SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 23, 1996
TRUST CREATED BY MIDLAND REALTY ACCEPTANCE CORP. (under a Pooling
and Servicing Agreement dated as of December 1, 1996, which Trust
is the Issuer of Commercial Mortgage Pass-Through Certificates,
Series 1996-C2)
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
333-15893-1 36-4122515
(Commission File Number) (IRS Employer Identification No.)
135 South LaSalle Street, Suite 1740, Chicago, IL 60603
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (800) 246-5761
Not applicable
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
Exhibit 1 Underwriting Agreement Relating to Midland Realty
Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1996-C2
Exhibit 4 Pooling and Servicing Agreement Relating to Midland
Realty Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1996-C2
Exhibit 99 Pricing Letter Relating to Midland Realty Acceptance Corp.,
Commercial Mortgage Pass-Through Certificates, Series
1996-C2
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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.
MIDLAND LOAN SERVICES, L.P., not in its individual
capacity, but solely as duly authorized agent of the
Registrant pursuant to Section 3.20 of the Pooling and
Servicing Agreement, dated as of September 1, 1996
By: Midland Data Systems, Inc., its General Partner
By: /s/ Alan L. Atterbury
Alan L. Atterbury, President
Date: January 6, 1997
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EXHIBIT INDEX
Exhibit No. Description
1 Underwriting Agreement
Relating to Midland
Realty Acceptance Corp.,
Commercial Mortgage
Pass-Through
Certificates, Series
1996-C2
4 Pooling and Servicing
Agreement Relating to
Midland Realty
Acceptance Corp.,
Commercial Mortgage
Pass-Through
Certificates, Series
1996-C2
99 Pricing Letter Relating
to Midland Realty
Acceptance Corp., Commercial
Mortgage Pass-Through
Certificates, Series 1996-C2
EXECUTION
MIDLAND REALTY ACCEPTANCE CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-C2, CLASS A-1, CLASS A-2, CLASS B,
CLASS C, CLASS D AND CLASS E
UNDERWRITING AGREEMENT
New York, New York
As of December 18, 1996
Prudential Securities Incorporated
One New York Plaza, 18th Floor
New York, New York 10292-2018
Deutsche Morgan Grenfell Inc.
31 West 52nd Street
New York, New York 10019
Llama Company, L.P.
One McIlroy Plaza, Suite 302
Fayetteville, Arkansas 72701
Ladies and Gentlemen:
Midland Realty Acceptance Corp., a Missouri corporation (the "Company"),
proposes to issue and sell, pursuant to the terms of this Underwriting Agreement
(this "Underwriting Agreement"), to Prudential Securities Incorporated ("PSI"),
Deutsche Morgan Grenfell Inc. ("DMG") and Llama Company, L.P. ("Llama"), as
underwriters (in such capacity, each an "Underwriter" and together, the
"Underwriters"), the Midland Realty Acceptance Corp., Commercial Mortgage
Pass-Through Certificates, Series 1996-C2, Class A-1, Class A-2, Class B, Class
C, Class D and Class E (collectively, the "Publicly Offered Certificates"). The
Publicly Offered Certificates constitute a portion of the Midland Realty
Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series 1996-C2
(the "Certificates"), consisting of sixteen classes, Class A-1, Class A-2, Class
A-EC, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L-1, Class L-2, Class R-I and Class R-II. The Certificates are
being issued pursuant to that certain Pooling and Servicing Agreement, dated as
of December 1, 1996 (the "Pooling and Servicing Agreement"; capitalized terms
used herein without definitions shall have the meanings given such terms in the
Pooling and Servicing
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Agreement), by and among the Company, as the Depositor, Midland Loan Services,
L.P., a Missouri limited partnership ("Midland"), as Servicer and as Special
Servicer, LaSalle National Bank, as Trustee, and ABN AMRO Bank N.V., as Fiscal
Agent, and the Publicly Offered Certificates have the respective initial
aggregate approximate Certificate Balances set forth in the Final Prospectus (as
hereinafter defined). The Certificates will represent, in the aggregate, the
entire beneficial ownership interest in a separate trust fund (the "Trust Fund")
to be created by the Company. The Trust Fund will consist primarily of a pool
(the "Mortgage Pool") of 136 "whole" mortgage loans (the "Mortgage Loans"),
secured by first liens on commercial and multifamily residential properties
(each, a "Mortgaged Property").
The sale of the Publicly Offered Certificates is to occur simultaneously
with the separate offering of the Midland Realty Acceptance Corp., Commercial
Mortgage Pass-Through Certificates, Series 1996-C2, Class A-EC, Class F, Class
G, Class H, Class J, Class K, Class L-1, Class L-2, Class R-I and Class R-II
(the "Privately Placed Certificates"), which are being issued pursuant to the
Pooling and Servicing Agreement and sold to PSI, DMG and Llama, as placement
agents (in such capacity, each a "Placement Agent" and together, the "Placement
Agents"), pursuant to that certain Certificate Purchase Agreement, dated as of
December 23, 1996 (the "Certificate Purchase Agreement"), among the Company and
the Placement Agents. The Placement Agents will privately offer such Privately
Placed Certificates pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act") and
Regulation D thereunder, as further described in that certain Private Placement
Memorandum dated December 23, 1996 (the "Private Placement Memorandum").
The Company will purchase (a) the Midland Mortgage Loans from Midland and
Midland Commercial Financing Corp., a Missouri corporation ("MCFC"), pursuant to
that certain Mortgage Loan Purchase and Sale Agreement, dated December 23, 1996
(the "MCFC Mortgage Loan Purchase Agreement"), among Midland, MCFC and the
Company; (b) the GACC Mortgage Loans from German American Capital Corporation, a
Maryland corporation ("GACC"), pursuant to that certain Mortgage Loan Purchase
and Sale Agreement, dated December 23, 1996 (the "GACC Mortgage Loan Purchase
Agreement"), between GACC and the Company; and (c) the BCMC Mortgage Loans from
MCFC pursuant to that certain Mortgage Loan Purchase and Sale Agreement, dated
December 23, 1996 (the "BCMC/MCFC Mortgage Loan Purchase Agreement"), between
MCFC and the Company, and MCFC will purchase the BCMC Mortgage Loans from Boston
Capital Mortgage Company, Limited Partnership, a Massachusetts limited
partnership ("BCMC"), pursuant to that certain Mortgage Loan Purchase and Sale
Agreement, dated December 23, 1996 (the "BCMC Mortgage Loan Purchase
Agreement"), between BCMC and MCFC. (The MCFC Mortgage Loan Purchase Agreement,
the GACC Mortgage Loan Purchase Agreement, the BCMC Mortgage Loan Purchase
Agreement and the BCMC/MCFC Mortgage Loan Purchase Agreement are collectively
referred to herein as the "Mortgage Loan Purchase Agreements.") Pursuant to the
Pooling and Servicing Agreement, the Mortgage Loans will be transferred by the
Company to the Trustee, for the benefit of the Certificateholders, in exchange
for the Certificates.
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Subject to the terms and conditions and in reliance on the representations
and warranties herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the percentage interests in the respective Classes of Publicly Offered
Certificates (in the principal or notional amount set forth opposite such
Underwriter's name in the Prospectus Supplement) at the purchase price for each
such Class as set forth in a separate writing between the Company and the
Underwriters (the "Pricing Letter").
1. Offering by the Underwriters. Upon the execution of this Underwriting
Agreement by all the parties hereto and the authorization by the Underwriters of
the release of the Publicly Offered Certificates, the Underwriters propose to
offer for sale to the public the Publicly Offered Certificates at the price and
upon the terms set forth in the Final Prospectus (as hereinafter defined).
2. Conditions of the Underwriters' Obligations. The obligation of the
Underwriters hereunder to purchase the Publicly Offered Certificates shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein as of the date hereof and as of the Closing Date, to
the accuracy of the statements of the Company, Midland and any of their
Affiliates, made in any certificate pursuant to the provisions hereof, to the
performance by the Company in all material respects of its obligations hereunder
and to the following additional conditions:
(a) All actions required to be taken and all filings required to be
made by or on behalf of the Company under the 1933 Act and the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the sale of the
Publicly Offered Certificates shall have been duly taken or made.
(b) The Underwriters shall have received on the Closing Date an
Officer's Certificate of the Company, dated the Closing Date, to the effect
that: (i) no stop order suspending the effectiveness of the Company's
registration statement (Registration No. 333-15893) (the "Registration
Statement") shall be in effect, (ii) no proceedings for such purpose shall
be pending before or threatened by the Securities and Exchange Commission
(the "Commission"), or by any authority administering any state securities
or "Blue Sky" laws, (iii) any requests for additional information on the
part of the Commission shall have been complied with to the Underwriters'
reasonable satisfaction, (iv) since the respective dates as of which
information is given in the Registration Statement, the Prospectus, dated
as of December 18, 1996 (the "Prospectus") and the Prospectus Supplement,
dated as of December 18, 1996 (the "Prospectus Supplement"; together with
the Prospectus, the "Final Prospectus") and except as otherwise stated
therein, there shall have been no material adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory situation or business
prospects of the Company, (v) there are no material actions, suits or
proceedings pending (or, to the best knowledge of the Company, threatened)
before any court or governmental agency, authority or
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body, affecting the Company or the transactions contemplated by this
Underwriting Agreement and (vi) the Company is not in violation of its
Articles of Incorporation, as amended, or its by-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, pooling and servicing agreement,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be bound, which
violations or defaults separately or in the aggregate would have a material
adverse effect on the Company.
(c) Subsequent to the execution of this Underwriting Agreement, there
shall not have occurred any of the following: (i) if at or prior to the
Closing Date, trading in securities on the New York Stock Exchange, London
Stock Exchange or Tokyo Stock Exchange shall have been suspended or any
material limitation in trading in securities generally shall have been
established on such exchange, or a banking moratorium shall have been
declared by New York or United States authorities or (ii) if at or prior to
the Closing Date, there shall have been an outbreak of hostilities between
the United States and any foreign power, or of any other insurrection or
armed conflict involving the United States which results in the declaration
of a national emergency or war, and, in the reasonable opinion of the
Underwriters, makes it impracticable or inadvisable to offer or sell the
Publicly Offered Certificates.
(d) The Underwriters shall have received written notification from the
Rating Agencies to the effect that the Publicly Offered Certificates have
been rated no lower than the required ratings set forth in the Final
Prospectus, and as of the Closing Date, such rating or ratings shall not
have been rescinded and there shall not have been any downgrading, or
public notification of a possible downgrading, or public notification of a
possible change without indication of direction.
(e) The Publicly Offered Certificates, the Mortgage Loan Purchase
Agreements, the Pooling and Servicing Agreement, the Certificate Purchase
Agreement and this Underwriting Agreement shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect.
(f) The Company shall have delivered to the Underwriters an Officer's
Certificate of the Company, dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Final Prospectus and
this Underwriting Agreement and that: (i) the representations and
warranties of the Company in this Underwriting Agreement are true and
correct in all material respects at and as of the Closing Date with the
same effect as if made on the Closing Date, (ii) the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date and (iii) nothing
has come to the attention of the signer that would lead the signer to
believe that the Final Prospectus contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under
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which they were made, not misleading, except that no such representation or
warranty shall be required as to statements contained in or omitted from
the Final Prospectus in reliance upon and in conformity with Underwriter
Provided Information (as hereinafter defined) (except to the extent that
any untrue statement or alleged untrue statement or omission or alleged
omission is a result of Seller Provided Information (as hereinafter
defined) which is not accurate and complete in all material respects).
(g) The Underwriters shall have received from Morrison & Hecker L.L.P.,
counsel to the Company, a favorable opinion, dated the Closing Date, and
satisfactory in form and substance to counsel for the Underwriters. With
respect to such opinion, such counsel (i) may express its reliance as to
factual matters on the representations and warranties in this Underwriting
Agreement, the Pooling and Servicing Agreement and the Mortgage Loan
Purchase Agreements made by, and on certificates or other documents
furnished by officers of, the parties to such agreements, (ii) may assume
the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the
Company, Midland, MCFC and any of their Affiliates, and (iii) may render
such opinion only as to the federal laws of the United States of America
and the laws of the States of Missouri and New York.
(h) The Underwriters shall have received from O'Melveny & Myers LLP,
counsel to the Underwriters, such opinion, dated the Closing Date, with
respect to the issuance and sale of the Publicly Offered Certificates, the
Final Prospectus and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them
to pass upon such matters.
(i) The Underwriters shall have received from Ernst & Young, LLP,
certified public accountants, a letter dated the Closing Date and
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, to the effect that such accountants have performed certain
specified procedures as a result of which they confirmed certain
information of an accounting, financial or statistical nature set forth in
the Final Prospectus.
(j) The Underwriters shall have received from Morrison & Hecker L.L.P.,
counsel to Midland and MCFC, a favorable opinion, dated the Closing Date,
in form and substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that (1) the Pooling and Servicing Agreement
has been duly authorized, executed and delivered by Midland, as the
Servicer and the Special Servicer, and constitutes the legal, valid,
binding and enforceable agreement of Midland, and (2) the MCFC Mortgage
Loan Purchase Agreement has been duly authorized, executed and delivered by
Midland and MCFC and constitutes the legal, valid, binding and enforceable
agreement of Midland and MCFC subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights in general and by general
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principles of equity regardless of whether enforcement is considered in a
proceeding in equity or at law, and as to such other matters as may be
agreed upon by the Underwriters, Midland and MCFC. With respect to such
opinion, such counsel (i) may express its reliance as to factual matters on
the representations and warranties made in such agreements by, and on
certificates or other documents furnished to the Underwriters by officers
of the parties to the Pooling and Servicing Agreement, (ii) may assume the
due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the Company, Midland,
MCFC and any of their Affiliates and (iii) may render such opinion only as
to the federal laws of the United States of America and the laws of the
States of Missouri and New York.
(k) The Underwriters shall have received from Cadwalader, Wickersham &
Taft, counsel to GACC in connection with the GACC Mortgage Loan Purchase
Agreement, a favorable opinion, dated the Closing Date, in form and
substance satisfactory to the Underwriters and counsel for the
Underwriters, to the effect that the GACC Mortgage Loan Purchase Agreement
has been duly authorized, executed and delivered by GACC and constitutes
the legal, valid, binding and enforceable agreement of GACC, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights in general and by general
principles of equity regardless of whether enforcement is considered in a
proceeding in equity or at law, and as to such other matters as may be
agreed upon by the Underwriters and GACC. With respect to such opinion,
such counsel (i) may express its reliance as to factual matters on the
representations and warranties in the GACC Mortgage Loan Purchase Agreement
made by, and on certificates or other documents furnished by officers of
the parties to such agreement, (ii) may assume the due authorization,
execution and delivery of the instruments and documents referred to therein
by the parties thereto other than GACC and its Affiliates, and (iii) may
render such opinion only as to the laws of the States of New York and
Maryland and the federal laws of the United States of America.
(l) The Underwriters shall have received from Battle Fowler, counsel to
BCMC in connection with the BCMC Mortgage Loan Purchase Agreement, a
favorable opinion, dated the Closing Date, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters, to the
effect that the BCMC Mortgage Loan Purchase Agreement has been duly
authorized, executed and delivered by BCMC and constitutes the legal,
valid, binding and enforceable agreement of BCMC, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights in general and by general
principles of equity regardless of whether enforcement is considered in a
proceeding in equity or at law, and as to such other matters as may be
agreed upon by the Underwriters and BCMC. With respect to such opinion,
such counsel (i) may express its reliance as to factual matters on the
representations and warranties in the BCMC Mortgage Loan Purchase Agreement
made by, and on certificates or other documents furnished by officers of
the parties to such
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agreement, (ii) may assume the due authorization, execution and delivery of
the instruments and documents referred to therein by the parties thereto
other than BCMC and its Affiliates, and (iii) may render such opinion only
as to the laws of the States of New York and Massachusetts and the federal
laws of the United States of America.
(m) The Underwriters shall have received from each of (i) Thomas A.
Rosiello, Esq., Senior Counsel of the Trustee and the Fiscal Agent and (ii)
Latham & Watkins, counsel to the Trustee and the Fiscal Agent, a favorable
opinion, dated the Closing Date, in form and substance satisfactory to the
Underwriters and counsel for the Underwriters, to the effect that the
Pooling and Servicing Agreement has been duly authorized, executed and
delivered by each of the Trustee and the Fiscal Agent, and constitutes the
legal, valid, binding and enforceable agreement of each of the Trustee and
the Fiscal Agent, subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights in general and by general principles of equity regardless of whether
enforcement is considered in a proceeding in equity or at law, and as to
such other matters as may be agreed upon by the Underwriters, the Trustee
and the Fiscal Agent.
(n) All proceedings in connection with the transactions contemplated by
this Underwriting Agreement and all documents incident hereto shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, and the Underwriters and such counsel shall have received
such information, certificates and documents as the Underwriters or such
counsel may have reasonably requested.
(o) The Underwriters shall have received a copy of the Letter of
Representations of the Company to The Depository Trust Company with respect
to the Publicly Offered Certificates.
(p) All conditions to the obligation of the Placement Agents pursuant
to Section 4 of the Certificate Purchase Agreement shall have been
satisfied.
(q) The Company shall have furnished such further information,
certificates, documents and opinions as the Underwriters may reasonably
request.
If any of the conditions specified in this Section 2 shall not have been
fulfilled in all material respects when and as provided in this Underwriting
Agreement, if the Company is in breach of any covenants or agreements contained
herein or if any of the opinions and certificates referred to above or elsewhere
in this Underwriting Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, this Underwriting Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Underwriters.
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3. Covenants of the Company. In further
consideration of the agreements of the Underwriters
contained in this Underwriting Agreement, the Company
covenants as follows:
(a) The Company shall furnish each Underwriter, without charge, copies
of the Registration Statement and any amendments thereto including exhibits
and as many copies of the Final Prospectus and any supplements and
amendments thereto as such Underwriter may from time to time reasonably
request.
(b) The Company will not file any amendment to the Registration
Statement or any supplement to the Prospectus of which each Underwriter
shall not previously have been advised and furnished with a copy a
reasonable time prior to the proposed filing or to which either Underwriter
shall have reasonably objected. The Company will use its best efforts to
cause any post-effective amendment to the Registration Statement to become
effective as promptly as possible. During the time when a prospectus is
required to be delivered under the 1933 Act, the Company will comply so far
as it is able with all requirements imposed upon it by the 1933 Act and the
rules and regulations thereunder to the extent necessary to permit the
continuance of sales or of dealings in the Publicly Offered Certificates in
accordance with the provisions hereof and of the Final Prospectus, and the
Company will prepare and file with the Commission, promptly upon request by
either Underwriter, any amendments to the Registration Statement or
amendments or supplements to the Prospectus which may be necessary or
advisable in connection with the distribution of the Publicly Offered
Certificates by the Underwriters, and will use its best efforts to cause
the same to become effective as promptly as possible. The Company will
advise the Underwriters, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement or any amended
Registration Statement has become effective or any amendment or supplement
to the Final Prospectus or any amended Prospectus has been filed. The
Company will advise the Underwriters, promptly after it receives notice or
obtains knowledge thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
order preventing or suspending the use of any preliminary prospectus
supplement or the Final Prospectus, or the suspension of the qualification
of the Publicly Offered Certificates for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose, or of any request made by the Commission for the amending or
supplementing of the Registration Statement or the Final Prospectus or for
additional information, and the Company will use its best efforts to
prevent the issuance of any such stop order or any order suspending any
such qualification, and if any such order is issued, to obtain the lifting
thereof as promptly as possible.
(c) If, at any time when a prospectus relating to the Publicly Offered
Certificates is required to be delivered under the 1933 Act, any event
occurs as a result of which the Final Prospectus would include any untrue
statement of a material fact, or omit to state any material fact required
to be stated therein or necessary to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary for any other reason to amend
or supplement the Final Prospectus to comply with the 1933 Act, to promptly
notify the Underwriters thereof and upon either Underwriter's request to
prepare and file with the Commission, at the Company's own expense, an
amendment or supplement which will correct such statement or omission or
any amendment which will effect such compliance.
(d) During the period when a prospectus is required by law to be
delivered in connection with the sale of the Publicly Offered Certificates
pursuant to this Underwriting Agreement, the Company will file, on a timely
and complete basis, all documents that are required to be filed by the
Company with the Commission pursuant to Sections 13, 14 or 15(d) of the
1934 Act.
(e) The Company shall qualify the Publicly Offered Certificates for
offer and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Underwriters shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in connection with
such qualification of the eligibility of the Publicly Offered Certificates
for investment under the laws of such jurisdictions as the Underwriters may
designate; provided that in connection therewith the Company shall not be
required to qualify to do business or to file a general consent to service
of process in any jurisdiction.
(f) For so long as any of the Publicly Offered Certificates remain
outstanding, to furnish to each Underwriter upon request in writing copies
of such financial statements and other periodic and special reports as the
Company may from time to time distribute generally to its creditors or the
holders of the Publicly Offered Certificates and to furnish to each
Underwriter copies of each annual or other report the Company shall be
required to file with the Commission.
(g) To the extent, if any, that the rating provided with respect to the
Publicly Offered Certificates by the rating agency or agencies that
initially rate the Publicly Offered Certificates is conditional upon the
furnishing of documents or the taking of any other actions by the Company,
the Company shall use its best efforts to furnish such documents and take
any such other actions.
(h) The Company will enter into the Certificate
Purchase Agreement, the Mortgage Loan Purchase
Agreements and the Pooling and Servicing Agreement on
or prior to the Closing Date.
4. Representations and Warranties of the Company.
The Company represents and warrants to each Underwriter
that:
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(a) The Registration Statement on Form S-3 (No. 333-15893) including
the Prospectus, has become effective. No stop order suspending the
effectiveness of such Registration Statement has been issued and no
proceeding for that purpose has been initiated or, to the best knowledge of
the Company, threatened by the Commission. The Prospectus Supplement will
be filed with the Commission pursuant to Rule 424 under the 1933 Act. The
conditions to the use of a registration statement on Form S-3 under the
1933 Act, as set forth in the General Instructions on Form S-3, and the
conditions of Rule 415 under the 1933 Act, have been satisfied with respect
to the Company and the Registration Statement. There are no contracts or
documents of the Company that are required to be filed as exhibits to the
Registration Statement pursuant to the 1933 Act or the rules and
regulations thereunder that have not been so filed.
(b) (i) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all material
respects to the requirements of the 1933 Act and the rules and regulations
thereunder, and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; (ii) on the date of this Underwriting
Agreement, the Registration Statement and the Final Prospectus conform, and
as of the Closing Date, the Registration Statement and the Final
Prospectus, as amended or supplemented, if applicable, will conform in all
material respects to the requirements of the 1933 Act and the rules and
regulations thereunder; and (iii) on the date of this Underwriting
Agreement, the Final Prospectus does not include, and as of the Closing
Date, the Final Prospectus, as amended or supplemented, if applicable, will
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing does not apply
to statements or omissions in any of such documents made in reliance upon
and in conformity with Underwriter Provided Information (except to the
extent that any untrue statement or alleged untrue statement or omission or
alleged omission is a result of Seller Provided Information which is not
accurate and complete in all material respects).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as otherwise stated
therein, there has been no material adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory situation or business
prospects of the Company, whether or not arising in the ordinary course of
business of the Company.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Missouri. The
Company has all requisite power and authority (corporate and other) and all
requisite authorizations, approvals, order, licenses, certificates and
permits of and from all governmental or regulatory officials and bodies to
own its properties, to conduct its business as described
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in the Registration Statement and the Final Prospectus and to execute,
deliver and perform this Underwriting Agreement, the Certificate Purchase
Agreement, the Pooling and Servicing Agreement and the Mortgage Loan
Purchase Agreements, except (i) such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution by the Underwriters of the Publicly Offered Certificates and
by the Placement Agents of the Privately Placed Certificates and (ii) for
such authorizations, approvals, orders, licenses, certificates and permits
the failure of which to obtain would not have a material adverse affect on
the Company. All such authorizations, approvals, orders, licenses,
certificates and permits are in full force and effect and contain no unduly
burdensome provisions and, except as set forth or contemplated in the
Registration Statement or the Final Prospectus, there are no legal or
governmental proceedings pending or, to the best knowledge of the Company,
threatened that would result in a modification, suspension or revocation
thereof that would have a material adverse affect on the Company.
(e) The Publicly Offered Certificates have been duly authorized, and
when they are issued and delivered pursuant to this Underwriting Agreement
in exchange for the purchase price thereof, they will have been duly
executed, issued and delivered and will be entitled to the benefits
provided by the Pooling and Servicing Agreement, subject, as to
enforcement, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting the rights of creditors generally, and
to general principles of equity (regardless of whether considered in a
proceeding in equity or at law), and will conform in substance to the
description thereof contained in the Registration Statement and the Final
Prospectus, and will in all material respects be in the form contemplated
by the Pooling and Servicing Agreement.
(f) This Underwriting Agreement has been duly authorized, executed and
delivered by the Company. Each of the Pooling and Servicing Agreement, the
Certificate Purchase Agreement and the Mortgage Loan Purchase Agreements,
when executed and delivered as contemplated hereby, will have been duly
authorized, executed and delivered by the Company. This Underwriting
Agreement constitutes, and each of the Pooling and Servicing Agreement, the
Certificate Purchase Agreement and the Mortgage Loan Purchase Agreements
when so executed and delivered will constitute, a legal, valid, binding and
enforceable agreement of the Company, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding in equity or at
law.
(g) As of the Closing Date, the Publicly Offered Certificates, the
Pooling and Servicing Agreement, the Mortgage Loan Purchase Agreements and
each of the Mortgage Loans will each conform in all material respects to
the respective descriptions thereof contained in the Final Prospectus, and
on the Closing Date, the Company (pursuant to the Pooling and Servicing
Agreement) will assign to the Trustee for the
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<PAGE>
benefit of the Certificateholders of the Publicly Offered Certificates,
certain representations and warranties with respect to the Mortgage Loans
made by the related Mortgage Loan Seller to the Company in the applicable
Mortgage Loan Purchase and Sale
Agreement.
(h) No filing or registration with, or notice to, or consent, approval,
non- disapproval, authorization or order or other action of, any court or
governmental authority or agency is required for the consummation by the
Company of the transactions contemplated by this Underwriting Agreement or
the Pooling and Servicing Agreement, except (i) such as have been obtained,
(ii) such as may be required under the 1933 Act, the rules and regulations
thereunder, or state securities or "Blue Sky" laws, in connection with the
purchase and distribution of the Publicly Offered Certificates by the
Underwriters or of the Privately Placed Certificates by the Placement Agent
and (iii) any the failure of which to obtain would not have a material
adverse affect on the Company.
(i) Other than as set forth or contemplated in the Final Prospectus,
there are no legal or governmental proceedings pending to which the Company
is a party or of which any property of the Company is the subject which, if
determined adversely to the Company would individually or in the aggregate
have a material adverse effect on the condition (financial or otherwise),
earnings, affairs, business or business prospects of the Company and, to
the Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(j) As of the Closing Date, each of the Mortgage Loans will meet the
criteria for selection described in the Final Prospectus, and at the
Closing Date, the representations and warranties made by the Company in the
Pooling and Servicing Agreement will be true and correct as of the date
made.
(k) At the time of execution and delivery of the Pooling and Servicing
Agreement, (i) the Company will have good and marketable title to the
Mortgage Loans, free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest (collectively
"Liens"), and 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 Publicly Offered Certificates, (ii) the Company will have the power
and authority to transfer the Publicly Offered Certificates to the
Underwriters and (iii) upon execution and delivery to the Trustee of the
Pooling and Servicing Agreement and delivery to the Underwriters of the
Publicly Offered Certificates, and delivery to the Placement Agents of the
Privately Placed Certificates, the Trustee will have good and marketable
title to the Mortgage Loans and the Underwriters will have good and
marketable title to the Publicly Offered Certificates, in each case free
and clear of any Liens.
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<PAGE>
(l) Neither the Company nor the Trust Fund is, and neither (i) the
issuance and sale of the Publicly Offered Certificates in the manner
contemplated by the Final Prospectus, nor (ii) the activities of the Trust
Fund pursuant to the Pooling and Servicing Agreement will cause the Company
or the Trust Fund to be an "investment company" or under the control of an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(m) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended, and the Trust Fund is
not required to be registered under the Investment Company Act of 1940, as
amended.
(n) Any taxes, fees and other governmental charges in connection with
the execution, delivery and issuance of this Underwriting Agreement, the
Pooling and Servicing Agreement and the Publicly Offered Certificates have
been or will be paid at or
prior to the Closing.
5. Indemnification and Contribution. (a) The Company and Midland, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
liable under the 1933 Act, the 1934 Act, or other federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Final Prospectus or in any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
agrees to reimburse such indemnified party for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that neither the
Company nor Midland will be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with Underwriter Provided Information
(except to the extent that any untrue statement or alleged untrue statement or
omission or alleged omission is a result of Seller Provided Information which is
not accurate and complete in all material respects); provided, further, that
neither the Company nor Midland will be liable to DMG (but will be liable to the
remaining Underwriters) in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with GACC Provided Information; and
provided, further, that neither the Company nor Midland will be liable to Llama
(but will be liable to the remaining Underwriters) in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in
NY1-473497
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<PAGE>
reliance upon and in conformity with BCMC Provided Information. This indemnity
will be in addition to any liability that the Company or Midland may otherwise
have.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the
same extent as the foregoing indemnity from the Company and Midland to the
Underwriters, but only with reference to Underwriter Provided Information
(except to the extent that any untrue statement or alleged untrue statement or
omission or alleged omission is a result of Seller Provided Information which is
not accurate and complete in all material respects). This indemnity will be in
addition to any liability that such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof,
but failure to notify the indemnifying party of any such claims shall not
relieve the indemnifying party of any liability that it may have to any
indemnified party except to the extent that the indemnifying party was
prejudiced by such failure. The indemnifying party will be entitled to
participate at its own expense in the defense or, if it so elects, to assume the
defense of any suit brought to enforce any such liability, but, if the
indemnifying party elects to assume the defense, such defense shall be conducted
by legal counsel reasonably acceptable to the indemnified party. In the event
the indemnifying party elects to assume the defense of any such suit and retain
such legal counsel, any indemnified party that is a defendant in the suit may
retain additional legal counsel but shall bear the legal fees and disbursements
of such legal counsel unless (i) the indemnifying party and such indemnified
party shall have mutually agreed to the retention of such legal counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and such indemnified party, and
representation of both such parties by the same legal counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
legal fees and disbursements of more than one legal counsel for all the
indemnified parties and that all such legal fees and disbursements shall be
reimbursed by the indemnifying party as they are incurred. The indemnifying
party shall not be liable to indemnify any person for any settlement of any
claim effected without its prior written consent. The indemnifying party shall
not, without the prior written consent of any indemnified party, which consent
will not be unreasonably withheld, effect any settlement of any pending or
threatened proceeding in respect of which such indemnified party is a party and
indemnity is or could have been sought hereunder by such indemnified party.
(d) Not later than 10:30 a.m. Kansas City time, on the business day before
the date on which a Current Report on Form 8-K relating to the Certificates is
required to be filed by the Company with the Commission pursuant to Section 3(d)
hereof, each Underwriter shall
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<PAGE>
deliver to the Company one complete copy in electronic format of all materials,
if any, provided by such Underwriter to prospective investors in such
Certificates which constitute "Computational Materials" within the meaning of
the no-action letter dated May 20, 1994, issued by the Division of Corporation
Finance of the Commission to Kidder, Peabody Acceptance Corporation I, Kidder,
Peabody & Co. Incorporated, and Kidder Structured Asset Corporation, the
no-action letter dated May 27, 1994, issued by the Division of Corporation
Finance of the Commission to the Public Securities Association and the no-action
letter of February 17, 1995 issued by the Commission to the Public Securities
Association (collectively, the "Kidder/PSA Letters") and the filing of which is
a condition of the relief granted in such letters (such materials being the
"Computational Materials"). Each delivery of Computational Materials to the
Company pursuant to this paragraph (d) shall be effected by delivering one copy
of such material in electronic format to counsel for the Company.
(e) Each Underwriter severally and not jointly agrees, except to the extent
that the Seller Provided Information is not accurate and complete in all
material respects, to indemnify and hold harmless the Company, each of the
Company's officers and directors and each person who controls the Company within
the meaning of Section 15 of the 1933 Act and Section 12 of the 1934 Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Offered Certificates), arise out of or
are based upon any untrue statement of a material fact contained in the
Computational Materials provided by such Underwriter, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, when
considered in conjunction with the Prospectus, and in the light of the
circumstances under which they were made, not misleading, except to the extent
that such untrue statement or omission is based upon the Seller Provided
Information and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred. The obligations of an
Underwriter under this Section 5(e) shall be in addition to any liability which
such Underwriter may otherwise have.
The procedures set forth in Section 5(c) shall be equally applicable to
this Section 5(e).
(f) If the indemnification provided for in this Section 5 shall for any
reason be unavailable to an indemnified party under this Section 5, then the
Company and the Underwriters shall contribute to the amount paid or payable by
such indemnified party as a result of the aggregate losses, claims, damages and
liabilities referred to in paragraph (a), (b) or (e) above, in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and the Underwriters on the other from the placement of the
Publicly Offered Certificates, and (ii) the relative fault of the Company on the
one hand and the Underwriters on
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<PAGE>
the other in connection with the statement or omission that resulted in such
losses, claims, damages and liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the purchase price
paid by the Underwriters pursuant to the Pricing Letter bears to the difference
between (i) the total price at which the Publicly Offered Certificates were sold
by the Underwriters and (ii) the purchase price paid by the Underwriters
pursuant to the Pricing Letter. The relative fault 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 Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this paragraph (f) were to be determined by pro rata allocation or
by any other method of allocation that does not take account of the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this paragraph (f) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this paragraph (f). Notwithstanding the provisions of this paragraph (f), the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Publicly Offered Certificates
placed by it exceeds the amount of any damages that the Underwriters have
otherwise been required to pay or have become liable 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. For purposes of this Section 5,
each person, if any, who controls the Underwriters within the meaning of either
the 1933 Act or the 1934 Act shall have the same rights to contribution as the
Underwriters, and each person, if any, who controls the Company within the
meaning of either the 1933 Act or the 1934 Act, each director and each officer
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this paragraph (f), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any other
obligation it or they may have to a party entitled to contribution except to the
extent the party obligated to make such contribution was prejudiced by such
failure.
"Seller Provided Information" means (a) the information appearing under
the caption "DESCRIPTION OF THE MORTGAGE POOL" in the Prospectus Supplement, (b)
Annex A to the Prospectus Supplement and (c) with respect to Computational
Materials only, a collateral asset book relating to each property securing the
Mortgage Loans.
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"Underwriter Provided Information" means (a) the respective names of
each Underwriter on the front and back cover of the Prospectus Supplement and
(b) the information contained under the caption "PLAN OF DISTRIBUTION" in the
Prospectus Supplement (excluding any information or materials cross-referenced
under such caption), but not including the information contained in the last
paragraph under such caption.
"GACC Provided Information" means information contained in the Final
Prospectus with respect to which GACC is obligated to indemnify the Company
under the GACC Mortgage Loan Purchase Agreement.
"BCMC Provided Information" means information contained in the Final
Prospectus with respect to which BCMC is obligated to indemnify the Company
under the BCMC Mortgage Loan Purchase Agreement.
6. Survival of Certain Representations and Obligations. The respective
representations, warranties, agreements, covenants, indemnities and other
statements of the Company, its officers and the Underwriters set forth in, or
made pursuant to, this Underwriting Agreement shall remain in full force and
effect, regardless of any investigation, or statement as to the result thereof,
made by or on behalf of any Underwriters, the Company, or any of the offices or
directors or any controlling person of any of the foregoing, and shall survive
the delivery of and payment for the Publicly Offered Certificates.
7. Termination. (a) This Underwriting Agreement may
be terminated by the Company by notice to the Underwriters
in the event that a stop order suspending the
effectiveness of the Registration Statement shall have
been issued or proceedings for that purpose shall have
been instituted or threatened.
(b) This Underwriting Agreement may be terminated by any of the
Underwriters by notice to the Company and the other Underwriters in the event
that the Company or the Servicer shall have failed, refused or been unable to
perform all obligations and satisfy all conditions to be performed or satisfied
hereunder by the Company or the Servicer, respectively, at or prior to the
Closing Date.
(c) Termination of this Underwriting Agreement pursuant to this Section 7
shall be without liability of any party to any other party other than as
provided in Section 8 hereof.
8. Default of the Underwriters. If the Underwriters default in their
obligation to purchase the Publicly Offered Certificates as provided in this
Underwriting Agreement and the aggregate principal amount of the Publicly
Offered Certificates with respect to which such default occurs is more than ten
percent of the aggregate principal amount or notional amount as applicable, of
such Publicly Offered Certificates, as the case may be, and arrangements
satisfactory to the Underwriters and the Company for the purchase of such
Publicly Offered Certificates by other persons are not made within 36 hours
after any such default, this
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Underwriting Agreement will terminate without liability on the part of the
Company except for the expenses to be paid or reimbursed by the Company pursuant
to Section 9 hereof. As used in this Underwriting Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. Expenses. The Company agrees with the Underwriters that: (a) whether or
not the transactions contemplated in this Underwriting Agreement are consummated
or this Underwriting Agreement is terminated, the Company will pay all fees and
expenses incident to the performance of its obligations under this Underwriting
Agreement, including but not limited to, (i) the Commission's registration fee,
(ii) the expenses of printing and distributing the Registration Statement, any
preliminary prospectus, the Prospectus Supplement, any amendments or supplements
to the Registration Statement or the Prospectus Supplement, and any Blue Sky
memorandum or legal investment survey and any supplements thereto, (iii) fees
and expenses of rating agencies, accountants and counsel for the Company, (iv)
the expenses referred to in Section 3(e) hereof, and (v) all miscellaneous
expenses referred to in Item 14 of the Registration Statement; (b) all
out-of-pocket expenses, including counsel fees, disbursements and expenses,
reasonably incurred by the Underwriters in connection with investigating,
preparing to market and marketing the Publicly Offered Certificates and
proposing to purchase and purchasing the Publicly Offered Certificates under
this Underwriting Agreement will be borne and paid by the Company if this
Underwriting Agreement is terminated by the Company pursuant to Section 8 hereof
or by the Underwriters on account of the failure, refusal or inability on the
part of the Company to perform all obligations and satisfy all conditions on the
part of the Company to be performed or satisfied hereunder; and (c) the Company
will pay the cost of preparing the certificates for the Publicly Offered
Certificates.
Except as otherwise provided in this Section 9, the Underwriters agree to
pay all of their expenses in connection with investigating, preparing to market
and marketing the Publicly Offered Certificates and proposing to purchase and
purchasing the Publicly Offered Certificates under this Underwriting Agreement,
including the fees and expenses of their counsel and any advertising expenses
incurred by it in making offers and sales of the Publicly Offered Certificates.
10. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to PSI, will be mailed, delivered or telecopied
and confirmed to it at One New York Plaza, 18th Floor, New York, New York
10292-2015, attention: Peter Riemenschneider, fax number (212) 778-5099; if sent
to DMG, will be mailed, delivered or telecopied and confirmed to it at 31 West
52nd Street, New York, New York 10019, attention: General Counsel, fax number
(212) 469-8172; if sent to Llama, will be mailed, delivered or telecopied and
confirmed to it at One McIlroy Plaza, Suite 302, Fayetteville, Arkansas 72701,
attention: Stephen D. Mansfield, fax number (501) 444-4042; or, if sent to the
Company, will be mailed, delivered or telecopied and confirmed to it at 210 West
10th Street, 6th Floor, Kansas City, Missouri 64105, attention: Alan L.
Atterbury, fax number (816) 435-2327.
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<PAGE>
11. Successors. This Underwriting Agreement shall inure to the benefit of
and shall be binding upon each Underwriter, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Underwriting Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Underwriting Agreement, or any provisions herein contained; the Underwriting
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person, except that (i) the representations and warranties of the
Company contained in this Underwriting Agreement shall also be for the benefit
of any person or persons who controls or control any Underwriter within the
meaning of Section 15 of the 1933 Act, and (ii) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who controls or control the Company within the meaning of
Section 15 of the 1933 Act. No purchaser of the Publicly Offered Certificates
from the Underwriters shall be deemed a successor because of such purchase.
12. Applicable Law; Counterparts. This Underwriting Agreement will be
governed by and construed in accordance with the laws of the State of New York
(without regard to conflict of laws principles). This Underwriting Agreement may
be executed in any number of counterparts, each of which shall for all purposes
be deemed to be an original and all of which shall together constitute but one
and the same instrument.
13. Time of the Essence. Time shall be of the
essence of this Underwriting Agreement.
[Remainder of Page Intentionally Left Blank]
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If the foregoing is in accordance with your understanding, please sign and
return six counterparts hereof.
Very truly yours,
MIDLAND REALTY ACCEPTANCE CORP.
By: /s/ Clarence Krantz
Clarence Krantz
Executive Vice President
AGREED AND ACCEPTED AS OF THE
DATE FIRST WRITTEN ABOVE
PRUDENTIAL SECURITIES
INCORPORATED
By: /s/ Stephanie Anzivino
Stephanie Anzivino
Vice President
DEUTSCHE MORGAN GRENFELL INC.
By: /s/ Joel C. Horne
Joel C. Horne
Director
By: /s/ Charlene S. Chai
Charlene S. Chai
Director
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<PAGE>
LLAMA COMPANY, L.P.
By: /s/ Stephen D. Mansfield
Stephen D. Mansfield
Senior Vice President
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S-2
<PAGE>
THE TERMS OF THIS UNDERWRITING AGREEMENT, INCLUDING,
WITHOUT LIMITATION, THE TERMS OF SECTION 5 HEREOF, ARE
AGREED AND ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE
MIDLAND LOAN SERVICES, L.P.
By: Midland Data Systems, Inc.,
its general partner
By: /s/ Alan L. Atterbury
Alan L. Atterbury
President
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S-3
EXECUTION
<PAGE>
MIDLAND REALTY ACCEPTANCE CORP.,
DEPOSITOR
MIDLAND LOAN SERVICES, L.P.,
SERVICER
MIDLAND LOAN SERVICES, L.P.,
SPECIAL SERVICER
LASALLE NATIONAL BANK,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1996
Commercial Mortgage Pass-Through Certificates
Series 1996-C2
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms................ 3
SECTION 1.2. Certain Calculations......... 40
SECTION 1.3. Certain Constructions........ 41
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment
of Mortgage Loans.............................. 41
SECTION 2.2. Acceptance by the
Custodian and the Trustee...................... 46
SECTION 2.3. Representations and
Warranties of the Depositor.................... 47
SECTION 2.4. Representations,
Warranties and Covenants
of the Servicer and the
Special Servicer............. 51
SECTION 2.5. Execution and Delivery of
Certificates; Issuance of
REMIC I Regular Interests.... 55
SECTION 2.6. Miscellaneous REMIC
Provisions................... 55
SECTION 2.7. Documents Not Delivered to
Custodian.................... 56
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Servicer to Act as
Servicer; Special Servicer
to Act as Special
Servicer; Administration
of the Mortgage Loans........ 56
SECTION 3.2. Liability of the Servicer.... 59
SECTION 3.3. Collection of Certain
Mortgage Loan Payments....... 60
SECTION 3.4. Collection of Taxes,
Assessments and Similar
Items........................ 60
SECTION 3.5. Collection Account;
Distribution Account......... 62
SECTION 3.6. Permitted Withdrawals from
the Collection Account....... 63
SECTION 3.7. Investment of Funds in the
Collection Account, the
Distribution Account and
the Reserve Accounts......... 65
SECTION 3.8. Maintenance of Insurance
Policies and Errors and
Omissions and Fidelity
Coverage..................... 67
SECTION 3.9. Enforcement of Due-On-Sale
Clauses; Assumption
Agreements................... 70
SECTION 3.10. Realization Upon
Mortgage Loans.......... 72
SECTION 3.11. Trustee to Cooperate;
Release of Mortgage
Files................... 76
i
<PAGE>
PAGE
SECTION 3.12. Servicing
Compensation and
Trustee Fees............ 77
SECTION 3.13. Reports to the
Trustee; Collection
Account Statements...... 79
SECTION 3.14. Annual Statement as
to Compliance........... 80
SECTION 3.15. Annual Independent
Public Accountants'
Servicing Report........ 80
SECTION 3.16. Access to Certain
Documentation........... 81
SECTION 3.17. Title and Management
of REO Properties....... 81
SECTION 3.18. Sale of Specially
Serviced Mortgage
Loans and REO
Properties.............. 85
SECTION 3.19. Inspections............. 87
SECTION 3.20. Available Information
and Notices............. 87
SECTION 3.21. Reserve Accounts........ 89
SECTION 3.22. Property Advances....... 89
SECTION 3.23. Appointment of
Special Servicer........ 90
SECTION 3.24. Transfer of Servicing
Between Servicer and
Special Servicer;
Record Keeping.......... 91
SECTION 3.25. Adjustment of
Servicing
Compensation in
Respect of Prepayment
Interest Shortfalls..... 92
SECTION 3.26. Consulting
Certificateholder....... 93
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions................ 93
SECTION 4.2. Statements to Rating
Agencies and
Certificateholders;
Available Information;
Information Furnished to
Financial Market Publisher...114
SECTION 4.3. Compliance with
Withholding Requirements.....117
SECTION 4.4. REMIC Compliance.............118
SECTION 4.5. Imposition of Tax on the
Trust Fund...................120
SECTION 4.6. Remittances; P&I Advances....121
ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates.............123
SECTION 5.2. Registration, Transfer and
Exchange of Certificates.....125
SECTION 5.3. Book-Entry Certificates......130
SECTION 5.4. Mutilated, Destroyed, Lost
or Stolen Certificates.......131
SECTION 5.5. Appointment of Paying Agent..131
SECTION 5.6. Access to
Certificateholders' Names
and Addresses................132
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PAGE
SECTION 5.7. Actions of
Certificateholders...........132
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the
Depositor, the Servicer
and the Special Servicer.....133
SECTION 6.2. Merger or Consolidation of
the Servicer and Special
Servicer.....................133
SECTION 6.3. Limitation on Liability
of the Depositor, the
Servicer and Others..........134
SECTION 6.4. Limitation on Resignation
of the Servicer and of the
Special Servicer.............135
SECTION 6.5. Rights of the Depositor
and the Trustee in Respect
of the Servicer and the
Special Servicer.............135
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default............136
SECTION 7.2. Trustee to Act;
Appointment of Successor.....138
SECTION 7.3. Notification to
Certificateholders...........140
SECTION 7.4. Other Remedies of Trustee....140
SECTION 7.5. Waiver of Past Events of
Default; Termination.........140
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee............141
SECTION 8.2. Certain Matters Affecting
the Trustee..................143
SECTION 8.3. Trustee Not Liable for
Certificates or Mortgage
Loans........................145
SECTION 8.4. Trustee May Own
Certificates.................146
SECTION 8.5. Payment of Trustee's Fees
and Expenses;
Indemnification..............147
SECTION 8.6. Eligibility Requirements
for Trustee..................148
SECTION 8.7. Resignation and Removal of
the Trustee..................149
SECTION 8.8. Successor Trustee............150
SECTION 8.9. Merger or Consolidation of
Trustee......................151
SECTION 8.10. Appointment of
Co-Trustee or
Separate Trustee........151
SECTION 8.11. Authenticating Agent....152
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SECTION 8.12. Appointment of
Custodians..............153
SECTION 8.13. Fiscal Agent
Appointed; Concerning
the Fiscal Agent........153
ARTICLE IX
TERMINATION
SECTION 9.1. Termination..................154
SECTION 9.2. Additional Termination
Requirements.................159
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Counterparts............160
SECTION 10.2. Limitation on Rights
of Certificateholders...160
SECTION 10.3. Governing Law...........161
SECTION 10.4. Notices.................161
SECTION 10.5. Severability of
Provisions..............164
SECTION 10.6. Notice to the
Depositor and Each
Rating Agency...........164
SECTION 10.7. Amendment...............165
SECTION 10.8. Confirmation of Intent..167
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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 A-EC 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-1 Certificate
Exhibit A-14 Form of Class L-2 Certificate
Exhibit A-15 Form of Class R-I Certificate
Exhibit A-16 Form of Class R-II 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 Form of MCFC Mortgage Loan Purchase and
Sale Agreement
Exhibit H Form of BCMC Mortgage Loan Purchase and
Sale Agreement
Exhibit I Form of BCMC/MCFC Mortgage Loan
Purchase and Sale Agreement
Exhibit J Form of GACC Mortgage Loan Purchase and Sale
Agreement
Exhibit K Privately Placed Securities Legend
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Pooling and Servicing Agreement, dated as of December 1, 1996 among
Midland Realty Acceptance Corp., as Depositor, Midland Loan Services, L.P., as
Servicer and Special Servicer, LaSalle National Bank, as Trustee and Custodian,
and ABN AMRO Bank N.V., as Fiscal Agent of the Trustee.
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. As provided herein, the Trustee will elect that the Trust Fund
be treated for federal income tax purposes as two separate real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, "REMIC I" and "REMIC
II," respectively). The Class A-1, Class A-2, Class A-EC, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L-1 and
Class L-2 Certificates constitute "regular interests" in REMIC II and the
Classes R-II Certificates are the sole class of "residual interests" in REMIC II
for purposes of the REMIC Provisions. The Class R-I Certificates are the sole
class of "residual interest" in REMIC I for purposes of the REMIC Provisions.
There are also eleven classes of uncertificated REMIC I Regular Interests issued
under this Agreement (the Class A-L-1, Class A-L-2, Class B-L, Class C-L, Class
D-L, Class E-L, Class F-L, Class G-L, Class H-L, Class J-L, Class K-L and Class
L-L Interests), each of which will constitute a regular interest in REMIC I. All
such REMIC I Regular Interests will be held by the Trustee as assets of REMIC
II.
The following table sets forth the designation and aggregate initial
Certificate Balance (or, with respect to the Class A-EC and Class L-2
Certificates, the Class A-EC Notional Balance and the Class L-2 Notional
Balance, respectively) for each Class of Certificates comprising interests in
REMIC II.
Certificate Balance
Class or Notional Balance
Class A-1 $145,744,000.00
Class A-2 $210,167,000.00
Class A-EC $512,101,998.44 (1)
Class B $ 30,727,000.00
Class C $ 28,166,000.00
Class D $ 23,045,000.00
Class E $ 7,682,000.00
Class F $ 15,364,000.00
Class G $ 12,803,000.00
Class H $ 5,122,000.00
Class J $ 12,803,000.00
Class K $ 7,682,000.00
Class L-1 $ 12,796,998.44
Class L-2 $ 12,796,998.44 (1)
(1) The Class A-EC and Class L-2 Certificates are not denominated in
Certificate Balance and accordingly will not receive principal
distributions. The Class A-EC and Class L-2 Certificates have an
initial Class A-EC Notional Balance and an initial Class L-2 Notional
Balance, respectively, in the amounts shown in the above table.
The initial Certificate Balance of each of the Class R-I and Class R-II
Certificates will be zero. 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 Scheduled
Principal Balance equal to approximately $512,101,998.44.
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Special Servicer, the Trustee and the Fiscal Agent
agree as follows:
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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.
"Advance": Any P&I Advance or Property 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 Property Advances for which the 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).
"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, The New York Times, from time to time).
"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 Officer's Certificate of the 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.
"Anticipated Loss": As defined in Section
4.6(c).
"Anticipated Loss Subordination Amount": With respect to any
Distribution Date and any Seriously Delinquent Mortgage Loan for which the
Servicer has made a reduced P&I Advance for such Distribution Date as a result
of an Anticipated Loss, an amount equal to the product of (i) the Anticipated
Loss for such Seriously Delinquent Loan and (ii) the excess of the Net Mortgage
Rate for such Mortgage Loan over the Weighted Average Pass-Through Rate as of
the first day of the related Interest Accrual Period.
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"Anticipated Termination Date": Any Distribution
Date on which it is anticipated that the Trust Fund will
be terminated pursuant to Section 9.1(c), Section
9.1(d) or Section 9.1(e).
"Applicable Monthly Payment": As defined in
Section 4.6(a).
"Applicant": As defined in Section 5.6(a).
"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 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 Servicer shall be responsible for
determining whether any assignment is legally sufficient or in recordable form.
"Assumed Scheduled Payment": An amount deemed due in respect of (i) any
Mortgage Loan that is delinquent in respect of its Balloon Payment and (ii) any
REO Mortgage Loan, which shall be equal to the Monthly Payment that would have
been due on the Mortgage Loan in accordance with the terms of the related Note
if (a) the maturity date for such Mortgage Loan had not occurred, (b) the
related Mortgaged Property had not become an REO Property, such Mortgage Loan
was still outstanding and no acceleration of the Mortgage Loan had occurred and
(c) in the case of any Mortgage Loan that provided for amortization of principal
prior to its maturity date, principal continued to amortize on the same
amortization schedule.
"Assumption Fees": Any fees collected by the Servicer or the Special
Servicer in connection with an assumption or modification of a Mortgage Loan or
substitution of a Borrower thereunder permitted to be executed under the
provisions of Section 3.1, Section 3.9 or Section 3.10.
"Auction Agent": An Independent financial advisory or investment
banking or investment brokerage firm nationally recognized in the field of real
estate financial analysis and auction procedures appointed by the Trustee
pursuant to Section 9.1(d)(i).
"Auction Fees": As defined in Section
9.1(d)(v).
"Auction Procedures": As defined in Section
9.1(d)(vi).
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"Auction Proceeds Distribution Date": The third Distribution Date
following an Auction Valuation Date, or such later Distribution Date determined
by the Auction Agent, but, in either event, no later than the Distribution Date
which immediately precedes the date which is 90 days following the date of
adoption of the plan of complete liquidation under Section 9.1(b).
"Auction Valuation Date": Each of (i) the Distribution Date occurring
in March of each year from and including March 2008, and (ii) any Business Day
after the Distribution Date occurring in March 2008 on which the Trustee
receives an unsolicited bona fide offer to purchase all (but not less than all)
of the Mortgage Loans.
"Authenticating Agent": Any authenticating agent
appointed by the Trustee pursuant to Section 8.11.
"Balloon Payment": With respect to each Mortgage Loan, the scheduled
payment of principal and interest due on the Maturity Date of such Mortgage Loan
which, pursuant to the related Note, is equal to the entire remaining principal
balance of such Mortgage Loan, plus accrued interest thereon.
"Base Interest Fraction": With respect to any Principal Prepayment on
any Mortgage Loan and with respect to any Class of Publicly Offered
Certificates, a fraction (A) the numerator of which is the greater of (x) zero
and (y) the difference between the Pass-Through Rate on such Class of Publicly
Offered Certificates and the discount rate used in calculating the Yield
Maintenance Charge with respect to such Principal Prepayment and (B) the
denominator of which is the difference between the related Mortgage Rate and the
discount rate used in calculating the Yield Maintenance Charge with respect to
such Principal Prepayment; provided, however, that under no circumstances shall
the Base Interest Fraction be greater than one; provided, further, that if the
discount rate used in calculating the Yield Maintenance Charge with respect to
any Principal Prepayment is greater than the related Mortgage Rate, then the
Base Interest Fraction shall equal zero.
"BCMC": Boston Capital Mortgage Company,
Limited Partnership, a Massachusetts limited partnership.
"BCMC Loans": Each of the Mortgage Loans transferred and assigned by
BCMC to the Depositor pursuant to the BCMC Mortgage Loan Purchase and Sale
Agreement.
"BCMC Mortgage Loan Purchase and Sale Agreement": The Mortgage Loan
Purchase and Sale Agreement, dated as of the Closing Date, by and between BCMC
and MCFC, substantially in the form attached hereto as Exhibit H.
"BCMC/MCFC Mortgage Loan Purchase and Sale Agreement": The Mortgage
Loan Purchase and Sale Agreement, dated as of the Closing Date, by and between
MCFC and the Depositor, substantially in the form attached hereto as Exhibit I.
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"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 Mortgage Loan Seller in respect of the Mortgage Loans
prior to or on the Closing Date which are due after the Cut-off Date, which
amount is to be deposited with the Servicer by the Depositor pursuant to Section
2.1.
"Certificate": Any Class A-1, Class A-2, Class A-EC, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L-1, Class
L-2, Class R-I or Class R-II Certificate issued, authenticated and delivered
hereunder.
"Certificate Balance": With respect to any Class of Regular
Certificates (other than the Class A-EC and Class L-2 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 made thereon on such prior Distribution Date;
and with respect to any REMIC I Regular Interest, (a) on or prior to the first
Distribution Date, an amount equal to the Certificate Balance of the Related
Certificates, and (b) as of any date of determination after the first
Distribution Date, the Certificate Balance of such REMIC I Regular Interest on
the Distribution Date immediately prior to such date of determination, after
application of distributions in respect of principal and Realized Losses made
thereon on such prior Distribution Date. The Class A-EC and Class L-2
Certificates have no Certificate Balances.
"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).
"Certificateholder": A Person whose name is registered in the
Certificate Register; provided, however, that any Certificate held or
beneficially owned by the Depositor, the Servicer, the Special Servicer, the
Trustee, a Manager or a Borrower or any Person known to a Responsible Officer of
the Certificate Registrar to be an Affiliate of any thereof shall be deemed not
to be outstanding and the Voting Rights to which it is entitled shall not be
taken into
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account in determining whether the requisite percentage of Voting Rights
necessary to effect any consent, approval or waiver which specifically relates
to such Person has been obtained (unless such consent, approval or waiver is to
an action which would materially and adversely affect the interests of the
Certificateholders of any Class, while any such Person is the holder of
Certificates aggregating not less than 66-2/3% of the Percentage Interest of any
such Class). 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.
"Class": With respect to Certificates or REMIC
I Regular Interests, all of the Certificates or REMIC I
Regular Interests bearing the same alphabetical and
numerical class designation.
"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 7.020%.
"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 7.233%.
"Class A-EC 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 A-EC Notional Balance": As of
any date of determination, an amount equal to the
aggregate Certificate Balance of the Regular Certificates
(other than the Class A-EC and Class L-2 Certificates).
"Class A-EC Pass-Through Rate": With respect to any Interest Accrual
Period, a per annum rate equal to the excess of the Weighted Average Net
Mortgage Rate over the Weighted Average Pass-Through Rate.
"Class A-EC Subordinated Advance Amount":
With respect to any Distribution Date, an amount equal to
the sum of the Anticipated Loss Subordination Amounts for
such Distribution Date.
"Class A-L-1 Interest": A regular interest in
REMIC I entitled to monthly distributions payable thereto
pursuant to Section 4.1.
"Class A-L-2 Interest": A regular interest in
REMIC I entitled to monthly distributions payable thereto
pursuant to Section 4.1.
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"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 7.342%.
"Class B-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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.
"Class C Pass-Through Rate": A per annum rate
equal to 7.441%.
"Class C-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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": A per annum rate
equal to 7.636%.
"Class D-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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": A per annum rate
equal to 8.029%.
"Class E-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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": A per annum rate
equal to 7.233%.
"Class F-L Interest": A regular interest in the
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
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"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": A per annum rate
equal to 7.233%.
"Class G-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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 7.233%.
"Class H-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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 7.233%.
"Class J-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"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 7.233%.
"Class K-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"Class L-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-13 hereto.
"Class L-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-14 hereto.
"Class L-2 Notional Balance": As of any
date of determination, an amount equal to the Certificate
Principal Balance of the Class L-1 Certificates.
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"Class L-2 Pass-Through Rate": A per annum
rate equal to 7.233%.
"Class L-L Interest": A regular interest in
REMIC I entitled to the monthly distributions payable
thereto pursuant to Section 4.1.
"Class Interest Distribution Amount": With respect to any Distribution
Date and any Class of Regular Certificates (other than the Class L-1
Certificates), interest for the related Interest Accrual Period at the
applicable Pass-Through Rate for such Class of Certificates and such Interest
Accrual Period on the Certificate Balance or Notional Balance of such Class.
With respect to the Class L-1 Certificates, zero. For purposes of determining
any Class Interest Distribution Amount, any distributions in reduction of
Certificate Balance, any reductions of Certificate Balance (and any resulting
reductions in Notional Balance) as a result of allocations of Realized Losses on
the Distribution Date occurring in such Interest Accrual Period shall be deemed
to have been made as of the first day of such Interest Accrual Period.
Notwithstanding the foregoing, the Class Interest Distribution Amount for each
Class of Certificates otherwise calculated as described above shall be reduced
by such Class' pro rata share of any Uncovered Prepayment Interest Shortfall for
such Distribution Date (pro rata according to each respective Class Interest
Distribution Amount determined without regard to this sentence).
"Class Interest Shortfall": On any Distribution Date for any Class of
Certificates, the excess, if any, of the Class Interest Distribution Amount for
such Class over the amount of interest actually distributed in respect of such
Class Interest Distribution Amount to the Holders of such Certificates pursuant
to Section 4.1(b) 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-15 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-16 hereto.
The Class R-II Certificates have no Pass-Through Rate or
Certificate Balance.
"Class R-II Distribution Amount": With respect to any Distribution
Date, the excess, if any, of the aggregate of all deemed distributions in
respect of the REMIC I Regular Interests on such Distribution Date pursuant to
Section 4.1(a), over the aggregate of all distributions made in respect of the
Regular Certificates on such Distribution Date pursuant to Sections 4.1(b) and
4.1(c).
"Closing Date": December 23, 1996.
"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.
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"Collection Account": The segregated account or accounts created and
maintained by the Servicer pursuant to Section 3.5(a), which shall be entitled
"LaSalle National Bank, as Trustee, in trust for Holders of Midland Realty
Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series 1996-C2,
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 January 1997, 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.
"Condemnation Proceeds": Any amount (other than
Insurance Proceeds) received in connection with the taking
of a Mortgaged Property by exercise of the power of
eminent domain or condemnation.
"Consulting Certificateholder": As defined in
Section 3.26.
"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
modification, restructuring or workout entered into by the Special Servicer.
"Corporate Trust Office": The principal office
of the Trustee located at 135 S. LaSalle Street, Suite
1740, Chicago, Illinois 60603, Attention:
Asset-Backed Securities Trust Services Dept.-MRAC
1996-C2, or the principal trust office of any successor
trustee qualified and appointed pursuant to Section 8.8.
"Custodial Agreement": The Custodial Agreement, if any, in effect from
time to time between the Custodian named therein, the 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 Servicer or any Affiliate of
the Trustee or the Servicer, but may not be the Depositor or any Affiliate of
the Depositor.
"Cut-off Date": December 1, 1996; provided, however that with respect
to the Newly Originated Mortgage Loans, the Cut-off Date shall be the date upon
which each such Mortgage Loan was funded.
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"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.
"Deficient Auction Bid": As defined in
Section 9.1(d)(iii).
"Definitive Certificate": As defined in Section
5.3(a).
"Depositor": Midland Realty Acceptance Corp., a
Missouri corporation and its successors and assigns.
"Determination Date": The 17th day of any
month, or if such 17th day is not a Business Day,
the Business Day immediately preceding such 17th day,
commencing on January 17, 1997.
"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.
"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) (a) 1.5%, if such sale or liquidation
occurs prior to 12 months following the date on which the related Mortgage Loan
initially became a Specially Serviced Mortgage Loan, or (b) 1.0%, if such sale
or liquidation occurs upon or after the expiration of such 12-month period.
"Disqualified Non-U.S. Person": With respect to a Class R-I or Class
R-II Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S.
Person that holds the Class R-I or Class R-II 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
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or Class R-II 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 or Class R-II 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 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 or Class R-II 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 or REMIC II 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.
"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 National Bank, as Trustee, in
trust for Holders of Midland Realty Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1996-C2, Distribution Account" and which shall
be an Eligible Account.
"Distribution Date": The 25th day of any
month, or if such 25th day is not a Business Day,
the Business Day immediately following such 25th day,
commencing on January 25, 1997.
"DMG": Deutsche Morgan Grenfell Inc.
"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.
"Early Termination Notice Date": Any date as of which the aggregate
Scheduled Principal Balance of the Mortgage Loans remaining in the Trust Fund is
less than 10% of the aggregate Scheduled Principal Balance of the Mortgage Loans
as of the Cut-off Date.
"Eligible Account": Either (i) a segregated account or accounts
maintained with a federally or state-chartered depository institution or trust
company, (a) the short term senior unsecured debt obligations of which are rated
at least "F1+" by Fitch or the long term senior unsecured debt obligations of
which are rated at least "AA" by Fitch and (b) the short term senior unsecured
debt obligations of which are rated at least "P1" by Moody's and the long term
senior unsecured debt obligations of which are rated at least "A2" by Moody's or
(ii) a
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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 subject to supervision or examination by federal or state
authority and subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. 9.10(b), or otherwise confirmed in writing by
each of the Rating Agencies that the maintenance of such account, which may be
an account maintained with the Trustee or the Servicer, shall not, in and of
itself, result in a downgrading, withdrawal or qualification of the rating then
assigned by such Rating Agency to any Class of Certificates. 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
environmental audit report or reports delivered to the Mortgage Loan Seller in
connection with the purchase of the related Mortgage Loan from the Originator of
such 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 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 and the payment of the Financial and Lease Reporting Fee.
"Event of Default": As defined in Section 7.1.
"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
Mortgage Loan Seller pursuant to Section 2.3(d) or 2.3(e), the recovery of all
Insurance Proceeds, Condemnation 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 Servicer, in its reasonable
judgment as evidenced by a certificate of a Servicing Officer delivered to the
Trustee and the Custodian, expects to be finally recoverable. The Servicer shall
maintain
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records, prepared by a Servicing Officer, of each Final Recovery Determination
until the earlier of (i) its termination as Servicer hereunder and the transfer
of such records to a successor servicer and (ii) five years following the
termination of the Trust Fund.
"Financial and Lease Reporting Fee": Any payment made by any Borrower
under the related Note as a deposit to ensure that such Borrower furnishes to
the mortgagee the required financial and leasing information on a timely basis
during the term of the related Mortgage Loan.
"Financial Market Publisher": Bloomberg
Financial Service.
"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.
"Fitch": Fitch Investors Service, L.P.
"FNMA": The Federal National Mortgage
Association, or any successor thereto.
"GACC": German American Capital Corporation,
a Maryland corporation.
"GACC Loans": The Mortgage Loans transferred and assigned by GACC to
the Depositor pursuant to the GACC Mortgage Loan Purchase and Sale Agreement.
"GACC Mortgage Loan Purchase and Sale Agreement": The Mortgage Loan
Purchase and Sale Agreement, dated as of the Closing Date, by and among the
Depositor and GACC, substantially in the form attached hereto as Exhibit J.
"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, the Trustee.
"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
Servicer, the Special Servicer, any Borrower or any Affiliate thereof, and (ii)
is not connected with any such specified Person as an officer,
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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 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.
"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
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 including in the related
Mortgage File or in accordance with prudent and customary servicing practices,
but, in any event, no less than 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.
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"Interest Distribution Amount": With respect to any REMIC I Regular
Interest and any Distribution Date, interest for the related Interest Accrual
Period at the Weighted Average Net Mortgage Rate for such Interest Accrual
Period on the Certificate Balance of such REMIC I Regular Interest, provided
that, for such purpose, any distributions in reduction of the Certificate
Balance and reductions of the Certificate Balance as a result of allocations of
Realized Losses on the Distribution Date occurring in such Interest Accrual
Period shall be deemed to have been made as of the first day of such Interest
Accrual Period.
"Interest Shortfall": With respect to any Distribution Date for any
REMIC I Regular Interest, the excess, if any, of the Interest Distribution
Amount of such REMIC I Regular Interest on such Distribution Date over the
amount actually distributed to such REMIC I Regular Interest in respect of its
Interest Distribution Amount on such Distribution Date.
"Interested Person": As of any date of determination, the Depositor,
the 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) and any Property
Advances, with interest thereon at the Advance Rate, incurred with respect to
such Specially Serviced Mortgage Loan or such property not previously reimbursed
from collections or other proceeds therefrom.
"Liquidation Proceeds": The amount (other than Insurance Proceeds)
received in connection with (i) the taking of a Mortgaged Property by exercise
of the power of eminent domain or condemnation, (ii) the liquidation of 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 or (iv) the sale of all of the Mortgage
Loans in accordance with Section 9.1.
"Llama": Llama Company, L.P.
"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.
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"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 Servicer or any
subservicer for the Servicer, as set forth in the Mortgage
Loan Schedule.
"MAI": Member of the Appraisal Institute with at
least 5 years of experience in the related property type.
"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.
"Maturity Date": With respect to each Mortgage
Loan, the maturity date as set forth in the Mortgage Loan
Schedule.
"MCFC": Midland Commercial Financing Corp.,
a Missouri corporation.
"MCFC Loans": The Mortgage Loans transferred and
assigned by Midland Commercial Financing Corp. to the
Depositor pursuant to the MCFC Mortgage Loan Purchase and
Sale Agreement.
"MCFC Mortgage Loan Purchase and Sale
Agreement": The Mortgage Loan Purchase and Sale
Agreement, dated as of the Closing Date, by and among the
Depositor, Midland Commercial Financing Corp., and Midland
Loan Services, L.P., substantially in the form attached
hereto as Exhibit G.
"Minimum Auction Price": As defined in
Section 9.1(d)(iii).
"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 interest, excluding any Balloon Payment, on such Mortgage Loan which is
payable by the related Borrower on such Due Date under the related Note (after
giving effect to any extension or modification permitted hereunder). With
respect to any REO Mortgage Loan, the monthly payment which would otherwise have
been payable on such Due Date had the related Note not been discharged (after
giving effect to any extension or other modification), determined as set forth
in the preceding sentence and on the assumption that all other amounts, if any,
due thereunder are paid when due.
"Moody's": 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.
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"Mortgage File": With respect to any Mortgage
Loan, the mortgage documents required to be maintained in
either the Trustee Mortgage File or the 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.
"Mortgage Loan Documents": Any and all documents
contained in the Trustee Mortgage File and the Servicer
Mortgage File.
"Mortgage Loan Purchase and Sale Agreement": With respect to the MCFC
Loans, the MCFC Mortgage Loan Purchase and Sale Agreement. With respect to the
BCMC Loans, the BCMC Mortgage Loan Purchase and Sale Agreement and the BCMC/MCFC
Mortgage Loan Purchase and Sale Agreement, as applicable. With respect to the
GACC Loans, the GACC Mortgage Loan Purchase and Sale Agreement.
"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 Loan Seller": With respect to the MCFC Loans, MCFC; with
respect to the BCMC Loans, BCMC and MCFC, collectively; and with respect to the
GACC Loans, GACC; provided, however, that references herein to the Mortgage Loan
Seller shall also include Midland Loan Services, L.P. with respect to any
obligation of the Mortgage Loan Seller to cure a breach of any representation
and warranty or repurchase the related Mortgage Loan under the MCFC Mortgage
Loan Purchase and Sale Agreement.
"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), 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.
"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 aggregate amount of the Prepayment Interest Surplus,
Servicing Fees (excluding the portion representing the Trustee's fees and
reimbursements for Rating Agency surveillance fees) and if the Special Servicer
and the Servicer are the same Person, the Special Servicing Fees for such
Distribution Date which are offset against such Prepayment Interest Shortfalls
pursuant to Section 3.25.
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"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 Servicing Fee Rate.
"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.
"Newly Originated Mortgage Loan": Each of the
Mortgage Loans which were originated after the Cut-off
Date, but prior to the Closing Date.
"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.
"Non-Premium Prepayment": Any Principal
Prepayment received that is not required to be accompanied
by a Prepayment Premium.
"Nonrecoverable Advance ": Any portion of an Advance proposed to be
made or previously made which has not been previously reimbursed to the
Servicer, the Trustee or the Fiscal Agent, as applicable, and which the
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
Servicer, the Trustee or the Fiscal Agent, as applicable, from late payments,
Insurance Proceeds, Condemnation 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 Servicer, the Trustee or the Fiscal Agent had previously advanced, and
the 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 Servicer, the Trustee or the Fiscal Agent, shall provide an
Officer's Certificate as described below. The determination by the Servicer,
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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 Fiscal Agent, as appropriate, delivered to the Trustee, the Special
Servicer and the Depositor setting forth such determination and the procedures
and considerations of the 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 obtained by the 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 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 a
citizen or resident of the United States; a corporation,
partnership, or other entity created or organized in or
under the laws of the United States or any political
subdivision thereof; or an estate or trust whose income is
subject to United States federal income tax regardless of
its source.
"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.
"Notice of Termination": Any of (i) the notices given to the Trustee by
the Servicer, the Depositor or any Holder of a Class R-I Certificate pursuant to
Section 9.1(c) and (ii) the notice given by the Trustee to each Holder pursuant
to Section 9.1(d)(iv).
"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 general partner of the
Servicer, Special Servicer or the Auction Agent 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 Servicer, as the case
may be.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Depositor, the Special Servicer or the Servicer,
as the case may be, acceptable to the Trustee, except that any opinion of
counsel relating to (a) qualification of REMIC I or REMIC II as a REMIC or the
imposition of tax under the REMIC Provisions on any income or property of either
REMIC, (b) compliance with the REMIC Provisions (including application of the
definition of "Independent Contractor") or (c) a resignation of the Servicer or
the Special Servicer pursuant to Section 6.4, must be an opinion of counsel who
is Independent of the Depositor, the Special Servicer and the Servicer.
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"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
Servicer, the Trustee, or the Fiscal Agent pursuant to Section 4.6(b)(iii).
"P&I Certificates": The Class A-1, Class A-2, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J and Class K Certificates.
"Pass-Through Rate": Any one of the Class A-1, Class A-2, Class A-EC,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K
or Class L-2 Pass- Through Rates.
"Paying Agent": The paying agent appointed
pursuant to Section 5.5.
"Percentage Interest": As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made with respect to the
related Class. With respect to any Certificate (except the Class R-I and Class
R-II Certificates), the percentage interest is derived by dividing the
denomination of such Certificate by the initial Certificate Balance or notional
amount of such Class of Certificates. With respect to any Class R-I or Class
R-II Certificate, the percentage interest is set forth on the face thereof.
"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 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 each Rating Agency shall have confirmed in
writing to the Servicer or the Special Servicer, as applicable, that a lower
rating will not result in the withdrawal, downgrading or qualification of the
ratings then assigned to the Certificates:
(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;
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(ii) [reserved]
(iii) 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);
(iv) Federal funds, time deposits in, or
uncertificated 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 rating category
of each Rating Agency, unless each of the
Rating Agencies has confirmed in writing
that a lower rating shall not result, in
and of itself, in a downgrading,
withdrawal or qualification of the rating
then assigned by such Rating Agency to any
Class of the Certificates;
(v) 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;
(vi) units of taxable money market funds rated
in the highest short term rating category
by each Rating Agency or mutual funds,
which funds seek to maintain a constant
asset value and have been rated by each
Rating Agency in its highest short term
rating category or which have been
designated in writing by each Rating
Agency as Permitted Investments with
respect to this definition;
(vii) 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
if each of the Rating Agencies has
previously confirmed in writing that the
holding of such demand, money market or
time deposit, demand obligation or any
other obligation, security or investment
shall not result, in and of itself, in a
downgrading, withdrawal or qualification
of the rating then assigned by such
Rating Agency to any Class of
Certificates; and
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(viii) such other obligations confirmed in
writing by each of the Rating Agencies
that such obligations are acceptable as
Permitted Investments and the holding of
such obligations by the Servicer or the
Special Servicer, as applicable, shall
not result, in and of itself, in a
downgrading, withdrawal or qualification
of the rating then assigned by such
Rating Agency to any Class of
Certificates;
provided, however, that (a) except with respect to units of money market funds
pursuant to clause (vi) 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
(vi) 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 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 or (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.
"Permitted Transferee": With respect to a Class
R-I or Class R-II 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-1 or Class R-II
Certificate to such Person will not cause REMIC I or
REMIC II 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": Prudential Securities
Incorporated, DMG and Llama.
"Plan": As defined in Section 5.2(i).
"Pooled Available Funds": For each Distribution Date, the sum of all
previously undistributed Monthly Payments or other receipts on account of
principal and interest (including Unscheduled Payments and any Net REO Proceeds
transferred from an REO Account to the Collection Account pursuant to Section
3.17(b)) on or in respect of the Mortgage Loans received by the Servicer in the
Collection Period relating to such Distribution Date, plus all other amounts
received by the Servicer during such Collection Period and required to be placed
in the Collection Account by the Servicer pursuant to Section 3.5(a) allocable
to such Mortgage Loans, and including all P&I Advances made by the Servicer, the
Trustee or the Fiscal Agent in respect
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of such Distribution Date and deposits made by the Servicer pursuant to Section
3.25 with respect to such Distribution Date, but excluding the following:
(a) amounts permitted to be used to reimburse the Servicer, the
Trustee or the Fiscal Agent for previously unreimbursed Advances
and interest thereon as described in Section 3.6(ii) and (iii);
(b) those portions of each payment of interest
which represent the applicable Servicing
Compensation;
(c) all amounts in the nature of late fees, late charges, NSF
check charges and similar fees, loan modification fees,
extension fees, loan service transaction fees, demand fees,
beneficiary statement charges, Assumption Fees and similar
fees;
(d) all amounts representing scheduled Monthly Payments due after the
Due Date in the related Collection Period (such amounts to be
treated as received on the Due Date when due);
(e) that portion of Liquidation Proceeds, Condemnation Proceeds or
Insurance Proceeds with respect to a Mortgage Loan which
represents any unpaid Servicing Compensation to which the Servicer
is entitled;
(f) all amounts representing certain expenses
reimbursable to the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent
and other amounts permitted to be retained
by the Servicer or the Special Servicer or
withdrawn by the Servicer from the
Collection Account (including, without
limitation, as provided in Section 3.6)
pursuant to the terms hereof;
(g) Prepayment Premiums received in the
related Collection Period;
(h) any interest or investment income on funds
on deposit in the Collection Account or in
Permitted Investments in which such fund may
be invested; and
(i) Default Interest received in the related Collection Period
with respect to a Mortgage Loan that is in default with
respect to its Balloon Payment.
"Pooled Principal Distribution Amount": For
any Distribution Date, an amount equal to the sum of:
(i) the principal component of all scheduled Monthly Payments (other
than Balloon Payments) which become due (regardless of whether
received) on the Mortgage Loans during the related Collection
Period;
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(ii) to the extent not included elsewhere in
this definition, the principal component
of all Assumed Scheduled Payments, as
applicable, deemed to become due
(regardless of whether received) during
the related Collection Period with
respect to any Mortgage Loan that is
delinquent in respect of its Balloon
Payment;
(iii) to the extent not included elsewhere in
this definition, the Scheduled Principal
Balance of each Mortgage Loan that was
repurchased from the Trust Fund in
connection with the breach of a
representation or warranty or purchased
from the Trust Fund pursuant to Section
9.1, in either case, during the related
Collection Period;
(iv) to the extent not included elsewhere in this definition, the
portion of Unscheduled Payments allocable to principal of any
Mortgage Loan that was liquidated during the related Collection
Period;
(v) to the extent not included elsewhere in this definition, the
principal component of all Balloon Payments received during the
related Collection Period;
(vi) to the extent not included elsewhere in
this definition, all other Principal
Prepayments received in the related
Collection Period; and
(vii) to the extent not included elsewhere in this definition, any
other full or partial recoveries in respect of principal,
including Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and Net REO Proceeds.
"Prepayment Assumption": The assumption identified as "Scenario 2" in
the Private Placement Memorandum dated December 23, 1996, relating to the
Privately Placed Certificates and identified as "Scenario 2" in the Prospectus
Supplement, dated December 18, 1996, relating to the Publicly Offered
Certificates.
"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 Scheduled 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 Interest Surplus": 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
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related Net Mortgage Rate on the Scheduled 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.
"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.
"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 A-EC Certificates, the Class
F Certificates, the Class G Certificates, the Class H Certificates, the Class J
Certificates, the Class K Certificates, the Class L-1 Certificates, the Class
L-2 Certificates, the Class R-I Certificates and the Class R-II Certificates.
"Property Advance": As to any Mortgage Loan, any advance made by the
Servicer, the Trustee or the Fiscal Agent in respect of costs and expenses
incurred pursuant to Sections 3.10(b), 3.10(f), 3.10(i) and 3.17(b) 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.
"PSI": Prudential Securities Incorporated.
"Publicly Offered Certificates": The Class A-1
Certificates, the Class A-2 Certificates, the Class B
Certificates, the Class C Certificates, the Class D
Certificates and the Class E Certificates.
"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 clauses (ii) or (iii) below, shall
have a claims paying ability of "AA" or better by both 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 of "AA" or better by both of the Rating
Agencies 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 rated "A" or better by both of the Rating Agencies, unless
in any such case each of the Rating Agencies has confirmed in writing that an
insurance company with a lower claims paying ability shall not result, in and of
itself, in a downgrading, withdrawal or qualification of the rating then
assigned by such Rating Agency to any Class of Certificates.
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"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 Regulations 1.860G-2(f)(2) that treats a defective obligation
as a qualified mortgage), or any substantially similar successor provision.
"Qualified Bidder": A prospective purchaser of the Mortgage Loans in an
auction pursuant to Section 9.1(d) whom the Auction Agent has reasonably
determined possesses the financial ability and is otherwise qualified to
purchase all of the Mortgage Loans, which may include the Servicer, the Special
Servicer or the Depositor, but may not include the Trustee or the Fiscal Agent.
"Rating Agency": Each of Fitch and Moody's. References herein to the
highest long-term senior unsecured debt rating category of each Rating Agency
shall mean "AAA" with respect to Fitch and "Aaa" with respect to Moody's.
References herein to the highest short-term senior unsecured debt rating
category of each Rating Agency shall mean "F1+" with respect to Fitch and "P1"
with respect to Moody's.
"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": With respect to any Distribution Date, the amount, if
any, by which the aggregate of the Certificate Balances of the REMIC I Regular
Interests, after giving effect to distributions made on such Distribution Date,
exceeds the aggregate of the Scheduled Principal Balances of the Mortgage Loans
as of the Due Date in the month in which such Distribution Date occurs.
"Record Date": With respect to each Distribution
Date, the last Business Day of the month preceding the
month in which such Distribution Date occurs.
"Regular Certificates": The Class A-1, Class A-2, Class A-EC, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class
L-1 and Class L-2 Certificates.
"Regular Servicing Period": Any Interest Accrual
Period other than a Special Servicing Period.
"Regulation D": Regulation D under the Act.
"Related Certificates" and "Related REMIC I Regular Interest": For any
REMIC I Regular Interest, the related Certificates set forth below and for any
Certificates, the related REMIC I Regular Interest set forth below:
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Related REMIC I
Related Certificates Regular Interest
Class A-1 Class A-L-1
Class A-2 Class A-L-2
Class A-EC N/A
Class B Class B-L
Class C Class C-L
Class D Class D-L
Class E Class E-L
Class F Class F-L
Class G Class G-L
Class H Class H-L
Class J Class J-L
Class K Class K-L
Class L-1 Class L-L
Class L-2 N/A
"REMIC": A "real estate mortgage investment
conduit" within the meaning of Section 860D of the Code.
"REMIC I": A segregated asset pool within the Trust Fund consisting of
the Mortgage Loans, collections thereon, any REO Property acquired in respect
thereof and amounts held from time to time in the Collection Account, the
Distribution Account and the REO Account, if established.
"REMIC I Regular Interests": The Class A-L-1, Class A-L-2, Class B-L,
Class C-L, Class D-L, Class E-L, Class F-L, Class G-L, Class H-L, Class J-L,
Class K-L and Class L-L Interests.
"REMIC II": The segregated pool of assets within
the Trust Fund consisting of the REMIC I Regular Interests
and amounts held in the Collection Account, the
Distribution Account and the REO Account, if established.
"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:
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(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;
(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 Regulations
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 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 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 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
pursuant to Section 2.3(d) or 2.3(e) 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 Servicer, equal to:
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(i) the unpaid principal balance of such
Mortgage Loan, Specially Serviced Mortgage
Loan or REO Mortgage Loan related to any
REO Property as of the Due Date as to
which a payment was last made by the
related Borrower or was advanced by the
Servicer (less any Advances previously
made on account of principal); plus
(ii) unpaid accrued interest from the Due
Date as to which interest was last paid
by such Borrower or was advanced by the
Servicer up to the Due Date in the month
following the month in which the
purchase or repurchase occurred at a
rate equal to the related Mortgage Rate
on the unpaid principal balance of such
Mortgage Loan, Specially Serviced
Mortgage Loan or REO Mortgage Loan
related to any REO Property (less any
Advances previously made on account of
interest); plus
(iii) any unreimbursed Advances, together with interest thereon at
the Advance Rate, and any unpaid Servicing Compensation and
Trust Fund expenses allocable to such Mortgage Loan; and plus
(iv) in the event that such Mortgage Loan is
required to be repurchased pursuant to
Section 2.3(d) or 2.3(e), expenses
reasonably incurred or to be incurred by
the Servicer, the Special Servicer or the
Trustee in respect of the breach or defect
giving rise to the repurchase obligation,
including any expenses arising out of the
enforcement of the repurchase obligation.
"Request for Release": A request for release
signed by a Servicing Officer, substantially in the form
of Exhibit E hereto.
"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.
"Responsible Officer": Any officer of the Asset-Backed Trust Services
Department 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 Trust Services Department 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
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signature appears on a list of corporate trust officers and employees furnished
to the Servicer by the Trustee, as such list may from time to time be amended.
"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 Balance, as the case may be, of such
Class of Certificates would be reduced to zero based on
the assumptions set forth below. Such Distribution Date
shall in each case be as follows:
Scheduled
Class Designation Final Distribution Date
Class A-1..................... August 25, 2005
Class A-2..................... December 25, 2006
Class A-EC.................... July 25, 2021
Class B....................... December 25, 2006
Class C....................... January 25, 2007
Class D....................... September 25, 2008
Class E....................... October 25, 2008
Class F....................... December 25, 2008
Class G....................... January 25, 2009
Class H....................... January 25, 2009
Class J....................... October 25, 2011
Class K....................... November 25, 2011
Class L-1..................... July 25, 2021
Class L-2..................... July 25, 2021
The Scheduled Final Distribution Dates set forth above were calculated
without regard to any delays in the collection of Balloon Payments, without
regard to a reasonable liquidation time with respect to any Mortgage Loans that
may be delinquent and using the assumptions identified as "Scenario 1" in each
of the Private Placement Memorandum dated December 23, 1996, relating to the
Privately Placed Certificates and the Prospectus Supplement dated December 18,
1996, relating to the Publicly Offered Certificates.
"Scheduled Principal Balance": With respect to any Mortgage Loan, as of
any Due Date, the principal balance of such Mortgage Loan as of such Due Date,
after giving effect to (a) any Principal Prepayments, Non-Premium Prepayments or
other unscheduled recoveries of principal and any Balloon Payments received
during the related Collection Period, and (b) any payment in respect of
principal, if any, due on or before such Due Date (other than a Balloon Payment,
but including the principal portion of any Assumed Scheduled Payment, if
applicable), irrespective of any delinquency in payment by the Borrower. The
Scheduled Principal Balance of any REO Mortgage Loan as of any Due Date is equal
to the principal balance thereof outstanding on the date that the related
Mortgaged Property became an REO Property minus any Net REO Proceeds allocated
to principal on such REO Mortgage Loan and reduced by the
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principal component of Monthly Payments due thereon on or before such Due Date.
With respect to any Mortgage Loan, from and after the date on which the Servicer
makes a Final Recovery Determination, the Scheduled Principal
Balance thereof shall be zero.
"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. 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 Securities Exchange Act of
1934, as amended.
"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 K hereto.
"Senior Certificates": The Class A-1, Class
A-2 and Class A-EC Certificates.
"Senior Principal Distribution Cross-Over Date": The first Distribution
Date as of which the aggregate Certificate Balance of the Class A-1 Certificates
and the Class A-2 Certificates outstanding immediately prior thereto exceeds the
sum of (a) the aggregate Scheduled Principal Balance of the Mortgage Loans that
will be outstanding immediately following such Distribution Date and (b) the
portion of the Available Distribution Amount for such Distribution Date that
will remain after the distribution of interest has been made on the Class A-1
and the Class A-2 Certificates on such Distribution Date.
"Seriously Delinquent Loan": As defined in Section 3.10(a). A Mortgage
Loan shall cease to be a Seriously Delinquent Loan in the event such Mortgage
Loan is no longer a Specially Serviced Mortgage Loan pursuant to the first
proviso to the definition of the term "Specially Serviced Mortgage Loan" and as
to which the related Borrower has made 12 consecutive Monthly Payments since the
date on which such Mortgage Loan became a Seriously Delinquent Loan.
"Servicer": Midland Loan Services, L.P., a
Missouri limited partnership, or its successor in
interest, or any successor Servicer appointed as herein
provided.
"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 Custodian pursuant to Section 2.1 or to be maintained as part of the Trustee
Mortgage File, including without limitation:
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(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 reports and other
similar documents; and
(v) any other written agreements related to such
Mortgage Loan.
"Servicer Remittance Report": A report prepared by the Servicer in such
media as may be agreed upon by the 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 4.1 and to furnish statements
to Certificateholders pursuant to Section 4.2 and containing such additional
information as the Servicer and the Trustee may from time to time agree.
"Servicing Compensation": With respect to each Mortgage Loan, the
Servicing Fee and the Special Servicing Fee which shall be due to the Servicer
and the Special Servicer, as applicable, and such other compensation of the
Servicer and Special Servicer specified in Section 3.12, as adjusted pursuant to
Section 3.25.
"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 Servicing Fee Rate and (ii) the Scheduled Principal
Balance of such Mortgage Loan as of the Due Date in the month preceding the
month in which such Distribution Date occurs.
"Servicing Fee Rate": With respect to each
Mortgage Loan, the per annum rate set forth in the
Mortgage Loan Schedule.
"Servicing Officer": Any officer or employee of the 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 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
countersignature of an officer of the general partner of the Servicer or of an
officer of the Special Servicer, as appropriate.
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"Servicing Standard": The standards for the
conduct of the 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).
"Special Servicer": Midland Loan Services, L.P.,
a Missouri limited partnership, 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 Scheduled 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
0.35%.
"Special Servicing Period": Any Interest Accrual
Period during which a Mortgage Loan is at any time a
Specially Serviced Mortgage Loan.
"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 (regardless of whether, in
respect thereof, P&I Advances have been reimbursed);
(ii) such Borrower has expressed to the
Servicer an inability to pay or a
hardship in paying such Mortgage Loan in
accordance with its terms;
(iii) the 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 Servicer has received notice of a
foreclosure or threatened foreclosure of
any lien on the related Mortgaged Property;
(v) a default of which the Servicer has notice
(other than a failure by such Borrower to
pay principal or interest) and which
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 Property
Advance shall be deemed to materially and
adversely affect the interests of the
Certificateholders;
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(vi) such Borrower has failed to make a Balloon Payment as and when
due (except in the case where the 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); or
(vii) the Servicer proposes to commence
foreclosure or other workout
arrangements;
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)
and (iv) 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, that at the time no circumstance identified in clauses (i)
through (vii) 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 2.6(a).
"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-1, Class
L-2, Class R-I and Class R-II Certificates.
"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 Allocation, or any successor forms, to be filed on behalf of each of
REMIC I and REMIC II 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.
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"Transfer": Any direct or indirect transfer or
other form of assignment of any Ownership Interest in a
Class R-I or Class R-II Certificate.
"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 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; (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
and the REO Account, including reinvestment income, if any, thereon; (xi) any
environmental indemnity agreements relating to such Mortgaged Properties; (xii)
the rights and remedies under the Mortgage Loan Purchase and Sale Agreement; and
(xiii) 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 and REMIC II.
"Trustee": LaSalle National Bank, 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 Scheduled 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 by the Servicer on
each Distribution Date.
"Trustee Fee Rate": A rate equal to
0.0075%.
"Trustee Mortgage File": With respect to any Mortgage Loan, the
mortgage documents listed in Section 2.1(i) through (xiii) 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.
"Uncovered Prepayment Interest Shortfall": For any Distribution Date,
any Prepayment Interest Shortfall not covered by Prepayment Interest Surplus,
the Servicing Fee (excluding the portion representing the Trustee's fees and
reimbursements for Rating Agency Surveillance fees) and, if the Servicer and
Special Servicer are the same person, the Special Servicing Fee pursuant to
Section 3.25.
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"Unscheduled Payments": With respect to a Mortgage Loan and a
Collection Period, all Liquidation Proceeds, Condemnation 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(d) or 2.3(e) 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, a fair market
value appraisal of the related Mortgaged 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 five years
experience in the related property type.
"Voting Right": The portion of the voting rights of all of the
Certificates that is allocated to any Certificate or Class of Certificates. At
all times during the term of this Agreement, the percentage of the Voting Rights
assigned to each Class shall be (a) 0%, in the case of the Class R-I and Class
R-II Certificates, (b) in the case of any of the Class A-1, Class A-2, Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K
Certificates, a percentage equal to the product of (x) 96% so long as the Class
A-EC Notional Balance is greater than zero and 97% thereafter and (y) a
fraction, the numerator of which is equal to the aggregate outstanding
Certificate Balance of such Class of Certificates and the denominator of which
is equal to the aggregate outstanding Certificate Balances of all Classes of
Certificates, (c) in the case of the Class A-EC Certificates, 1% so long as the
Class A-EC Notional Balance is greater than zero and 0% thereafter, (d) in the
case of the Class L-1 Certificates, 0.10% and (e) in the case of the Class L-2
Certificates, 2.90%. The Voting Rights of any Class of Certificates shall be
allocated among Holders of Certificates of such Class in proportion to their
respective Percentage Interests. The aggregate Voting Rights of Holders of more
than one Class of Certificates shall be equal to the sum of the products of each
such Holder's Voting Rights and the percentage of Voting Rights allocated to the
related Class of Certificates.
"Weighted Average Net Mortgage Rate": With respect to any Interest
Accrual Period, a per annum rate equal to the weighted average of the Net
Mortgage Rates as of the first day of such Interest Accrual Period. The "Net
Mortgage Rate" for each Mortgage Loan is the Mortgage Rate for such Mortgage
Loan (in the absence of a default minus the Servicing Fee Rate).
"Weighted Average Pass-Through Rate": With respect to any Interest
Accrual Period, a per annum rate equal to the weighted average of the
Pass-Through Rates for the Regular Certificates (other than the Class A-EC
Certificates) as of the first day of such Interest Accrual Period. For purposes
of computing the Weighted Average Net Pass-Through Rate, the Class L-1 and Class
L-2 Certificates shall be deemed to be a single Class that has both a principal
component and an interest component.
"Workout Fee": As defined in Section
3.12(b).
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"Yield Maintenance Charges": As defined in
Section 4.1(c).
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, Condemnation Proceeds,
Liquidation Proceeds 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 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 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.
Unless the context clearly indicates otherwise, references to section
numbers are to sections of this Agreement.
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 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
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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 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 MCFC Mortgage Loan Purchase and Sale Agreement, the BCMC Mortgage Loan
Purchase and Sale Agreement, the BCMC/MCFC Mortgage Loan Purchase and Sale
Agreement and the GACC Mortgage Loan Purchase and Sale Agreement (other than (i)
the right to recovery of certain transaction expenses, including certain
estimated expenses, and the right to receive certain indemnification payments as
set forth in Sections 1 and 5, respectively, of each such Mortgage Loan Purchase
and Sale Agreement, and (ii) the representations and warranties under Section
2(c) of each such Mortgage Loan Purchase and Sale Agreement). The Depositor
shall cause the Reserve Accounts to be transferred to and held in the name of
the Servicer on behalf of the Trustee as successor to the applicable Mortgage
Loan Seller.
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 to the Servicer, the following documents
or instruments with respect to each such Mortgage Loan:
(i) the original of the related Note, endorsed
by the applicable Mortgage Loan 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
Mortgage Loan 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, the related
original recorded Assignment of Mortgage
to the applicable Mortgage Loan 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 Mortgage Loan 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 Mortgage Loan Seller,
is in suitable form for recordation in
the jurisdiction in which the related
Mortgaged Property is located);
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(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
Mortgage Loan Seller or a counterpart
thereof and the related original
assignment of such security agreement
executed by the applicable Mortgage Loan
Seller in blank which the Trustee or its
designee is authorized to complete;
(iv) a copy of each Form UCC-1 financing
statement, if any, filed with respect to
personal property constituting a part of
the related Mortgaged Property, together
with a copy of each Form UCC-2 or
UCC-3 assignment, if any, to the
applicable Mortgage Loan Seller filed with
respect to such financing statement and a
copy of each Form UCC-2 or
UCC-3 assignment, if any, of such
financing statement executed by the
applicable Mortgage Loan 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
Mortgage Loan Seller, is in suitable form
for filing in the filing office in which
such financing statement was filed);
(v) the related original of the Loan
Agreement, if any, relating to such
Mortgage Loan or a counterpart thereof;
(vi) the related original lender's title insurance policy, 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, the related
original recorded reassignment of such
instrument, if any, to the applicable
Mortgage Loan 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 Mortgage Loan 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 Mortgage Loan 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
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included in a related Assignment of
Mortgage and need not be a separate
instrument);
(viii) copies of the original Environmental
Reports with respect to the Mortgaged
Property;
(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 Mortgage Loan Seller or a
counterpart thereof and the related
original reassignment of such instrument
executed by the applicable Mortgage Loan
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
Mortgage Loan Seller is not the
Originator, together with an assignment of
the agreement);
(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 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 Servicer to
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, a copy of the
UCC-1 financing statements, if any,
submitted for filing with respect to the
security interest of the applicable
Originator in such Reserve Accounts and
all funds contained therein, together
with a copy of each Form UCC-2 or
UCC-3 assignment, if any, to the
applicable Mortgage Loan Seller filed
with respect to such financing statement
and a copy of each Form UCC-2 or
UCC-3 assignment, if any, of such
financing statement executed by the
applicable Mortgage Loan 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
Mortgage Loan
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Seller is in suitable form for filing in
the filing office in which such financing
statement was filed); and
(xiii) the original of each assumption or
substitution 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), and originals
or copies of any and all amendments,
modifications and supplements to, and
waivers related to, any of the foregoing.
On or promptly following the Closing Date, the Trustee or Custodian, as
applicable, shall, to the extent possession thereof has been delivered to it,
complete any Assignment of Mortgage delivered pursuant to clause (ii) above, any
assignment of security agreement delivered pursuant to clause (iii) above, any
Form UCC-2 or UCC-3 assignment delivered pursuant to clause (iv) and (xii)
above, any reassignment of Assignment of Leases, Rents and Profits delivered
pursuant to clause (vii) above and any reassignment of assignment of contracts
delivered pursuant to clause (ix) above, in each case, by inserting the name of
the Trustee as assignee and delivering to the Servicer (1) for recordation, (a)
each Assignment of Mortgage referred to in Section 2.1(ii) which has not yet
been submitted for recordation and (b) each reassignment of Assignment of
Leases, Rents and Profits referred to in Section 2.1(vii) (if not otherwise
included in the related Assignment of Mortgage) which has not yet been submitted
for recordation; and (2) for filing, each UCC-2 or UCC-3 financing statement
assignment referred to in Section 2.1(iv) and (xii) which has not yet been
submitted for filing. On or promptly following the Closing Date, the Trustee or
Custodian, as 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 Servicer shall, upon receipt, 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 Mortgage Loan Seller. In the event that any such document is lost or
returned unrecorded because of a defect therein, the Servicer shall use its best
efforts to promptly prepare a substitute document for signature by the Depositor
or the applicable Mortgage Loan Seller, as applicable, and thereafter the
Servicer shall cause each such document to be duly recorded at the expense of
the applicable Mortgage Loan Seller. The Servicer shall, promptly upon receipt
of the original of each such recorded 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, if applicable,
certified by the public recording office to be a true and complete copy of the
recorded original thereof. If a pro forma title insurance policy has been
delivered to the Custodian in lieu of an original title insurance policy, the
Depositor or the Servicer will promptly deliver to the Custodian the related
original title insurance policy upon receipt thereof. The Depositor shall
promptly cause the UCC-1s, UCC-2s and UCC-3s referred to in Section 2.1(iv) and
(xii) to be filed in the applicable public recording or filing office at the
expense of
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the applicable Mortgage Loan Seller and upon filing will promptly deliver to the
Custodian the related UCC-1, UCC-2 or UCC-3 with evidence of filing thereon.
All original documents relating to the Mortgage Loans which are not
delivered to the Custodian are and shall be held by the Trustee or the 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
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 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 office, in which case
the Depositor or the 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 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
Trustee hereunder in trust, upon the conditions herein set forth, for the use
and benefit of all present and future Certificateholders. The Trustee agrees to
review each Trustee Mortgage File within 45 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 Section 2.1 above
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, 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 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 and the applicable Mortgage Loan Seller (with a copy to the 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 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
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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(i) with respect to the 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(i)
of the Uniform Commercial 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. 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 existing 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,
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
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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 performance 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, transfer,
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) The related Assignment of Mortgage
constitutes the legal, valid and binding
assignment of the related Mortgage from
the Depositor to the Trustee, and any
related reassignment of Assignment of
Leases, Rents and Profits constitutes
the legal, valid and binding assignment
of any 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 warranties
set forth in this Section 2.3 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 Servicer and the Special
Servicer.
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(d) Upon discovery by the Custodian, the Servicer, the Special Servicer
or the Trustee of a breach of the representation and warranty set forth in
Section 2(b)(xxx) of the MCFC Mortgage Loan Purchase and Sale Agreement, the
BCMC Mortgage Loan Purchase and Sale Agreement or the GACC Mortgage Loan
Purchase and Sale Agreement, as applicable, or that any Mortgage Loan otherwise
fails to constitute a Qualified Mortgage, such Person shall give prompt notice
thereof to the applicable Mortgage Loan Seller and the Rating Agencies and such
Mortgage Loan Seller shall, to the extent such Mortgage Loan Seller is obligated
to correct such condition or repurchase the related Mortgage Loan under the
terms of the applicable Mortgage Loan Purchase and Sale Agreement, correct such
condition or repurchase such Mortgage Loan at the Repurchase Price within 85
days of discovery of such failure, all pursuant to and as more particularly
described in the applicable Mortgage Loan Purchase and Sale Agreement; it being
understood and agreed that none of such Persons has an obligation to conduct any
investigation with respect to such matters.
(e) Upon discovery by the Custodian, the Servicer, the Special Servicer
or the Trustee of a breach of any representation or warranty of MCFC with
respect to the MCFC Mortgage Loan Purchase and Sale Agreement, BCMC with respect
to the BCMC Mortgage Loan Purchase and Sale Agreement or GACC with respect to
the GACC Mortgage Loan Purchase and Sale Agreement (other than the
representation set forth in Section 2(a) and 2(b)(xxx) of each such agreement
and Section 2(c) of each such Mortgage Loan Purchase and Sale 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 Mortgage Loan Seller and the Rating Agencies and such Mortgage
Loan Seller shall, to the extent such Mortgage Loan Seller is obligated to cure
such breach or repurchase the related Mortgage Loan under the terms of the
applicable Mortgage Loan Purchase and Sale Agreement, either cure such breach or
repurchase such Mortgage Loan at the Repurchase Price within 85 days of the
receipt of notice of such breach, as the same may be extended, all pursuant to
and as more particularly described in the applicable Mortgage Loan Purchase and
Sale Agreement; it being understood and agreed that none of the Custodian, the
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).
(f) Upon receipt by the Servicer from the applicable Mortgage Loan
Seller of the Repurchase Price for a repurchased Mortgage Loan, the 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 Servicer of the Repurchase Price and the
deposit of the Repurchase Price into the Collection Account pursuant to this
Section 2.3(f), release or cause to be released to the applicable Mortgage Loan
Seller the related Trustee Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by the Servicer to vest in the
applicable Mortgage Loan Seller any Mortgage Loan released pursuant hereto, and
any rights of the Depositor in, to and under the applicable Mortgage Loan
Purchase and Sale Agreement, as such agreement related to such Mortgage Loan
that were initially transferred to the Trust Fund under Section 2.1, and the
Trustee, Special Servicer and the
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Servicer shall have no further responsibility with regard to such Trustee
Mortgage File or the related Mortgage Loan.
(g) In the event that the applicable Mortgage Loan Seller incurs any
expense in connection with curing a breach of a representation or warranty
pursuant to Section 2.3(d) and (e) which also constitutes a default under the
related Mortgage Loan, the applicable Mortgage Loan Seller shall have a right,
and the applicable Mortgage Loan 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 Servicer or Special Servicer, as applicable,
shall use reasonable efforts in recovering, or assisting the applicable Mortgage
Loan Seller in recovering, from such Borrower the amount of any such expenses.
(h) 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.
(i) The Servicer or the Special Servicer, as applicable, shall use its
best efforts, in accordance with the Servicing Standard, to enforce the
obligations of each Mortgage Loan Seller to cure 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 and Sale Agreement) under the terms of
the applicable Mortgage Loan Purchase and Sale Agreement.
SECTION 2.4. Representations, Warranties and
Covenants of the Servicer and
the Special Servicer.
(a) The Servicer hereby represents, warrants
and covenants that as of the Closing Date:
(i) The Servicer is a limited partnership,
duly organized, validly existing and in
good standing under the laws of the State
of Missouri and has all licenses necessary
to carry on its business as now being
conducted or 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 Servicer has the full partnership
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 Servicer and its performance and
compliance with the terms of this
Agreement do not violate the Servicer's
certificate of limited partnership 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 Servicer
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is a party or which may be applicable to the 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 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 Servicer and, assuming due
authorization, execution and delivery by
the other parties hereto, constitutes a
legal, valid and binding obligation of
the 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 Servicer is not in violation of, and
the execution and delivery of this
Agreement by the 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
Servicer or its properties taken as a
whole or impair the ability of the Trust
Fund to realize on the Mortgage Loans;
(v) There is no action, suit or proceeding
pending or, to the knowledge of the
Servicer, threatened, against the 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
Servicer or would, if adversely
determined, materially impair the ability
of the Servicer to perform under the terms
of this Agreement or which would 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 Servicer contemplated
herein; and
(vi) No consent, approval, authorization or
order of, or registration or filing with,
or notice to any court or governmental
agency or body is required for the
execution, delivery and performance by the
Servicer of, or compliance by the Servicer
with, this Agreement or, if required, such
approval has been obtained prior to the
Cut-off Date, except to the extent that
the failure of the Servicer to be
qualified as a foreign limited partnership
or licensed in one or more states is not
necessary for the enforcement of the
Mortgage Loans.
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(b) The Special Servicer hereby represents, warrants and covenants that
as of the Closing Date:
(i) The Special Servicer is a limited
partnership, duly organized, validly
existing and in good standing under the
laws of the State of Missouri and has all
licenses necessary to carry on its
business as now being conducted or 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;
(ii) The Special Servicer has the full
partnership 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 limited partnership 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 condition
(financial or otherwise) 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 execution 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
condition (financial or otherwise) or
operations of the Special Servicer or its
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properties taken as a whole or impair the
ability of the Trust Fund to realize on
the Specially Serviced Mortgage Loans;
(v) There is no action, suit or proceeding
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, if adversely determined, materially
impair the ability of the Special Servicer
to perform under the terms of this
Agreement or which would 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; and
(vi) No consent, approval, authorization or
order of, or registration 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 Cut-off Date, except
to the extent that the failure of the
Special Servicer to be qualified as a
foreign limited partnership or licensed in
one or more states is not necessary for
the enforcement of the Specially Serviced
Mortgage Loans.
(c) It is understood and agreed that the representations and warranties
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 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 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 2.5. Execution and Delivery of
Certificates; Issuance of REMIC
I 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 Regular Certificates and the Class R-II Certificates; and
(ii) has caused to be executed and caused to be authenticated and delivered to
or upon the order of the Depositor, or as directed by the terms of this
Agreement, Class A-1, Class A-2, Class
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A-EC, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L-1, Class L-2, Class R-I, and Class R-II 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
(ii)) evidence ownership of the entire Trust Fund.
SECTION 2.6. Miscellaneous REMIC Provisions.
(a) The Class A-L-1, Class A-L-2, Class B-L, Class C-L, Class D-L,
Class E-L, Class F-L, Class G-L, Class H-L, Class J-L, Class K-L and Class L-L
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 Class A-1, Class A-2, Class
A-EC, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L-1 and Class L-2 Certificates are hereby 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
Closing Date is hereby designated as the "Startup Day" of REMIC I and REMIC II
within the meaning of Section 860G(a)(9) of the Code. The "latest possible
maturity date" of the REMIC I Regular Interests and the Regular Certificates for
purposes of Code Section 860G(a)(1) is the Scheduled Final Distribution Date.
The initial Certificate Balance of each Class of REMIC I Regular Interests is
equal to the Certificate Balance of the Related Class of Certificates. The
pass-through rate of each Class of REMIC I Regular Interests is a per annum rate
equal to the REMIC I Pass-Through Rate.
(b) None of the Depositor, Trustee, Fiscal Agent, Special Servicer or
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 2.7. Documents Not Delivered to
Custodian.
All original documents relating to the Mortgage Loans which are part of
the Servicer Mortgage File are and shall be held by the 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 Servicer shall immediately
vest in the Trustee, in trust for the benefit of the Certificateholders.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Servicer to Act as
Servicer; Special
Servicer to Act as
Special Servicer;
Administration of the
Mortgage Loans.
(a) The 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 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 Servicer, the Special Servicer,
any sub- servicer or any Affiliate of the Servicer, the Special
Servicer or any subservicer may have with the related Borrower
or any Affiliate of such Borrower;
(ii) the ownership of any Certificate by the
Servicer, the Special Servicer or any
Affiliate of either;
(iii) the Servicer's, the Trustee's or the Fiscal Agent's obligation
to make P&I Advances or Property Advances or to incur
servicing expenses with respect to such Mortgage Loan;
(iv) the 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; or
(v) the ownership or servicing or management for others by the
Servicer, the Special Servicer or any sub-servicer, of any other
mortgage loans or property.
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The standards set forth above with respect to the conduct of the
Servicer and the Special Servicer in the performance of their respective
obligations under this Agreement is herein referred to as the "Servicing
Standard."
The Servicer's or the Special Servicer's liability for actions and
omissions in its capacity as 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 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
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 Servicer and the Special
Servicer shall have full power and authority, acting alone or through
sub-servicers (subject to paragraph (d) of this Section 3.1 and 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 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.
Notwithstanding the foregoing, neither the Servicer nor the Special Servicer
shall modify, amend, waive or otherwise consent to the change of the stated
Maturity Date of any Mortgage Loan, the payment of principal of, or interest or
Default Interest on, any Mortgage Loan, or any other term of a Mortgage Loan,
unless (a) such modification, amendment, waiver or consent is not a "significant
modification" under Section 1001 of the Code, including proposed, temporary or
final Treasury regulations thereunder, or Treasury Regulations Section
1.860G-2(b)(3) (other than clause (i) thereof), (b) to the extent such
modification, amendment, waiver or consent would constitute a "significant
modification" under the preceding clause (a), such Mortgage Loan is in default
or a default with respect thereto is reasonably foreseeable or (c) permitted by
Section 3.10; provided, however, that neither the Servicer nor the Special
Servicer may agree to any retroactive modification, amendment, waiver or
consent. The Servicer and the Special Servicer shall service and administer 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 Servicer and the
Special Servicer any powers of attorney and other documents prepared by the
Servicer or the Special Servicer and necessary or appropriate (as certified in
such written request) to enable the 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 Servicer or Special
Servicer under any such powers of attorney.
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(b) Unless otherwise provided in the related Note, the 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.
(c) [Reserved].
(d) The 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 Servicer or
the Special Servicer shall grant any modification, waiver or amendment to any
Mortgage Loan without the approval of the Servicer or the Special Servicer, as
applicable, and (3) such agreement shall be consistent with the standards set
forth in Section 3.1(a). 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 3.1(d).
Any sub-servicing agreement entered into by the Servicer or the Special
Servicer, shall provide that it may be assumed or terminated by the Trustee if
the Trustee or a successor Servicer or Special Servicer has assumed the duties
of the 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 Servicer or Special Servicer of the
obligations of the Servicer or the Special Servicer, as applicable, pursuant to
Section 7.2.
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 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, obligations, duties or
liabilities with respect to the sub-servicer, including the Depositor acting in
such capacity, except as set forth in Section 3.1(e).
(e) If the Trustee or any successor Servicer or Special Servicer
assumes the obligations of the Servicer or the Special Servicer, as applicable,
in accordance with Section 7.2, the Trustee or such successor Servicer or
Special Servicer, to the extent necessary to permit the Trustee or such
successor 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
Servicer or Special Servicer, succeed to all of the rights and obligations of
the Servicer or Special Servicer under any sub-servicing agreement entered into
by the Servicer or Special Servicer pursuant to Section 3.1(d), subject to the
right of termination by the Trustee set forth in Section 3.1(d). In such event,
the Trustee or such successor Servicer or Special Servicer shall be deemed to
have assumed all of the Servicer's or Special Servicer's interest therein (but
not any liabilities or obligations in respect of acts or omissions of the
Servicer or Special Servicer prior to such deemed assumption) and to have
replaced the 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 Servicer, except that the
Servicer or the
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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 Servicer or Special Servicer.
In the event that the Trustee or any successor Servicer or Special
Servicer assumes the servicing obligations of the Servicer or the Special
Servicer, as the case may be, upon request of the Trustee or such successor
Servicer or Special Servicer, as the case may be, the Servicer or Special
Servicer shall, at its own expense, deliver to the Trustee or such successor
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 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 Servicer.
SECTION 3.2. Liability of the Servicer.
Notwithstanding any sub-servicing agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the 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 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 Servicer or Special Servicer, as applicable, were servicing
and administering the Mortgage Loans alone. The Servicer or the Special
Servicer, as applicable, shall be entitled to enter into an agreement with any
sub-servicer providing for indemnification of the 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 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 Servicer only)
reasonable advance notice to such Borrowers of Balloon Payments due with respect
to such Mortgage Loans. Consistent with the foregoing, the 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.
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SECTION 3.4. Collection of Taxes,
Assessments and
Similar Items.
(a) With respect to each Mortgage Loan (other than REO Mortgage Loans),
the 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
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
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 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 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 Servicer shall make such advance
within five Business Days after the Servicer has received confirmation that such
item has not been paid. The Servicer shall be entitled to reimbursement of
Property Advances that it makes pursuant to the preceding sentence, with
interest thereon at the Advance Rate, from amounts received on or in respect of
the Mortgage Loan respecting which such Property Advance was made or if such
Property Advance has become a Nonrecoverable Advance, to the extent permitted by
Section 3.6 of this Agreement. No costs incurred by the 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 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 (each, an "Escrow Account")
into which all Escrow Payments shall be deposited within one (1) Business Day
after receipt. The 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, L.P., as Servicer, in trust for LaSalle
National Bank, as Trustee in trust for Holders of Midland Realty Acceptance
Corp. Commercial Mortgage Pass-Through Certificates, Series 1996-C2, and Various
Borrowers." Withdrawals from an Escrow Account may be made by the Servicer only:
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(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 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 termination of this Agreement;
(v) to pay from time to time to the 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;
(vi) to remit to the related Borrower the
Financial and Lease Reporting Fee as and
when required pursuant to the related
Mortgage; and
(vii) to remove any funds deposited in such Escrow Account that were
not required to be deposited therein.
SECTION 3.5. Collection Account;
Distribution Account.
(a) The 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 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;
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(iii) any amounts required to be deposited pursuant to Section
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 Condemnation Proceeds,
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 recoveries of Property Advances
made pursuant to Section 3.4; and
(vi) any other amounts required by the
provisions of this Agreement to be
deposited into the Collection Account by
the Servicer or the Special Servicer,
including, without limitation, proceeds of
any purchase or repurchase of a Mortgage
Loan pursuant to Section 2.3(d) or
(e), Section 3.18 or Section 9.1.
The foregoing requirements for deposits in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
late fees, NSF check charges, Assumption Fees, loan modification fees, loan
service transaction fees, extension fees, demand fees, beneficiary statement
charges and similar fees need not be deposited in the Collection Account by the
Servicer and, to the extent permitted by applicable law, the Servicer or the
Special Servicer, as applicable, shall be entitled to retain any such charges
and fees received with respect to the Mortgage Loans. In the event that the
Servicer deposits in the Collection Account any amount not required to be
deposited therein, the 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 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.
SECTION 3.6. Permitted Withdrawals from the
Collection Account.
The 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):
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(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
4.6;
(ii) to pay or reimburse the Servicer, the
Trustee or the Fiscal Agent for
Advances, the right of the 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 Servicer, the Trustee or
the Fiscal Agent the Advance Interest
Amount;
(iv) to pay on or before each Remittance Date
to the Servicer and the Special Servicer,
as applicable, as compensation, the unpaid
Servicing Fee and Special Servicing Fee,
respectively, in respect of the related
Distribution Date (in each case, 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 Servicing Fee, from interest
received on the related Mortgage Loans,
and to pay from time to time, to the
Servicer any interest or investment income
earned on funds deposited in the
Collection Account, and to pay to the
Servicer as additional Servicing
Compensation any Prepayment Interest
Surplus received in the preceding
Collection Period and to pay to the
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 Mortgage Loan Seller
or the purchaser of any Specially Serviced
Mortgage Loan or REO Property, as the case
may be, with respect to each Mortgage Loan
or REO Property that has previously been
purchased or repurchased by it pursuant to
Section 2.3(d), 2.3(e), 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
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
3.12(d), Section 3.17(a),
(b) and (c), Section 3.18(a),
6.3, 7.4, 8.5(d),
9.1(d) or Section 10.7, or any
other provision
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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 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 and REMIC II under the
circumstances and to the extent
described in Section 4.5;
(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 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 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 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 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 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 are to be reimbursed or paid from
amounts on deposit in the Collection Account pursuant to this Agreement.
SECTION 3.7. Investment of Funds in the
Collection Account, the
Distribution Account and the
Reserve Accounts.
(a) The 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
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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 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 Servicer shall act upon the written request of the related
Borrower or Manager to the extent the 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 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 Servicer or the Special Servicer, as applicable,
as an independent contractor to the Trust Fund) over each such investment and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent (which shall initially be the
Servicer), 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
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 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
(y) demand payment of all amounts due
thereunder promptly upon
determination by the 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 Servicer (other than income or gain realized from investment of
funds on deposit in the Distribution Account made
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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 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
Servicer may request that the Trustee withdraw and remit to the Servicer all
amounts due to it with respect to the Distribution Account pursuant to the
preceding sentence. The Servicer shall deposit from its own funds in 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 in any REO Account the amount of any loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss. The
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 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 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 for each Mortgage Loan (other than REO Mortgage Loans), and
if the Borrower does not so maintain, shall itself maintain (subject to the
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 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 12 months of
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rent interruptions and (C) such other insurance (including public liability
insurance), in each case as required in the related Mortgage Loan Documents. 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 Servicer or the Special Servicer, as
applicable, 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 12 months of rent interruptions, and (C) such other insurance, in each
case as required in the related Mortgage Loan. In the case of any insurance
otherwise required to be maintained pursuant to this section that is not being
so maintained because the Servicer or the Special Servicer, as applicable, has
deemed that it is not available at commercially reasonable rates, the Servicer
or the Special Servicer, as applicable, shall deliver an Officer's Certificate
to the Trustee detailing the steps that the 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 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 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 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 Servicer
will use its reasonable efforts in accordance with the Servicing Standard to
cause the related Borrower, to the extent required under the related Mortgage
Loan Documents, 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. 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 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
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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 Servicer of maintaining insurance policies pursuant to this
Section 3.8 shall be paid by the Servicer as a Property Advance and shall be
reimbursable to the 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 Servicer and the Special Servicer agree to prepare and present, on
behalf of itself, the Trustee and the Certificateholders, claims under each
related insurance policy 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 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 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
Servicer before termination to the extent required by the related Mortgage Loan
Documents.
(b) (I) If the 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, 12-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 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 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 Servicer or Special
Servicer hereunder, as applicable, the 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) The Servicer and the Special Servicer shall each maintain a
master force placed insurance policy, to the extent available at commercially
reasonable rates, issued by a Qualified Insurer that provides no less coverage
in scope and amount than the insurance
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required to be maintained pursuant to Section 3.8(a). If the Servicer or the
Special Servicer, as applicable, causes any Mortgaged Property or REO Property
to be covered by a master force placed insurance policy, the 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 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 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 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 Servicer or the Special Servicer, as applicable. In addition,
each of the 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. Each of the Servicer and the
Special Servicer shall cause each and every sub-servicer for it to maintain, or
cause to be maintained by any agent or contractor servicing any Mortgage Loan on
behalf of such subservicer, a fidelity bond and an errors and omissions
insurance policy which satisfy the requirements for the fidelity bond and the
errors and omissions policy to be maintained by the Servicer or the Special
Servicer pursuant to this Section 3.8(c). All fidelity bonds and policies of
errors and omissions insurance obtained under this Section 3.8(c) shall be
issued by a Qualified Insurer.
SECTION 3.9. Enforcement of
Due-On-Sale Clauses;
Assumption Agreements.
(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,
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then, for so long as such Mortgage Loan is included in the Trust Fund, the
Servicer or the Special Servicer, as applicable, on behalf of the Trust Fund,
shall enforce such provision to the extent permitted under the terms of such
Mortgage Loan, applicable law and governmental regulations, unless such
provision is not enforceable under applicable law or such enforcement is
reasonably likely to result in meritorious legal action by the related Borrower
or except to the extent that the Servicer or the Special Servicer, as
applicable, acting in accordance with the Servicing Standard, determines that
such enforcement would not be in the best interests of the Trust Fund. Subject
to the foregoing, the Servicer or the Special Servicer, as applicable, 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 Servicer or the Special Servicer, as applicable, shall enter into an
assumption or substitution agreement only if the credit status of the
prospective new Borrower is in compliance with the Servicer's or the Special
Servicer's, as applicable, regular commercial mortgage origination or servicing
standards and criteria and the terms of the related Mortgage Loan and the
Servicing Standard. The Servicer or the Special Servicer, as applicable, 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 Servicer or the Special Servicer, as applicable, for
entering into an assumption or substitution agreement will be retained by the
Servicer or the Special Servicer, as applicable, as additional servicing
compensation. Notwithstanding the foregoing, the Servicer or 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:
(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 creation 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
Servicer or the Special Servicer, as applicable, on behalf of the Trust Fund,
shall enforce such provision and in connection therewith shall (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 Servicer or the Special Servicer, as applicable,
acting in
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accordance with the Servicing Standard, determines that such enforcement would
not be in the best interests of the Trust Fund. Notwithstanding the foregoing,
the Servicer or the Special Servicer, as applicable, 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 Servicer or the Special Servicer, as
applicable, 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.
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, 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. Contemporaneously with the
earliest to occur of (i) the effective date of any modification, amendment,
waiver or consent to a change of the stated maturity, Mortgage Rate, principal
balance or amortization terms of any Specially Serviced Mortgage Loan, or any
other term of a Mortgage Loan to the extent such modification, amendment, waiver
or consent would constitute a "significant" modification under Section 1001 of
the Code, including proposed Treasury regulations thereunder, as to which
Mortgage Loan a default has occurred or is reasonably foreseeable, (ii) 90 days
after the occurrence of any uncured payment delinquency, (iii) the appointment
of a receiver in respect of a Mortgaged Property, or (iv) the date a Mortgaged
Property securing a Mortgage Loan becomes an REO Property (each such Mortgage
Loan, a "Seriously Delinquent Loan"), the Special Servicer shall promptly order
an Updated Appraisal of the Mortgaged Property securing such Mortgage Loan,
except to the extent such appraisal had been previously obtained within the
prior 12 months. In addition, the Special Servicer shall promptly order a new
Updated Appraisal or an update of the prior Updated Appraisal in the event any
Mortgage Loan is a Seriously Delinquent Loan and such prior Updated Appraisal is
more than 12 months old. The Special Servicer shall provide the Servicer with a
copy of the Updated Appraisal promptly after the Special Servicer's receipt
thereof.
Following a default by a Borrower in the payment of a Balloon Payment,
the Special Servicer may grant successive extensions; provided, however, the
Special Servicer shall not grant any extension that would extend the Maturity
Date beyond the date occurring on or after January 25, 2029.
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(b) In connection with any foreclosure or other acquisition, the
Servicer shall, at the direction of the Special Servicer, pay the costs and
expenses in any such proceedings as an Advance unless the Servicer determines,
in its good faith judgment, that such Advance would constitute a Nonrecoverable
Advance. The Servicer shall be entitled to reimbursement of Advances (with
interest at the Advance Rate) made pursuant to the preceding sentence to the
extent permitted by Section 3.6(ii) (or Section 3.6(iii), in the case of
interest at the Advance Rate).
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
Servicer or the Special Servicer) or a separate trustee or co-trustee on behalf
of the Trustee as holder of the REMIC I Regular Interests and
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 Scheduled 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 indebtedness evidenced by the
related Note shall have been discharged,
such Note and, for purposes of determining
the Scheduled 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
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Net REO Proceeds exceed the 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:
(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 (which opinion shall be an
expense of the Trust Fund) to the effect
that the holding of such personal
property by REMIC I will not cause the
imposition of a tax on REMIC I or
REMIC II under the REMIC Provisions or
cause REMIC I or REMIC II 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 (which opinion shall be an expense
of the Trust Fund) 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 or REMIC II under the REMIC Provisions or cause REMIC I or REMIC II 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
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(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 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.
(f) The environmental assessment contemplated by Section 3.10(f) 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 Servicer shall at the direction of
the Special Servicer advance the cost of preparation of such environmental
assessments unless the Servicer determines, in its good faith judgment, that
such Advance would be a Nonrecoverable Advance. The Servicer shall be entitled
to reimbursement of Advances (with interest at the Advance Rate) made pursuant
to the preceding sentence to the extent permitted pursuant to Section 3.6.
(g) If the Special Servicer determines pursuant to Section 3.10(f)(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(f)(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(f)), but only if the Trustee has mailed notice to the
Holders of the 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 Servicer or the Special
Servicer shall be obligated to take any action or not take any action pursuant
to this Section 3.10(h) at the direction of the Certificateholders unless the
Certificateholders agree to indemnify the Trustee, the Servicer and the Special
Servicer with respect to such action or inaction. None of the
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Special Servicer, 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.
(h) 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.
(i) The costs of any Updated Appraisal obtained pursuant to this
Section 3.10 shall be paid by the Servicer as an Advance and shall be
reimbursable (with interest thereon at the Advance Rate) from the Collection
Account pursuant to Section 3.6.
SECTION 3.11. Trustee to Cooperate;
Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes, the 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 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 Servicer or the
Special Servicer, as applicable. Upon receipt of (a) such Mortgage File (or
portion thereof) by the Custodian from the 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 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
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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 and
Trustee Fees.
(a) As compensation for its activities hereunder, the Servicer shall be
entitled to the Servicing Fee, which shall be payable solely from receipts on
the related Mortgage Loans, and may be withheld from payments 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 Servicer's rights to the Servicing Fee may not be transferred in whole or in
part except in connection with the transfer of all of the Servicer's
responsibilities and obligations under this Agreement. In addition, the Servicer
shall be entitled to receive, as additional servicing compensation, any
Prepayment Interest Surplus (subject to Section 3.25) and, to the extent
permitted by applicable law and the related Notes and Mortgages, any late
payment charges, late fees, NSF check charges (including with respect to
Specially Serviced Mortgage Loans), demand fees, Assumption Fees, loan
modification fees, extension fees, Financial and Lease Reporting Fees (to the
extent such fees are not required to be remitted to the related Borrower
pursuant to the related Note), loan service transaction fees, beneficiary
statement charges, or similar items (but not including any Default Interest or
Prepayment Premiums, except to the extent permitted under Section 4.1(c)), in
each case to the extent received, with respect to any Mortgage Loan that is not
a Specially Serviced Mortgage Loan and not required to be deposited or retained
in the Collection Account pursuant to Section 3.5. The 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.
As compensation for its activities hereunder, the Trustee shall be
entitled to the Trustee Fee with respect to each Mortgage Loan, which shall be
paid by the Servicer from its own funds on each Distribution Date without
reimbursement therefor. 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.
Except as otherwise provided herein, the Servicer shall pay all
expenses incurred by it in connection with its servicing activities hereunder
and the Trustee shall pay all expenses incurred by it in connection with its
activities hereunder. In addition, the Servicer shall be obligated to pay the
ongoing surveillance fees of the Rating Agencies with respect to maintaining the
ratings on 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
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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.
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, late fees, demand
fees, Assumption Fees, loan modification fees, extension fees, Financial and
Lease Reporting Fees (to the extent such fees are not required to be remitted to
the related Borrower pursuant to the related Note), 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 and not required to be
deposited or retained in the Collection Account pursuant to Section 3.5.
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 Servicer
or the Special Servicer with respect to each Corrected Mortgage Loan. If any
Corrected Mortgaged Loan again becomes a Specially Serviced Mortgage Loan, any
right to the Workout Fee with respect to such Mortgaged 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) The Servicer, the Special Servicer and the Trustee shall be
entitled to reimbursement from the Trust Fund for the cost and expenses
specifically set forth herein as reimbursable by the Trust Fund and for the
unanticipated costs and expenses incurred by them in the performance of their
duties under this Agreement which are "unanticipated expenses incurred by the
REMIC" within the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii).
Such expenses shall include, by way of example and not by way of limitation,
environmental assessments, appraisals in connection with foreclosure, the fees
and expenses of any administrative or judicial proceeding and expenses expressly
identified as reimbursable in Section 3.6(vi).
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(e) No provision of this Agreement or of the Certificates shall require
the Servicer, the Special Servicer, the Trustee or the Fiscal Agent to expend or
risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder or thereunder, or in the exercise
of any of their rights or powers, if, in the good faith business judgment of the
Servicer, Special Servicer, Trustee or the Fiscal Agent, as the case may be,
repayment of such funds would not be ultimately recoverable from late payments,
Insurance Proceeds, Condemnation Proceeds, Net Liquidation Proceeds and other
collections on or in respect of the Mortgage Loans, or from adequate indemnity
from other assets comprising the Trust Fund against such risk or liability.
If the 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 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 Servicer, the Special Servicer or the
Trustee, the cost of which would not be an expense of the Trust Fund hereunder,
then the 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 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 Servicer, the Special Servicer or the Trustee, as
the case may be, in its sole discretion. Unless such arrangements have been
made, the 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 Servicer shall deliver to the Paying Agent, with a copy to the
Trustee, the Fiscal Agent and each Rating Agency, no later than the third
Business Day following each Determination Date, but in any event no later than
the third Business Day prior to the related Distribution Date, (i) the Servicer
Remittance Report with respect to such Determination Date (which shall include,
without limitation, the amount of Pooled Available Funds for the related
Distribution Date) and (ii) 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 Servicer makes deposits into and withdrawals
from the Collection Account, not later than fifteen days after each Distribution
Date, the Servicer shall forward to the Trustee a statement prepared by the
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.
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(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 Servicer or the Special Servicer pursuant to this Agreement.
SECTION 3.14. Annual Statement as to
Compliance.
The Servicer and the Special Servicer shall deliver to the Trustee, the
Rating Agencies and to the Depositor on or before March 31 of each year,
beginning with March 31, 1998, an Officer's Certificate stating, as to each
signatory thereof, (i) that a review of the activities of the 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 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 or REMIC
II as a REMIC from the IRS or any other governmental agency or body.
SECTION 3.15. Annual Independent Public
Accountants' Servicing
Report.
On or before March 31 of each year, beginning with March 31, 1998 the
Servicer and the Special Servicer at its expense shall cause a nationally
recognized firm of Independent public accountants (who may also render other
services to the 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 for the preceding twelve (12) months
and that their examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, disclosed no exceptions or errors in records
relating to the servicing of the Mortgage Loans in accordance with the terms of
this Agreement that in their opinion are material, except for such exceptions as
set forth in their statement.
SECTION 3.16. Access to Certain
Documentation.
(a) The 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 without charge but only upon
reasonable request
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and during normal business hours at the offices of the
Servicer or the Special Servicer, as applicable.
(b) In connection with the solicitation of bids to purchase the
Mortgage Loans pursuant to Section 9.1(d), the Servicer and the Special Servicer
shall, in accordance with the Auction Procedures, provide each Qualified Bidder
who has paid the non-refundable deposit required pursuant to Section 9.1(d)(vi)
with access to all documents that the Auction Agent considers material to
prospective purchasers in connection with their evaluation of the purchase of
the Mortgage Loans and shall cooperate with the Auction Agent in order to
facilitate prospective purchasers' due diligence in accordance with the Auction
Procedures, including without limitation the provision of facilities in which
copies of each Mortgage File may be reviewed, provision of facilities for the
photocopying of documents relating to Mortgages in return for payment of
expenses of such photocopying, cooperation in arranging access to Mortgaged
Properties and such other matters as the Auction Agent may reasonably request;
provided, however, that the Servicer or the Special Servicer, as applicable,
shall be entitled to be compensated by Qualified Bidders for its costs of
providing such access, cooperation and facilities.
(c) Nothing in this Section 3.16 shall detract from the obligation of
the 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
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 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 two years after the Trust
Fund acquires ownership of such REO Property for purposes of Section 860G(a)(8)
of the Code, unless (i) the Special Servicer, on behalf of REMIC I, has applied
for and received an extension of such two-year 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 (which
opinion shall be an expense of the Trust Fund), 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
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Property within such two-year period as extended by such additional specified
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.
(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 National Bank, as Trustee, in trust for
Holders of Midland Realty Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1996-C2, 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 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 due and payable in
respect of such REO Property;
(ii) all real estate taxes and assessments in
respect of such REO Property that may
result in the imposition of a lien
thereon; and
(iii) all costs and expenses reasonable and necessary to protect,
maintain, manage, operate, repair and restore such REO
Property, 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 Servicer shall make an Advance
equal to the amount of such shortfall unless the Servicer determines, in its
good faith judgment, that such Advance would be a Nonrecoverable Advance. The
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
Servicer from
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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:
(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 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;
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(ii) 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;
(iii) 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
(iv) the Special Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of
such REO Property.
The Special Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
(c) 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 3.10 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 five years experience in the
relevant property type and the cost thereof shall be an expense of the Trust
Fund.
(d) 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).
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,
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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 may then offer to sell to any Person such Specially Serviced
Mortgage Loan or such REO Property but shall, in any event, so offer to sell
such REO Property no later than the time determined by the Special Servicer to
be sufficient to result in the sale of such 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 an
Interested Person, or is determined to be such a price by the Trustee if the
offeror is an Interested Person; 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
Certificateholders and that the end of the two-year 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 two-year 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.
(b) 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 3.10(a) and, as applicable, among other factors, 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).
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(c) 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 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 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.
(d) 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.
The 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 such times and in such manner as are
consistent with the Servicing Standard, but shall in any event (i) inspect each
Mortgaged Property at least once every 12 months with the first such inspection
being completed during or prior to June, 1998, unless each of the Rating
Agencies has confirmed in writing that a longer period between inspections
(which may not exceed 24 months) shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by such
Rating Agency to any Class of the Certificates; (ii) if the Servicer or the
Special Servicer retains any Financial and Lease Reporting Fees pursuant to
Section 3.12, inspect the related Mortgaged Property as soon as practicable
thereafter, except to the extent such Mortgaged Property has been inspected by
the Servicer or the Special Servicer within the immediately preceding 120 days;
and (iii) if any Monthly Payment becomes more than 60 days delinquent (without
giving effect to any grace period permitted under the related Note or Mortgage)
on any Mortgage Loan, inspect each related Mortgaged Property as soon as
practicable thereafter.
SECTION 3.20. Available Information and
Notices.
The Servicer or the Special Servicer, if applicable, shall promptly
give notice to the Trustee, who will copy each Certificateholder, each Rating
Agency, the Depositor, the Placement Agents and the Mortgage Loan 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 Servicer or the
Special Servicer determines, in accordance with the Servicing
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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 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
Servicer, the Special Servicer or the Trustee hereunder, and the 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.
In addition to the other reports and information made available and
distributed to the Depositor, the Placement Agents, the Trustee or the
Certificateholders pursuant to other provisions of this Agreement, the 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 Servicer or the Special Servicer as
applicable, for any liability or damage that may arise therefrom, be executed to
the extent the 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 Rating Agencies, the Placement Agents, the Trustee,
the Certificateholders and any other Persons to whom the Servicer or the Special
Servicer, as the case may be, believes such disclosure is appropriate, in each
case except to the extent doing so is prohibited by applicable law or by any
documents related to a Mortgage Loan.
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, any Certificateholder, the
Placement Agents, 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 4.2(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 Servicer or the Special Servicer. The Servicer
or the Special Servicer, as appropriate, shall make available at its offices
during normal business hours, for review by the Depositor, the Placement Agents,
the Trustee, the Rating Agencies, any Certificateholder, any Person identified
to the Servicer or the Special Servicer, as applicable, by a Certificateholder
as a prospective transferee of a Certificate and any other Persons to whom the
Servicer or the Special Servicer, as applicable, believes such disclosure is
appropriate, the following items: (i) the inspection reports prepared by or on
behalf of the Servicer or the Special Servicer, as applicable, in connection
with the property inspections conducted by the Servicer or the Special Servicer,
as applicable, pursuant to Section 3.19, (ii) any and all modifications,
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waivers and amendments of the terms of a Mortgage Loan entered into by the
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
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 Servicer, the Special
Servicer or the Trustee, as applicable, upon request (subject to the exception
in the preceding sentence). The Servicer, the Special Servicer and the Trustee
shall be permitted to require payment (other than from any Rating Agency) 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 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 Servicer or the Trustee 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.
SECTION 3.21. Reserve Accounts.
The Servicer shall administer each Reserve Account in accordance with
the related Mortgage Loan Documents.
SECTION 3.22. Property Advances.
(a) The Servicer (or, to the extent provided in Section 3.22(b), the
Trustee or the Fiscal Agent) shall make any Property Advances as and to the
extent otherwise required pursuant to the terms hereof. For purpose of
calculating distributions to the Certificateholders, Property 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 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
Property Advance required to be made pursuant to the terms hereof, and in
connection therewith, shall set forth in such notice the amount of such Property
Advance, the Person to whom it should be paid, and the circumstances and purpose
of such Property Advance, and shall set forth therein information and
instructions for the payment of such Property Advance, and, on the date
specified in such notice for the payment of such Property 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
Property Advance in accordance with such information and instructions. If the
Trustee fails to make any Property 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 Property Advance and, thereby, the Trustee
shall not be in default under this Agreement.
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(c) Notwithstanding anything herein to the contrary, none of the
Servicer, the Trustee or the Fiscal Agent shall be obligated to make a Property
Advance as to any Mortgage Loan or REO Property if the Servicer, the Trustee or
the Fiscal Agent as applicable, determines that such Property 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 Servicer that a
Property Advance, if made, would be a Nonrecoverable Advance. The Trustee and
the Fiscal Agent, in determining whether or not a Property Advance previously
made is, or a proposed Property Advance, if made, would be, a Nonrecoverable
Advance shall be subject to the standards applicable to the Servicer hereunder.
(d) The Servicer, the Trustee and/or the Fiscal Agent, as applicable,
shall be entitled to, and the Servicer hereby covenants and agrees to promptly
seek and effect, the reimbursement of Property 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 Property Advances.
(e) The Servicer, the Trustee and/or the Fiscal Agent shall not be
required to make a Property Advance for any amounts required to cure any failure
of any Mortgaged Property to comply with the Americans with Disabilities Act of
1990, as amended, and all rules and regulations promulgated pursuant thereto, or
any applicable environmental law, and such amounts shall be paid as an expense
of the Trust Fund.
SECTION 3.23. Appointment of Special
Servicer.
Midland Loan Services, L.P. is hereby appointed
as the initial Special Servicer hereunder.
The Special Servicer may be removed without cause and a successor
Special Servicer appointed (i) first, with the written consent of the Special
Servicer, by the Holders of the majority of the aggregate Voting Rights of the
Class L-2, Class L-1, Class J and Class K Certificates, but only until such time
as Realized Losses allocated to the Class L-1 Certificate equal or exceed 75% of
the initial Certificate Balance of such Class; (ii) second, by the Holders of
the majority of the aggregate Voting Rights of the Class K Certificates, but
only until such time as Realized Losses allocated to the Class K Certificates
equal or exceed 50% of the initial Certificate Balance of such Class; and (iii)
third, by the Holders of the majority of the aggregate Voting Rights of the
Class J Certificates, but only until such time as Realized Losses allocated to
the Class J Certificates equal or exceed 50% of the initial Certificate Balance
of such Class; and (iv) thereafter, by the Holders of the majority of the
aggregate Voting Rights of the second most subordinate Class of Certificates
then outstanding, but only until such time as Realized Losses allocated to the
most subordinate Class of Certificates then outstanding equals or exceeds 50% of
the initial Certificate Balance of such Class.
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 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) each of the
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Rating Agencies confirms to the Trustee in writing that such appointment and
assumption shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
Certificates.
SECTION 3.24. Transfer of Servicing
Between Servicer and
Special Servicer; Record
Keeping.
(a) Upon determining that any Mortgage Loan has become a Specially
Serviced Mortgage Loan, the 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 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 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 Servicer
shall instruct the related Borrower to continue to remit all payments in respect
of such Mortgage Loan to the Servicer. If Midland Loan Services, L.P. ceases to
be the Servicer or the Special Servicer, Midland Loan Services, L.P. and the
successor Servicer or Special Servicer, as applicable, may agree that,
notwithstanding the preceding sentence, with respect to each Mortgage Loan that
became a Specially Serviced Mortgage Loan, the 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 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 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 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 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
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information, including correspondence with the related Borrower, and the Special
Servicer shall provide copies of the foregoing to the Servicer.
(c) Not later than the Business Day preceding each date on which the
Servicer is required to furnish a report under Section 3.13 to the Trustee, the
Special Servicer shall deliver to the 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
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 Servicer
with any information reasonably required by the Servicer to perform its duties
under this Agreement.
SECTION 3.25. Adjustment of Servicing
Compensation in Respect of
Prepayment Interest
Shortfalls.
(a) The aggregate amount of the Prepayment Interest Surplus and
Servicing Fees (excluding Trustee's fees and Rating Agencies Surveillance
fees)(in that order) that the Servicer shall be entitled to receive with respect
to all of the Mortgage Loans on each Distribution Date shall be offset on such
Distribution Date by an amount equal to the aggregate of the Prepayment Interest
Shortfalls for such Distribution Date with respect to all Mortgage Loans. The
Servicer shall include the amount by which the aggregate Servicing Fees and
Prepayment Interest Surplus is offset pursuant to this Section 3.25 as part of
the Pooled Available Funds on such Distribution Date. The amount of any offset
against the aggregate Servicing Fees and Prepayment Interest Surplus with
respect to any Distribution Date under this Section 3.25 shall be limited to the
aggregate amount of the Servicing Fees and Prepayment Interest Surplus otherwise
payable to the Servicer on such Distribution Date (without adjustment on account
of Prepayment Interest Shortfalls) and the rights of the Certificateholders to
offset of the aggregate Prepayment Interest Shortfalls shall not be cumulative.
To the extent the Servicer shall already have withdrawn or withheld Servicing
Compensation required to pay Prepayment Interest Shortfalls, the Servicer shall
promptly deposit in the Collection Amount such amounts to the extent required to
pay Prepayment Interest Shortfalls hereunder.
(b) To the extent that the Servicer and the Special Servicer are the
same Person, the aggregate amount of the Special Servicing Fees that the Special
Servicer shall be entitled to receive with respect to all of the Specially
Serviced Mortgage Loans on each Distribution Date shall be offset on such
Distribution Date by an amount equal to the excess of
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(X) the aggregate of the Prepayment Interest Shortfalls for such Distribution
Date with respect to all Mortgage Loans over (Y) the amount of Servicing Fees
and Prepayment Interest Surplus offset against such Prepayment Interest
Shortfalls in accordance with Section 3.25(a). The Servicer shall include the
amount by which the aggregate Special Servicing Fee is offset pursuant to this
Section 3.25 as part of the Pooled Available Funds on such Distribution Date.
The amount of any offset against the aggregate Special Servicing Fee with
respect to any Distribution Date under this Section 3.25 shall be limited to the
aggregate amount of the Special Servicing Fees otherwise payable to the Special
Servicer on such Distribution Date (without adjustment on account of Prepayment
Interest Shortfalls) and the rights of the Certificateholders to offset of the
aggregate Prepayment Interest Shortfalls shall not be cumulative.
SECTION 3.26. Consulting
Certificateholder.
The Special Servicer shall make its Servicing Officers available to
representatives of a Consulting Certificateholder during normal business hours
upon reasonable notice in order to discuss matters relating to any Specially
Serviced Mortgage Loan and REO Property, except to the extent doing so is
prohibited by applicable law or by any Mortgage Loan Documents. The Special
Servicer may, in its sole discretion, require that an agreement governing the
availability, use and disclosure of any information derived pursuant to such
discussions, and which may provide indemnification to the Special Servicer for
any liability or damage that may arise therefrom, be executed by the Consulting
Certificateholder.
A "Consulting Certificateholder" shall be any Holder of Certificates of
the most subordinate Class or the next most subordinate Class then outstanding,
which Certificates have a Certificate Balance of at least $3,000,000.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions.
(a) (I) On each Remittance Date, to the extent of Pooled Available
Funds, amounts held in the Collection Account shall be withdrawn and remitted to
the Trustee for deposit in the Distribution Account in the following amounts:
(i) First, pro rata (A) to the Class
A-L-1 Interest in respect of
interest, (1) the Interest
Distribution Amount therefor, and
(2) the aggregate unpaid Interest
Shortfalls allocated to the Class
A-L-1 Interest on any prior
Distribution Date; (B) to the
Class A-L-2 Interest in respect of
interest, (1) the Interest
Distribution Amount therefor, and
(2) the aggregate unpaid Interest
Shortfalls allocated to the Class
A-L-2 Interest on any prior
Distribution Date; (C) to the
Class B-L Interest in respect of
interest, (1) the portion of the
Interest Distribution Amount
therefor that is in excess of
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interest thereon at the Class B Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class B-L Interest on any prior
Distribution Date; (D) to the Class C-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class C Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class C-L Interest on any prior
Distribution Date; (E) to the Class D-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class D Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class D-L Interest on any prior
Distribution Date; (F) to the Class E-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class E Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class E-L Interest on any prior
Distribution Date; (G) to the Class F-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class F Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class F-L Interest on any prior
Distribution Date; (H) to the Class G-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class G Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class G-L Interest on any prior
Distribution Date; (I) to the Class H-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class H Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class H-L Interest on any prior
Distribution Date; (J) to the Class J-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class J Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
allocated to the Class J-L Interest on any prior
Distribution Date; (K) to the Class K-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class K Pass-Through Rate and (2)
a proportionate amount of any unpaid Interest Shortfalls
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allocated to the Class K-L Interest on any prior
Distribution Date; (L) to the Class L-L Interest in
respect of interest, (1) the portion of the Interest
Distribution Amount therefor that is in excess of
interest thereon at the Class L-2 Pass-Through Rate and
(2) a proportionate amount of any unpaid Interest
Shortfalls allocated to the Class L-L Interest on any
prior Distribution Date; provided, however, that amounts
payable pursuant to this subparagraph (i) will be reduced
by the Class A-EC Subordinated Advance Amount, such
reduction being allocated to the REMIC I Regular
Interests in reverse alphabetical order;
(ii) Second, to the Class A-L-1 Interest, in reduction of the
Certificate Balance thereof, the Pooled Principal
Distribution Amount for such Distribution Date, until the
Certificate Balance thereof is reduced to zero;
(iii) Third, to the Class A-L-1
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest
thereon at the Class A-1
Pass-Through Rate from the date
on which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date following the Remittance
Date on which distributions in
respect of such unreimbursed
Realized Loss are made pursuant
to this subparagraph, up to an
amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to
such REMIC I Regular Interest
and interest thereon, provided
that any distribution pursuant
to this subparagraph shall be
deemed to be distributed first
in respect of any such interest
and then in respect of any such
unreimbursed Realized Loss;
(iv) Fourth, to the Class A-L-2 Interest, in reduction of the
Certificate Balance thereof, the Pooled Principal
Distribution Amount for such Distribution Date, until the
Certificate Balance thereof is reduced to zero;
(v) Fifth, to the Class A-L-2 Interest,
for the unreimbursed amounts of
Realized Losses, if any, together
with interest thereon at the Class
A-2 Pass-Through Rate from the date
on which such unreimbursed Realized
Loss was allocated (or the date on
which interest was last paid) to,
but not including, the Distribution
Date following the Remittance Date
on which distributions in respect
of such unreimbursed Realized Loss
are made pursuant to this
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subparagraph, up to an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated to
such REMIC I Regular Interest and interest thereon,
provided that any distribution pursuant to this
subparagraph shall be deemed to be distributed first in
respect of any such interest and then in respect of any
such unreimbursed Realized Loss;
(vi) Sixth, to the Class B-L Interest,
in respect of interest, (A) the
portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class B Pass-Through Rate and
(B) a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
B-L Interest on any prior
Distribution Date;
(vii) Seventh, after the Certificate
Balance of the Class A-L Interest
has been reduced to zero, to the
Class B-L Interest, in reduction of
the Certificate Balance thereof,
the Pooled Principal Distribution
Amount less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance of the Class B-L Interest
is reduced to zero;
(viii) Eighth, to the Class B-L
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest
thereon at the Class B
Pass-Through Rate from the date
on which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date following the Remittance
Date on which distributions in
respect of such unreimbursed
Realized Loss are made pursuant
to this subparagraph, up to an
amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to
such REMIC I Regular Interest
and interest thereon, provided
that any distribution pursuant
to this subparagraph shall be
deemed to be distributed first
in respect of any such interest
and then in respect of any such
unreimbursed Realized Loss;
(ix) Ninth, to the Class C-L Interest,
in respect of interest, (A) the
portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class C Pass-Through Rate and
(B) a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
C-L Interest on any prior
Distribution Date;
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(x) Tenth, after the Certificate
Balance of the Class B-L Interest
has been reduced to zero, to the
Class C-L Interest, in reduction of
the Certificate Balance thereof,
the Pooled Principal Distribution
Amount less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance of the Class C-L Interest
is reduced to zero;
(xi) Eleventh, to the Class C-L
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Class C Pass-Through Rate
from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date
following the Remittance Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to such REMIC I Regular
Interest and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(xii) Twelfth, to the Class D-L Interest,
in respect of interest, (A) the
portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class D Pass-Through Rate and
(B) a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
D-L Interest on any prior
Distribution Date;
(xiii) Thirteenth, after the
Certificate Balance of the
Class C-L Interest has been
reduced to zero, to the Class
D-L Interest, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount less the
portion thereof distributed on
such Distribution Date pursuant
to any preceding clause, until
the Certificate Balance of the
Class D-L Interest is reduced
to zero;
(xiv) Fourteenth, to the Class D-L
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Class D Pass-through Rate
from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date
following the Remittance Date on
which distributions in respect of
such
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unreimbursed Realized Loss are made pursuant to this
subparagraph, up to an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated to
such REMIC I Regular Interest and interest thereon,
provided that any distribution pursuant to this
subparagraph shall be deemed to be distributed first in
respect of any such interest and then in respect of any
such unreimbursed Realized Loss;
(xv) Fifteenth, to the Class E-L
Interest, in respect of interest,
(A) the portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class E Pass-Through Rate and (B)
a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
E-L Interest on any prior
Distribution Date;
(xvi) Sixteenth, after the Certificate
Balance of the Class D-L Interest
has been reduced to zero, to the
Class E-L Interest, in reduction of
the Certificate Balance thereof,
the Pooled Principal Distribution
Amount less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance of the Class E-L Interest
is reduced to zero;
(xvii) Seventeenth, to the Class E-L Interest, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Class E Pass-Through Rate
from the date on which such unreimbursed Realized Loss
was allocated (or the date on which interest was last
paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made
pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such REMIC I Regular Interest and
interest thereon, provided that any distribution pursuant
to this subparagraph shall be deemed to be distributed
first in respect of any such interest and then in respect
of any such unreimbursed Realized Loss;
(xviii) Eighteenth, to the Class F-L
Interest, in respect of
interest, (A) the portion of
the Interest Distribution
Amount therefor that is equal
to interest thereon at the
Class F Pass-Through Rate and
(B) a proportionate amount of
the aggregate unpaid Interest
Shortfalls allocated to the
Class F-L Interest on any prior
Distribution Date;
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(xix) Nineteenth, after the Certificate
Balance of the Class E-L Interest
has been reduced to zero, to the
Class F-L Interest, in reduction of
the Certificate Balance thereof,
the Pooled Principal Distribution
Amount less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance of the Class F-L Interest
is reduced to zero;
(xx) Twentieth, to the Class F-L
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Class F Pass-Through Rate
from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date
following the Remittance Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to such REMIC I Regular
Interest and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(xxi) Twenty-First, to the Class G-L
Interest, in respect of interest,
(A) the portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class G Pass-Through Rate and (B)
a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
G-L Interest on any prior
Distribution Date;
(xxii) Twenty-Second, after the Certificate Balance of the Class
F-L Interest has been reduced to zero, to the Class G-L
Interest, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount less
the portion thereof distributed on such Distribution Date
pursuant to any preceding clause, until the Certificate
Balance of the Class G-L Interest is reduced to zero;
(xxiii) Twenty-Third, to the Class G-L
Interest, for the unreimbursed
amounts of Realized Losses, if
any, together with interest
thereon at the Class G
Pass-Through Rate from the date
on which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date following the Remittance
Date on which distributions in
respect of such
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unreimbursed Realized Loss are made pursuant to this
subparagraph, up to an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated to
such REMIC I Regular Interest and interest thereon,
provided that any distribution pursuant to this
subparagraph shall be deemed to be distributed first in
respect of any such interest and then in respect of any
such unreimbursed Realized Loss;
(xxiv) Twenty-Fourth, to the Class H-L Interest, in respect of
interest, (A) the portion of the Interest Distribution
Amount therefor that is equal to interest thereon at the
Class H Pass-Through Rate and (B) a proportionate amount
of the aggregate unpaid Interest Shortfalls allocated to
the Class H-L Interest on any prior Distribution Date;
(xxv) Twenty-Fifth, after the Certificate
Balance of the Class G-L Interest
has been reduced to zero, to the
Class H-L Interest, in reduction of
the Certificate Balance thereof,
the Pooled Principal Distribution
Amount less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance of the Class H-L Interest
is reduced to zero;
(xxvi) Twenty-Sixth, to the Class H-L Interest, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Class H Pass-Through Rate
from the date on which such unreimbursed Realized Loss
was allocated (or the date on which interest was last
paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made
pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such REMIC I Regular Interest and
interest thereon, provided that any distribution pursuant
to this subparagraph shall be deemed to be distributed
first in respect of any such interest and then in respect
of any such unreimbursed Realized Loss;
(xxvii) Twenty-Seventh, to the Class
J-L Interest, in respect of
interest, (A) the portion of
the Interest Distribution
Amount therefor that is equal
to interest thereon at the
Class J Pass-Through Rate and
(B) a proportionate amount of
the
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aggregate unpaid Interest
Shortfalls allocated to the Class
J-L Interest on any prior
Distribution Date;
(xxviii) Twenty-Eighth, after the
Certificate Balance of the
Class H-L Interest has been
reduced to zero, to the Class
J-L Interest, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount less the
portion thereof distributed on
such Distribution Date pursuant
to any preceding clause, until
the Certificate Balance of the
Class J-L Interest is reduced
to zero;
(xxix) Twenty-Ninth, to the Class J-L Interest, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Class J Pass-Through Rate
from the date on which such unreimbursed Realized Loss
was allocated (or the date on which interest was last
paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made
pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such REMIC I Regular Interest and
interest thereon, provided that any distribution pursuant
to this subparagraph shall be deemed to be distributed
first in respect of any such interest and then in respect
of any such unreimbursed Realized Loss;
(xxx) Thirtieth, to the Class K-L
Interest, in respect of interest,
(A) the portion of the Interest
Distribution Amount therefor that
is equal to interest thereon at the
Class K Pass-Through Rate and (B)
a proportionate amount of the
aggregate unpaid Interest
Shortfalls allocated to the Class
K-L Interest on any prior
Distribution Date;
(xxxi) Thirty-First, after the Certificate Balance of the Class
J-L Interest has been reduced to zero, to the Class K-L
Interest, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount less
the portion thereof distributed on such Distribution Date
pursuant to any preceding clause, until the Certificate
Balance of the Class K-L Interest is reduced to zero;
(xxxii) Thirty-Second, to the Class
K-L Interest, for the
unreimbursed amounts of
Realized Losses, if any,
together with interest thereon
at the Class K Pass-Through
Rate from the date on which
such unreimbursed Realized Loss
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was allocated (or the date on which interest was last
paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made
pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such REMIC I Regular Interest and
interest thereon, provided that any distribution pursuant
to this subparagraph shall be deemed to be distributed
first in respect of any such interest and then in respect
of any such unreimbursed Realized Loss;
(xxxiii) Thirty-Third, to the Class L-L
Interest, in respect of
interest, (A) the portion of
the Interest Distribution
Amount therefor that is equal
to interest thereon at the
Class L-2 Pass-Through Rate and
(B) a proportionate amount of
the aggregate unpaid Interest
Shortfalls allocated to the
Class L-L Interest on any prior
Distribution Date;
(xxxiv)Thirty-Fourth, after the Certificate Balance of the Class
L-L Interest has been reduced to zero, to the Class L-L
Interest, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount less
the portion thereof distributed on such Distribution Date
pursuant to any preceding clause, until the Certificate
Balance of the Class L-L Interest is reduced to zero;
(xxxv) Thirty-Fifth, to the Class L-L Interest, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Class L-2 Pass-Through Rate
from the date on which such unreimbursed Realized Loss
was allocated (or the date on which interest was last
paid) to, but not including, the Distribution Date
following the Remittance Date on which distributions in
respect of such unreimbursed Realized Loss are made
pursuant to this subparagraph, up to an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such REMIC I Regular Interest and
interest thereon, provided that any distribution pursuant
to this subparagraph shall be deemed to be distributed
first in respect of any such interest and then in respect
of any such unreimbursed Realized Loss; and
(xxxvi) Thirty-Sixth, with respect to
Class A-EC Subordinated Advance Amounts,
to each of the
REMIC I Regular
Interests that
have been
allocated Class
A-EC Subordinated
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Advance Amounts, in proportion to such Class A-EC
Subordinated Advance Amounts previously allocated
thereto.
Notwithstanding anything to the contrary in this Agreement, on each
Distribution Date prior to the earlier of (i) the Senior Principal Distribution
Cross-Over Date and (ii) the final Distribution Date in connection with the
termination of the Trust Fund, all distributions of principal to the Class A-L-1
Interest and the Class A-L-2 Interest will be paid, first, to the Class A-L-1
Interest until the Certificate Balance thereof is reduced to zero, and
thereafter, to the Class A-L-2 Interest until the Certificate Balance thereof is
reduced to zero. On each Distribution Date on and after the Senior Principal
Distribution Cross-Over Date, and in any event on the final Distribution Date in
connection with the termination of the Trust Fund, distributions of principal on
the Class A-L-1 Interest and the Class A-L-2 Interest will be paid pro rata in
accordance with their respective Certificate Balances outstanding immediately
prior to such Distribution Date, until each such Certificate Balance is reduced
to zero.
(II) On each Remittance Date, the Trustee shall receive for deposit
into the Distribution Account in respect of each REMIC I Regular Interest,
distributions from amounts on deposit in the Collection Account in respect of
Prepayment Premiums, if any, distributable to its Related Certificate pursuant
to Section 4.1(c); provided that amounts distributable to the Class A-EC
Certificates pursuant to such Section shall be received by the Trustee for
deposit in the Distribution Account in respect of the Class A-L-1 Interest, the
Class A-L-2 Interest, the Class B-L Interest, Class C-L Interest, Class D-L
Interest, Class E-L Interest, the Class F-L Interest, the Class G-L Interest,
the Class H-L Interest, the Class J-L Interest and the Class K-L Interest, pro
rata in accordance with their respective Certificate Balances.
(III) On each Remittance Date, the Trustee shall receive for deposit
into the Distribution Account in respect of each REMIC I Regular Interest,
distributions from amounts on deposit in the Collection Account in respect of
Default Interest received in the related Collection Period with respect to a
Mortgage Loan that is in default with respect to its Balloon Payment, if any,
distributable to its Related Certificate pursuant to the last paragraph of
Section 4.1(b)(I).
(b) (I) On each Distribution Date, to the extent of amounts remitted to
the Distribution Account pursuant to Section 4.1(a)(I), Holders of each Class of
Certificates (other than the Residual Certificates) shall receive distributions
from amounts on deposit in the Distribution Account, up to the Pooled Available
Funds for such Distribution Date, in the amounts and in the order of priority
set forth below:
(i) First, to the Class A-1
Certificates, Class A-2
Certificates and Class A-EC
Certificates, pro rata in
accordance with the Class Interest
Distribution Amount of each
(excluding any Class A-EC
Subordinated Advance Amounts for
such Distribution Date), up to
an amount equal to the Class
Interest Distribution Amount of
each such Class for such
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Distribution Date (excluding any
Class A-EC Subordinated Advance
Amounts for such Distribution
Date);
(ii) Second, to the Class A-1
Certificates, the Class A-2
Certificates and Class A-EC
Certificates, pro rata in
accordance with the Class Interest
Shortfall of each (excluding any
Class Interest Shortfalls on the
Class A-EC Certificates
attributable to the Class A-EC
Subordinated Advance Amounts), up
to an amount equal to the aggregate
unpaid Class Interest Shortfalls
previously allocated to such Class
on any previous Distribution Dates
and not paid (excluding any Class
Interest Shortfalls on the Class
A-EC Certificates attributable to
the Class A-EC Subordinated Advance
Amounts);
(iii) Third, to the Class A-1
Certificates, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount for such
Distribution Date, until the
Certificate Balance thereof is
reduced to zero;
(iv) Fourth, after the Certificate
Balance of the Class A-1
Certificates has been reduced to
zero, to the Class A-2
Certificates, in reduction of the
Certificate Balance thereof, the
Pooled Principal Distribution
Amount for such Distribution Date,
until the Certificate Balance
thereof is reduced to zero;
(v) Fifth, to the Class A-1
Certificates and the Class A-2
Certificates, pro rata, for the
unreimbursed amounts of Realized
Losses, if any, together with
interest thereon at the
Pass-Through Rate of such Class
from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class A-1
Certificates and the Class A-2
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(vi) Sixth, to the Class B Certificates, up to an amount equal
to the Class Interest Distribution Amount of such Class
for such Distribution
Date;
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(vii) Seventh, to the Class B Certificates, up to an amount
equal to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(viii) Eighth, after the Certificate
Balance of the Class A-2
Certificates has been reduced
to zero, to the Class B
Certificates, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount for such
Distribution Date less the
portion thereof distributed on
such Distribution Date pursuant
to any preceding clause, until
the Certificate Balance thereof
is reduced to zero;
(ix) Ninth, to the Class B Certificates,
for the unreimbursed amounts of
Realized Losses, if any, together
with interest thereon at the
Pass-Through Rate of such Class
from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class B
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(x) Tenth, to the Class C Certificates, up to an amount equal
to the Class Interest Distribution Amount of such Class
for such Distribution
Date;
(xi) Eleventh, to the Class C Certificates, up to an amount
equal to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(xii) Twelfth, after the Certificate
Balance of the Class B Certificates
has been reduced to zero, to the
Class C Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
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(xiii) Thirteenth, to the Class C
Certificates, for the
unreimbursed amounts of
Realized Losses, if any,
together with interest thereon
at the Pass-Through Rate of
such Class from the date on
which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date on which distributions in
respect of such unreimbursed
Realized Loss are made pursuant
to this subparagraph, up to an
amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to
the Class C Certificates and
interest thereon, provided that
any distribution pursuant to
this subparagraph shall be
deemed to be distributed first
in respect of any such interest
and then in respect of any such
unreimbursed Realized Loss;
(xiv) Fourteenth, to the Class D Certificates, up to an amount
equal to the Class Interest Distribution Amount of such
Class for such Distribution Date;
(xv) Fifteenth, to the Class D Certificates, up to an amount
equal to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(xvi) Sixteenth, after the Certificate
Balance of the Class C Certificates
has been reduced to zero, to the
Class D Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
(xvii) Seventeenth, to the Class D Certificates, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Pass-Through Rate of such
Class from the date on which such unreimbursed Realized
Loss was allocated (or the date on which interest was
last paid) to, but not including, the Distribution Date
on which distributions in respect of such unreimbursed
Realized Loss are made pursuant to this subparagraph, up
to an amount equal to the aggregate of such unreimbursed
Realized Losses previously allocated to the Class D
Certificates and interest thereon, provided that any
distribution pursuant to this subparagraph shall be
deemed to be distributed first in respect of any such
interest and then in respect of any such unreimbursed
Realized Loss;
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<PAGE>
(xviii) Eighteenth, to the Class E Certificates, up to an
amount equal to the Class Interest Distribution
Amount of such Class for such Distribution
Date;
(xix) Nineteenth, to the Class E Certificates, up to an amount
equal to the aggregate unpaid Class Interest Shortfalls
previously allocated to such Class on any previous
Distribution Dates and not paid;
(xx) Twentieth, after the Certificate
Balance of the Class D Certificates
has been reduced to zero, to the
Class E Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
(xxi) Twenty-First, to the Class E
Certificates, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Pass-Through Rate of such
Class from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class E
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(xxii) Twenty-Second, to the Class F Certificates, up to an
amount equal to the Class Interest Distribution Amount of
such Class for such Distribution Date;
(xxiii) Twenty-Third, to the Class F Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
(xxiv) Twenty-Fourth, after the Certificate Balance of the Class
E Certificates has been reduced to zero, to the Class F
Certificates, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount for
such Distribution Date less the portion thereof
distributed on
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such Distribution Date pursuant to
any preceding clause, until the
Certificate Balance thereof is
reduced to zero;
(xxv) Twenty-Fifth, to the Class F
Certificates, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Pass-Through Rate of such
Class from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class F
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss;
(xxvi) Twenty-Sixth, to the Class G Certificates, up to an
amount equal to the Class Interest Distribution Amount of
such Class for such Distribution Date;
(xxvii) Twenty-Seventh, to the Class G Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
(xxviii) Twenty-Eighth, after the
Certificate Balance of the
Class F Certificates has been
reduced to zero, to the Class G
Certificates, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount for such
Distribution Date less the
portion thereof distributed on
such Distribution Date pursuant
to any preceding clause, until
the Certificate Balance thereof
is reduced to zero;
(xxix) Twenty-Ninth, to the Class G Certificates, for the
unreimbursed amounts of Realized Losses, if any, together
with interest thereon at the Pass-Through Rate of such
Class from the date on which such unreimbursed Realized
Loss was allocated (or the date on which interest was
last paid) to, but not including, the Distribution Date
on which distributions in respect of such unreimbursed
Realized Loss are made pursuant to this subparagraph, up
to an amount equal to the aggregate of such unreimbursed
Realized Losses previously allocated to the Class G
Certificates and interest thereon, provided that any
distribution pursuant to
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<PAGE>
this subparagraph shall be deemed to be distributed first
in respect of any such interest and then in respect of
any such unreimbursed Realized Loss;
(xxx) Thirtieth, to the Class H Certificates, up to an amount
equal to the Class Interest Distribution Amount of such
Class for such Distribution Date;
(xxxi) Thirty-First, to the Class H Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
(xxxii) Thirty-Second, after the
Certificate Balance of the
Class G Certificates has been
reduced to zero, to the Class H
Certificates, in reduction of
the Certificate Balance
thereof, the Pooled Principal
Distribution Amount for such
Distribution Date less the
portion thereof distributed on
such Distribution Date pursuant
to any preceding clause, until
the Certificate Balance thereof
is reduced to zero;
(xxxiii) Thirty-Third, to the Class H
Certificates, for the
unreimbursed amounts of
Realized Losses, if any,
together with interest thereon
at the Pass-Through Rate of
such Class from the date on
which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date on which distributions in
respect of such unreimbursed
Realized Loss are made pursuant
to this subparagraph, up to an
amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to
the Class H Certificates and
interest thereon, provided that
any distribution pursuant to
this subparagraph shall be
deemed to be distributed first
in respect of any such interest
and then in respect of any such
unreimbursed Realized Loss;
(xxxiv)Thirty-Fourth, to the Class J Certificates, up to an
amount equal to the Class Interest Distribution Amount of
such Class for such Distribution Date;
(xxxv) Thirty-Fifth, to the Class J Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
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(xxxvi)Thirty-Sixth, after the Certificate Balance of the Class
H Certificates has been reduced to zero, to the Class J
Certificates, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount for
such Distribution Date less the portion thereof
distributed on such Distribution Date pursuant to any
preceding clause, until the Certificate Balance thereof
is reduced to zero;
(xxxvii) Thirty-Seventh, to the Class J
Certificates, for the
unreimbursed amounts of
Realized Losses, if any,
together with interest thereon
at the Pass-Through Rate of
such Class from the date on
which such unreimbursed
Realized Loss was allocated (or
the date on which interest was
last paid) to, but not
including, the Distribution
Date on which distributions in
respect of such unreimbursed
Realized Loss are made pursuant
to this subparagraph, up to an
amount equal to the aggregate
of such unreimbursed Realized
Losses previously allocated to
the Class J Certificates and
interest thereon, provided that
any distribution pursuant to
this subparagraph shall be
deemed to be distributed first
in respect of any such interest
and then in respect of any such
unreimbursed Realized Loss;
(xxxviii) Thirty-Eighth, to the Class K Certificates, up to an
amount equal to the Class Interest Distribution
Amount of such Class for such Distribution
Date;
(xxxix)Thirty-Ninth, to the Class K Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
(xl) Fortieth, after the Certificate
Balance of the Class J Certificates
has been reduced to zero, to the
Class K Certificates, in reduction
of the Certificate Balance thereof,
the Pooled Principal Distribution
Amount for such Distribution Date
less the portion thereof
distributed on such Distribution
Date pursuant to any preceding
clause, until the Certificate
Balance thereof is reduced to zero;
(xli) Forty-First, to the Class K
Certificates, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Pass-Through Rate of such
Class from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which
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<PAGE>
distributions in respect of such unreimbursed Realized
Loss are made pursuant to this subparagraph, up to an
amount equal to the aggregate of such unreimbursed
Realized Losses previously allocated to the Class K
Certificates and interest thereon, provided that any
distribution pursuant to this subparagraph shall be
deemed to be distributed first in respect of any such
interest and then in respect of any such unreimbursed
Realized Loss;
(xlii) Forty-Second, to the Class L-2 Certificates, up to an
amount equal to the Class Interest Distribution Amount of
such Class for such Distribution Date;
(xliii) Forty-Third, to the Class L-2 Certificates, up to an
amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class on any
previous Distribution Dates and not paid;
(xliv) Forty-Fourth, after the Certificate Balance of the Class
K Certificates has been reduced to zero, to the Class L-1
Certificates, in reduction of the Certificate Balance
thereof, the Pooled Principal Distribution Amount for
such Distribution Date less the portion thereof
distributed on such Distribution Date pursuant to any
preceding clause, until the Certificate Balance thereof
is reduced to zero; and
(xlv) Forty-Fifth, to the Class L-1
Certificates, for the unreimbursed
amounts of Realized Losses, if
any, together with interest thereon
at the Pass-Through Rate of such
Class from the date on which such
unreimbursed Realized Loss was
allocated (or the date on which
interest was last paid) to, but not
including, the Distribution Date on
which distributions in respect of
such unreimbursed Realized Loss are
made pursuant to this subparagraph,
up to an amount equal to the
aggregate of such unreimbursed
Realized Losses previously
allocated to the Class L-1
Certificates and interest thereon,
provided that any distribution
pursuant to this subparagraph shall
be deemed to be distributed first
in respect of any such interest and
then in respect of any such
unreimbursed Realized Loss.
(xlvi) Forty-Sixth, to the Class A-EC Certificates, up to an
amount equal to the Class A-EC Subordinated Advance
Amount for such Distribution Date, plus the aggregate
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<PAGE>
unpaid Class A-EC Subordinated
Advance Amounts from any previous
Distribution Dates.
All references to pro rata in the preceding clauses shall mean pro rata based on
the amount distributable pursuant to such clause.
Notwithstanding anything to the contrary in this Agreement, on each
Distribution Date prior to the earlier of (i) the Senior Principal Distribution
Cross-Over Date and (ii) the final Distribution Date in connection with the
termination of the Trust Fund, all distributions of principal to the Class A-1
Certificates and Class A-2 Certificates will be paid, first, to Holders of the
Class A-1 Certificates until the Certificate Balance of such Certificates is
reduced to zero, and thereafter, to holders of the Class A-2 Certificates, until
the Certificate Balance of such Certificates is reduced to zero. On each
Distribution Date on and after the Senior Principal Distribution Cross-Over
Date, and in any event on the final Distribution Date in connection with the
termination of the Trust Fund, distributions of principal on the Class A-1
Certificates and Class A-2 Certificates will be paid to Holders of such Class of
Certificates, pro rata in accordance with their respective Certificate Balances
outstanding immediately prior to such Distribution Date, until the Certificate
Balance of each such Class of Certificates is reduced to zero.
On each Distribution Date, following the distribution from the
Collection Account to the Distribution Account pursuant to Section 4.1(a)(III),
Default Interest received in the related Collection Period with respect to a
Mortgage Loan that is in default with respect to its Balloon Payment shall be
distributed from amounts deposited in the Distribution Account pursuant to
Section 4.6(b)(iv) on each Distribution Date to the Holders of the Class of
Certificates that is entitled to distributions in respect of principal on such
Distribution Date; provided that if more than one Class of Certificates is
entitled to distributions in respect of principal on such Distribution Date, the
amount of such Default Interest will be allocated among such Classes pro rata in
accordance with their respective Certificate Balances immediately prior to such
Distribution Date.
(II) On each Distribution Date, amounts remaining in the Distribution
Account following the distributions to the Certificates pursuant to Section
4.1(b)(I) and (c) shall be distributed as follows:
(i) First, to the Class R-II
Certificates, in an amount equal to
the Class R-II Distribution Amount
for such Distribution Date; and
(ii) Second, to the Class R-I Certificates, in an amount equal
to any remaining funds in the Distribution Account.
(c) On each Distribution Date, following the distribution from the
Collection Account to the Distribution Account pursuant to Section 4.1(a)(II),
the Paying Agent shall make distributions of Prepayment Premiums with respect to
any Principal Prepayments
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<PAGE>
received in the related Collection Period from amounts deposited in the
Distribution Account pursuant to Section 4.6(b)(i) as follows:
(I) Any Prepayment Premiums calculated with reference to a yield
maintenance formula ("Yield Maintenance Charges") received in the related
Collection Period shall be distributed to the holders of the Certificates
outstanding on such Distribution Date, in the following amounts and order of
priority:
(a) to each of the Class A-1, Class
A-2, Class B, Class C,
Class D, and Class E Certificates,
an amount equal to the product of
(A) a fraction, the numerator of
which is the amount distributed as
principal to such Class on such
Distribution Date, and the
denominator of which is the total
amount distributed as principal to
all Classes of Certificates on such
Distribution Date, (B) the Base
Interest Fraction for the related
principal payment and such Class of
Certificates and (C) the aggregate
amount of Yield Maintenance Charges
collected on such Principal
Prepayment during the related
Collection Period; and
(b) any remaining Prepayment Premiums following the
distribution in clause (i) immediately above, to the
Class A- EC Certificates.
(II) Any Prepayment Premiums that are not Yield Maintenance Charges
received in the related Collection Period shall be distributed to the Holders of
the Class A-EC Certificates.
(III) Notwithstanding the foregoing, Prepayment Premiums shall be
distributed on any Distribution Date only to the extent they are received in
respect of the Mortgage Loans in the related Collection Period.
(d) The Certificate Balances of the REMIC I Regular Interests will be
reduced without distribution on any Distribution Date as a write-off to the
extent of any Realized Losses with respect to such date. Any such write-offs
will be applied to the REMIC I Regular Interests: first, to the Class L-L
Interest; second, to the Class K-L Interest; third, to the Class J-L Interest,
fourth, to the Class H-L Interest, fifth, to the Class G-L Interest; sixth, to
the Class F-L Interest; seventh, to the Class E-L Interest; eighth, to the Class
D-L Interest; ninth, to the Class C-L Interest; tenth, to the Class B-L
Interest; and eleventh, to the Class A-L-1 Interest and the Class A-L-2
Interest, pro rata in accordance with their respective Certificate Balances
outstanding immediately prior to such Distribution Date.
The Certificate Balances of the Regular Certificates (other than the Class A-EC
and Class L-2 Certificates) will be reduced without distribution on any
Distribution Date, as a write-off, to the extent that, after allocation of
Realized Losses in accordance with the preceding sentence, the
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Certificate Balance of any Class of Certificates exceeds the Certificate Balance
of its Related REMIC I Regular Interest.
(e) All amounts distributable to a Class of Certificates pursuant to
this Section 4.1 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 either (i) is
DTC or its nominee or (ii) holds Certificates with an aggregate initial
Certificate Balance, Class A-EC Notional Balance or Class L-2 Notional Balance
in excess of $5,000,000, and shall have provided the Paying Agent with wire
instructions in writing at least 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 only upon presentment and
surrender of such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as such agent)
maintained in the Borough of Manhattan that is specified in the notice to
Certificateholders of such final distribution.
(f) Except as otherwise provided in Section 9.1 with respect to an
Anticipated Termination Date, the Trustee shall, no later than the fifteenth 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:
(A) the Trustee reasonably expects, based upon
information previously 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
(B) 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 and Class R-II Certificates shall remain
outstanding until there is no other Class of Certificates or REMIC I 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 4.1(f) 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
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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-II 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
Certificate(s) for final payment thereof in accordance with this Section 4.1(f).
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 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) Federated Money Market Fund,
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.
(g) Notwithstanding any provision in this Agreement to the contrary,
the aggregate amount distributable to each Class pursuant to this Section 4.1
shall be reduced by the aggregate amount paid to any Person pursuant to Section
6.3 or Section 8.5(d), such reduction to be allocated among such Classes pro
rata, based upon the respective amounts so distributable without taking into
account the provision of this Section 4.1(g). Such reduction of amounts
otherwise distributable to a Class shall be allocated first in respect of
interest and second in respect of principal. For purposes of determining Class
Interest Shortfalls and Certificate Balances, the amount of any such reduction
so allocated to a Class shall be deemed to have been distributed to such Class.
SECTION 4.2. Statements to Rating Agencies
and Certificateholders;
Available Information;
Information Furnished to
Financial Market Publisher.
(a) On each Distribution Date, the Trustee shall prepare and forward by
mail to each Rating Agency and each Holder of a Certificate, with copies to the
Depositor, Paying Agent, the Placement Agents, Servicer and Special Servicer, a
statement as to such distribution setting forth for each Class, as applicable:
(i) Pooled Principal Distribution Amount and
the amount allocable to principal included
in Pooled Available Funds;
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(ii) The Class Interest Distribution Amount distributable to
such Class and the amount of Pooled Available Funds
allocable thereto, together with any Class Interest
Shortfall allocable to such Class;
(iii) The amount of any P&I Advances by
the 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
Pooled Principal Distribution Amount on such Distribution Date;
(v) Realized Losses and their allocation to
the Certificate Balance of any Class of
Certificates;
(vi) The Scheduled 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 one month, (B)
delinquent two months, (C)
delinquent three or more months,
(D) as to which foreclosure
proceedings have been commenced and
(E) that otherwise constitute
Specially Serviced Mortgage Loans,
and, with respect to each Specially
Serviced Mortgage Loan, the amount
of Property Advances made during
the related Collection Period, the
amount of the P&I Advance made on
such Distribution Date, the
aggregate amount of Property
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
Mortgage 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 the Special Servicer
made a Final Recovery Determination 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
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appraised value of the related REO
Property per the most recent Updated
Appraisal obtained;
(xi) The amount of the Servicing Compensation paid to the 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 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; and
(xiv) Any additional information regarding the Mortgage Loans, which
the Servicer or the Special Servicer, in its sole discretion,
delivers to the Trustee for distribution to the
Certificateholders.
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 Balance.
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 or Class R-II
Certificate) and to each Rating 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 or Class R-II 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 or Class
R-II 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 or Class R-II 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.
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In addition to the reports required to be delivered pursuant to this
Section 4.2(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.
(b) On or within two Business Days following each Distribution Date,
the Trustee shall prepare and furnish to the Financial Market Publisher and the
Placement Agents, using the format and media mutually agreed upon by the
Trustee, the Financial Market Publisher 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:
(i) an identifying loan number;
(ii) the Mortgage Rate; and
(iii) the principal balance as of such
Distribution Date.
The Trustee shall only be obligated to deliver the statements, reports and
information contemplated by Section 4.2(a) and 4.2(b) to the extent it receives
the necessary underlying information from the Servicer and the Special Servicer
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 Servicer's or the Special
Servicer's failure to deliver such underlying information in a timely manner.
Absent manifest error, the Trustee may conclusively rely on any such information
forwarded to it by the Servicer and the Special Servicer and shall have no
obligation to verify the same. Nothing herein shall obligate the Trustee, the
Servicer or the Special Servicer to violate (in the reasonable judgment of the
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
Servicer or the Special Servicer to disseminate information for such reason
shall not be a breach hereof.
SECTION 4.3. 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
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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.
SECTION 4.4. REMIC Compliance.
(a) The parties intend that each of REMIC I and REMIC II shall
constitute, and that the affairs of each of REMIC I and REMIC II 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 and
REMIC II and shall on behalf of each of REMIC I and REMIC II: (i) prepare, sign
and file, or cause to be prepared and filed, all required Tax Returns for each
of REMIC I and REMIC II, using a calendar year as the taxable year for each of
REMIC I and REMIC II, when and as required by the REMIC Provisions and other
applicable federal, state or local income tax laws; (ii) make an election, on
behalf of each of REMIC I and REMIC II to be treated as a REMIC on Form 1066 for
its first taxable year, in accordance with the REMIC Provisions; (iii) prepare
and forward, or cause to be prepared 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; (iv) if the filing or distribution of any
documents of an administrative nature not addressed in clauses (i) through (iii)
of this Section 4.4 is then required by the REMIC Provisions in order to
maintain the status of REMIC I or REMIC II as a REMIC or is otherwise required
by the Code, 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; (v) within thirty 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 and
REMIC II 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); and (vi) maintain
such records relating to each of REMIC I and REMIC II as may be necessary to
prepare the foregoing returns, schedules, statements or information, such
records, for federal income tax purposes, to be maintained on a calendar year
and on an accrual basis. The Holder of the largest Percentage Interest in the
Class R-I or Class R-II Certificates shall be the tax matters person of REMIC I
or REMIC II, respectively, pursuant to Treasury Regulations Section 1.860F-4(d).
If more than one Holder should hold an equal Percentage Interest in the Class
R-I or Class R-II Certificates larger than that held by any other Holder, the
first such Holder to have acquired such Class R-I or Class R-II Certificates
shall be such tax matters person. The Trustee shall act as attorney-in-fact and
agent for the tax matters person of each of REMIC I and REMIC II, and each
Holder of a Percentage Interest in the Class R-I or Class R-II 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
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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. The Trustee shall not intentionally take any action or intentionally 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 or REMIC II or the imposition of tax
on REMIC I or REMIC II (other than a tax on income expressly permitted or
contemplated to be received by the terms of this Agreement). 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 Servicer or the Special Servicer which causes the Trustee to be
unable to comply with any of clauses (i) through (vi) of the fifth preceding
sentence or which results in any action contemplated by clauses (i) or (ii) of
the next succeeding sentence. 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 or REMIC II 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 or REMIC II 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 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 4.4. The Depositor, the
Special Servicer and the Servicer shall cooperate in a timely manner with the
Trustee in supplying any information within the Depositor's, the Special
Servicer's or the Servicer's control (other than any confidential information)
that is reasonably necessary to enable the Trustee to perform its duties under
this Section 4.4.
(b) The following assumptions are to be used for purposes of
determining the anticipated payments of principal and interest for calculating
the original yield to maturity and original issue discount with respect to the
Regular Certificates: (i) each Mortgage Loan will pay principal and interest in
accordance with its terms and scheduled payments will be timely received on
their Due Dates, provided that the Mortgage Loans in the aggregate will prepay
in accordance with the Prepayment Assumption; and (ii) no Mortgage Loan is
repurchased by the Depositor.
SECTION 4.5. Imposition of Tax on the Trust
Fund.
In the event that any tax, including interest, penalties or
assessments, additional amounts or additions to tax, is imposed on REMIC I or
REMIC II, 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)
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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
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 Servicer shall maintain in a separate, non-interest-bearing account,
and the Servicer shall deposit in the Collection Account the excess determined
by the 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 Pooled Available Funds sufficient funds to pay or
provide for the payment of, and to actually pay, such tax as is legally owed by
REMIC I and REMIC II (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). 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 or REMIC II 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 from the Distribution Account with respect to any
such net income of or contribution to REMIC II (and return the balance thereof,
if any, to the Collection Account or the Distribution Account, as the case may
be). To the extent that any such tax is paid to the Internal Revenue Service,
the Trustee shall retain an equal amount from future amounts otherwise
distributable to the Holders of the Class R-I or the Class R-II Certificates as
the case may be, and shall distribute such retained amounts to the Holders of
REMIC I Regular Interests or Regular Certificates, as applicable, until they are
fully reimbursed and then to the Holders of the Class R-I Certificates or the
Class R-II Certificates, as applicable. None of the Servicer, the Special
Servicer and the Trustee shall be responsible for any taxes imposed on REMIC I
or REMIC II, in any case, except to the extent such tax is attributable to a
breach of a representation or warranty of the Servicer or the Special Servicer
or an act or omission of the Servicer, the Special Servicer or the Trustee in
contravention of this Agreement, provided, further, that such breach, act or
omission could result in liability under Section 6.3 in the case of the 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 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 Servicer or the Special Servicer.
SECTION 4.6. Remittances; P&I Advances.
(a) For purposes of this Section 4.6, "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 Scheduled 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.
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(b) On the Remittance Date immediately preceding each Distribution
Date, the 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 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 Pooled
Available Funds for such Distribution Date (excluding P&I Advances);
(iii) 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; and
(iv) remit to the Trustee from the Collection Account for
deposit in the Distribution Account an amount equal to the Default
Interest with respect to any Mortgage Loan that is in default with
respect to its Balloon Payment received by the Servicer in the
Collection Period preceding such Remittance Date.
(c) Upon the Servicer's receipt of the Updated Appraisal relating to
each Seriously Delinquent Loan, the Servicer shall determine the amount (the
"Anticipated Loss") equal to the excess, if any, of (i) the sum of (w) the
Scheduled Principal Balance of such Mortgage Loan as of the immediately
preceding Determination Date, (x) to the extent not previously advanced by the
Servicer, Trustee or Fiscal Agent, all accrued and unpaid interest on such
Mortgage Loan at a per annum rate equal to the related Mortgage Rate, (y) all
unreimbursed Advances with respect to such Mortgage Loan with interest thereon
at the Advance Rate, and (z) to the extent not previously advanced by the
Servicer, Trustee or Fiscal Agent, all currently due but unpaid real estate
taxes and assessments, insurance premiums, and, if applicable, ground rents in
respect of the related Mortgaged Property and a good faith estimate of any
expenses relating to uncontested foreclosure, realization and liquidation of
such Mortgaged Property, over (ii) an amount equal to 90% of the appraised value
of the related Mortgaged Property as reflected in the Updated Appraisal thereof;
provided, however, that in the event the Updated Appraisal has not been received
within 60 days after the Special Servicer has ordered such appraisal pursuant to
Section 3.10(a), the Anticipated Loss shall be equal to 40% of the Scheduled
Principal Balance of the Seriously Delinquent Loan; provided, further that
promptly upon its receipt of such appraisal, the Servicer shall recalculate the
Anticipated Loss. Notwithstanding Section 4.6(b)(iii), upon determination of the
Anticipated Loss with respect to any Seriously Delinquent Loan, the amount of
any P&I Advance required to be made with respect to such Mortgage Loan shall be
an amount equal to the product of (A) the amount of the P&I Advance that would
be required to be made 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 Scheduled Principal Balance of such Mortgage Loan as of
the immediately
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preceding Determination Date less the Anticipated Loss and the denominator of
which is such Scheduled Principal Balance.
(d) [Reserved]
(e) If, as of 5:00 p.m., New York City time, on any Remittance Date the
Servicer shall not (i) have made the P&I Advance required to have been made on
such date pursuant to Section 4.6(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 Servicer. If the Trustee fails to make any P&I Advance required to be
made under this Section 4.6, 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.
(f) Anything to the contrary in this Agreement notwithstanding, none of
the 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 4.6 if the 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 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 be subject to the standards applicable
to the Servicer hereunder.
(g) The Servicer, the Trustee or the Fiscal Agent, as applicable, shall
be entitled to, and the Servicer hereby covenants and agrees to promptly seek
and effect, the reimbursement of P&I Advances it makes 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).
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 A-EC 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-1 Certificates, the Class
L-2 Certificates, the Class R-I Certificates and the Class R-II Certificates.
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The Class A-1, Class A-2, Class A-EC, Class B, Class C, Class D, Class
E, Class F, Class G, Class H, Class J, Class K, Class L-1, Class L-2, Class R-I
and Class R-II
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 and
A-16, 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 Class A-1, Class A-2, Class B, Class C, Class D, and Class E
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 Book- Entry Certificates shall
be in minimum denominations of $100,000 and multiples of $1,000 in excess
thereof and the Certificates other than Book-Entry Certificates shall be in
minimum denominations of $100,000 and multiples of $1 in excess thereof, except
one Certificate of each such Class may be issued which represents a different
initial Certificate Balance or Notional Balance to accommodate the remainder of
the initial Certificate Balance or related Notional amount. Each Certificate
will share ratably in all rights of the related Class. The Class R-I and Class
R-II Certificates shall each be issuable in one or more registered, definitive
physical certificates in minimum denominations of 5% Percentage Interests and
integral multiples of a 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 Balance)
A-1 $100,000 $145,744,000.00
A-2 $100,000 $210,167,000.00
A-EC $100,000 $512,101,998.44
B $100,000 $ 30,727,000.00
C $100,000 $ 28,166,000.00
D $100,000 $ 23,045,000.00
E $100,000 $ 7,682,000.00
F $100,000 $ 15,364,000.00
G $100,000 $ 12,803,000.00
H $100,000 $ 5,122,000.00
J $100,000 $ 12,803,000.00
K $100,000 $ 7,682,000.00
L-1 $100,000 $ 12,796,998.44
L-2 $100,000 $12,796,998.44
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.
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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-16 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 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 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:
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(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; or
(ii) 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 Act, (2) an Opinion of
Counsel acceptable to the Certificate
Registrar that such transfer is in
compliance with the 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
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 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 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 five
Business Days of such request if made at the Corporate Trust Office, or within
ten Business Days if made at the office of a transfer agent (other than the
Certificate Registrar), 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 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.
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(e) Individual Certificates may only be transferred to Eligible
Investors as described herein. In the event the Certificate Registrar shall
determine that an Individual 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 to
Institutional Accredited Investors, as provided herein. In connection with any
transfer 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 and Class R-II 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 or Class R-II Certificate if (x) the transferor has advised the
Certificate Registrar in writing that the Certificate is being transferred to 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. 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
proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Act and other
applicable laws.
(h) Neither the Depositor, the Servicer, the Special Servicer, the
Trustee nor the Certificate Registrar is obligated to register or qualify any
Class of Certificates under the 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 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
Act or is not made in accordance with such federal and state laws.
(i) No transfer of any Ownership Interest in a Class A-EC Certificate
or 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 Class A-EC Certificates or Subordinate
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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 Class A-EC Certificate or 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 Class A-EC Certificate or Subordinate Certificate
will not result in the assets of the Trust Fund being deemed to be "plan assets"
and subject to the fiduciary responsibility or prohibited transaction provisions
of ERISA, the Code, or any Similar Law 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 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 Servicer, the Special
Servicer, Certificate Registrar or the Depositor. None of the Trustee, the
Fiscal Agent, the Servicer, the Special Servicer, and the Certificate Registrar
will register a Class R-I or Class R-II Certificate in any Person's name unless
such Person has provided the letter referred to in clause (a) above. Any
transfer of a Class A-EC Certificate or 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 or a Class R-II 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 or a Class R-II Certificate are expressly subject to the
following provisions:
(i) Each Person acquiring or holding any
Ownership Interest in a Class R-I
Certificate or a Class R-II 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 or a Class R-II
Certificate may be transferred, and no such Transfer shall be
registered in the Certificate Register, without the express
written consent of the Certificate Registrar,
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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 or a
Class R-II 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 or a Class R-II 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 and Class R-II 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.
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 or a
Class R-II 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
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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 or Class
R-II 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) The Class A-1 Certificates, the Class A-2 Certificates, the Class B
Certificates, the Class C Certificates, the Class D Certificates and the Class E
Certificates shall, in the case of each such Class, initially be issued as one
or more Book-Entry Certificates registered in the name of the Securities
Depository or its nominees 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 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 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
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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 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 of the Class A-1 Certificates, the Class A-2 Certificates, the
Class B Certificates, the Class C Certificates, the Class D Certificates and the
Class E 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 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.
The Trustee may appoint a paying agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.1. The Trustee shall
cause such Paying Agent, if other than the Trustee or the Servicer, to execute
and deliver to the Servicer and the Trustee an instrument in which such Paying
Agent shall agree with the Servicer and the Trustee that such Paying Agent will
hold all sums held by it for payment to Certificateholders in trust for the
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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 "BBB"
by Fitch and "Baa2" by Moody's, unless each of the Rating Agencies has confirmed
in writing that a lower rating shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by such
Rating Agency to any Class of the Certificates.
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 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 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 Servicer, if made in the manner provided in this Section.
(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
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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 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 SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the
Servicer and the Special
Servicer.
The Depositor, the 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
Servicer and Special Servicer.
Subject to the third paragraph of this Section 6.2, the Servicer will
keep in full effect its existence, rights and good standing as a limited
partnership under the laws of the State of Missouri 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 limited partnership
under the laws of the State of Missouri 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 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 Servicer or the Special Servicer, as
applicable hereunder, and shall be deemed to have assumed all of the liabilities
of the Servicer or the Special Servicer, as applicable hereunder, if each of the
Rating Agencies has confirmed in writing that such merger, consolidation or
transfer and succession shall not result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then assigned by such Rating Agency to
any Class of Certificates.
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SECTION 6.3. Limitation on
Liability of the
Depositor, the
Servicer and Others.
Neither the Depositor, the Servicer, the Special Servicer, nor any of
the directors, officers, employees or agents of the Depositor or the Servicer or
the Special Servicer (or any general partner of the Servicer or, if applicable,
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
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 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 Servicer,
the Special Servicer and any director, officer, employee or agent of the
Depositor, the Servicer or the Special Servicer (or the general partner of the
Servicer or, if applicable, 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 Servicer, the Special Servicer and any director, officer,
employee or agent of the Depositor, the Servicer or the Special Servicer (or the
general partner of the Servicer or, if applicable, 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 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 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 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 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 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.
SECTION 6.4. Limitation on Resignation of
the Servicer and of the Special
Servicer.
Each of the Servicer and the Special Servicer may assign its respective
rights and delegate its respective duties and obligations under this Agreement
in connection with the sale or transfer of a substantial portion of its mortgage
servicing or asset management portfolio,
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provided that: (i) the purchaser or transferee accepting such assignment and
delegation (A) shall be satisfactory to the Trustee, (B) shall be (I) an
established mortgage finance institution, bank or mortgage servicing
institution, organized and doing business under the laws of any state of the
United States or the District of Columbia, authorized under such laws to perform
the duties of a servicer of mortgage loans or (II) a Person resulting from a
merger, consolidation or succession that is permitted under Section 6.2, and (C)
shall execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Servicer or the Special Servicer,
as applicable, under this Agreement from and after the date of such agreement;
(ii) as evidenced by a letter from each Rating Agency delivered to the Trustee,
each Rating Agency's rating or ratings of the Regular Certificates in effect
immediately prior to such assignment and delegation will not be qualified,
downgraded or withdrawn as a result of such assignment and delegation; (iii) the
Servicer or the Special Servicer, as applicable, shall not be released from its
obligations under this Agreement that arose prior to the effective date of such
assignment and delegation under this Section 6.4; and (iv) the rate at which the
Servicing Fee (or any component thereof) is calculated shall not exceed the rate
in effect prior to such assignment and delegation. Upon acceptance of such
assignment and delegation, the purchaser or transferee shall be the successor
Servicer or Special Servicer hereunder, as applicable.
Except as provided in this Section 6.4, neither the Servicer nor the
Special Servicer shall resign from the obligations and duties hereby imposed on
it except upon determination that its duties hereunder are no longer permissible
under applicable law. Any such determination permitting the resignation of the
Servicer or the Special Servicer, as applicable, shall be evidenced by an
Opinion of Counsel (obtained at the resigning Servicer's expense) to such effect
delivered to the Trustee.
No resignation or removal of the Servicer or the Special Servicer, as
applicable, as contemplated by the preceding paragraphs shall become effective
until the Trustee or a successor Servicer or the Special Servicer, as
applicable, shall have assumed the Servicer's or the Special Servicer's
responsibilities, duties, liabilities and obligations hereunder.
SECTION 6.5. Rights of the Depositor and the
Trustee in Respect of the
Servicer and the Special
Servicer.
Each of the 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 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 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 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 Servicer or
the Special Servicer
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and neither such Person is obligated to supervise the performance of the
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 Servicer
and the Special Servicer, as applicable (except with respect to item (vii) in
the case of the Special Servicer) means any one of the following events:
(i) any failure by the Servicer or the Special
Servicer, as applicable, to remit to the
Collection Account or any failure by the
Servicer to remit to the Trustee for
deposit into the Distribution Account any
amount required to be so remitted by the
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 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 Servicer or
the Special Servicer, which, in either
event, materially and adversely affects
the interests of the Certificateholders,
the 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 Servicer or
Special Servicer by the Depositor or the
Trustee, or to the 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 any of the
Rating Agencies that the then- current
rating assigned to any Class of
Certificates will be withdrawn,
downgraded or qualified if the Servicer
or Special Servicer, as applicable, is
not removed as Servicer or Special
Servicer hereunder; or
(iv) a decree or order of a court or agency or
supervisory authority having jurisdiction
in the premises in an involuntary case
under any present or future federal or
state bankruptcy, insolvency or similar
law for the appointment of a conservator
or receiver or liquidator in any
insolvency, readjustment of debt,
marshalling of assets and liabilities
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or similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the 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
(v) the 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 Servicer
or the Special Servicer, or of or relating
to all or substantially all of the
property of either the Servicer or the
Special Servicer; or
(vi) the 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
(vii) the Servicer shall fail to make any Advance required to be
made by the 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, the Trustee shall, by
notice in writing to the Servicer or the Special Servicer, as the case may be,
terminate 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
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, the Trustee shall require that any termination of the Servicer
shall constitute a termination of the Special Servicer and vice versa. On or
after the receipt by the 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 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 Servicer and the Special
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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 Servicer or Special Servicer (if other than the Trustee) with all
documents and records requested by the Trustee or the successor Servicer or
Special Servicer (if other than the Trustee) to enable the Trustee or the
successor 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 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 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 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 the Trustee or such successor
Servicer or Special Servicer shall reasonably request (including electromagnetic
form), to enable it to assume the Servicer's or Special Servicer's function
hereunder. All reasonable costs and expenses of the successor Servicer or
successor Special Servicer incurred in connection with transferring the Mortgage
Files to the successor 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 Servicer or successor
Special Servicer pursuant to this Section 7.1 shall be paid by the predecessor
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 Servicer or Special Servicer within a
reasonable time after presentation of such documentation, the Trustee or the
successor 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 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 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 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
Servicer or Special Servicer shall not affect any liability of the predecessor
Servicer or Special Servicer, as applicable, which may have arisen prior to its
termination as Servicer or Special Servicer. The Trustee shall not be liable for
any of the representations and warranties of the Servicer or of the Special
Servicer herein or in any related document or agreement, for any acts or
omissions of the predecessor Servicer or Special Servicer, as applicable, or for
any losses incurred in respect of any Permitted
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Investment by the 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 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 Servicer or
Special Servicer would have been entitled if the Servicer or Special Servicer,
as applicable, had continued to act hereunder. Unless otherwise agreed to in
writing by the Servicer and the Trustee, in the event any Advances made by the
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 in full.
In addition to the foregoing, any successor 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 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 each Rating Agency in one of its two 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, the appointment of which will not result in the downgrading,
withdrawal or qualification of the rating or ratings then assigned to any Class
of Certificates as evidenced in writing by each Rating Agency, as the successor
to the Servicer or Special Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Servicer or Special
Servicer hereunder. No appointment of a successor to the Servicer or Special
Servicer hereunder shall be effective until the assumption by such successor of
all the Servicer's or Special Servicer's responsibilities, duties and
liabilities hereunder. Pending appointment of a successor to the 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 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 appointment
of a successor to the 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.
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(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 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 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, 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.
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
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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 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 Servicer, the Special Servicer,
the Depositor, the Paying Agent or the Auction 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 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
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
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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; and
(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 Servicer or the Special Servicer to
comply with the obligations of the
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 Servicer's or the Special
Servicer's failure to comply with its
obligations listed in clause (i) (except
with respect to remittances to the
Collection Account) and (vii) of
Section 7.1 or to provide scheduled
reports, certificates and statements when
and as required to be delivered to the
Trustee pursuant to this Agreement.
(v) The Trustee and the Fiscal Agent shall not
be under any obligation 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 or REMIC II 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 Servicer or the Special Servicer under this
Agreement, except pursuant to Sections 3.22 or 4.6 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 Servicer or the Special Servicer in accordance
with
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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 protected in acting or
refraining from acting upon any
resolution, Officer's Certificate,
certificate of auditors or any other
certificate, statement, instrument,
opinion, report, notice, request, consent,
order, appraisal, bond or other paper or
document reasonably believed by it to be
genuine and to have been signed or
presented by the proper party or parties
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 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 Opinion of Counsel;
(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 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;
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(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 Servicer or the Special Servicer if an
Event of Default shall have occurred and
be continuing relating to the 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 hereunder 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) 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 or REMIC II to fail to qualify as a REMIC
at any time that any Certificates are outstanding or subject REMIC I or REMIC II
to any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
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 pursuant to this Agreement or the eligibility of any
Mortgage Loan for purposes of this Agreement.
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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 Servicer or the
Special Servicer and the Trustee, the Fiscal Agent, the Special Servicer and the
Servicer assume no responsibility for their correctness. The Trustee, the Fiscal
Agent, the 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 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 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 Servicer or the Special
Servicer pursuant to Section 7.2); the compliance by the Depositor, the 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 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 Servicer or the
Special Servicer (other than, with respect to the Trustee only, if the Trustee
shall assume the duties of the Servicer or the Special Servicer pursuant to
Section 7.2) or any subservicer or any Borrower; any action of the Servicer or
the Special Servicer (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Servicer or the Special Servicer pursuant
to Section 7.2) or any subservicer 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 Servicer or the Special
Servicer or any subservicer 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 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 Servicer or the Special Servicer pursuant to Section
7.2) unless the taking of such action is not permitted by the 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. Under no circumstances shall the
Fiscal Agent be liable under any of the circumstances described in the preceding
sentence. The
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Trustee and the Fiscal Agent shall not be accountable for the use or application
by the Depositor, the 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 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 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 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
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 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's Fees and
Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay 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 Servicer on each Distribution 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.
(b) To the extent specifically permitted by Section 3.12(d), the
Trustee shall be paid or reimbursed from the Trust Fund upon its request for
expenses, disbursements and advances incurred or made by the Trustee pursuant to
and in accordance with any of the provisions of this Agreement except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Servicer and the Special Servicer covenant and agree to pay or
reimburse the Trustee for the reasonable expenses, disbursements and advances
incurred or made by the
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Trustee in connection with any transfer of the servicing responsibilities of the
Servicer or the Special Servicer, as applicable hereunder, pursuant to or
otherwise arising from the resignation or removal of the 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 Paying Agent, the Certificate Registrar, the Custodian,
the 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 related to each such party's respective willful misconduct, bad faith,
fraud and/or negligence in the performance of its respective duties hereunder or
by reason of reckless disregard of its respective obligations and duties
hereunder (including in the case of the Servicer or the Special Servicer, any
agent of the 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
Regulations 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 is entitled to
indemnification pursuant to Section 8.5(c). 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 4.5, 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
Servicer, the Special Servicer, the Paying Agent, the Certificate Registrar or
the Custodian.
(f) This Section 8.5 shall be expressly construed to include, but not
be limited to, such indemnities, compensation, expenses, disbursements,
advances, losses,
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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 corporation or
association organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate trust
powers and to accept the trust conferred under this Agreement, having a combined
capital and surplus of at least $50,000,000 and a rating on its unsecured senior
long-term debt of at least "AA" (unless a Fiscal Agent is appointed and acting
hereunder that has a long-term senior unsecured debt rating that is at least
"AA" (without regard to any plus or minus)), unless each of the Rating Agencies
has confirmed in writing that a lower rating shall not result, in and of itself,
in a downgrading, withdrawal or qualification of the rating then assigned by
such Rating Agency to any Class of the Certificates and subject to supervision
or examination by federal or state authority and shall not be an Affiliate of
the Servicer or the Special Servicer (except during any period when the Trustee
has assumed the duties of the 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 Servicer,
the Special Servicer and each Rating Agency. Upon such notice of resignation,
the Fiscal Agent shall also be deemed to have been removed and, accordingly, the
Servicer shall promptly appoint a successor Trustee, which appointment of
successor Trustee shall not result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then assigned by the Rating Agencies
to any Class of the Certificates as confirmed in writing by each of the Rating
Agencies, 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 debt rating
categories, shall be confirmed in writing by each of the Rating Agencies that
such appointment of successor Fiscal Agent shall not result, in and of itself,
in a downgrading, withdrawal or qualification of the rating then assigned by
such Rating Agency to any Class of the Certificates by written instrument, in
triplicate, which instrument shall be delivered to the resigning Trustee, with a
copy to the fiscal agent deemed removed, and the successor Trustee and successor
Fiscal Agent. Notwithstanding the foregoing, if no successor
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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 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, then the Depositor or the
Servicer may 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 be deemed to be a removal also of the Fiscal Agent) 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
Servicer, one complete set to the Special Servicer, one complete set to the
Trustee so removed, one complete set to the Fiscal Agent deemed removed, one
complete set to the successor Trustee so appointed and one complete set to the
successor Fiscal Agent so appointed.
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 National Bank 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 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 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 each Rating
Agency shall have confirmed in
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writing that the appointment of such successor Trustee and successor Fiscal
Agent shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
the Certificates. 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, 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 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.
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
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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
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 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
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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 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 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 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 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 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.
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.
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
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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
"BBB" from each Rating Agency, unless each of the Rating Agencies has confirmed
in writing that a lower rating shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by such
Rating Agency to any Class of the Certificates, and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 10.7. The Trustee shall pay
the Custodian reasonable compensation from its own funds. The Trustee shall
serve as the initial Custodian.
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 4.6.
(b) The Fiscal Agent undertakes to perform such duties and only such
duties as are specifically set forth in Sections 3.22 and 4.6.
(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 4.6, 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).
ARTICLE IX
TERMINATION
SECTION 9.1. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Special Servicer, the Depositor, the Trustee and the Fiscal Agent created
hereby with respect to the Certificates (other than the obligation to make
certain payments and to send certain notices to Certificateholders as
hereinafter set forth) shall terminate immediately following the
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occurrence of the last action required to be taken by the Trustee pursuant to
this Article IX on the Termination Date; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of twenty-one
years from the death of the survivor of the descendants of Joseph P. Kennedy,
the late ambassador of the United States to the United Kingdom, living on the
date hereof.
(b) The Trust Fund, REMIC I and REMIC II shall be terminated and the
assets of the Trust Fund shall be sold or otherwise disposed of in connection
therewith, only pursuant to a "plan of complete liquidation" within the meaning
of Code Section 860F(a)(4)(A) providing for the actions contemplated by the
provisions hereof pursuant to which the applicable Notice of Termination is
given and requiring that the Trust Fund, REMIC I and REMIC II shall terminate on
a Distribution Date occurring not more than 90 days following the date of
adoption of the plan of complete liquidation. For purposes of this Section
9.1(b), the Notice of Termination given pursuant to Sections 9.1(c) or
9.1(d)(iv) shall constitute the adoption of the plan of complete liquidation as
of the date such notice is given, which date shall be specified by the Trustee
in the final federal income tax returns of REMIC I and REMIC II pursuant to
Treasury Regulations Section 1.860F-1.
(c) If the Trust Fund has not been previously terminated pursuant to
subsection (d) of this Section 9.1, any Holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class may effect an
early termination of the Trust Fund, upon not less than 30 days' prior Notice of
Termination given to the Trustee and the Servicer any time on or after the Early
Termination Notice Date specifying the Anticipated Termination Date, by
purchasing on such date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect of any Mortgage
Loan, at a purchase price, payable in cash, equal to not less than the greater
of:
(i) the sum of
(A) 100% of the unpaid principal balance of each Mortgage
Loan included in the Trust Fund as of the last day of the
month preceding such Distribution Date (less any Advances
previously made on account of principal);
(B) the fair market value of all other
property included in the Trust Fund
as of the last day of the month
preceding such Distribution Date,
as determined by an Updated
Appraisal performed by an
Independent appraiser acceptable to
the Servicer as of the date not
more than 30 days prior to the last
day of the month preceding such
Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such
Mortgage Loan (including for this
purpose any Mortgage Loan as to
which title to the related
Mortgaged Property has been
acquired) at the Mortgage Rate to
the last day of the month preceding
such
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Distribution Date (less any Advances
previously made on account of interest);
(D) the aggregate amount of unreimbursed Advances (with
interest thereon at the Advance Rate), unpaid Servicing
Compensation and unpaid Trust Fund expenses; or
(ii) the aggregate fair market value of the
Mortgage Loans, and all other property
acquired in respect of any Mortgage Loan
in the Trust Fund, on the last day of
the month preceding such Distribution
Date, as determined by an Independent
financial advisory or investment banking
or investment brokerage firm acceptable
to the Servicer as of a date not more
than 30 days prior to the last day of
the month preceding such Distribution
Date, together with one month's interest
thereon at the related Mortgage Rate and
disposition expenses.
The Servicer or the Depositor may also effect such termination as
provided above if it first notifies each Holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class through the
Trustee of its intention to do so in writing at least 30 days prior to the Early
Termination Notice Date and no Class R-I Holder terminates the Trust Fund as
described above within such 30 day period. All costs and expenses incurred by
any party to this Agreement or by the Trust Fund in connection with the purchase
of the Mortgage Loans and other assets of the Trust Fund pursuant to this
Section 9.1(c) shall be borne by the party exercising its purchase rights
hereunder. The Trustee shall be entitled to rely conclusively on any
determination made by an Independent appraiser pursuant to this subsection (c).
(d) If the Trust Fund has not been previously terminated pursuant to
subsection (c) of this Section 9.1, on or after the Auction Valuation Date, the
Trustee shall conduct an auction of the Mortgage Loans in accordance with the
following principles:
(i) The Trustee shall request that four
Independent financial advisory or
investment banking or investment brokerage
firms nationally recognized in the field
of real estate analysis and reasonably
acceptable to the Servicer provide the
Trustee with an estimated value at which
the Mortgage Loans and all other property
in respect of any Mortgage Loan in the
Trust Fund could be sold at an auction.
If the aggregate value of the Mortgage
Loans and such property, as determined by
the average of the three highest such
estimates, equals or exceeds the aggregate
amount of the Certificate Balances of all
Certificates outstanding as of the close
of business on the Auction Valuation Date,
plus unpaid interest thereon, the
anticipated Auction Fees, unpaid Servicing
Compensation, unreimbursed Advances
(together with interest thereon at the
Advance Rate), and unpaid Trust Fund
expenses, the Trustee shall appoint an
Auction Agent to solicit offers from
Qualified Bidders to purchase all (but not
less than all) of the Mortgage Loans and
such property in accordance with the
Auction Procedures for
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a price that is not less than the Minimum Auction Price. In the
event that there is an auction of the Mortgage Loans and such
property the Auction Agent shall be authorized to employ
Independent attorneys and other Independent professional
consultants (including, without limitation, appraisers and
environmental consultants) as reasonably required to conduct
such sale.
(ii) In determining the aggregate amount of
the Certificate Balances pursuant to
this Section 9.1(d), there shall be
included all Certificates owned by or on
behalf of the Depositor, the Servicer,
the Special Servicer, the Trustee, a
Manager or a Borrower or any Affiliate
thereof, notwithstanding the proviso in
the first sentence of the definition of
the term "Certificateholder."
(iii) The Trustee shall reject every bid that
the Auction Agent advises the Trustee in
writing (a) is from a Person other than
a Qualified Bidder, (b) provides for a
purchase price that is less than an
amount equal to the aggregate amount of
the Certificate Balances of all
Certificates outstanding as of the close
of business on the closing date, plus
unpaid interest thereon, the Auction
Fees, unpaid Servicing Compensation,
unreimbursed Advances (together with
interest thereon at the Advance Rate),
and unpaid Trust Fund expenses (the
"Minimum Auction Price"), (c)
provides for purchase on terms other
than all-cash or (d) is contingent on
the occurrence or non-occurrence of any
event, except with respect to any
contingency relating to the due
diligence which may be performed by the
Qualified Bidder pursuant to the Auction
Procedures (each, a "Deficient Auction
Bid"). If all bids received by the
Trustee are Deficient Auction Bids, as
advised by the Auction Agent, the
Mortgage Loans and such property shall
not be sold and there shall be no
termination of the Trust Fund pursuant
to this Section 9.1(d).
(iv) In the event the Trustee receives any bids
that are not Deficient Auction Bids, the
Trustee shall accept the highest bid that
is not a Deficient Auction Bid, and shall
deliver a Notice of Termination to the
Servicer, the Special Servicer, the Rating
Agencies and the Certificateholders
specifying the Anticipated Termination
Date (which shall be first Distribution
Date following the date of closing of the
sale of the Mortgage Loans and such
property). The Trustee shall sell the
Mortgage Loans and such property to the
successful bidder at a closing to be held
no later than the Remittance Date
immediately preceding the Auction Proceeds
Distribution Date.
(v) The Trustee shall be entitled to be reimbursed from the
Collection Account for expenses (which shall be deemed to be
expenses of the Trust Fund) that it or the Auction Agent on its
behalf incurs pursuant
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to this Section 9.1(d) in connection with the valuation and sale
of the Mortgage Loans and such property (collectively, the
"Auction Fees"), including all fees and reasonable expenses of
legal counsel and other professional consultants retained by
either of the Trustee or the Auction Agent. The Trustee shall
not be personally liable for any act or omission of the Auction
Agent hereunder or any Independent attorneys and other
Independent professional consultants appointed by the Auction
Agent.
(vi) Any auction shall be conducted in
accordance with auction procedures to be
developed by the auction agent in
connection with such auction (the "Auction
Procedures"), provided that such
procedures shall include at a minimum
provisions substantially to the effect
that: (i) no due diligence of the
Servicer's, the Special Servicer's or the
Trustee's records with respect to the
Mortgage Loans may be conducted by any
bidder prior to being notified that it has
submitted the highest bid; (ii) the
Auction Agent is entitled to require that
the highest bidder provide a
non-refundable good faith deposit
sufficient to reimburse the Trustee and
the Auction Agent for all expenses in
connection with the evaluation of such bid
and in connection with such highest
bidder's due diligence, (iii) each bidder
may be required to enter into a
confidentiality agreement with the
Servicer, the Special Servicer, the
Auction Agent and the Trustee prior to
being permitted to conduct due diligence,
(iv) Borrowers on any of the Mortgage
Loans shall be prohibited from submitting
bids, and (v) in the event that the
highest bidder withdraws, the next highest
bidder shall be permitted to conduct due
diligence as if it were the highest bidder.
(e) If the Trust Fund has not been previously terminated pursuant to
subsection (c) or (d) of this Section 9.1, the Trustee shall determine as soon
as practicable the Distribution Date on which the Trustee reasonably
anticipates, based on information with respect to the Mortgage Loans previously
provided to it, that the final distribution will be made (i) to the Holders of
outstanding Regular Certificates, and to the Trustee in respect of the REMIC I
Regular Interests notwithstanding that such distribution may be insufficient to
distribute in full the Certificate Balance of each Certificate or REMIC I
Regular Interest, together with amounts required to be distributed on such
Distribution Date pursuant to Section 4.1(a), 4.1(b) or 4.1(c), as applicable,
or (ii) if no such Classes of Certificates are then outstanding, to the Holders
of the Residual Certificates in accordance with Section 4.1(b)(II), in either
case, following the later to occur of (A) the receipt or collection of the last
payment due on any Mortgage Loan included in the Trust Fund or (B) the
liquidation or disposition pursuant to Section 3.18 of the last asset held by
the Trust Fund.
(f) Notice of any termination of the Trust Fund pursuant to this
Section 9.1 shall be mailed by the Trustee to affected Certificateholders with a
copy to the Servicer and the Special Servicer and each Rating Agency at their
addresses shown in the Certificate Registrar as soon as practicable after the
Trustee shall have received, given or been deemed to have
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received a Notice of Termination but in any event not more than thirty days, and
not less than ten days, prior to the Anticipated Termination Date. The notice
mailed by the Trustee to affected Certificateholders shall:
(i) specify the Anticipated Termination Date on which the final
distribution is anticipated to be made to Holders of
Certificates of the Classes specified therein;
(ii) specify the amount of any such final
distribution, if known; and
(iii) state that the final distribution to Certificateholders will
be made only upon presentation and surrender of Certificates
at the office of the Paying Agent therein specified.
If the Trust Fund is not terminated on any Anticipated Termination Date for any
reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(g) Any funds not distributed on the Termination Date because of the
failure of any Certificateholders to tender their Certificates shall be set
aside and held in trust for the account of the appropriate non-tendering
Certificateholders, whereupon the Trust Fund shall terminate. If any
Certificates as to which notice of the Termination Date has been given pursuant
to this Section 9.1 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 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 Certificate shall not have been
surrendered for cancellation, the Trustee may, directly or through an agent,
take appropriate steps to contact the remaining Certificateholders concerning
surrender of their Certificates. The costs and expenses of maintaining such
funds in trust and of contacting 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-II Certificateholders all amounts distributable to the Holders thereof.
No interest shall accrue or be payable to any Certificateholder on any amount
held as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 9.1.
SECTION 9.2. Additional Termination
Requirements.
In the event that (a) the holder of a Class R-I Certificate
representing greater than a 50% Percentage Interest in such Class, the Servicer
or the Depositor exercises its purchase option as provided in Section 9.1(c) or
(b) the procedures for sale of all Mortgage Loans as provided in Section 9.1(d)
are initiated, the Trust Fund shall be terminated in accordance with the
following additional requirements: provided that the Trustee has received from
the Class R-I Certificateholders, the Servicer, the Depositor or the purchaser
of the Mortgage Loans, as appropriate, an Opinion of Counsel or other evidence
to the effect that the termination of the Trust Fund (i) will constitute a
"qualified liquidation" of each of REMIC I and REMIC II within
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the meaning of Code Section 860F(a)(4)(A-3) and (ii) will not subject REMIC I or
REMIC II to tax or cause either REMIC I or REMIC II to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. 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 10.2. Limitation on Rights of
Certificateholders.
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
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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 10.3. 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 10.4. Notices.
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 National Bank or ABN AMRO Bank N.V.
135 South LaSalle Street
Suite 1740
Chicago, Illinois 60603
Attention Asset - Backed Securities Trust
Services, MRAC 1996-C2
Telecopy No.: (312) 904-2084
With copies to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Attention: Mark Michigan, Esq.
Telecopy No.: (212) 751-4864
If to the Depositor, to:
Midland Realty Acceptance Corp.
210 West 10th Street
6th Floor
Kansas City, Missouri 64105
Attention: Alan L. Atterbury
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 the Servicer or the Special Servicer, to:
Midland Loan Services, L.P.
210 West 10th Street
6th Floor
Kansas City, Missouri 64105
Attention: Alan L. Atterbury
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 Mortgage Loan Seller (for the BCMC Loans), to:
Boston Capital Mortgage Company, Limited Partnership
One Boston Place
Boston, Massachusetts 02108-4406
Attn: Kingsley Greenland
Telecopy No.: (612) 624-8799
If to the Mortgage Loan Seller (for the GACC Loans), to:
German American Capital Corporation
31 West 52nd Street
New York, New York 10019
Attn: General Counsel
Telecopy No.: (212) 469-8172
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If to the Mortgage Loan Seller (for the MCFC Loans) to:
Midland Commercial Financing Corp.
210 West 10th Street
Kansas City, Missouri 64105
Attention: Alan L. Atterbury
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 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 10.5. 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 10.6. Notice to the Depositor
and Each Rating Agency.
(a) The Trustee shall use its best efforts to promptly provide written
notice to the Depositor 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 Servicer, Special
Servicer, Trustee or Fiscal Agent;
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(iv) the repurchase of Mortgage Loans
pursuant to Section 2.3(d) or
2.3(e);
(v) the final payment to any Class of
Certificateholders;
(vi) each report to Certificateholders
described in Section 4.2;
(b) The Servicer and the Special Servicer shall promptly furnish to
each Rating Agency copies of the following:
(i) each of its annual statements as to
compliance described in Section 3.14;
(ii) each of its annual independent public
accountants' servicing reports described
in Section 3.15.
(iii) 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 Servicer or the Special
Servicer, if applicable, pursuant
thereto to the extent consistent with
applicable law and the related Mortgage
Loan Documents.
(c) The Special Servicer, shall furnish each Rating Agency with such
information with respect to any Specially Serviced Mortgage Loan as 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.
(d) Notices to each Rating Agency shall be
addressed as follows:
Fitch Investors Service, L.P.
One State Street Plaza
New York, New York 10004
Attention: Commercial Mortgage Surveillance
Moody's Investor Services, Inc.
99 Church Street
New York, New York 10007
Attention: Commercial Mortgage Surveillance
or in each case to such other address as any Rating Agency shall specify by
written notice to the parties hereto.
SECTION 10.7. Amendment.
This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the 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
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supplement any provisions herein or therein that may be inconsistent with any
other provisions herein or therein, (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 Regular Certificates by each Rating Agency, or (iv) to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement
and will not result in the downgrading, withdrawal or qualification of the
rating or ratings then assigned to any outstanding Class of Certificates, as
confirmed by each Rating Agency in writing and, in all cases, which, as
evidenced by an Opinion of Counsel at the expense of the party (other than the
Trustee, unless such amendment modifies or otherwise relates solely to the
obligations, duties or rights of the Trustee) requesting such amendment, 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 Servicer, the Special Servicer, the Trustee and
the Fiscal Agent with the consent of the Holders of each of the Classes of
Regular Certificates representing not less than 662/3% 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:
(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
Certificates 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 Servicer, the Trustee or the
Fiscal Agent to make a P&I Advance or Property 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 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 two 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.
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In the event that neither the Depositor nor the successor thereto, if
any, is in existence, any amendment under this Section 10.7 shall be effective
with the consent in writing of the Trustee, the Fiscal Agent, the Servicer, the
Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
Promptly after the execution of any amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder 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 10.7 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.
Notwithstanding any contrary provision of this Agreement, no amendment
shall be made to this Agreement or any Custodial Agreement unless the 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 or REMIC II 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
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.
SECTION 10.8. 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,
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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 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
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]
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer, the Special Servicer,
the Trustee and the Fiscal Agent have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
MIDLAND REALTY ACCEPTANCE CORP., as Depositor
By: /s/ Clarence A. Krantz
Name: Clarence A. Krantz
Title: Executive Vice President
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
MIDLAND LOAN SERVICES, L.P.,
as Servicer and Special Servicer
By: MIDLAND DATA SYSTEMS, INC.,
its General Partner
By: /s/ Alan L. Atterbury
Name: Alan L. Atterbury
Title: President
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
LASALLE NATIONAL BANK,
as Trustee, Custodian, Certificate Registrar and Paying
Agent
By: /s/Russell M. Goldenberg
Name: Russell M. Goldenberg
Title: Vice President
Signed and acknowledged
in the presence of:
Print Name:
Print Name:
ABN AMRO BANK
N.V., as Fiscal
Agent of the Trustee
By: /s/Robert C. Smolka By: /s/Kenneth M. Gonski
Name: Robert C. Smolka Name: Kenneth M. Gonski
Title:Group Vice President Title:Vice President
<PAGE>
STATE OF MISSOURI )
) ss.:
COUNTY OF JACKSON )
On this ____ day of December, 1996, before me appeared Clarence A.
Krantz to me personally known, who being by me duly sworn did say that he is an
Executive Vice President of MIDLAND REALTY ACCEPTANCE CORP., a Missouri
corporation and that he signed his name thereto under authority of the board of
directors of said corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
--------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
<PAGE>
STATE OF MISSOURI )
) ss.:
COUNTY OF JACKSON )
On this ____ day of December, 1996, before me appeared Alan L.
Atterbury, to me personally known, who being by me duly sworn did say that he is
the President of Midland Data Systems, Inc., a Missouri corporation, the general
partner of MIDLAND LOAN SERVICES, L.P., a Missouri limited partnership, and that
the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said
corporation by authority of its board of directors as the general partner of
said limited partnership, and said person acknowledged said instrument to be the
free act and deed of said corporation as the general partner of said limited
partnership and the free act and deed of said limited partnership.
WITNESS my hand and seal hereto affixed the day and year first above
written.
--------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
<PAGE>
STATE OF __________________ )
) ss.:
COUNTY OF _______________ )
On this ___ day of
, before me appeared
____________________, to me personally
known, who being by me duly sworn did say that he is a
[Title] of
, a
corporation, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation by authority of its board of
directors, and said __________________ acknowledged said instrument to be the
free act and deed of said corporation and the free act and deed of said
corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
--------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
<PAGE>
STATE OF __________________ )
) ss.:
COUNTY OF ________________ )
On this ___th day of
, before me,
the undersigned, a Notary Public in and for the State of
, duly commissioned
and sworn, personally appeared
, to me
known who, by me duly sworn, did depose and acknowledge
before me and say that he resides at
; that he is the
of
, a
, the
corporation described in and that executed the foregoing instrument; and that he
signed his name thereto under authority of the board of directors of said
corporation and on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year first above
written.
--------------------------------
NOTARY PUBLIC in and for the
State of
.
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
Name:
Address:
<PAGE>
STATE OF __________________ )
) ss.:
COUNTY OF ________________ )
On the ___th day of
, before me,
, a
Notary Public in and for said State, personally appeared
,
and
, personally known to me or proved to me on the basis of satisfactory evidence
to be the persons whose names are subscribed to the within instrument and
acknowledged to me that they executed the same in their authorized capacity, and
that by their signatures on the instrument the corporation upon behalf of which
the person acted executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
NOTARY PUBLIC
My commission expires ___________________
<PAGE>
MIDLAND REALTY ACCEPTANCE CORP.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1996-C2, CLASS A-1, CLASS A-2, CLASS B,
CLASS C, CLASS D AND CLASS E
PRICING LETTER
New York, New York
As of December 18, 1996
Prudential Securities Incorporated
One New York Plaza, 18th Floor
New York, New York 10292-2018
Deutsche Morgan Grenfell Inc.
31 West 52nd Street
New York, New York 10019
Llama Company, L.P.
One McIlroy Plaza, Suite 302
Fayetteville, Arkansas 72701
Ladies and Gentlemen:
Reference is made to that certain Underwriting Agreement dated as of
the date hereof (the "Underwriting Agreement"; capitalized terms used herein
without definition shall have the meanings given such terms in the Underwriting
Agreement) among Prudential Securities Incorporated, Deutsche Morgan Grenfell
Inc. and Llama Company, L.P., as underwriters, and Midland Realty Acceptance
Corp. This letter constitutes the Pricing Letter as defined in the Underwriting
Agreement.
The purchase price (expressed as a percentage of the initial
Certificate Balance) to be paid by the Underwriters for each class of the
Publicly Offered Certificates is as follows:
Class Purchase Price
Class A-1 101.500%
Class A-2 101.500%
Class B 101.500%
NY1-475710
Pricing Letter
<PAGE>
Class C 101.500%
Class D 101.500%
Class E 101.500%
If the foregoing is in accordance with your understanding, please sign
and return six counterparts hereof.
Very truly yours,
MIDLAND REALTY ACCEPTANCE CORP.
By: /s/Clarence Krantz
Clarence Krantz
Executive Vice President
AGREED AND ACCEPTED AS OF THE
DATE FIRST WRITTEN ABOVE
PRUDENTIAL SECURITIES
INCORPORATED
By: /s/Stephanie Anzivino
Stephanie Anzivino
Vice President
DEUTSCHE MORGAN GRENFELL INC.
By: /s/Joel C. Horne
Joel C. Horne
Director
By: /s/Charlene S. Chai
Charlene S. Chai
Director
NY1-475710
Pricing Letter
<PAGE>
LLAMA COMPANY, L.P.
By: /s/Stephen D. Mansfield
Stephen D. Mansfield
Senior Vice President
NY1-475710
Pricing Letter
