provided, however, that the Class R-I, Class R-II and Class R-III Certificates
shall remain outstanding until there is no other Class of Certificates, REMIC I
Regular Interests or REMIC II Regular Interests outstanding.
Any funds not distributed to any Holder or Holders of Certificates of such Class
on such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such Distribution Date, be set aside and
held in trust for the benefit of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.7(b) 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, at their last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive from such funds held the final distribution
with respect thereto. If, within one year after the second notice, any of such
Certificates shall not have been surrendered for cancellation, the Trustee may,
directly or through an agent, take appropriate steps to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds in trust and of contacting such
Certificateholders shall be paid out of such funds. If, within two years after
the second notice, any such Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R-III Certificateholders
all amounts distributable to the Holders thereof. No interest shall accrue or be
payable to any Certificateholder on any amount held in trust hereunder or by the
Trustee as a result of such Certificateholder's failure to surrender its
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Certificate(s) for final payment thereof in accordance with this Section 4.7(b).
Any such amounts transferred to the Trustee may be invested in Permitted
Investments and all income and gain realized from investment of such funds shall
be for the benefit of the Trustee. In the event the Trustee is permitted or
required to invest any amounts in Permitted Investments under this Agreement,
whether in its capacity as Trustee or in the event of its assumption of the
duties of, or becoming the successor to, the Master Servicer in accordance with
the terms of this Agreement, it shall invest such amounts in the following
Permitted Investments and priority, in each case only for so long as any such
investment shall continue to be a Permitted Investment: (1) Permitted
Investments under clause (v) of the definition of Permitted Investments, and (2)
if (1) above is not available, Permitted Investments under clause (i) of the
definition of Permitted Investments. The Trustee shall deposit into the
applicable account funds in the amount of any loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss.
SECTION 4.8. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Paying
Agent 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 non-U.S.
Person that has furnished or caused to be furnished (i) an effective Form W-8 or
Form W-9 or an acceptable substitute form or a successor form and who has
informed the Trustee in writing that it 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 4224 or an acceptable substitute form or a
successor form. In the event the Paying Agent 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 Paying Agent
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.
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ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates.
The Certificates consist of the Class A-1 Certificates, the Class A-2
Certificates, the Class X Certificates, the Class B Certificates, the Class C
Certificates, the Class D Certificates, the Class E Certificates, the Class F
Certificates, the Class G Certificates, the Class H Certificates, the Class J
Certificates, the Class K Certificates, the Class L Certificates, the Class M
Certificates, the Class N Certificates, the Class O Certificates, the Class P
Certificates, the Class R-I Certificates, the Class R-II Certificates and the
Class R-III Certificates.
The Class A-1, Class A-2, Class X, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class
O, Class P, Class R-I, Class R-II and Class R-III Certificates will be
substantially in the forms annexed hereto as Exhibits A-1, A-2, A-3, A-4, A-5,
A-6, A-7, A-8, A-9, A-10, A-11, A-12, A-13, A-14, A-15, A-16, A-17, A-18, A-19
and A-20, respectively. The Certificates of each Class will be issuable in
definitive physical form only, registered in the name of the holders thereof;
provided, however, that in accordance with Section 5.3 beneficial ownership
interests in the REMIC III Regular Certificates shall initially be represented
by Book-Entry Certificates held and transferred through the book-entry
facilities of the Securities Depository, in minimum denominations of authorized
initial Certificate Balance or Notional Amount, as described in the succeeding
table. The Class A Certificates shall be in minimum denominations of $5,000 and
multiples of $1 in excess thereof. The Class X, Class B, Class C, Class D, Class
E and Class F Certificates shall be in minimum denominations of $50,000 and
multiples of $1 in excess thereof and the Class G, Class H, Class J, Class K,
Class L, Class M, Class N, Class O and Class P Certificates shall be in minimum
denominations of $100,000 and multiples of $1 in excess thereof. The Class R-I,
Class R-II and Class R-II Certificates shall be in minimum denominations of 5%
Percentage Interests and integral multiples of 1% Percentage Interest in excess
thereof and together aggregating the entire 100% Percentage Interest in each
such Class.
Aggregate Denominations
of all Certificates of Class
Minimum (in initial Certificate Balance or
Class Denomination initial Notional Amount)
- ------------------------------------------------------------------------------
A-1 $ 5,000 $133,500,000
A-2 $ 5,000 $409,513,000
X $ 50,000 $733,801,915
B $ 50,000 $ 33,021,000
C $ 50,000 $ 34,856,000
D $ 50,000 $ 11,007,000
E $ 50,000 $ 23,848,000
F $ 50,000 $ 12,842,000
G $ 100,000 $ 1,834,000
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H $ 100,000 $ 12,842,000
J $ 100,000 $ 20,179,000
K $ 100,000 $ 5,504,000
L $ 100,000 $ 7,338,000
M $ 100,000 $ 9,172,000
N $ 100,000 $ 5,504,000
O $ 100,000 $ 3,669,000
P $ 100,000 $ 9,172,915
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.
Each Certificate may be printed or in typewritten or similar form,
and each Certificate shall, upon original issue, be executed by the Trustee and
authenticated by the Trustee or the Authenticating Agent and delivered to the
Depositor. All Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee or Authenticating Agent by an authorized officer or
signatory. Certificates bearing the signature of an individual who was at any
time the proper officer or signatory of the Trustee or Authenticating Agent
shall bind the Trustee or Authenticating Agent, notwithstanding that such
individual has ceased to hold such office or position prior to the delivery of
such Certificates or did not hold such office or position at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication in the form set forth in Exhibits A-1 through
A-20 executed by the Authenticating Agent 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 5.2. Registration, Transfer and Exchange of Certificates.
(a) The Trustee shall keep or cause to be kept at the Corporate Trust
Office books (the "Certificate Register") for the registration, transfer and
exchange of Certificates (the Trustee, in such capacity, being the "Certificate
Registrar"). The names and addresses of all Certificateholders and the names and
addresses of the transferees of any Certificates shall be registered in the
Certificate Register. The Person in whose name any Certificate is so registered
shall be deemed and treated as the sole owner and Holder thereof for all
purposes of this Agreement and the Certificate Registrar, the Master Servicer,
the Special Servicer, the Trustee, the Fiscal Agent, any Paying Agent and any
agent of any of them shall not be affected by any notice or knowledge to the
contrary. An Individual Certificate is transferable or exchangeable only upon
the surrender of such Certificate to the Certificate Registrar at the Corporate
Trust Office together with an assignment and transfer (executed by the Holder or
his duly authorized attorney), subject to the requirements of this Section 5.2.
Upon request of the Trustee, the
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Certificate Registrar shall provide the Trustee with the names, addresses and
Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any Individual
Certificate, subject to the requirements of this Section 5.2, the Trustee shall
execute and the Authenticating Agent shall duly authenticate in the name of the
designated transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate Certificate Balance. Such Certificates shall
be delivered by the Certificate Registrar in accordance with this Section 5.2.
Each Certificate surrendered for registration of transfer shall be cancelled and
subsequently destroyed by the Certificate Registrar. Each new Certificate issued
pursuant to this Section 5.2 shall be registered in the name of any Person as
the transferring Holder may request, subject to the provisions of this Section
5.2.
(c) The exchange, transfer and registration of transfer of
Individual Certificates that are Privately Placed Certificates shall be subject
to the restrictions set forth below (in addition to the other provisions of this
Section 5.2):
(i) The Certificate Registrar shall register the transfer of
an Individual Certificate that is a Privately Placed Certificate if the
requested transfer is being made to a transferee who has provided the
Certificate Registrar with an Investment Representation Letter substantially in
the form of Exhibit D-1 hereto (an "Investment Representation Letter"), to the
effect that the transfer is being made to a Qualified Institutional Buyer in
accordance with Rule 144A;
(ii) The Certificate Registrar shall register the transfer of
an Individual Certificate that is a Privately Placed Certificate if the
requested transfer is being made pursuant to an exemption from registration
under the Securities Act provided by Rule 144 thereunder (if available); or
(iii) The Certificate Registrar shall register the transfer of
an Individual Certificate that is a Privately Placed Certificate, if prior to
the transfer, the transferee furnishes to the Certificate Registrar (1) an
Investment Representation Letter to the effect that the transfer is being made
to an Institutional Accredited Investor in accordance with an applicable
exemption under the 1933 Act, (2) an Opinion of Counsel acceptable to the
Certificate Registrar that such transfer is in compliance with the 1933 Act, and
(3) a written undertaking by the transferor to reimburse the Trust for any costs
incurred by it in connection with the proposed transfer. In addition, the
Certificate Registrar may, as a condition of the registration of any such
transfer, require the transferor to furnish such other certificates, legal
opinions or other information (at the transferor's expense) as the Certificate
Registrar may reasonably require to confirm that the proposed transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act and other applicable laws.
(d) Subject to the restrictions on transfer and exchange set
forth in this Section 5.2, the Holder of one or more Certificates may transfer
or exchange the same in whole or in part (with a Certificate Balance or Notional
Amount equal to any authorized denomination) by surrendering such Certificate at
the Corporate Trust Office or at the office of any transfer agent appointed as
provided under this Agreement, together with an instrument of assignment or
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transfer (executed by the Holder or its duly authorized attorney), in the case
of transfer, and a written request for exchange in the case of exchange. Subject
to the restrictions on transfer set forth in this Section 5.2, following a
proper request for transfer or exchange, the Certificate Registrar shall, within
a reasonable time period after such request, execute and deliver at the
Corporate Trust Office or at the office of such transfer agent, as the case may
be, to the transferee (in the case of transfer) or the Holder (in the case of
exchange) or send by first class mail (at the risk of the transferee in the case
of transfer or the Holder in the case of exchange) to such address as the
transferee or the Holder, as applicable, may request, an Individual Certificate
or Certificates, as the case may require, for a like aggregate Certificate
Balance or Notional Amount and in such authorized denomination or denominations
as may be requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office or at
the office of a transfer agent by the registered Holder in person, or by a duly
authorized attorney-in-fact. The Certificate Registrar may decline to accept any
request for an exchange or registration of transfer of any Certificate during
the period of 15 days preceding any Distribution Date.
(e) Individual Certificates that are Privately Placed Certificates
may only be transferred to Eligible Investors as described herein. In the event
the Certificate Registrar shall determine that an Individual Certificate that is
a Privately Placed Certificate is being held by or for the benefit of a Person
who is not an Eligible Investor, or that such holding is unlawful under the laws
of a relevant jurisdiction, then the Certificate Registrar shall void such
transfer, if permitted under applicable law.
(f) No fee or service charge shall be imposed by the Certificate
Registrar for its services in respect of any registration of transfer or
exchange referred to in this Section 5.2 other than for transfers of Privately
Placed Certificates to Institutional Accredited Investors, as provided herein.
In connection with any transfer of Privately Placed Certificates to an
Institutional Accredited Investor, the transferor shall reimburse the Trust for
any costs (including the cost of the Certificate Registrar's counsel's review of
the documents and any legal opinions submitted by the transferor or transferee
to the Certificate Registrar as provided herein) incurred by the Certificate
Registrar in connection with such transfer. The Certificate Registrar may
require payment by each transferor of a sum sufficient to cover any tax, expense
or other governmental charge payable in connection with any such transfer.
(g) Subject to the other provisions of this Section 5.2, transfers of
the Class R-I, Class R-II and Class R-III Certificates may be made only in
accordance with this Section 5.2(g). The Certificate Registrar shall register
the transfer of a Class R-I, Class R-II or Class R-III Certificate if (i)(x) the
transferor has advised the Certificate Registrar in writing that the Certificate
is being transferred to a buyer that the transferor reasonably believes is a
Qualified Institutional Buyer or an Institutional Accredited Investor; and (y)
prior to transfer the transferor furnishes to the Certificate Registrar an
Investment Representation Letter or (ii) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available). In addition, the Certificate Registrar may, as a condition of the
registration of any such transfer, require the transferor to furnish such other
certifications, legal opinions or other information (at the transferor's
expense) as they may reasonably be required to confirm that the
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proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the 1933 Act and
other applicable laws.
(h) Neither the Depositor, the Master Servicer, the Special Servicer,
the Trustee nor the Certificate Registrar is obligated to register or qualify
any Class of Certificates under the 1933 Act or any other securities law or to
take any action not otherwise required under this Agreement to permit the
transfer of such Certificates without registration or qualification. Any
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Depositor, the Master Servicer, the Special Servicer, the
Trustee, the Fiscal Agent and the Certificate Registrar, against any loss,
liability or expense that may result if the transfer is not exempt from the
registration requirements of the 1933 Act or is not made in accordance with such
federal and state laws.
(i) No transfer of any Ownership Interest in a Subordinate Certificate
shall be made to (i) an employee benefit plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code, or a
governmental plan subject to any federal, state or local law ("Similar Law"),
which is to a material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or (ii) an insurance company that is using the
assets of any insurance company separate account or general account in which the
assets of any such Plan are invested (or which are deemed pursuant to ERISA or
any Similar Law to include assets of Plans) to acquire any such Subordinate
Certificates, other than using assets of its general account in circumstances
whereby such transfer and the subsequent holding of the applicable Certificate
would not constitute or result in a prohibited transaction within the meaning of
Section 406 or 407 of ERISA, Section 4975 of the Code, or any Similar Law. Each
prospective transferee of a Subordinate Certificate shall deliver to the
Depositor, the Certificate Registrar and the Trustee, (A) a transfer or
representation letter, substantially in the form of Exhibit D-2 hereto, stating
that the prospective transferee is not a Person referred to in (i) or (ii)
above, or (B) an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trustee and the Certificate Registrar that the purchase or
holding of the Subordinate Certificate will not constitute or result in a
prohibited transaction within the meaning of Section 406 or Section 407 of ERISA
or Section 4975 of the Code, and will not subject the Master Servicer, the
Special Servicer, the Depositor, the Trustee or the Certificate Registrar to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code), which Opinion of Counsel shall not be an expense of
the Trustee, the Fiscal Agent, the Trust Fund, the Master Servicer, the Special
Servicer, Certificate Registrar or the Depositor. None of the Trustee, the
Fiscal Agent, the Master Servicer, the Special Servicer, and the Certificate
Registrar will register a Class R-I, Class R-II or Class R-III Certificate in
any Person's name unless such Person has provided the letter referred to in
clause (A) above. Any transfer of a Subordinate Certificate that would violate,
or result in a prohibited transaction under, ERISA or Section 4975 of the Code
shall be deemed absolutely null and void ab initio.
(j) Each Person who has or acquires any Ownership Interest in a Class
R-I, Class R-II or a Class R-III Certificate shall be deemed by the acceptance
or acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class R-I Certificate, Class R-II Certificate or a Class R-III
Certificate are expressly subject to the following provisions:
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(i) Each Person acquiring or holding any Ownership Interest
in a Class R-I Certificate, Class R-II Certificate or a Class R-III Certificate
shall be a Permitted Transferee and shall not acquire or hold such Ownership
Interest as agent (including as a broker, nominee or other middleman) on behalf
of any Person that is not a Permitted Transferee. Any such Person shall promptly
notify the Certificate Registrar of any change or impending change in its status
(or the status of the beneficial owner of such Ownership Interest) as a
Permitted Transferee. Any acquisition described in the first sentence of this
Section 5.2(j)(i) by a Person who is not a Permitted Transferee or by a Person
who is acting as an agent of a Person who is not a Permitted Transferee shall be
void and of no effect, and the immediately preceding owner who was a Permitted
Transferee shall be restored to registered and beneficial ownership of the
Ownership Interest as fully as possible.
(ii) No Ownership Interest in a Class R-I, Class R-II or
a Class R-III Certificate may be transferred, and no such Transfer shall be
registered in the Certificate Register, without the express written consent of
the Certificate Registrar, and the Certificate Registrar shall not recognize a
proposed Transfer, and such proposed Transfer shall not be effective, without
such consent with respect thereto. In connection with any proposed Transfer of
any Ownership Interest in a Class R-I, Class R-II or a Class R-III Certificate,
the Certificate Registrar shall, as a condition to such consent, (x) require
delivery to it in form and substance satisfactory to it, and the proposed
transferee shall deliver to the Certificate Registrar and to the proposed
transferor, an affidavit in substantially the form attached as Exhibit C-1 (a
"Transferee Affidavit") (A) that such proposed transferee is a Permitted
Transferee and (B) stating that (I) the proposed transferee historically has
paid its debts as they have come due and intends to do so in the future, (II)
the proposed transferee understands that, as the holder of an Ownership Interest
in a Class R-I, Class R-II or a Class R-III Certificate, as applicable, it may
incur liabilities in excess of cash flows generated by the residual interest,
(III) the proposed transferee intends to pay taxes associated with holding the
Ownership Interest as they become due, (IV) the proposed transferee will not
transfer the Ownership Interest to any Person that does not provide a Transferee
Affidavit or as to which the proposed transferee has actual knowledge that such
Person is not a Permitted Transferee or is acting as an agent (including as a
broker, nominee or other middleman) for a Person that is not a Permitted
Transferee, and (V) the proposed transferee expressly agrees to be bound by and
to abide by the provisions of this Section 5.2(j) and (y) other than in
connection with the initial issuance of the Class R-I, Class R-II and Class
R-III Certificates, require a statement from the proposed transferor
substantially in the form attached as Exhibit C-2 (the "Transferor Letter"),
that the proposed transferor has no actual knowledge that the proposed
transferee is not a Permitted Transferee and has no actual knowledge or reason
to know that the proposed transferee's statements in the preceding clauses
(x)(B)(I) or (III) are false.
(iii) Notwithstanding the delivery of a Transferee Affidavit by a
proposed transferee under clause (ii) above, if a Responsible Officer of the
Certificate Registrar has actual knowledge that the proposed transferee is not a
Permitted Transferee, no Transfer to such proposed transferee shall be effected
and such proposed Transfer shall not be registered on the Certificate Register;
provided, however, that the Certificate Registrar shall not be required to
conduct any independent investigation to determine whether a proposed transferee
is a Permitted Transferee.
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Upon notice to the Certificate Registrar that there has occurred a
Transfer to any Person that is a Disqualified Organization or an agent thereof
(including a broker, nominee, or middleman) in contravention of the foregoing
restrictions, and in any event not later than 60 days after a request for
information from the transferor of such Ownership Interest in a Class R-I, Class
R-II or a Class R-III Certificate, or such agent thereof, the Certificate
Registrar and the Trustee agree to furnish to the IRS and the transferor of such
Ownership Interest or such agent thereof such information necessary to the
application of Section 860E(e) of the Code as may be required by the Code,
including, but not limited to, the present value of the total anticipated excess
inclusions with respect to such Class R-I, Class R-II or Class R-III Certificate
(or portion thereof) for periods after such Transfer. At the election of the
Certificate Registrar and the Trustee, the Certificate Registrar and the Trustee
may charge a reasonable fee for computing and furnishing such information to the
transferor or to such agent thereof referred to above; provided, however, that
such Persons shall in no event be excused from furnishing such information.
SECTION 5.3. Book-Entry Certificates.
(a) Each Class of REMIC III Certificates shall initially be issued
as one or more Book-Entry Certificates registered in the name of the Securities
Depository or its nominee and, except as provided in subsection (c) below,
transfer of such Certificates may not be registered by the Certificate Registrar
unless such transfer is to a successor Securities Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership Interests
therein. Such Certificate Owners shall hold and transfer their respective
Ownership Interest in and to such Certificates through the book-entry facilities
of the Securities Depository and, except as provided in subsection (c) below,
shall not be entitled to definitive, fully registered 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
Securities Depository Participant or brokerage firm representing each such
Certificate Owner. Each Securities Depository Participant shall only transfer
the Ownership Interests in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Securities Depository's normal procedures. Neither the Certificate Registrar
nor the Trustee shall have any responsibility to monitor or restrict the
transfer of Ownership Interests in Book-Entry Certificates through the
book-entry facilities of the Securities Depository.
(b) The Trustee, the Master Servicer, the Special Servicer, the Fiscal
Agent and the Certificate Registrar may for all purposes, including the making
of payments due on the Book-Entry Certificates, deal with the Securities
Depository as the authorized representative of the Certificate Owners with
respect to such Certificates for the purposes of exercising the rights of
Certificateholders hereunder. 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 Securities Depository
Participants and brokerage firms representing such Certificate Owners. Multiple
requests and directions from, and votes of, the Securities 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
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Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Securities Depository of such record date.
(c) If (i)(A) the Depositor advises the Trustee and the Certificate
Registrar in writing that the Securities Depository is no longer willing or able
to properly discharge its responsibilities with respect to any Class of the
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 Securities Depository with respect to any Class of the
Book-Entry Certificates, the Certificate Registrar shall notify all affected
Certificate Owners, through the Securities 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 the Book-Entry Certificates by the Securities
Depository, accompanied by registration instructions from the Securities
Depository for registration of transfer, the Trustee shall execute, and the
Certificate Registrar shall authenticate and deliver, the Definitive
Certificates to the Certificate Owners identified in such instructions. None of
the Depositor, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent 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 Class of the REMIC III
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 5.4. 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 Certificate Registrar such security or indemnity as may be required by it
to save it, the Trustee, the Fiscal Agent, the Special Servicer and the Master
Servicer harmless, then, in the absence of actual knowledge by a Responsible
Officer of the Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and the Trustee or the
Authenticating Agent shall authenticate and the Certificate Registrar shall
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and of like tenor and
Percentage Interest. Upon the issuance of any new Certificate under this Section
5.4, the Certificate Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.4 shall constitute complete and indefeasible evidence
of ownership of the corresponding interest in the Trust Fund, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 5.5. Appointment of Paying Agent.
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The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Article IV. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Master Servicer, to
execute and deliver to the Master Servicer and the Trustee an instrument in
which such Paying Agent shall agree with the Master Servicer and the Trustee
that such Paying Agent will hold all sums held by it for payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to such Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee. The
Paying Agent shall at all times be an entity having a long-term senior unsecured
debt rating of at least "Baa2" by Moody's and "BBB" by DCR, unless and to the
extent Rating Agency Confirmation is obtained (the cost, if any, of obtaining
such confirmation to be paid by the Trustee; provided that such appointment is
made by the Trustee in its sole discretion and otherwise by the Trust Fund).
SECTION 5.6. Access to Certificateholders' Names and Addresses.
(a) If any Certificateholder (for purposes of this Section 5.6, an
"Applicant") applies in writing to the Certificate Registrar, and such
application states that the Applicant desires 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 which such
Applicant proposes to transmit, then the Certificate Registrar shall, at the
expense of such Applicant, within ten Business Days after the receipt of such
application, transmit such communication to the Certificateholders as of the
most recent Record Date; provided, however, if such communication relates to
performance by the Master Servicer, the Special Servicer or the Trustee of its
duties hereunder, the Certificate Registrar shall furnish or cause to be
furnished to such Applicant a list of the names and addresses of the
Certificateholders as of the most recent Record Date.
(b) Every Certificateholder, by receiving and holding its Certificate,
agrees with the Trustee that the Trustee and the Certificate Registrar shall not
be held accountable in any way by reason of the disclosure of any information as
to the names and addresses of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.7. Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, when required, to the Depositor, the Special
Servicer or the Master Servicer. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee, the Depositor, the Special
Servicer and the Master Servicer, if made in the manner provided in this
Section.
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(b) The fact and date of the execution by any Certificateholder of
any such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Depositor, the Special Servicer or the Master Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
(d) The Trustee or Certificate Registrar may require such additional
proof of any matter referred to in this Section 5.7 as it shall deem necessary.
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master Servicer and
the Special Servicer.
The Depositor, the Master Servicer and the Special Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement.
SECTION 6.2. Merger or Consolidation of the Master Servicer and
Special Servicer.
Subject to the third paragraph of this Section 6.2, the Master
Servicer will keep in full effect its existence, rights and good standing as a
corporation under the laws of the State of Delaware and will not jeopardize its
ability to do business in each jurisdiction in which one or more of the
Mortgaged Properties are located or to protect the validity and enforceability
of this Agreement, the Certificates or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Subject to the following paragraph, the Special Servicer will keep in
full effect its existence, rights and good standing as a corporation under the
laws of the State of Delaware and will not jeopardize its ability to do business
in each jurisdiction in which one or more of the Mortgaged Properties are
located or to protect the validity and enforceability of this Agreement, the
Certificates or any of the Specially Serviced Mortgage Loans and to perform its
respective duties under this Agreement.
Each of the Master Servicer and the Special Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which it shall be a party, or any Person succeeding to its
business, shall be the successor of the Master Servicer or the
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Special Servicer, as applicable hereunder, and shall be deemed to have assumed
all of the liabilities of the Master Servicer or the Special Servicer, as
applicable hereunder, if Rating Agency Confirmation has been obtained with
respect to such merger, consolidation or transfer and succession (the cost, if
any, of obtaining such confirmation to be paid by the Master Servicer or Special
Servicer, as applicable).
SECTION 6.3. Limitation on Liability of the Depositor, the Master
Servicer and Others.
Neither the Depositor, the Master Servicer, the Special Servicer, nor
any of the owners, directors, managers, officers, employees or agents of the
Depositor or the Master Servicer or the Special Servicer shall be under any
liability to the Trust Fund or the Certificateholders 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 or the Master Servicer or the Special Servicer
or any such Person against any breach of warranties or representations made
herein, or against any specific liability imposed on the Master Servicer or the
Special Servicer for a breach of the Servicing Standard, or against any
liability which would otherwise be imposed by reason of its respective willful
misfeasance, misrepresentation, bad faith, fraud or negligence in the
performance of its duties or by reason of negligent disregard of its respective
obligations or duties hereunder. The Depositor, the Master Servicer, the Special
Servicer and any owner, director, manager, officer, employee or agent of the
Depositor, 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 appropriate Person with respect to any matters arising hereunder. The
Depositor, the Master Servicer, the Special Servicer and any owner, director,
officer, employee or agent of the Depositor, the Master Servicer or the Special
Servicer shall be indemnified and held harmless by the Trust Fund against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of its respective willful misfeasance, misrepresentation, bad
faith, fraud or negligence or (in the case of the Master Servicer or Special
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor nor the Master Servicer
nor the Special Servicer shall be under any obligation to appear in, prosecute
or defend any legal action unless such action is related to its respective
duties under this Agreement and in its opinion does not expose it to any expense
or liability; provided, however, that the Depositor or the Master Servicer or
the Special Servicer may in its discretion undertake any action related to its
obligations hereunder which it may deem necessary or desirable with 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 expenses and costs
of such action and any liability resulting therefrom (except any liability
related to the Master Servicer's or the Special Servicer's obligations under
Section 3.1(a)) shall be expenses, costs and liabilities of the Trust Fund, and
the Depositor, the Master Servicer and the Special Servicer shall be entitled to
be reimbursed therefor from the Collection Account as provided in Section
3.6(vi) of this Agreement.
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SECTION 6.4. Resignation of Master Servicer or Special Servicer.
(a) Except as otherwise provided in Section 6.2 and 6.4(b) hereof, neither
the Master Servicer nor the Special Servicer shall resign from the obligations
and duties hereby imposed on it, unless there is a determination that its duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
(the other activities so causing such conflict being of a type and nature
carried on by it at the date of this Agreement). Any such determination
permitting the resignation of the Master Servicer or the Special Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until a successor servicer designated
by the Trustee, with the consent of the Depositor, shall have assumed the
responsibilities and obligations of the Master Servicer or the Special Servicer,
as the case may be, under this Agreement and Rating Agency Confirmation shall
have been obtained with respect to such servicing transfer. Notice of such
resignation shall be given promptly by the Master Servicer or the Special
Servicer, as the case may be, to the Trustee.
(b) The Master Servicer and the Special Servicer may each resign from the
obligations and duties imposed on it, upon 30 days notice to the Trustee,
provided that (i) a successor servicer (x) is available, (y) has assets of at
least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent
compensation, to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing; and (iii) Rating
Agency Confirmation is obtained with respect to such servicing transfer, as
evidenced by a letter delivered to the Trustee by each Rating Agency.
SECTION 6.5 Assignment or Delegation of Duties by Master Servicer or
the Special Servicer.
In addition to actions permitted under Section 6.2, the Master
Servicer and the Special Servicer shall each have the right without the prior
written consent of the Trustee to assign and delegate all of its duties
hereunder; provided, however, that (i) the Master Servicer or the Special
Servicer, as the case may be, gives the Depositor and the Trustee notice of such
assignment and delegation; (ii) such purchaser or transferee accepting such
assignment and delegation executes and delivers to the Depositor and the Trustee
an agreement accepting such assignment, which contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer or the Special Servicer, as the case may be,
with like effect as if originally named as a party to this Agreement; (iii) a
Rating Agency Confirmation shall have been obtained with respect to such
assignment and delegation; and (iv) the assignment and delegation is reasonably
satisfactory to the Trustee and the Depositor. In the case of any such
assignment and delegation in accordance with the requirements of this Section,
the Master Servicer or the Special Servicer, as the case may be, shall be
released from its obligations under this Agreement, except that the Master
Servicer or the Special Servicer, as the case may be, shall remain liable for
all liabilities and obligations incurred by it as the Master Servicer or the
Special Servicer, as the case may be, hereunder prior to the satisfaction of the
conditions to such assignment set forth in the preceding sentence.
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Notwithstanding the above, each of the Master Servicer and the Special Servicer
may appoint Sub-Servicers in accordance with Section 3.2 hereof (provided that
the Master Servicer or the Special Servicer remains fully liable for their
actions), or agents or independent contractors appointed or retained to perform
select duties thereof.
SECTION 6.6 Rights of the Depositor, the Rating Agencies and the
Trustee in Respect of the Master Servicer and the Special Servicer.
Each of the Master Servicer and the Special Servicer shall afford the
Depositor, the Rating Agencies, and the Trustee, upon reasonable notice, during
normal business hours access to all records maintained by it in respect of its
rights and obligations hereunder and access to its officers responsible for such
obligations. Upon request, each of the Master Servicer and the Special Servicer
shall furnish to the Depositor, the Rating Agencies and the Trustee its most
recent financial statements and such other information in its possession (which
it is not prohibited by applicable law or contract from disclosing) regarding
its business, affairs, property and condition, financial or otherwise, as the
party requesting such information, in its reasonable judgment, determines to be
relevant to the performance of the obligations hereunder of the Master Servicer
or the Special Servicer. Neither the Depositor nor the Trustee shall have any
responsibility or liability for any action or failure to act by the Master
Servicer or the Special Servicer and neither such Person is obligated to
supervise the performance of the Master Servicer or the Special Servicer under
this Agreement or otherwise.
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.
"Event of Default," wherever used herein, with respect to the Master
Servicer and the Special Servicer, as applicable (except with respect to item
(x) in the case of the Special Servicer) means any one of the following events:
(i) any failure by the Master Servicer or the Special Servicer,
as applicable, to remit to the Collection Account or any failure by the Master
Servicer to remit to the Trustee for deposit into the Distribution Account any
amount required to be so remitted by the Master Servicer or the Special
Servicer, as applicable, pursuant to and in accordance with the terms of this
Agreement; or
(ii) any failure on the part of the Master Servicer or Special
Servicer, as applicable, duly to observe or perform in any material respect any
other of the covenants or agreements, or the breach of any representations or
warranties provided herein on the part of the Master Servicer or the Special
Servicer, which, in either event, materially and adversely affects the interests
of the Certificateholders, the Master Servicer, the Special Servicer or the
Trustee with respect to any Mortgage Loan and which, in either event, continues
unremedied for a period of 30 days after the date on which written notice of
such failure or breach, requiring the same to be remedied, shall have been given
to the Master Servicer or Special Servicer by the Depositor
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or the Trustee, or to the Master Servicer or Special Servicer, the Depositor and
the Trustee by the Holders of Certificates entitled to at least 25% of the
aggregate Voting Rights of any Class affected thereby; or
(iii) confirmation in writing by DCR that the then-current
rating assigned to any Class of Certificates will be withdrawn or downgraded if
the Master Servicer or Special Servicer, as applicable, is not removed as Master
Servicer or Special Servicer hereunder; or
(iv) confirmation in writing by Moody's that the then-current
rating assigned to any Class of Certificates will be withdrawn, downgraded or
qualified if the Master Servicer or Special Servicer, as applicable, is not
removed as Master Servicer or Special Servicer hereunder; or
(v) the Master Servicer or the Special Servicer shall no longer
be an "approved" or "acceptable" (or equivalent designation) servicer by each of
the Rating Agencies for mortgage pools similar to the Trust Fund, and the Master
Servicer or the Special Servicer, as applicable, shall not have resolved all
such matters to the satisfaction of Moody's within ninety (90) days (or such
longer time period as may be agreed in writing by Moody's) after such change in
designation; or
(vi) Moody's places its ratings of any Class of Certificates on a
"watch" status in contemplation of a ratings downgrade or withdrawal, citing
servicing concerns with respect to the Master Servicer or Special Servicer, as
applicable, as the sole or a contributory factor in such rating action and the
Master Servicer or the Special Servicer, as applicable, shall not have resolved
all such matters to the satisfaction of Moody's within ninety (90) days (or such
longer time period as may be agreed in writing by Moody's) after such placement
on "watch" status; or
(vii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Master Servicer or Special Servicer, as applicable, and
such decree or order shall have remained in force, undischarged or unstayed, for
a period of 60 days; or
(viii) the Master Servicer or Special Servicer, as applicable,
shall consent to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or the Special
Servicer, or of or relating to all or substantially all of the property of
either the Master Servicer or the Special Servicer; or
(ix) the Master Servicer or Special Servicer, as applicable,
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
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(x) the Master Servicer shall fail to make any Advance required
to be made by the Master Servicer hereunder (whether or not the Trustee or the
Fiscal Agent makes such Advance);
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may, and at the written direction of the Holders
of 25% of the aggregate Voting Rights of all Certificates and in the case of an
Event of Default described in clauses (iii) through (vi) above, the Trustee
shall, by notice in writing to the Master Servicer or the Special Servicer, as
the case may be, terminate (subject to Section 7.2) all of its respective rights
and obligations under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than any rights it may have hereunder as a
Certificateholder and any rights or obligations that accrued prior to the date
of such termination (including the right to receive all amounts accrued or owing
to it under this Agreement, plus interest at the Advance Rate on such amounts
until received to the extent such amounts bear interest as provided in this
Agreement, with respect to periods prior to the date of such termination, and
the right to the benefits of Section 6.3 notwithstanding any such termination);
provided, however, that in the event the Master Servicer and the Special
Servicer are the same Person, the Trustee may, and at the written direction of
the Holders of 25% of the aggregate Voting Rights of all Certificates and in the
case of an Event of Default described in clauses (iii) through (vi) above, the
Trustee shall require that any termination of the Master Servicer shall
constitute a termination of the Special Servicer and vice versa. On or after the
receipt by the Master Servicer or the Special Servicer, as the case may be, of
such written notice, all of its authority and power under this Agreement,
whether with respect to the Certificates or the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee pursuant to and under this Section
(notwithstanding any failure of the Trustee to satisfy the criterion set forth
in Section 6.4) and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
defaulting Master Servicer or Special Servicer, as the case may be, 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. Each of the Master Servicer and the Special Servicer, on behalf of
itself, agrees in the event it is terminated pursuant to this Section 7.1
promptly (and in any event no later than ten Business Days subsequent to such
notice) to provide, at its own expense, the Trustee or the successor Master
Servicer or Special Servicer (if other than the Trustee) with all documents and
records requested by the Trustee or the successor Master Servicer or Special
Servicer (if other than the Trustee) to enable the Trustee or the successor
Master Servicer or Special Servicer (if other than the Trustee) to assume its
functions hereunder, and to cooperate with the Trustee and the successor to its
responsibilities hereunder in effecting the termination of its responsibilities
and rights hereunder, including, without limitation, the transfer to the
successor Master Servicer or Special Servicer or the Trustee, as applicable, for
administration by it of all cash amounts which shall at the time be or should
have been credited by the Master Servicer or the Special Servicer to the
Collection Account and any REO Account or Reserve Account or thereafter be
received with respect to the Mortgage Loans, and shall promptly provide the
Trustee or such successor Master Servicer or Special Servicer (which may include
the Trustee), as applicable, all documents and records reasonably requested by
it, such documents and records to be provided in such form as
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the Trustee or such successor Master Servicer or Special Servicer shall
reasonably request (including electromagnetic form), to enable it to assume the
Master Servicer's or Special Servicer's function hereunder. All reasonable costs
and expenses of the successor Master Servicer or successor Special Servicer
incurred in connection with transferring the Mortgage Files to the successor
Master Servicer (or copies of the Mortgage Files relating to Specially Serviced
Mortgage Loans to the successor Special Servicer) and amending this Agreement to
reflect such succession as Master Servicer or successor Special Servicer
pursuant to this Section 7.1 shall be paid by the predecessor Master Servicer or
Special Servicer upon presentation of reasonable documentation of such costs and
expenses; provided, however, that if any such costs and expenses remain unpaid
by the predecessor Master Servicer or Special Servicer within a reasonable time
after presentation of such documentation, the Trustee or the successor Master
Servicer or Special Servicer (if other than the Trustee) may be reimbursed from
the Collection Account for such unpaid costs and expenses, which shall be deemed
to be expenses of the Trust Fund.
SECTION 7.2. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer or the Special Servicer
receives a notice of termination pursuant to Section 7.1, the Trustee shall be
its successor in such capacity in all respects under this Agreement and the
transactions set forth or provided for herein and, except as provided herein,
shall be subject to all the responsibilities, duties, limitations on liability
and liabilities relating thereto and arising thereafter placed on the Master
Servicer or Special Servicer by the terms and provisions hereof; provided,
however, that (i) the Trustee shall have no responsibilities, duties,
liabilities or obligations with respect to any act or omission of the Master
Servicer or of the Special Servicer and (ii) any failure to perform, or delay in
performing, such duties or responsibilities caused by the terminated party's
failure to provide, or delay in providing, records, tapes, disks, information or
monies shall not be considered a default by any successor hereunder. The
appointment of a successor Master Servicer or Special Servicer shall not affect
any liability of the predecessor Master Servicer or Special Servicer, as
applicable, which may have arisen prior to its termination as Master Servicer or
Special Servicer. The Trustee shall not be liable for any of the representations
and warranties of the Master Servicer or of the Special Servicer herein or in
any related document or agreement, for any acts or omissions of the predecessor
Master Servicer or Special Servicer, as applicable, or for any losses incurred
in respect of any Permitted Investment by the Master Servicer pursuant to
Section 3.7 hereunder nor shall the Trustee be required to purchase any Mortgage
Loan hereunder. As compensation therefor, the Trustee as successor Master
Servicer or Special Servicer shall be entitled to all Servicing Compensation
relating to the Mortgage Loans that accrue after the date of the Trustee's
succession to which the Master Servicer or Special Servicer would have been
entitled if the Master Servicer or Special Servicer, as applicable, had
continued to act hereunder (other than Workout Fees payable to the terminated
Special Servicer pursuant to Section 3.12(b)). Unless otherwise agreed to in
writing by the Master Servicer and the Trustee, in the event any Advances made
by the Master Servicer, the Fiscal Agent or the Trustee shall at any time be
outstanding, or any amounts of interest thereon shall be accrued and unpaid, all
amounts available to repay Advances and interest hereunder shall be applied
entirely to the Advances made by the Trustee and the Fiscal Agent (and the
accrued and unpaid interest thereon), until such Advances made by the Trustee
and the Fiscal Agent (and accrued and unpaid interest thereon) shall have been
repaid
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in full. In addition to the foregoing, any successor Master Servicer (which, for
the purposes of this sentence, shall not include the Trustee) shall be required
to allocate funds available for the payment of unreimbursed Advances (with
interest thereon at the Advance Rate) on a first in, first out basis, which
results in the payment of unreimbursed Advances (with interest thereon at the
Advance Rate) first to the predecessor Master Servicer. Notwithstanding the
above, the Trustee may, if it shall be unwilling to so act, or shall, if it is
unable to so act, or if the Holders of Certificates entitled to a majority of
the aggregate Voting Rights so request in writing to the Trustee, or if neither
the Trustee nor the Fiscal Agent is rated by Moody's in one of its two highest
long-term senior unsecured debt rating categories and by DCR in one of its three
highest long-term senior unsecured debt rating categories, promptly appoint, or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution which is the subject of a Rating Agency Confirmation,
(the cost, if any, of obtaining such confirmation to be paid by the terminated
Master Servicer or Special Servicer, as applicable), as the successor to the
Master Servicer or Special Servicer 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 Special Servicer hereunder shall be effective until the assumption by such
successor of all the Master Servicer's or Special Servicer's responsibilities,
duties and liabilities hereunder. Pending appointment of a successor to the
Master Servicer or 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
described herein, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the terminated party hereunder. The Depositor, the Trustee, the Master
Servicer or Special Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
SECTION 7.3. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.1 above or appoint-
ment of a successor to the Master Servicer or the Special Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within 5 days after the occurrence of any Event of Default of
which a Responsible Officer of the Trustee has actual knowledge, the Trustee
shall transmit by mail to all Holders of Certificates and to each Rating Agency
notice of such Event of Default, unless such Event of Default shall have been
cured or waived.
SECTION 7.4. Other Remedies of Trustee.
During the continuance of any Event of Default, so long as such Event
of Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 7.1, shall have the right, in its own name as trustee of an
express trust, to take all actions now or hereafter existing at law, in equity
or by statute to enforce its rights and remedies and to protect the interests,
and enforce the rights and remedies, of the Certificateholders (including the
institution
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and prosecution of all judicial, administrative and other proceedings and the
filing of proofs of claim and debt in connection therewith). In such event, the
legal fees, expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Trustee shall be entitled to be reimbursed therefor from the Collection Account
as provided in Section 3.6(vi). Except as otherwise expressly provided in this
Agreement, no remedy provided for by this Agreement shall be exclusive of any
other remedy, and each and every remedy shall be cumulative and in addition to
any other remedy and no delay or omission to exercise any right or remedy shall
impair any such right or remedy or shall be deemed to be a waiver of any Event
of Default.
SECTION 7.5. Waiver of Past Events of Default; Termination.
The Holders of Certificates evidencing not less than 66-2/3% of the
aggregate Voting Rights of the Certificates may, on behalf of all Holders of
Certificates, waive any default by the Master Servicer or Special Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to (including P&I Advances) or payments
from the Collection Account or the Distribution Account or in remitting payments
as received, in each case in accordance with this Agreement. Upon any such
waiver of a past default, and payment to the Trustee of all reasonable costs and
expenses incurred by the Trustee in connection with such default and prior to
its waivers (which costs shall be paid as an Additional Trust Fund Expense) such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon. Notwithstanding any other provisions of this Agreement, for
purposes of waiving any Event of Default pursuant to this Section 7.5,
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.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee has actual knowledge 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.
During the continuance of an Event of Default of which a Responsible Officer of
the Trustee has actual knowledge, 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 person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) The Trustee, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are
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specifically required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they conform on their face to
the requirements of this Agreement; provided, however, that, the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument
provided to it hereunder by the Master Servicer, the Special Servicer, the
Depositor or the Paying Agent. If any such instrument is found not to conform on
its face to the requirements of this Agreement in a material manner, the Trustee
shall report such finding to the presenting party and request a correction of
such instrument.
(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 the foregoing
shall be subject to Section 8.2; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of which
a Responsible Officer of the Trustee has actual knowledge, and after the curing
or waiver of all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any resolutions, certificates, statements,
reports, opinions, documents, orders or other instruments furnished to the
Trustee that conform on their face to the requirements of this Agreement without
responsibility for investigating the contents thereof;
(ii) The Trustee shall not be personally or otherwise liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers, unless it shall be proven that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally or otherwise 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 a
majority of the aggregate Voting Rights (or such other percentage as is
specified herein) of each affected Class, or of the aggregate Voting Rights of
the Certificates, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising or omitting to
exercise any trust or power conferred upon the Trustee, under this Agreement;
(iv) Except as provided in the succeeding sentence, the Trustee
shall not be charged with knowledge of any failure by the Depositor to comply
with the obligations of the Depositor hereunder or any failure of the Master
Servicer or the Special Servicer to comply with the obligations of the Master
Servicer or the Special Servicer referred to in clause (i) or (ii) of Section
7.1, or of any breach or occurrence referred to in clause (iii) through (vi) of
Section 7.1, as the case may be, unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure, breach or occurrence. The Trustee
shall be deemed to have actual knowledge of the Master Servicer's failure to
comply with its obligations listed in clause (i) (except with respect to
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remittances to the Collection Account) and (vii) of Section 7.1 (except with
respect to Servicing Advances) or to provide scheduled reports, certificates and
statements when and as required to be delivered to the Trustee pursuant to this
Agreement; and
(v) The Trustee and the Fiscal Agent shall not be under any obli-
gation to appear in prosecute or defend any legal action which is not incidental
to their respective duties as Trustee and Fiscal Agent in accordance with this
Agreement (and, if either does, all legal expenses and costs of such action
shall be expenses and costs of the Trust Fund, and the Trustee and the Fiscal
Agent shall be entitled to be reimbursed therefor from the Collection Account,
unless such legal action arises out of the negligence or bad faith of the
Trustee or the Fiscal Agent, as the case may be, or any breach of a
representation, warranty or covenant of the Trustee or the Fiscal Agent, as the
case may be, contained herein).
(vi) The execution by the Trustee of any forms or plans of
liquidation in connection with REMIC I, REMIC II or REMIC III shall not
constitute a representation by the Trustee as to the adequacy of such form or
plan of liquidation.
The Trustee, in its capacity as Trustee, shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if in the Trustee's opinion the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Master Servicer or the Special Servicer under
this Agreement or during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Master Servicer or the Special Servicer in accordance with the terms of this
Agreement. The Trustee shall not be required to post any surety or bond of any
kind in connection with its performance of its obligations under this Agreement.
SECTION 8.2. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.1:
(i) The Trustee may request and/or rely upon and shall be pro-
tected 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 and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any such party or
parties;
(ii) The Trustee may consult with counsel and any memorandum
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such memorandum or Opinion of Counsel;
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(iii) (A) The Trustee shall be under no obligation 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 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; (B) the right of the
Trustee to perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and the Trustee shall not be answerable for other than
its negligence or willful misconduct in the performance of any such act;
provided, however, that subject to the foregoing clause (A), nothing contained
herein shall relieve the Trustee of the obligations, upon the occurrence of an
Event of Default (which has not been cured or waived) of which a Responsible
Officer of the Trustee has actual knowledge, 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 person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(iv) The Trustee shall not be personally or otherwise liable
for any action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) 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 a majority (or such other percentage as is specified
herein) of the aggregate Voting Rights of any affected Class; 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. The reasonable expense of every such
investigation shall be paid by the Master Servicer or the Special Servicer if an
Event of Default shall have occurred and be continuing relating to the Master
Servicer or the Special Servicer, respectively, and otherwise by the
Certificateholders requesting the investigation; and
(vi) The Trustee may execute any of the trusts or powers here-
under or perform any duties hereunder either directly or by or through agents or
attorneys, provided that the Trustee shall not otherwise be relieved of its
duties and obligations hereunder.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Mortgage Loan by the Depositor
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pursuant to this Agreement or the eligibility of any Mortgage Loan for
purposes of this Agreement.
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall not be
taken as the statements of the Trustee, the Fiscal Agent, the Master Servicer or
the Special Servicer and the Trustee, the Fiscal Agent, the Special Servicer and
the Master Servicer assume no responsibility for their correctness. The Trustee,
the Fiscal Agent, the Master Servicer and the Special Servicer make no
representations or warranties as to the validity or sufficiency of this
Agreement, of the Certificates, or any private placement memorandum or
prospectus used to offer the Certificates for sale or the validity,
enforceability or sufficiency of any Mortgage Loan or related document. The
Trustee and the Fiscal Agent shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage or any Mortgage Loan, or the perfection and priority of any
Mortgage or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Trust Fund or its ability to generate the
payments to be distributed to Certificateholders under this Agreement. Without
limiting the foregoing, neither the Trustee nor the Fiscal Agent shall be liable
or responsible for: the existence, condition and ownership of any Mortgaged
Property; the existence of any hazard or other insurance thereon (other than,
with respect to the Trustee only, if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.2) or the enforceability thereof; the
existence of any Mortgage Loan or the contents of the related Mortgage File on
any computer or other record thereof (other than, with respect to the Trustee
only, if the Trustee shall assume the duties of the Master Servicer or the
Special Servicer pursuant to Section 7.2); the validity of the assignment of any
Mortgage Loan to the Trust Fund or of any intervening assignment; the
completeness of any Mortgage File; the performance or enforcement of any
Mortgage Loan (other than, with respect to the Trustee only, if the Trustee
shall assume the duties of the Master Servicer or the Special Servicer pursuant
to Section 7.2); the compliance by the Depositor, the Master Servicer or the
Special Servicer with any warranty or representation made under this Agreement
or in any related document or the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Master Servicer or the Special Servicer or any loss
resulting therefrom, it being understood that the Trustee only shall remain
responsible for any Trust Fund property that it may hold in its individual
capacity; the acts or omissions of any of the Depositor, the Master Servicer or
the Special Servicer (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Master Servicer or the Special Servicer
pursuant to Section 7.2) or any Sub-Servicer or any Borrower; any action of the
Master Servicer or the Special Servicer (other than, with respect to the Trustee
only, if the Trustee shall assume the duties of the Master Servicer or the
Special Servicer pursuant to Section 7.2) or any Sub-Servicer taken in the name
of the Trustee, except with respect to the Trustee, to the extent such action is
taken at the express written direction of the Trustee; the failure of the Master
Servicer or the Special Servicer or any Sub-Servicer to act or perform any
duties required of it on behalf of the Trust Fund or the Trustee hereunder; or
any action by or omission of the Trustee taken at the instruction of the Master
Servicer or the Special Servicer (other than in each case, with respect to the
Trustee only, if the Trustee shall assume the duties of the Master Servicer or
the Special Servicer pursuant to Section 7.2) unless the taking of such action
is not permitted by the
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express terms of this Agreement; provided, however, that the foregoing shall not
relieve the Trustee or the Fiscal Agent of its obligation to perform its duties
as specifically set forth in this Agreement. The Trustee and the Fiscal Agent
shall not be accountable for the use or application by the Depositor, the Master
Servicer or the Special Servicer of any of the Certificates or of the proceeds
of such Certificates, or for the use or application of any funds paid to the
Depositor, the Master Servicer or the Special Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account, or the
Distribution Account by the Depositor, the Master Servicer or the Special
Servicer, other than in each case, with respect to the Trustee only, any funds
held by the Trustee. The Trustee (unless the Trustee shall have become the
successor Master Servicer) or the Fiscal Agent shall have no responsibility for
(A) filing any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security interest
or lien granted to it hereunder or to record this Agreement, (B) seeing to any
insurance, (C) seeing to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Trust Fund, or (D)
confirming or verifying the contents of any reports or certificates of the
Master Servicer delivered to the Trustee pursuant to this Agreement believed by
the Trustee to be genuine and to have been signed or presented by the proper
party or parties. In making any calculation hereunder which includes as a
component thereof the payment or distribution of interest for a stated period at
a stated rate "to the extent permitted by applicable law," the Trustee shall
assume that such payment is so permitted unless a Responsible Officer of the
Trustee has actual knowledge, or receives an Opinion of Counsel (at the expense
of the Person asserting the impermissibility) to the effect, that such payment
is not permitted by applicable law.
SECTION 8.4. Trustee May Own Certificates.
The Trustee and the Fiscal Agent in their individual capacities or
any other capacity may become the owner or pledgee of Certificates, and may deal
with the Depositor, the Master Servicer and the Special Servicer in banking
transactions, with the same rights each would have if it were not Trustee or
Fiscal Agent.
SECTION 8.5. Payment of Trustee Fees and Expenses; Indemnification.
(a) The Master Servicer shall pay from the Collection Amount to the
Trustee or any successor Trustee from time to time, and the Trustee or any
successor Trustee shall be entitled to receive from the Collection Account on
each Remittance Date the Trustee Fee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
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
hereunder of the Trustee. The Trustee shall pay the routine fees and expenses of
the Certificate Registrar, the Paying Agent, the Custodian and the
Authenticating Agent. The Trustee's rights to the Trustee Fee may not be
transferred in whole or in part except in connection with the transfer of all of
the Trustee's responsibilities and obligations under this Agreement.
(b) Except as otherwise provided herein, the Trustee shall pay all
expenses incurred by it in connection with its activities hereunder. The Master
Servicer and the Special
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Servicer covenant and agree to pay or reimburse the Trustee for the reasonable
expenses, disbursements and advances incurred or made by the Trustee in
connection with any transfer of the servicing responsibilities of the Master
Servicer or the Special Servicer, as applicable hereunder, pursuant to or
otherwise arising from the resignation or removal of the Master Servicer or the
Special Servicer, as applicable, in accordance with any of the provisions of
this Agreement (and including the reasonable fees and expenses and disbursements
of its counsel and all other persons not regularly in its employ), except any
such expense, disbursement or advance as may arise from the negligence or bad
faith of the Trustee.
(c) Each of the Master Servicer and the Special Servicer shall
indemnify the Trustee and the Fiscal Agent and their respective Affiliates and
each of the directors, officers, employees and agents of the Trustee, the Fiscal
Agent and their respective Affiliates (each, an "Indemnified Party"), and hold
each of them harmless against any, and all claims, losses, damages, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments, and any
other costs, fees and expenses that the Indemnified Party may sustain in
connection with this Agreement (including without limitation any liability, cost
or expense arising from the Master Servicer's or Special Servicer's negligent or
intentional misuse of any power of attorney granted pursuant to Section 3.1(a))
related to each such party's respective willful misconduct, bad faith, fraud,
misrepresentation and/or negligence in the performance of its respective duties
hereunder or by reason of negligent disregard of its respective obligations and
duties hereunder (including in the case of the Master Servicer or the Special
Servicer, any agent of the Master Servicer or the Special Servicer).
(d) The Trust Fund shall indemnify each Indemnified Party from, and
hold it harmless against, any and all losses, liabilities, damages, claims or
expenses (including reasonable attorneys' fees) arising in respect of this
Agreement or the Certificates, in each case to the extent, and only to the
extent, such payments are expressly reimbursable under this Agreement or are
"unanticipated expenses incurred by the REMIC" within the meaning of Treasury
Regulation Section 1.860G-1(b)(3)(ii), other than (i) those resulting from the
negligence, misrepresentation, fraud, bad faith or willful misconduct of the
Trustee and (ii) those as to which such Indemnified Party has received
indemnification payments pursuant to Section 8.5(c) within 30 days after the
request therefor. The term "unanticipated expenses incurred by a REMIC" shall
include any fees, expenses and disbursements of any separate trustee or
co-trustee appointed hereunder, only to the extent such fees, expenses and
disbursements were not reasonably anticipated as of the Closing Date and the
losses, liabilities, damages, claims or expenses (including reasonable
attorneys' fees) incurred or advanced by an Indemnified Party in connection with
any litigation arising out of this Agreement, including, without limitation,
under Section 2.3, Section 3.10, the third paragraph of Section 3.11, Section
8.11, Section 10.3, Section 5.1, and Section 7.1. The right of reimbursement of
the Indemnified Parties under this Section 8.5(d) shall be senior to the rights
of all Certificateholders.
(e) Notwithstanding anything herein to the contrary, this Section
8.5 shall survive the termination or maturity of this Agreement or the
resignation or removal of the Trustee and the Fiscal Agent as regards rights
accrued prior to such resignation or removal and (with respect to any acts or
omissions during their respective tenures) the resignation, removal or
termination of the Master Servicer or the Special Servicer.
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(f) This Section 8.5 shall be expressly construed to include, but not
be limited to, such indemnities, compensation, expenses, disbursements,
advances, losses, liabilities, damages and the like, as may pertain or relate to
any environmental law or environmental matter.
SECTION 8.6. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a bank, trust company,
corporation or association organized and doing business under the laws of the
United States of America, any state thereof, 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 $100,000,000 and a rating on its unsecured senior long-term debt of at
least "A" by DCR or "Aa2" by Moody's (unless a Fiscal Agent is appointed and
acting hereunder that has a long-term senior unsecured debt rating that is at
least "A" (without regard to any plus or minus) by DCR or "Aa2" by Moody's),
unless a Rating Agency Confirmation is obtained with respect to a lower rating
(the cost, if any, of obtaining such confirmation to be paid by the Trustee) and
subject to supervision or examination by federal or state authority and shall
not be an Affiliate of the Master Servicer or the Special Servicer (except
during any period when the Trustee has assumed the duties of the Master Servicer
or the Special Servicer, as applicable, pursuant to Section 7.2). If a
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for purposes of this Section the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In the event that the
place of business from which the Trustee administers the Trust Fund is a state
or local jurisdiction that imposes a tax on the Trust Fund or the net income of
a REMIC (other than a tax corresponding to a tax imposed under the REMIC
Provisions) the Trustee shall elect, at its sole discretion, either to (i)
resign immediately in the manner and with the effect specified in Section 8.7,
(ii) pay such tax and continue as Trustee or (iii) administer the Trust Fund
from a state and local jurisdiction that does not impose such a tax. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.7.
SECTION 8.7. Resignation and Removal of the Trustee.
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 and each Rating Agency. Upon such notice of
resignation, the Fiscal Agent shall also be automatically removed and,
accordingly, the Master Servicer shall promptly appoint a successor Trustee,
which appointment of successor Trustee shall be subject to a Rating Agency
Confirmation, and a successor Fiscal Agent, which, if the successor Trustee is
not rated by each Rating Agency in one of its two highest long-term unsecured
debt rating categories, the successor Fiscal Agent shall be subject to a Rating
Agency Confirmation. The appointment shall be by a written instrument executed
in triplicate, which instrument shall be delivered to the resigning Trustee,
with a copy to the removed Fiscal Agent and the successor Trustee and successor
Fiscal Agent. The cost, if any, of obtaining the foregoing confirmations shall
be paid
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by the resigning Trustee and the removed Fiscal Agent. Notwithstanding the
foregoing, if no successor Trustee and Fiscal Agent shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee and departing Fiscal Agent may petition any
court of competent jurisdiction for the appointment of a successor Trustee and
successor Fiscal Agent.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.6 and shall fail to resign after written
request therefor by the Depositor or Master Servicer, or if at any time the
Trustee or the Fiscal Agent shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or the Fiscal Agent
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or the Fiscal Agent or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation or the Master
Servicer receives notice from DCR that the Trustee is no longer eligible and may
cause a downgrade or withdrawal of the current ratings assigned to the
Certificates, then the Depositor or the Master Servicer shall remove the Trustee
and the Fiscal Agent and shall promptly appoint a successor Trustee and
successor Fiscal Agent by written instrument, which shall be delivered to the
Trustee and the Fiscal Agent so removed and to the successor Trustee and
successor Fiscal Agent.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and the Fiscal Agent (and any removal
of the Trustee shall cause the Fiscal Agent to be automatically removed) and
appoint a successor Trustee and successor Fiscal Agent (each meeting the
requirements of Section 8.8) by written instrument or instruments, in eight
originals, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Master Servicer, one complete set to the Special Servicer,
one complete set to the Trustee so removed, one complete set to the removed
Fiscal Agent, one complete set to the successor Trustee so appointed and one
complete set to the successor Fiscal Agent so appointed. Such removal of the
Trustee and/or Fiscal Agent, if without cause, shall be effective upon the
payment to the Trustee and the Fiscal Agent of all reasonable costs and expenses
incurred by them in connection with such removal (which costs shall be paid as
an Additional Trust Fund Expense).
In the event of the resignation or removal of the Trustee, the Fiscal
Agent shall be entitled to resign, it being understood that the initial Fiscal
Agent shall not be obligated to act in such capacity hereunder at any time that
LaSalle Bank National Association is not the Trustee.
Any resignation or removal of the Trustee and Fiscal Agent and
appointment of a successor Trustee and, if such trustee is not rated by each
Rating Agency in one of its two highest long-term unsecured debt rating
categories, a successor Fiscal Agent pursuant to any of the provisions of this
Section 8.7 shall not become effective until acceptance of appointment by the
successor Trustee and, if necessary, Fiscal Agent as provided in Section 8.8.
SECTION 8.8. Successor Trustee.
Any successor Trustee and any successor Fiscal Agent appointed as
provided in Section 8.7 shall execute, acknowledge and deliver to the Depositor
and to the predecessor
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Trustee and predecessor Fiscal Agent, as the case may be, instruments accepting
their appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee and predecessor Fiscal Agent shall become effective and such
successor Trustee and successor Fiscal Agent, 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, provided that a Rating Agency Confirmation has been
obtained with respect to the appointment of such successor Trustee and successor
Fiscal Agent. The cost, if any, of obtaining such confirmation shall be paid by
the Trustee that resigned or was removed, unless the Trustee was removed without
cause by the Holders of Certificates entitled to a majority of the Voting
Rights, in which case such costs shall be an Additional Trust Fund Expense. 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 predecessor Trustee and predecessor Fiscal Agent shall execute and deliver
such instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee and
successor Fiscal Agent all such rights, powers, duties and obligations. No
successor Trustee or successor Fiscal Agent shall accept appointment as provided
in this Section 8.8 unless at the time of such acceptance such successor Trustee
or successor Fiscal Agent shall be eligible under the provisions of Section 8.6.
Upon acceptance of appointment by a successor Trustee or successor
Fiscal Agent as provided in this Section 8.8, the successor Trustee shall mail
notice of the succession of such Trustee and Fiscal Agent hereunder to all
Holders of Certificates at their addresses as shown in the Certificate Register.
SECTION 8.9. Merger or Consolidation of Trustee.
Any corporation into which the Trustee 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 Trustee shall be a party, or any
corporation 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 corporation shall be eligible under the provisions of Section
8.6 and a Rating Agency Confirmation has been obtained, 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. Any Person into which the
Fiscal Agent may be merged or converted or with which it may be consolidated or
any corporation or bank resulting from any merger, conversion or consolidation
to which the Fiscal Agent shall be a party, or any corporation or banking
association succeeding to all or substantially all of the corporate trust
business of the Fiscal Agent shall be the successor of the Fiscal Agent
hereunder, provided that such corporation or bank shall be eligible under the
provisions of Section 8.6 and a Rating Agency Confirmation has be obtained
without the execution or filing of any paper or any farther act on the part of
any of the parties hereto, anything to the contrary notwithstanding.
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SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
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
Depositor 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 (at the expense of the Trustee) 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 Depositor and the Trustee may consider necessary or desirable.
If the Depositor shall no longer be in existence or shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. Except as required
by applicable law, the appointment of a co-trustee or separate trustee shall not
relieve the Trustee of its responsibilities hereunder. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor Trustee under Section 8.6 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.8.
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 (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee solely at the direction of the Trustee.
No trustee under this Agreement shall be personally liable by reason
of any act or omission of any other trustee under this Agreement. The Depositor
and the Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee, except that if the Depositor is no
longer in existence, or if the separate trustee or co-trustee is an employee of
the Trustee, the Trustee acting alone may accept the resignation of or remove
any separate trustee or co-trustee.
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. Every such instrument shall be filed with the Trustee.
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
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Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. In no event shall any such separate trustee or co-trustee be entitled
to any provision relating to the conduct of, affecting the liability of, or
affording protection to such separate trustee or co-trustee that imposes a
standard of conduct less stringent than that imposed on the Trustee hereunder,
affording greater protection than that afforded to the Trustee hereunder or
providing a greater limit on liability than that provided to the Trustee
hereunder.
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 hereunder shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
SECTION 8.11. Authenticating Agent.
The Trustee may appoint an Authenticating Agent to execute and to
authenticate Certificates. The Authenticating Agent must be acceptable to the
Depositor and the Master Servicer 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
Depositor and the Master Servicer, 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, the
Special Servicer and the Master Servicer. The Trustee may at any time terminate
the agency of the Authenticating Agent by giving written notice of termination
to the Authenticating Agent, the Depositor, the Special Servicer 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 8.11, the Trustee promptly shall
appoint a successor Authenticating Agent, which shall be acceptable to the
Master Servicer and 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
8.11.
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The Authenticating Agent shall have no responsibility or liability
for any action taken by it as such at the direction of the Trustee. The Trustee
shall pay the Authenticating Agent reasonable compensation from its own funds.
SECTION 8.12. Appointment of Custodians.
(a) The Trustee may appoint one or more Custodians to hold all or a
portion of the Mortgage Files as agent for the Trustee, by entering into a
Custodial Agreement. The Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodial Agreement
may be amended only as provided in Section 11.7. The Trustee shall pay the
Custodian reasonable compensation from its own funds and the Trustee shall
remain liable for all actions of any Custodian and shall not be relieved of any
of its obligations hereunder. The Trustee shall serve as the initial Custodian.
(b) Each Custodian shall be a depository institution subject to
supervision by federal or state authority, shall have a combined capital and
surplus of at least $10,000,000, shall have a long-term senior unsecured debt
rating of at least "Baa2" from Moody's, unless Moody's has confirmed in writing
(the cost, if any, of obtaining such confirmation to be paid by the Trustee;
provided that such appointment was made by the Trustee in its sole discretion
and otherwise by the Trust Fund) that a lower rating shall not result, in and of
itself, in a downgrading, withdrawal or qualification of the rating then
assigned by Moody's to any Class of the Certificates, and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File.
(c) Each Custodian shall maintain a fidelity bond and shall keep in
force during the term of this Agreement a policy or policies of insurance
covering loss occasioned by the errors and omissions of its officers and
employees in connection with its obligations hereunder. All fidelity bonds and
policies of errors and omissions insurance obtained under this Section 8.12(c)
shall be issued by a Qualified Insurer. Each Custodian shall be deemed to have
complied with the requirement for a fidelity bond if one of its Affiliates has
such fidelity bond coverage and, by the terms of such fidelity bond, the
coverage afforded thereunder extends to the Custodian. Notwithstanding the
foregoing, so long as the long-term unsecured debt obligations of the Custodian
or its corporate parent have been rated "A" or better by DCR and "A2" or better
by Moody's, the Custodian shall be entitled to provide self-insurance or obtain
from its corporate parent adequate insurance, as applicable, with respect to its
obligation hereunder to maintain a fidelity bond or an errors and omissions
insurance policy.
SECTION 8.13. Fiscal Agent Appointed; Concerning the Fiscal Agent.
(a) The Trustee hereby appoints ABN AMRO Bank N.V. as the initial
Fiscal Agent hereunder for the purposes of exercising and performing the
obligations and duties imposed upon the Fiscal Agent by Sections 3.22 and 4.5.
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(b) The Fiscal Agent undertakes to perform such duties and only such
duties as are specifically set forth in Sections 3.22 and 4.5.
(c) No provision of this Agreement shall be construed to relieve
the Fiscal Agent from liability for its own negligent failure to act, bad faith
or its own willful misfeasance; provided, however, that (i) the duties and
obligations of the Fiscal Agent shall be determined solely by the express
provisions of Sections 3.22 and 4.5, the Fiscal Agent shall not be liable except
for the performance of such duties and obligations, no implied covenants or
obligations shall be read into this Agreement against the Fiscal Agent and, in
the absence of bad faith on the part of the Fiscal Agent, the Fiscal Agent may
conclusively rely, as to the truth and correctness of the statements or
conclusions expressed therein, upon any resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Fiscal Agent by any Person and which on their face do not contradict the
requirements of this Agreement, and (ii) the provisions of clauses (ii) and (iv)
of Section 8.1(c) shall apply to the Fiscal Agent.
(d) Except as otherwise provided in Section 8.1(c), the Fiscal Agent
also shall have the benefit of provisions of clauses (i), (ii), (iii) (other
than the proviso thereto), (iv), (v) (other than the proviso thereto) and (vi)
of Section 8.2(a).
SECTION 8.14. Representations and Warranties of the Trustee and
Fiscal Agent.
(a) The Trustee hereby represents, warrants and covenants that as of
the Closing Date:
(i) The Trustee is a national banking association, duly organ-
ized, validly existing and in good standing under the laws of the United States
of America and, except to the extent that the laws of certain jurisdictions in
which any part of the Trust Fund may be located require that a co-trustee or
separate trustee be appointed to act with respect to such property, the Trustee
has all licenses necessary to carry on its business as now being conducted, and
is in compliance with the laws of each state in which any Mortgaged Property is
located, to the extent necessary to ensure the enforceability of each Mortgage
Loan in accordance with the terms of this Agreement;
(ii) The Trustee has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform in accordance
herewith; the execution and delivery of this Agreement by the Trustee and its
performance and compliance with the terms of this Agreement do not violate the
Trustee's charter 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 contract, agreement or other instrument to which
the Trustee is a party or which may be applicable to the Trustee or any of its
assets, which default or breach would have consequences that would materially
and adversely affect the financial condition or operations of the Trustee or its
properties taken as a whole or impair the ability of the Trust Fund to realize
on the Mortgage Loans;
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(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Trustee and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a legal, valid and binding
obligation of the Trustee, enforceable against it in accordance with the terms
of this Agreement, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation, receivership, moratorium or other laws
relating to or affecting creditors' rights generally, or by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) The Trustee is not in violation of, and the execution and
delivery of this Agreement by the Trustee and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, or result in the
creation or imposition of any lien, charge or encumbrance which, in any such
event, would have consequences that would materially and adversely affect the
financial condition or operations of the Trustee or its properties taken as a
whole or impair the ability of the Trust Fund to realize on the Mortgage Loans;
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Trustee, threatened, against the Trustee which, either in
any one instance or in the aggregate, would result in any material adverse
change in the business, operations or financial condition of the Trustee or
would materially impair the ability of the Trustee to perform under the terms of
this Agreement or draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with the
obligations of the Trustee contemplated herein;
(vi) No consent, approval, authorization or order of, or regis-
tration or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Trustee of, or
compliance by the Trustee with, this Agreement or, if required, such approval
has been obtained prior to the Closing Date, except to the extent that the
failure of the Trustee to be qualified as a foreign corporation or licensed in
one or more states is not necessary for the enforcement of the Mortgage Loans;
and
(vii) The Trustee represents that it will use reasonable com-
mercial efforts to cure (by August 1999) any deficiencies with regards to the
manipulation or calculation of dates beyond December 31, 1999 in the internally
maintained computer software systems used by the Trustee in the conduct of its
trust business which would materially and adversely affect its ability to
perform its obligations under this Agreement. The Trustee further represents
that it will use reasonable commercial efforts to obtain reasonable assurances
from each third party vendor of licensed computer software systems used by the
Trustee in the conduct of its trust business that such vendors shall use
reasonable commercial efforts to cure any deficiencies with regards to the
manipulation or calculation of dates beyond December 31, 1999 in such systems
which would materially and adversely affect the ability of the Trustee to
perform its obligations under this Agreement.
(b) The Fiscal Agent hereby represents, warrants and covenants that
as of the Closing Date:
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(i) The Fiscal Agent is a corporation, duly organized, validly
existing and in good standing under the laws of the Netherlands and has all
licenses necessary to carry on its business as now being conducted;
(ii) The Fiscal Agent has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform in accordance
herewith; the execution and delivery of this Agreement by the Fiscal Agent and
its performance and compliance with the terms of this Agreement do not violate
the Fiscal Agent's charter 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 contract, agreement or other instrument to
which the Fiscal Agent is a party or which may be applicable to the Fiscal Agent
or any of its assets, which default or breach would have consequences that would
materially and adversely affect the financial condition or operations of the
Fiscal Agent or its properties taken as a whole;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Fiscal Agent and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of the Fiscal Agent, enforceable against it in accordance
with the terms of this Agreement, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or
other laws relating to or affecting creditors' rights generally, or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(iv) The Fiscal Agent is not in violation of, and the execution
and delivery of this Agreement by the Fiscal Agent and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction, or result
in the creation or imposition of any lien, charge or encumbrance which, in any
such event, would have consequences that would materially and adversely affect
the financial condition or operations of the Fiscal Agent or its properties
taken as a whole;
(v) There are no actions, suits or proceedings pending or, to
the knowledge of the Fiscal Agent, threatened, against the Fiscal Agent which,
either in any one instance or in the aggregate, would result in any material
adverse change in the business, operations or financial condition of the Fiscal
Agent or would materially impair the ability of the Fiscal Agent to perform
under the terms of this Agreement or draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Fiscal Agent contemplated herein; and
(vi) No consent, approval, authorization or order of, or regis-
tration or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Fiscal Agent of, or
compliance by the Fiscal Agent with, this Agreement or, if required, such
approval has been obtained prior to the Closing Date, except to the extent that
the failure of the Fiscal Agent to be qualified as a foreign corporation or
licensed in one or more states is not necessary for the enforcement of the
Mortgage Loans.
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(c) It is understood and agreed that the representations and war-
ranties set forth in this Section shall survive until the termination of this
Agreement, and shall inure to the benefit of the Master Servicer, the Special
Servicer and the Depositor. Upon discovery by the Depositor, the Master
Servicer, the Special Servicer or a Responsible Officer of the Trustee (or upon
written notice thereof from any Certificateholder) of a breach of any of the
representations and warranties set forth in this Section which materially and
adversely affects the interests of the Certificateholders, the Master Servicer,
the Special Servicer or the Trustee with respect to any Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties
hereto and to the Rating Agencies.
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust.
(a) Subject to Section 9.3, the Trust Fund and the respective obliga-
tions and responsibilities of the Depositor, the Trustee, the Master Servicer,
the Special Servicer and the Fiscal Agent hereunder (other than the obligation
of the Trustee to make payments to Certificateholders on the final Distribution
Date pursuant to Article IV or otherwise as set forth in Section 9.2 and other
than the obligations in the nature of information or tax reporting or
tax-related administrative or judicial contests or proceedings) shall terminate
on the earlier of (i) the later of (A) the final payment or other liquidation of
the last Mortgage Loan held by the Trust Fund and (B) the disposition of the
last REO Property held by the Trust and (ii) the sale of all Mortgage Loans and
any REO Properties held by the Trust Fund in accordance with Section 9.1(b);
provided that in no event shall the Trust Fund created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the
Holders of the Controlling Class, the Depositor, the Master Servicer, the
Special Servicer and the Majority Certificateholder of the Class R-I
Certificates notice of the date when the aggregate Certificate Balance of the
Principal Balance Certificates, after giving effect to distributions of
principal made on the next Distribution Date, will be less than or equal to 1%
of the aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The Holders of the Controlling Class representing a majority Percentage Interest
in such Class, the Depositor, the Master Servicer, the Special Servicer, and the
Majority Certificateholder of the Class R-I Certificates shall thereafter be
entitled, in that order of priority, to purchase, in whole only, the Mortgage
Loans and any REO Properties then remaining in the Trust Fund. If any such party
desires to exercise such option, it will notify the Trustee who will notify any
other such party with a prior right to exercise such option. If any such party
that has been so provided notice by the Trustee notifies the Trustee within ten
Business Days after receiving notice of the proposed purchase that it wishes to
purchase the assets of the Trust, then such party (or, in the event that more
than one of such parties notifies the Trustee that it wishes to purchase the
assets of the Trust, the party with
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the first right to purchase the assets of the Trust) may purchase the assets of
the Trust in accordance with this Agreement. The "Termination Price" shall equal
the sum of (i) the aggregate Repurchase Price of all the remaining Mortgage
Loans (other than REO Mortgage Loans and Mortgage Loans as to which a Final
Recovery Determination has been made) held by the Trust, plus (ii) the appraised
value of each remaining REO Property, if any, held by the Trust (such appraisal
to be conducted in accordance with MAI standards by an appraiser with at least
ten years experience in the related property type and in the jurisdiction in
which the REO Property is located selected by the Master Servicer and approved
by the Trustee), minus (iii) solely in the case where the Master Servicer is
effecting such purchase, the aggregate amount of unreimbursed Advances made by
the Master Servicer, together with any Advance Interest Amount accrued and
payable to the Master Servicer in respect of such Advances and any unpaid Master
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,
solely in the case where the Special Servicer is effecting such purchase, 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).
In the event that the Holders of the Controlling Class representing a
majority Percentage Interest in such Class, the Depositor, the Master Servicer,
the Special Servicer, or the Majority Certificateholder of Class R-I
Certificates purchase all of the remaining Mortgage Loans and REO Properties
held by the Trust in accordance with the preceding paragraph, the party
effecting such purchase (the "Final Purchaser") shall (i) deposit in the
Collection Account not later than the Determination 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
and (ii) deliver notice to the Trustee of its intention to effect such purchase.
Upon confirmation that such deposit has been made, the Trustee shall release or
cause to be released to the Final Purchaser or its designee the Mortgage Files
for the remaining Mortgage Loans and shall execute all assignments, endorsements
and other instruments furnished to it by the Final Purchaser without recourse,
representation or warranty as shall be necessary to effectuate transfer of the
remaining Mortgage Loans and REO Properties held by the Trust, in each case
without representation or warranty by the Trustee. All Mortgage Files for the
remaining Mortgage Loans and REO Properties shall be delivered to the Final
Purchaser or its designee.
(c) As a condition to the purchase of the assets of the Trust
pursuant to Section 9.1(b), the Final Purchaser shall deliver to the Trustee an
Opinion of Counsel, which shall be at the expense of the Final Purchaser,
stating that such termination will be a "qualified liquidation" under Section
860F(a)(4) of the Code. Such purchase shall be made in accordance with Section
9.3.
SECTION 9.2. Procedure Upon Termination of Trust.
(a) Notice of any termination pursuant to the provisions of
Section 9.1, specifying the Distribution Date upon which the final distribution
shall be made, shall be given promptly by the Trustee to each Rating Agency and
each Certificateholder by first class mail at least 20 days prior to the date of
such termination. Such notice shall specify (A) the Distribution
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Date upon which final distribution on the Certificates will be made and (B) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distribution being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. The
Trustee shall give such notice to the Depositor and the Certificate Registrar at
the time such notice is given to Certificateholders. Upon any such termination,
the Trustee shall terminate, or request the Master Servicer to terminate, the
Collection Account and the Distribution Account and any other account or fund
maintained with respect to the Certificates, subject to the Trustee's obligation
hereunder to hold all amounts payable to the nontendering Certificateholders in
trust without interest pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute
to each Certificateholder that presents and surrenders its Certificates all
amounts payable on such Certificates on such final Distribution Date in
accordance with Article IV.
SECTION 9.3. Additional Trust Termination Requirements.
(a) In the event of a purchase of all the remaining Mortgage Loans
and REO Properties held by the Trust in accordance with Section 9.1 or any other
termination of the Trust under this Article IX, the Trust and each REMIC Pool
shall be terminated in accordance with the following additional requirements,
unless in the case of a termination under Section 9.1 hereof, the Final
Purchaser delivers to the Trustee an Opinion of Counsel at the expense of the
Final Purchaser (or, in the case of any other termination, the Trustee shall
obtain such Opinion of Counsel at the expense of the Trust Fund) addressed to
the Depositor and the Trustee to the effect that the failure of the Trust to
comply with the requirements of this Section 9.3 will not (i) result in the
imposition of taxes on "prohibited transactions" of any Trust REMIC under the
REMIC Provisions or (ii) cause any Trust REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(i) within 89 days prior to the final Distribution Date set forth
in the notice given by the Trustee under Section 9.2, the Trustee shall adopt a
plan of complete liquidation prepared by the Final Purchaser and meeting the
requirements for a qualified liquidation for each REMIC Pool under Section 860F
of the Code and any regulations thereunder;
(ii) during such 90-day liquidation period and at or after the
adoption of the plans of complete liquidation and at or prior to the final
Distribution Date, the Trustee shall sell all of the remaining Mortgage Loans
and any REO Properties held by the Trust to the Final Purchaser for cash in an
amount equal to the Termination Price, such cash shall be deposited into the
Collection Account, shall be deemed distributed on the REMIC I Regular Interests
in retirement thereof, shall be deemed distributed on the REMIC II Regular
Interests in retirement thereof, and shall be distributed to the
Certificateholders in retirement of the Certificates;
(iii) at the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Holders of the related Class of Residual Certificates all
cash on hand in each REMIC Pool after making such
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final deemed payment or payments (other than cash retained to meet claims), and
REMIC I, REMIC II and REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I Interests,
the REMIC II Interests, the REMIC III Regular Certificates, or the Class R-III
Certificates be made after the 89th day from the date on which such plans of
complete liquidation are adopted. The Trustee shall specify the first day of the
90-day liquidation period in a statement attached to the final Tax Return for
each REMIC Pool pursuant to Treasury Regulation Section 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to adopt a plan of complete liquidation for each
of REMIC I, REMIC II and REMIC III prepared by the Final Purchaser in accordance
with the foregoing requirements, which authorization shall be binding upon all
successor Certificateholders.
ARTICLE X
REMIC ADMINISTRATION
SECTION 10.1. REMIC Election.
(a) The parties intend that each of REMIC I, REMIC II and REMIC III
shall constitute, and that the affairs of each of REMIC I, REMIC II and REMIC
III shall be conducted so as to qualify it as, a "real estate mortgage
investment conduit" as defined in, and in accordance with, the REMIC Provisions,
and the provisions hereof shall be interpreted consistently with this intention.
In furtherance of such intention, the Trustee shall, to the extent permitted by
applicable law, act as agent, and is hereby appointed to act as agent, of each
of REMIC I, REMIC II and REMIC III and shall, on behalf of each of REMIC I,
REMIC II and REMIC III, make an election to treat each of REMIC I, REMIC II and
REMIC III as a REMIC on Form 1066 for its first taxable year, in accordance with
the REMIC Provisions.
(b) The REMIC I Regular Interests are hereby designated as "regular
interests" in REMIC I within the meaning of Section 860G(a)(1) of the Code, and
the Class R-I Certificates are hereby designated as the sole class of "residual
interests" in REMIC I within the meaning of Section 860G(a)(2) of the Code. The
REMIC II Regular Interests shall be designated as "regular interests" in REMIC
II within the meaning of Section 860G(a)(1) of the Code, and the Class R-II
Certificates are hereby designated as the sole class of "residual interests" in
REMIC II within the meaning of Section 860G(a)(2) of the Code. The Class A-1,
Class A-2, Class X, Class B, Class C, Class D, Class E, Class F, Class G, Class
H, Class J, Class K, Class L, Class M, Class N, Class O and Class P Certificates
are hereby designated as "regular interests" in REMIC III within the meaning of
Section 860G(a)(1) of the Code and the Class R-III Certificates are hereby
designated as the sole class of "residual interests" in REMIC III within the
meaning of Section 860G(a)(2) of the Code. The Class X Certificates represent a
"specified portion" of the interest payments on the Class WAC-II Interest,
within the meaning of Treasury Regulations Section 1.860G-1(a)(2) of the Code.
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(c) The Closing Date is hereby designated as the "Startup Day" of
REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of the
Code. The "latest possible maturity date" of the REMIC I Regular Interests, the
REMIC II Regular Interests and the REMIC III Regular Certificates for purposes
of Code Section 860G(a)(1) is the Rated Final Distribution Date.
SECTION 10.2. REMIC Compliance.
(a) The Trustee shall cause to be prepared, signed, and timely filed
with the Internal Revenue Service, on behalf of each REMIC Pool, an application
for a taxpayer identification number for such REMIC Pool on Internal Revenue
Service Form SS-4. The Trustee shall prepare, sign and file, or cause to be
prepared and signed and filed, all required Tax Returns for each of REMIC I,
REMIC II and REMIC III, using a calendar year as the taxable year for each of
REMIC I, REMIC II and REMIC III, when and as required by the REMIC Provisions
and other applicable federal, state or local income tax laws.
The Trustee shall, within 30 days of the Closing Date, furnish or
cause to be furnished to the Internal Revenue Service, on Form 8811 or as
otherwise may be required by the Code, the name, title and address of the Person
that the holders of the Certificates may contact for tax information relating
thereto (and the Trustee shall act as the representative of each of REMIC I,
REMIC II and REMIC III for this purpose), together with such additional
information as may be required by such Form, and shall update such information
at the time or times and in the manner required by the Code (and the Depositor
agrees within 10 Business Days of the Closing Date, to provide any information
reasonably requested by the Trustee and necessary to make such filing);
(b) The Trustee shall prepare and forward, or cause to be pre-
pared and forwarded, to the Certificateholders and the Internal Revenue Service
and applicable state and local tax authorities all information reports as and
when required to be provided to them in accordance with the REMIC Provisions and
applicable state and local law. If the filing or distribution of any documents
of an administrative nature not addressed in Section 10.1 or Section 10.2(a) is
then required by the REMIC Provisions in order to maintain the status of REMIC
I, REMIC II or REMIC III as a REMIC or is otherwise required by the Code or
applicable state or local law, the Trustee shall prepare, sign and file or
distribute, or cause to be prepared and signed and filed or distributed, such
documents with or to such Persons when and as required by the REMIC Provisions
or the Code or comparable provisions of state and local law.
(c) The Holder of the largest Percentage Interest in the Class R-I,
Class R-II or Class R-III Certificates shall be the tax matters person of REMIC
I, REMIC II or REMIC III, respectively, pursuant to Treasury Regulation Section
1.860F-4(d); provided, however, that any amendment to such Regulation which
requires that another Person be designated the tax matters person shall be
followed from and after the effective date of such amendment. If more than one
Holder should hold an equal Percentage Interest in the Class R-I, Class R-II or
Class R-III Certificates larger than that held by any other Holder, the first
such Holder to have acquired such Class R-I, Class R-II or Class R-III
Certificates shall be such tax matters person. The Trustee
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shall act as attorney-in-fact and agent for the tax matters person of each of
REMIC I, REMIC II and REMIC III, and each Holder of a Percentage Interest in the
Class R-I, Class R-II or Class R-III Certificates, by acceptance thereof, is
deemed to have consented to the Trustee's appointment in such capacity and
agrees to execute any documents required to give effect thereto, and any fees
and expenses incurred by the Trustee in connection with any audit or
administrative or judicial proceeding shall be paid by the Trust Fund.
(d) The Trustee shall not intentionally take any action or intention-
ally omit to take any action if, in taking or omitting to take such action, the
Trustee knows that such action or omission (as the case may be) would cause the
termination of the REMIC status of REMIC I, REMIC II or REMIC III or the
imposition of tax on REMIC I, REMIC II or REMIC III other than a tax on income
expressly permitted or contemplated to be received by the terms of this
Agreement (any of the foregoing, an "Adverse REMIC Event"). In this regard, the
Trustee shall not permit the creation of any "interests" (within the meaning of
Treasury Regulation Section 1.860D-1(b)(1)) in any of the REMIC Pools other than
the REMIC I Regular Interests, the REMIC II Regular Interests and the interests
evidenced by the Certificates. Notwithstanding any provision of this paragraph
to the contrary, the Trustee shall not be required to take any action that the
Trustee in good faith believes to be inconsistent with any other provision of
this Agreement, nor shall the Trustee be deemed in violation of this paragraph
if it takes any action expressly required or authorized by any other provision
of this Agreement, and the Trustee shall have no responsibility or liability
with respect to any act or omission of the Depositor or the Master Servicer or
the Special Servicer which causes the Trustee to be unable to comply with any of
Sections 10.1(a), 10.2(a), 10.2(b), 10.2(e) or which results in any action
contemplated by the next succeeding paragraph.
In this regard the Trustee shall (i) exercise reasonable care not to
allow the occurrence of any "prohibited transactions" with the meaning of Code
Section 860F(a), unless the party seeking such action shall have delivered to
the Trustee an Opinion of Counsel (at such party's expense) that such occurrence
would not (A) result in a taxable gain, (B) otherwise subject REMIC I, REMIC II
or REMIC III to tax (other than a tax at the highest marginal corporate tax rate
on net income from foreclosure property), or (C) cause either REMIC I, REMIC II
or REMIC III to fail to qualify as a REMIC; and (ii) exercise reasonable care
not to allow the Trust Fund to receive income from the performance of services
or from assets not permitted under the REMIC Provisions to be held by a REMIC
(provided, however, that the receipt of any income expressly permitted or
contemplated by the terms of this Agreement shall not be deemed to violate this
clause).
None of the Master Servicer, the Special Servicer and the Depositor
shall be responsible or liable (except in connection with any act or omission
referred to in the two preceding sentences) for any failure by the Trustee to
comply with the provisions of this Section 10.2.
(e) The Trustee shall maintain such records relating to each of
REMIC I, REMIC II and REMIC III as may be necessary to demonstrate that each
REMIC has complied with the REMIC provisions and to prepare the foregoing
returns, schedules, statements or
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information, such records, for federal income tax purposes, to be maintained on
a calendar year and on an accrual basis.
(f) The Depositor, the Special Servicer and the Master Servicer shall
cooperate in a timely manner with the Trustee in supplying any information
within the Depositor's, the Special Servicer's or the Master Servicer's control
(other than any confidential information) that is reasonably necessary to enable
the Trustee to perform its duties under this Section 10.2.
(g) None of the Depositor, Trustee, Fiscal Agent, Special Servicer
or Master Servicer shall enter into any arrangement by which the Trust Fund will
receive a fee or other compensation for services other than as specifically
contemplated herein.
SECTION 10.3. Imposition of Tax on the Trust Fund.
(a) In the event that any tax, including interest, penalties or
assessments, additional amounts or additions to tax (collectively "Taxes"), is
imposed on REMIC I, REMIC II or REMIC III, such tax shall be charged against
amounts otherwise distributable to the Holders of the Certificates; provided,
that any taxes imposed on any net income from foreclosure property pursuant to
Code Section 860G(d) or any similar tax imposed by a state or local jurisdiction
shall instead be treated as an expense of the related REO Property in
determining Net REO Proceeds with respect to such REO Property (and until such
Taxes are paid, the Master Servicer from time to time shall withdraw from the
Collection Account amounts reasonably determined by the Special Servicer to be
necessary to pay such Taxes, which the Master Servicer shall maintain in a
separate, non-interest-bearing account, and the Master Servicer shall deposit in
the Collection Account the excess determined by the Master Servicer from time to
time of the amount in such account over the amount necessary to pay such Taxes)
and shall be paid therefrom. Except as provided in the preceding sentence, the
Trustee is hereby authorized to and shall retain or cause to be retained from
Available Funds sufficient funds to pay or provide for the payment of, and to
actually pay, such Taxes as are legally owed by REMIC I, REMIC II and REMIC III
(but such authorization shall not prevent the Trustee from contesting, at the
expense of the Trust Fund, any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings).
(b) The Trustee is hereby authorized to and shall segregate or
cause to be segregated, in a separate non-interest bearing account, (i) the net
income from any "prohibited transaction" under Code Section 860F(a) or (ii) the
amount of any contribution to REMIC I, REMIC II or REMIC III after the Startup
Day that is subject to tax under Code Section 860G(d) and use such income or
amount, to the extent necessary, to pay such tax, such amounts to be segregated
from the Collection Account with respect to any such net income of or
contribution to REMIC I and REMIC II and from the Distribution Account with
respect to any such net income of or contribution to REMIC III (and return the
balance thereof, if any, to the Collection Account or the Distribution Account,
as the case may be).
(c) The Holders of the Class R-I, Class R-II and Class R-III Certifi-
cates shall pay when due their pro rata share of any and all taxes, interest,
penalties or assessments,
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additional payments or additions to tax imposed on REMIC I, REMIC II or REMIC
III, as applicable, or their respective assets or transactions, including,
without limitation, "prohibited transaction" taxes, as defined in Section 860F
of the Code, any tax on contributions imposed by Section 860G(d) of the Code,
and any tax on "net income from foreclosure property" as defined in Section
860(G)(c) of the Code. To the extent that any such Taxes are not paid by the
Class R-I, Class R-II or Class R-III Certificateholders, respectively, and such
Taxes are paid to the Internal Revenue Service or any state or local taxing
authority, the Trustee shall retain an equal amount from future amounts
otherwise distributable to the Holders of the Class R-I, Class R-II or Class
R-III Certificates, as the case may be, and shall distribute such retained
amounts to the Holders of REMIC I Regular Interests, REMIC II Regular Interests
or REMIC III Regular Certificates, as applicable, until they are fully
reimbursed and then to the Holders of the Class R-I, Class R-II or Class R-III
Certificates, as applicable. None of the Master Servicer, the Special Servicer
and the Trustee shall be responsible for any Taxes imposed on REMIC I, REMIC II
or REMIC III, in any case, except to the extent such Taxes are attributable to a
breach of a representation or warranty of the Master Servicer or the Special
Servicer or an act or omission of the Master Servicer, the Special Servicer or
the Trustee in contravention of this Agreement, unless the Master Servicer,
Special Servicer or Trustee would be entitled to indemnification under Section
6.3 in the case of the Master Servicer or Special Servicer or Section 8.5, in
the case of the Trustee. Notwithstanding anything in this Agreement to the
contrary, in each such case, the Master Servicer and the Special Servicer shall
not be responsible for the Trustee's breaches, acts or omissions, and the
Trustee shall not be responsible for the breaches, acts or omissions of the
Master Servicer or the Special Servicer.
SECTION 10.4. Prohibited Transactions and Activities.
(a) Following the Start-up Day, the Trustee shall not, except as
expressly required by any provision of this Agreement, accept any contribution
of assets to the Trust Fund unless the Trustee shall have received an Opinion of
Counsel (the costs of obtaining such opinion to be borne by the Person
requesting such contribution) to the effect that the inclusion of such assets in
the Trust Fund will not cause REMIC I, REMIC II or REMIC III to fail to qualify
as a REMIC at any time that any Certificates are outstanding or subject REMIC I,
REMIC II or REMIC III to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Counterparts.
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 11.2. Limitation on Rights of Certificateholders.
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The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement or the Mortgage Loans, unless, with respect to this Agreement, such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates representing a majority of the aggregate Voting Rights
allocated to each affected Class of Certificates 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 30 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. It is understood and intended,
and expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever 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, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Holders of Certificates of such Class. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 11.3. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.4. Notices.
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All demands, notices and communications hereunder shall be in
writing, shall be deemed to have been given upon receipt (or, in the case of
notice by telecopy, upon confirmation of receipt) as follows:
If to the Trustee or the Fiscal Agent, to:
LaSalle Bank National Association
135 South LaSalle Street, Suite 1625
Chicago, IL 60674
Attention: Asset-Backed Securities Trust Services Group -
Commercial Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1999-C1
If to the Depositor, to:
Commercial Mortgage Acceptance Corp.
210 West 10th Street
6th Floor
Kansas City, Missouri 64105
Attention: Chief Executive Officer
Telecopy No.: (816) 435-2326
With copies to:
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108-4606
Attention: William A. Hirsch, Esq.
Telecopy No.: (816) 474-4208
If to the Master Servicer, to:
Midland Loan Services, Inc.
210 West 10th Street
6th Floor
Kansas City, Missouri 64105
Attention: Chief Executive Officer
Telecopy No.: (816) 435-2326
With copies to:
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108-4606
Attention: William A. Hirsch, Esq.
Telecopy No.: (816) 474-4208
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If to the Special Servicer, to:
ORIX Real Estate Capital Markets, LLC
1717 Main Street
Dallas, Texas, 75201
Attention: Edgar L. Smith, II
Telecopy No.: (214) 237-2034
With copies to:
ORIX Real Estate Capital Markets, LLC
1717 Main Street, 12th Floor
Dallas, Texas 75201
Attention: Paul K. Smyth
Telecopy No.: (214) 237-2040
If to the Seller (for the RFC Loans), to:
Residential Funding Corporation
8400 Normandale Lake Blvd., Suite 600
Minneapolis, MN 55437
Attn: Robert Conway
Telecopy No.: (612) 806-6877
If to the Seller (for the CIBCLoans), to:
CIBC Inc.
World Financial Center, 19th Floor
New York, NY 10281
Attn: Brian Jay Neilinger
Telecopy No.: (212) 571-4714
If to the Seller (for the Midland Loans) to:
Midland Loan Services, Inc.
210 West 10th Street
Kansas City, Missouri 64105
Attention: Chief Executive Officer
Telecopy No.: (816) 435-2326
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With copies to:
Morrison & Hecker L.L.P.
2600 Grand Avenue
Kansas City, Missouri 64108-4606
Attention: William A. Hirsch, Esq.
Telecopy No.: (816) 474-4208
If to any Certificateholder, to:
the address set forth in the
Certificate Register,
or, in the case of the parties to this Agreement, to such other address as such
party shall specify by written notice to the other parties hereto.
SECTION 11.5. 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, to the
extent permitted by applicable law, 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 11.6. Notice to the Depositor, the Operating Adviser and
Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly provide written
notice to the Depositor, the Operating Adviser and 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 merger, consolidation, resignation or termination
of the Master Servicer, Special Servicer, Trustee or Fiscal Agent;
(iv) the repurchase or substitution of Mortgage Loans pursuant to
Section 2.3;
(v) the final payment to any Class of Certificateholders;
(vi) each report to Certificateholders described in Section 4.4;
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(vii) any change in the location of the Distribution Account;
(viii) CSSA SIP Loan Set-up File, Loan Periodic Report and Bond
File electronically and any other items included in the definition of CSSA SIP
if such other items have been received in electronic format from the Master
Servicer;
(b) The Master Servicer and the Special Servicer shall promptly
furnish to the Operating Adviser and each Rating Agency copies of the following:
(i) the resignation or removal of the Trustee;
(ii) any change in the location of the Collection Account;
(iii) each of its annual statements as to compliance described in
Section 3.14;
(iv) each of its annual independent public accountants'
servicing reports described in Section 3.15.
(v) annual reports of each Borrower with respect to the net
operating income and occupancy rates required to be delivered by the related
Mortgage and actually received by the Master Servicer or the Special Servicer,
if applicable, pursuant thereto to the extent consistent with applicable law and
the related Mortgage Loan Documents.
(vi) any Officers' Certificates delivered by the Master Servicer
or the Special Servicer to the Trustee;
(vii) all site inspections;
(viii) all rent rolls and sales reports to the extent they
are sent in and requested by the Operating Advisor or a Rating Agency;
(ix) any extension or modification of a maturity date; and
(x) any modifications, waiver or amendment of any term of any
Mortgage Loan.
(c) The Special Servicer, shall furnish the Operating Adviser, the
Master Servicer and each Rating Agency with such information with respect to any
Specially Serviced Mortgage Loan as the Operating Adviser or such Rating Agency
shall request and which the Special Servicer can obtain to the extent consistent
with applicable law and the related Mortgage Loan Documents.
The Trustee, the Master Servicer and the Special Servicer, as
applicable, shall furnish to each Rating Agency with respect to each Mortgage
Loan such information as the Rating Agency shall reasonably request and which
the Trustee, Master Servicer or Special
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Servicer can reasonably provide in accordance with applicable law and without
waiving any attorney-client privilege relating to such information. The Trustee,
Master Servicer and Special Servicer, as applicable, may include any reasonable
disclaimer they deem appropriate with respect to such information.
(d) Notices to each Rating Agency shall be addressed as follows:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Commercial MBS Monitoring Department
Duff & Phelps Credit Rating Co.
55 East Monroe Street
Chicago, Illinois 60603
Attention: CMBS Monitoring Group
Fax: (312) 265-2852
or in each case to such other address as any Rating Agency shall specify by
written notice to the parties hereto.
SECTION 11.7. Amendment.
This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Special Servicer, the Trustee
and the Fiscal Agent, without the consent of any of the Certificateholders, (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein or
therein that may be inconsistent with any other provisions herein or therein or
in the Prospectus Supplement (or in the Prospectus referenced in the Prospectus
Supplement), (iii) to amend any provision hereof to the extent necessary or
desirable to maintain the rating or ratings assigned to each of the Classes of
REMIC III Regular Certificates by each Rating Agency, or (iv) to make any other
provisions with respect to matters or questions arising under this Agreement
which (x) shall not be inconsistent with the provisions of this Agreement, (y)
shall not result in the downgrading, withdrawal or qualification (if applicable)
of the rating or ratings then assigned to any outstanding Class of Certificates,
as confirmed by a Rating Agency Confirmation (the cost, if any, of obtaining
such confirmation shall be paid by the Person requesting such amendment unless
such amendment is in the best interest of the Trust Fund in which case it will
be paid by the Trust Fund), and (z) shall not adversely affect in any material
respect the interests of any Certificateholder.
This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Special Servicer, the
Trustee and the Fiscal Agent with the consent of the Holders of each of the
Classes of REMIC III Regular Certificates representing not less than 51% of the
aggregate Voting Rights allocated to all Classes of Certificates 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 Certificateholders; provided, however, that no such
amendment shall:
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(i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of each affected Certificateholder;
(ii) change the percentages of Voting Rights of Holders of Cer-
tificates which are required to consent to any action or inaction under this
Agreement, without the consent of the Holders of all Certificates then
outstanding; or
(iii) alter the obligations of the Master Servicer, the Trustee
or the Fiscal Agent to make a P&I Advance or Servicing Advance without the
consent of the Holders of all Certificates representing all of the Voting Rights
of the Class or Classes affected thereby.
Further, the Depositor, the Master Servicer, the Special Servicer,
the Trustee and the Fiscal Agent, at any time and from time to time, without the
consent of the Certificateholders, may amend this Agreement or any Custodial
Agreement to modify, eliminate or add to any of its provisions to such extent as
shall be necessary to maintain the qualification of the Trust REMICs as three
separate REMICs, or to prevent the imposition of any additional material state
or local taxes, at all times that any Certificates are outstanding; provided,
however, that such action, as evidenced by an Opinion of Counsel (obtained at
the expense of the Trust Fund), is necessary or helpful to maintain such
qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
In the event that neither the Depositor nor the successor thereto, if
any, is in existence, any amendment under this Section 11.7 shall be effective
with the consent in writing of the Trustee, the Fiscal Agent, the Master
Servicer, the Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.7,
Certificates registered in the name of the Depositor, the Master Servicer, the
Special Servicer or any of their respective Affiliates shall be entitled to the
same Voting Rights with respect to matters described above as they would if any
other Person held such Certificates.
Promptly after the execution of any amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder, the Operating Adviser and each Rating Agency (with a copy of
such amendment to each Rating Agency).
It shall not be necessary for the consent of Certificateholders under
this Section 11.7 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
method of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe; provided, however , that such method
shall always be by affirmation and in writing.
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Notwithstanding any contrary provision of this Agreement, no
amendment shall be made to this Agreement or any Custodial Agreement unless the
Master Servicer and the Trustee shall have received an Opinion of Counsel, at
the expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in clause (i) or (ii) of the first
sentence of this Section, then at the expense of the Trust Fund), to the effect
that such amendment will not cause REMIC I, REMIC II or REMIC III 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 (other than a tax
at the highest marginal corporate tax rate on net income from foreclosure
property).
Prior to the execution of any amendment to this Agreement or any
Custodial Agreement, the Trustee, the Fiscal Agent, the Special Servicer and the
Master Servicer shall be entitled to receive and rely conclusively upon an
Opinion of Counsel, at the expense of the party requesting such amendment (or,
if such amendment is required by any Rating Agency to maintain the rating issued
by it or requested by the Trustee for any purpose described in clause (i), (ii)
or (iv) (which do not modify or otherwise relate solely to the obligations,
duties or rights of the Trustee) of the first sentence of this Section, then at
the expense of the Trust Fund) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
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SECTION 11.8. Confirmation of Intent.
It is the express intent of the parties hereto that the conveyance of
the Trust Fund (including the Mortgage Loans) by the Depositor to the Trustee on
behalf of Certificateholders as contemplated by this Agreement and the sale by
the Depositor of the Certificates be, and be treated for all purposes as, a sale
by the Depositor of the undivided portion of the beneficial interest in the
Trust Fund represented by the Certificates. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the Trust Fund by the
Depositor to the Trustee to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the intent of the parties, the Trust
Fund is held to continue to be property of the Depositor then (a) this Agreement
shall also be deemed to be a security agreement under applicable law; (b) the
transfer of the Trust Fund provided for herein shall be deemed to be a grant by
the Depositor to the Trustee on behalf of Certificateholders of a first priority
security interest in all of the Depositor's right, title and interest in and to
the Trust Fund and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including, without limitation, all amounts from time to time held or
invested in the Collection Account, the REO Accounts, the Reserve Accounts and
the Distribution Account, whether in the form of cash, instruments, securities
or other property; (c) the possession by the Trustee (or the Custodian or any
other agent on its behalf) of Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the Missouri and Illinois Uniform
Commercial Codes; and (d) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from Persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Trustee pursuant to any provision hereof shall
also be deemed to be an assignment of any security interest created hereby. The
Depositor shall, and upon the request of the Master Servicer, the Trustee shall,
to the extent consistent with this Agreement (and at the expense of the Trust
Fund), take such actions as may be necessary to ensure that, if this Agreement
were deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement. It is the intent of the parties that such a security interest would
be effective whether any of the Certificates are sold, pledged or assigned.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Special
Servicer, the Trustee and the Fiscal Agent have caused their names to be signed
to this Pooling and Servicing Agreement by their respective officers thereunto
duly authorized as of the day and year first above written.
COMMERCIAL MORTGAGE ACCEPTANCE
CORP., as Depositor
By: /s/ Charles J. Sipple
--------------------------------
Name: Charles J. Sipple
Title: Senior Vice President
MIDLAND LOAN SERVICES, INC.,
as Master Servicer
By: /s/ Lawrence D. Ashley
--------------------------------
Name: Lawrence D. Ashley
Title: Senior Vice President
ORIX REAL ESTATE CAPITAL CAPITAL MARKETS, LLC
(formerly Banc One Mortgage Capital Markets,
LLC), as Special Servicer
By: /s/ Edgar L. Smith II
--------------------------------
Name: Edgar L. Smith
Title: Chief Operating Officer
LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By: /s/ Russell M Goldenberg
--------------------------------
Name: Russell M. Goldenberg
Title: Group Senior Vice President
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ABN AMRO BANK N.V., as Fiscal Agent
By: /s/ Irene Pazik
--------------------------------
Name: Irene Pazik
Title: Vice President
By: /s/ Robert C. Smolka
--------------------------------
Name: Robert C. Smolka
Title: Group Vice President
180
