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Wachovia Bank Commercial Mortgage Trust Series 2007-C34 – ‘8-K’ for 11/1/07 – EX-4

On:  Monday, 11/19/07, at 3:15pm ET   ·   For:  11/1/07   ·   Accession #:  898080-7-331   ·   File #:  333-131262-11

2 Referenced via Accession #:  

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/19/07  Wachovia Bank Com’l Mtg… 2007-C34 8-K:1,9    11/01/07    7:10M                                    Dewey & Leboeuf LLP

Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report -- form8-k                           HTML     30K 
 2: EX-1        Exhibit 1.1 - Underwriting Agreement                HTML    193K 
 3: EX-4        Exhibit 4.1 - Pooling and Servicing Agreement       HTML   3.92M 
 4: EX-8        Exhibit 8.1 - Opinion of Dewey & Leboeuf LLP        HTML     21K 
 5: EX-8        Exhibit 8.2 - Opinion of Dewey & Leboeuf LLP        HTML     13K 
 6: EX-99       Exhibit 99.1 - Wachovia Mlpa                        HTML    996K 
 7: EX-99       Exhibit 99.2 - Barclays Mlpa                        HTML    474K 


EX-4   —   Exhibit 4.1 – Pooling and Servicing Agreement
Exhibit Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"The Certificates
"The Controlling Class Representative

This exhibit is an HTML Document rendered as filed.  [ Alternative Formats ]



 

Exhibit 4.1

 

WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC.

Depositor

and

WACHOVIA BANK, NATIONAL ASSOCIATION

Master Servicer

and

CWCAPITAL ASSET MANAGEMENT LLC

Special Servicer

and

WELLS FARGO BANK, N.A.

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of November 1, 2007

 

______________________________

 

$1,479,435,064

Commercial Mortgage Pass-Through Certificates

 

Series 2007-C34

 


 

 

 

TABLE OF CONTENTS

 

 

 

Page

 

ARTICLE I

DEFINITIONS

 

 

Section 1.01

Defined Terms.

4

 

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS
AND WARRANTIES; ORIGINAL ISSUANCE OF CERTIFICATES

 

 

Section 2.01

Conveyance of Mortgage Loans and ED Loan REMIC Interests.

82

Section 2.02

Acceptance of the Trust Fund by Trustee.

85

Section 2.03

Mortgage Loan Seller’s Repurchase or Substitution of Mortgage Loans for Document Defects and Breaches of Representations and Warranties.

88

Section 2.04

Representations and Warranties of Depositor.

94

Section 2.05

Conveyance of Majority Mortgage Loans and ED Loan REMIC; Acceptance of each ED Loan REMIC, REMIC I and Additional Interest Grantor Trust by Trustee.

95

Section 2.06

Issuance of the REMIC I Regular Interests; Execution, Authentication and Delivery of Class R-I Certificates.

96

Section 2.07

Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by Trustee.

96

Section 2.08

Execution, Authentication and Delivery of REMIC II Certificates.

96

Section 2.09

Execution, Authentication and Delivery of Class Z Certificates.

96

 

ARTICLE III

ADMINISTRATION AND SERVICING OF THE TRUST FUND

 

 

Section 3.01

Administration of the Mortgage Loans.

97

Section 3.02

Collection of Mortgage Loan Payments.

99

Section 3.03

Collection of Taxes, Assessments and Similar Items; Servicing Accounts; Reserve Accounts.

102

Section 3.04

Certificate Account, Interest Reserve Account, Gain-on-Sale Reserve Account, Additional Interest Account, Distribution Account and Companion Distribution Account.

106

Section 3.05

Permitted Withdrawals from the Certificate Account, Distribution Account, Interest Reserve Account, Additional Interest Account, Gain-on-Sale Reserve Account, Companion Distribution Account and Interest Shortfall Account.

110

 

 

-i-




 

Section 3.06

Investment of Funds in the Servicing Accounts, Reserve Accounts, Certificate Account, Interest Reserve Account, Distribution Account, Companion Distribution Account, Additional Interest Account, Gain-on-Sale Reserve Account, REO Account and Interest Shortfall Account.

118

Section 3.07

Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage.

121

Section 3.08

Enforcement of Alienation Clauses.

124

Section 3.09

Realization Upon Defaulted Mortgage Loans; Required Appraisals.

128

Section 3.10

Trustee and Custodian to Cooperate; Release of Mortgage Files.

132

Section 3.11

Servicing Compensation.

133

Section 3.12

Property Inspections; Collection of Financial Statements; Delivery of Certain Reports.

138

Section 3.13

Annual Reports on Assessment of Compliance with Servicing Criteria and Annual Statement as to Compliance.

141

Section 3.14

Attestation by Independent Public Accountants.

144

Section 3.15

Access to Certain Information.

145

Section 3.16

Title to REO Property; REO Account.

149

Section 3.17

Management of REO Property.

150

Section 3.18

Resolution of Defaulted Mortgage Loans and REO Properties.

154

Section 3.19

Additional Obligations of Master Servicer and Special Servicer.

158

Section 3.20

Modifications, Waivers, Amendments and Consents.

159

Section 3.21

Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping.

167

Section 3.22

Sub-Servicing Agreements.

171

Section 3.23

Representations and Warranties of Master Servicer and Special Servicer.

174

Section 3.24

Sub-Servicing Agreement Representation and Warranty.

177

Section 3.25

Designation of Controlling Class Representative.

177

Section 3.26

Companion Paying Agent.

180

Section 3.27

Companion Register.

180

Section 3.28

Future Debt Secured by Interests in Related Mortgagors.

181

Section 3.29

Certain Matters Relating to the Future Securitization of the Pari Passu Companion Loans.

181

Section 3.30

Litigation Control.

185

 

ARTICLE IV

DISTRIBUTIONS TO CERTIFICATEHOLDERS

 

 

Section 4.01

Distributions.

187

Section 4.02

Statements to Certificateholders; CMSA Loan Periodic Update File.

202

Section 4.03

P&I Advances.

207

 

 

-ii-


 

Section 4.04

Allocation of Realized Losses and Additional Trust Fund Expenses; Allocation of Certificate Deferred Interest; Allocation of Appraisal Reduction Amounts.

210

Section 4.05

Calculations.

212

Section 4.06

Use of Agents.

213

 

ARTICLE V

THE CERTIFICATES

 

 

 

 

 

Section 5.01

The Certificates.

213

Section 5.02

Registration, Transfer and Exchange of Certificates.

214

Section 5.03

Book-Entry Certificates.

220

Section 5.04

Mutilated, Destroyed, Lost or Stolen Certificates.

222

Section 5.05

Persons Deemed Owners.

222

 

ARTICLE VI

THE DEPOSITOR, THE MASTER SERVICER, THE SPECIAL
SERVICER AND THE CONTROLLING CLASS REPRESENTATIVE

 

 

Section 6.01

Liability of Depositor, Master Servicer and Special Servicer.

223

Section 6.02

Merger, Consolidation or Conversion of Depositor or Master Servicer or Special Servicer.

223

Section 6.03

Limitation on Liability of Depositor, Master Servicer and Special Servicer.

223

Section 6.04

Resignation of Master Servicer and the Special Servicer.

224

Section 6.05

Rights of Depositor and Trustee in Respect of Master Servicer and the Special Servicer.

225

Section 6.06

Depositor, Master Servicer and Special Servicer to Cooperate with Trustee.

226

Section 6.07

Depositor, Special Servicer and Trustee to Cooperate with Master Servicer.

226

Section 6.08

Depositor, Master Servicer and Trustee to Cooperate with Special Servicer.

226

Section 6.09

Designation of Special Servicer by the Controlling Class and Controlling Holders.

226

Section 6.10

Master Servicer or Special Servicer as Owner of a Certificate.

228

Section 6.11

The Controlling Class Representative.

229

 

ARTICLE VII

DEFAULT

 

 

Section 7.01

Events of Default.

232

Section 7.02

Trustee to Act; Appointment of Successor.

237

 

 

-iii-


 

Section 7.03

Notification to Certificateholders and Companion Holders.

239

Section 7.04

Waiver of Events of Default.

239

Section 7.05

Additional Remedies of Trustee Upon Event of Default.

239

 

ARTICLE VIII

CONCERNING THE TRUSTEE

 

 

Section 8.01

Duties of Trustee.

240

Section 8.02

Certain Matters Affecting Trustee.

241

Section 8.03

Trustee Not Liable for Validity or Sufficiency of Certificates or Mortgage Loans.

243

Section 8.04

Trustee May Own Certificates.

243

Section 8.05

Fees and Expenses of Trustee; Indemnification of Trustee.

243

Section 8.06

Eligibility Requirements for Trustee.

244

Section 8.07

Resignation and Removal of Trustee.

245

Section 8.08

Successor Trustee.

246

Section 8.09

Merger or Consolidation of Trustee.

246

Section 8.10

Appointment of Co-Trustee or Separate Trustee.

247

Section 8.11

Appointment of Custodians.

248

Section 8.12

Appointment of Authenticating Agents.

249

Section 8.13

Access to Certain Information.

250

Section 8.14

Appointment of REMIC Administrators.

250

Section 8.15

Representations and Warranties of Trustee.

251

Section 8.16

Appointment of the Paying Agent.

252

Section 8.17

Reports to the Securities and Exchange Commission; Available Information.

253

Section 8.18

Maintenance of Mortgage File.

267

Section 8.19

Notification Requirements and Deliveries in Connection with Securitization of a Serviced Companion Loan.

267

 

ARTICLE IX

TERMINATION

 

 

Section 9.01

Termination Upon Repurchase or Liquidation of All Mortgage Loans.

269

Section 9.02

Additional Termination Requirements.

272

 

ARTICLE X

ADDITIONAL TAX PROVISIONS

 

 

Section 10.01

REMIC Administration.

273

Section 10.02

Administration of the Additional Interest Grantor Trust.

278

 

 

-iv-


 

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

 

Section 11.01

Amendment.

281

Section 11.02

Recordation of Agreement; Counterparts.

283

Section 11.03

Limitation on Rights of Certificateholders.

283

Section 11.04

Governing Law.

284

Section 11.05

Notices.

284

Section 11.06

Severability of Provisions.

285

Section 11.07

Grant of a Security Interest.

285

Section 11.08

Streit Act.

286

Section 11.09

Successors and Assigns; Beneficiaries.

286

Section 11.10

Article and Section Headings.

286

Section 11.11

Notices to Rating Agencies.

286

Section 11.12

Complete Agreement.

288

 

 

-v-


 

EXHIBITS

Exhibit Description

Exhibit No.

Section  Reference

Form of Class A-1 Certificate

A-1

Section 1.01 Definition of “Class A-1 Certificate”

Form of Class A-2 Certificate

A-2

Section 1.01 Definition of “Class A-2 Certificate”

Form of Class A-PB Certificate

A-3

Section 1.01 Definition of “Class A-PB Certificate”

Form of Class A-3 Certificate

A-4

Section 1.01 Definition of “Class A-3 Certificate”

Form of Class A-1A Certificate

A-5

Section 1.01 Definition of “Class A-1A Certificate”

Form of Class IO Certificate

A-6

Section 1.01 Definition of “Class IO Certificate”

Form of Class A-M Certificate

A-7

Section 1.01 Definition of “Class A-M Certificate”

Form of Class A-J Certificate

A-8

Section 1.01 Definition of “Class A-J Certificate”

Form of Class B Certificate

A-9

Section 1.01 Definition of “Class B Certificate”

Form of Class C Certificate

A-10

Section 1.01 Definition of “Class C Certificate”

Form of Class D Certificate

A-11

Section 1.01 Definition of “Class D Certificate”

Form of Class E Certificate

A-12

Section 1.01 Definition of “Class E Certificate”

Form of Class F Certificate

A-13

Section 1.01 Definition of “Class F Certificate”

Form of Class G Certificate

A-14

Section 1.01 Definition of “Class G Certificate”

Form of Class H Certificate

A-15

Form of Class J Certificate

A-16

Section 1.01 Definition of “Class J Certificate”

Form of Class K Certificate

A-17

Section 1.01 Definition of “Class K Certificate”

 

 

-vi-




 

Exhibit Description

Exhibit No.

Section  Reference

Form of Class L Certificate

A-18

Section 1.01 Definition of “Class L Certificate”

Form of Class M Certificate

A-19

Section 1.01 Definition of “Class M Certificate”

Form of Class N Certificate

A-20

Section 1.01 Definition of “Class N Certificate”

Form of Class O Certificate

A-21

Section 1.01 Definition of “Class O Certificate”

Form of Class P Certificate

A-22

Section 1.01 Definition of “Class P Certificate”

Form of Class Q Certificate

A-23

Section 1.01 Definition of “Class Q Certificate”

Form of Class S Certificate

A-24

Section 1.01 Definition of “Class S Certificate”

Form of Class R-I Certificate

A-25

Section 1.01 Definition of “Class R-I Certificate”

Form of Class R-II Certificate

A-26

Section 1.01 Definition of “Class R-II Certificate”

Form of Class Z Certificate

A-27

Section 1.01 Definition of “Class Z Certificate”

Mortgage Loan Schedule

B

Section 1.01 Definition of “Mortgage Loan Schedule”

Schedule of Exceptions to Mortgage File Delivery

C-1

Section 2.02(a)

Form of Custodial Certification

C-2

Section 2.02(b)

Form of Master Servicer Request for Release

D-1

Section 1.01 Definition of “Request for Release”; Section 2.03(b); Section 3.10(a); and Section 3.10(b)

Form of Special Servicer Request for Release

D-2

Section 1.01 Definition of “Request for Release”; Section 3.10(b)

Calculation of NOI/Debt Service Coverage Ratios

E

Section 1.01 Definition of “Net Operating Income”

Form of Transferor Certificate

F-1

Section 5.02(b)

Form of Transferee Certificate for QIBs

F-2

Section 5.02(b)

Form of Transferee Certificate for Non-QIBs

F-3

Section 5.02(b)

 

 

-vii-




 

Exhibit Description

Exhibit No.

Section  Reference

Form of Transferee Certificate for Transfers Pursuant to Regulation S

F-4

Section 5.02(b)

Form of Transferee Certificate for Exchange or Transfer From Domestic Global Certificate to Regulation S Global Certificate During the Restricted Period

F-5

Section 1.01 Definition of “Exchange Certificate”; Section 5.02(b)

Form of Transferee Certificate for Exchange or Transfer From Domestic Global Certificate to Regulation S Global Certificate After the Restricted Period

F-6

Section 1.01 Definition of “Exchange Certificate”; Section 5.02(b)

Form of Transferee Certificate

G

Section 5.02(c)

Form of Transfer Affidavit and Agreement Pursuant to Section 5.02(d)(i)(B)

H-1

Section 5.02(d)(i)(B)

Form of Transferor Certificate Pursuant to Section 5.02(d)(i)(D)

H-2

Section 5.02(d)(i)(D)

Form of Notice and Acknowledgment

I-1

Section 6.09

Form of Acknowledgment of Proposed Special Servicer

I-2

Section 6.09

List of Earnout and Holdback Mortgage Loans

J

Section 3.20(j); Section 6.11(a)(vii)

Form of Certificateholder Confirmation Certificate Request by Beneficial Holder

K-1

Section 1.01 Definition of “Privileged Person”; Section 3.15(a)

Form of Prospective Purchaser Certificate

K-2

Section 1.01 Definition of “Privileged Person”; Section 3.15(a)

Initial Companion Holders

L

Section 3.27

Form of Purchase Option Notice

M

Section 3.18(e)

Form of Defeasance Certificate

N

Section 3.20(h)

Form of Depositor Certification

O

Section 8.17(j)(v); Section 8.17(m)

Form of Trustee Certification

P

Section 8.17(m)

Form of Master Servicer Certification

Q-1

Section 8.17(m)

Form of Special Servicer Certification

Q-2

Section 8.17(m)

 

 

-viii-




 

Exhibit Description

Exhibit No.

Section  Reference

Class A-PB Planned Principal Balance Schedule

R

Section 1.01 Definition of “Class A-PB Planned Principal Balance”

Relevant Servicing Criteria

S

Section 1.01 Definition of “Relevant Servicing Criteria”; Section 3.13(a)

[Reserved]

T

 

Additional Form 10-D Disclosure

U

Section 8.17(h)

Additional Disclosure Notification

V

Section 1.01 Definition of “Additional Disclosure Notification”; Section 8.17(h); Section 8.17(i); 8.17(j)

Additional Form 10-K Disclosure

W

Section 8.17(j)

Form 8-K Disclosure Information

X

Section 8.17(i)

Sub-Servicer List

Y

Section 3.13(b); Section 3.14; Section 7.01(a)(xi)

Tenants-in-Common Transfer Compliance

Z

Section 1.01 Definition of “Tenants-In-Common Loan”; Section 3.08(a)(ii)

Officer’s Certificate of Master Servicer re: Tenants-in-Common Approvals

AA

Section 3.08(a)(ii)

 

 

-ix-



 

POOLING AND SERVICING AGREEMENT

This Pooling and Servicing Agreement (this “Agreement”) is dated and effective as of November 1, 2007, among WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC., as Depositor, WACHOVIA BANK, NATIONAL ASSOCIATION, as Master Servicer, CWCAPITAL ASSET MANAGEMENT LLC, as Special Servicer, and WELLS FARGO BANK, N.A., as Trustee.

PRELIMINARY STATEMENT:

The Depositor intends to sell mortgage pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple classes (each, a “Class”), which in the aggregate will evidence the entire beneficial ownership interest in a trust fund (the “Trust Fund”) to be created hereunder, the primary assets of which will be the Mortgage Loans.

REMIC  I

As provided herein, the Trustee will elect to treat each segregated pool of assets consisting of an ED Loan and certain other related assets subject to this Agreement as a REMIC for federal income tax purposes, and each such segregated pool of assets will be designated an “ED Loan REMIC”. Each such ED Loan REMIC Regular Interest will be held as an asset of REMIC I, and each such ED Loan REMIC Residual Interest will represent the sole class of “residual interests” in the related ED Loan REMIC and will be represented by the Class R-I Certificates.

As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of all of the Majority Mortgage Loans (exclusive of that portion of the interest payments thereon that constitutes Additional Interest), each ED Loan REMIC Regular Interest and certain other related assets subject to this Agreement as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as REMIC I. The Class R-I Certificates will represent the sole class of “residual interests” in REMIC I for purposes of the REMIC Provisions under federal income tax law. For federal income tax purposes, the interests defined in the table below the heading “REMIC II” as “Corresponding REMIC I Regular Interests” are the “regular interests” in REMIC I.

REMIC  II

As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of all of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as REMIC II. The Class R-II Certificates will evidence the sole class of “residual interests” in REMIC II for purposes of the REMIC Provisions under federal income tax law. For federal income tax purposes, each Class of Regular Certificates will be designated as a separate “regular interest” in REMIC II for purposes of the REMIC Provisions under federal income tax law.

The following table sets forth the Class or Component designation, the original REMIC I Principal Balance for each corresponding REMIC I Regular Interest (each, a

 

-1-


 

Corresponding REMIC I Regular Interest”), the Corresponding Components of the Class IO Certificates (the “Corresponding Components”) and the Original Class Principal Balance for each Class of Sequential Pay Certificates (the “Corresponding Certificates”). Each of the “Corresponding Components of Class IO Certificates” is a “regular interest” in REMIC II and the Class IO Certificates represent such Corresponding Components.

 

Corresponding Certificates

Original Class Principal Balance

Corresponding REMIC  I Regular Interests (1)

Original REMIC  I Principal Balance

REMIC  I Pass-Through Rate

Corresponding Components of Class  IO Certificates (1)

Class A-1

$18,111,000

LA-1

$18,111,000

5.074%

IO-A-1

Class A-2

$178,441,000

LA-2

$178,441,000

5.569%

IO-A-2

Class A-PB

$48,817,000

LA-PB

$48,817,000

5.617%

IO-A-PB

Class A-3

$474,091,000

LA-3

$474,091,000

5.678%

IO-A-3

Class A-1A

$316,144,000

LA-1A

$316,144,000

(2)

IO-A-1A

Class A-M

$147,944,000

LA-M

$147,944,000

(2)

IO-A-M

Class A-J

$88,766,000

LA-J

$88,766,000

(3)

IO-A-J

Class B

$18,493,000

LB

$18,493,000

(4)

IO-B

Class C

$16,643,000

LC

$16,643,000

(4)

IO-C

Class D

$16,644,000

LD

$16,644,000

(4)

IO-D

Class E

$11,096,000

LE

$11,096,000

(4)

IO-E

Class F

$12,945,000

LF

$12,945,000

(4)

IO-F

Class G

$16,643,000

LG

$16,643,000

(4)

IO-G

Class H

$18,493,000

LH

$18,493,000

(4)

IO-H

Class J

$18,493,000

LJ

$18,493,000

(4)

IO-J

Class K

$14,795,000

LK

$14,795,000

(4)

IO-K

Class L

$11,095,000

LL

$11,095,000

4.859%

IO-L

Class M

$5,548,000

LM

$5,548,000

4.859%

IO-M

Class N

$7,397,000

LN

$7,397,000

4.859%

IO-N

Class O

$3,699,000

LO

$3,699,000

4.859%

IO-O

Class P

$3,699,000

LP

$3,699,000

4.859%

IO-P

Class Q

$5,547,000

LQ

$5,547,000

4.859%

IO-Q

Class S

$25,891,064

LS

$25,891,064

4.859%

IO-S

 

(1)

The REMIC I Regular Interest and the Component of the Class IO Certificates that corresponds to any particular Class of Regular Certificates (other than the Class IO Certificates) also correspond to each other and, accordingly, constitute the Corresponding REMIC I Regular Interest and the Corresponding Component (if any), respectively, with respect to each other.

(2)

Capped at the Weighted Average Net Mortgage Rate.

(3)

The Class A-J Certificate Pass-Through Rate will be equal to the Weighted Average Net Mortgage Rate less 0.075%.

(4)

The Weighted Average Net Mortgage Rate.

The portion of the Trust Fund consisting of the Additional Interest and amounts held from time to time in the Additional Interest Account that represent Additional Interest shall be treated as a grantor trust (the “Additional Interest Grantor Trust”) for federal income tax purposes. The Class Z Certificates represent undivided beneficial interests in the Additional Interest Grantor Trust. As provided herein, the Trustee shall take all actions necessary to ensure that the portions of the Trust Fund consisting of the Grantor Trusts maintain their respective

 

 

-2-


 

status as a “grantor trust” under federal income tax law and not be treated as part of any ED Loan REMIC, REMIC I or REMIC II.

Each of the mortgage loans referred to in this Agreement as the Caplease Subordinate Companion Loans, the 2100 Ross Subordinate Companion Loan, the Llano Logistics Subordinate Companion Loan, the Glenbrooke at Palm Bay Subordinate Companion Loan, The Barrington Subordinate Companion Loan, the Winn-Dixie Distribution Center - Orlando, FL Pari Passu Companion Loans, the Winn-Dixie Distribution Center - Orlando, FL Subordinate Companion Loan, the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loans, the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Subordinate Companion Loan, the Newforest Estates Subordinate Companion Loan, the Winn-Dixie Distribution - Fitzgerald, GA Subordinate Companion Loan and the Dean Foods - Opa-Locka, FL Subordinate Companion Loan (each, a “Companion Loan” and, collectively, the “Companion Loans”) are not and will not be part of the Trust Fund but are secured by corresponding Mortgages that secure certain related Mortgage Loans that are identified on the Mortgage Loan Schedule as the Nestle 94 Pool Loan (the “Caplease Loan”) (loan number 2), the 2100 Ross Loan (loan number 5), the Llano Logistics Loan (loan number 7), the Glenbrooke at Palm Bay Loan (loan number 11), The Barrington Loan (loan number 23), the Winn-Dixie Distribution Center - Orlando, FL Loan (loan numbers 24.01 and 24.02), the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan (loan numbers 25.01 and 25.02), the Newforest Estates Loan (loan number 36), the Winn-Dixie Distribution - Fitzgerald, GA Loan (loan numbers 44.01 and 44.02) and the Dean Foods - Opa-Locka, FL Loan (loan numbers 75.01 and 75.02) (each, a “Co-Lender Loan” and collectively, the “Co-Lender Loans”) that are part of the Trust Fund.

The Caplease Subordinate Companion Loans are subordinate in right of entitlement to the Caplease Loan. The 2100 Ross Subordinate Companion Loan is subordinate in right of entitlement to the 2100 Ross Loan. The Llano Logistics Subordinate Companion Loan is subordinate in right of entitlement to the Llano Logistics Loan. The Glenbrooke at Palm Bay Subordinate Companion Loan is subordinate in right of entitlement to the Glenbrooke at Palm Bay Loan. The Barrington Subordinate Companion Loan is subordinate in right of entitlement to The Barrington Loan. The Winn-Dixie Distribution Center - Orlando, FL Loan and the Winn-Dixie Distribution Center - Orlando, FL Pari Passu Companion Loans are pari passu in right of entitlement with each other. The Winn-Dixie Distribution Center - Orlando, FL Subordinate Companion Loan is subordinate in right of entitlement to the Winn-Dixie Distribution Center - Orlando, FL Loan and the Winn-Dixie Distribution Center – Orlando, FL Pari Passu Companion Loans. The Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan and the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loans are pari passu in right of entitlement with each other. The Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Subordinate Companion Loan is subordinate in right of entitlement to the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Companion Loan. The Newforest Estates Subordinate Companion Loan is subordinate in right of entitlement to the Newforest Estates Loan. The Winn-Dixie Distribution - Fitzgerald, GA Subordinate Companion Loan is subordinate in right of entitlement to the Winn-Dixie Distribution - Fitzgerald, GA Loan. The Dean Foods - Opa-Locka, FL Subordinate Companion Loan is subordinate in right of entitlement to the Dean Foods - Opa-Locka, FL Loan.

 

 

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As and to the extent provided herein, each of the Companion Loans will be serviced and administered in accordance with this Agreement.

In consideration of the mutual agreements herein contained, the Depositor, the Master Servicer, the Special Servicer and the Trustee agree as follows:

ARTICLE I

 

DEFINITIONS

 

 

Section 1.01

Defined Terms.

Whenever used in this Agreement, including in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article.

2100 Ross Intercreditor Agreement”: The Intercreditor and Servicing Agreement, dated April 17, 2007, by and between Wachovia Bank, National Association, as Initial Lead Lender and MW1-2002, LLC, as Initial Co-Lender, relating to the 2100 Ross Whole Loan.

2100 Ross Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 5 on the Mortgage Loan Schedule).

2100 Ross Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the 2100 Ross Loan and subordinate in right of entitlement to the 2100 Ross Loan.

2100 Ross Whole Loan”: The 2100 Ross Loan, together with the 2100 Ross Subordinate Companion Loan.

30/360 Basis”: The accrual of interest calculated on the basis of a 360-day year consisting of twelve 30-day months.

Accrued Certificate Interest”: With respect to any Class of Regular Certificates (other than the Class IO Certificates) for any Distribution Date, one month’s interest at the Pass-Through Rate applicable to such Class of Certificates for such Distribution Date, accrued for the related Interest Accrual Period on the related Class Principal Balance outstanding immediately prior to such Distribution Date; and, with respect to the Class IO Certificates for any Distribution Date, the sum of the Accrued Component Interest for the related Interest Accrual Period for all of the Components for such Distribution Date. Accrued Certificate Interest shall be calculated on a 30/360 Basis and, with respect to any Class of Regular Certificates for any Distribution Date, shall be deemed to accrue during the calendar month preceding the month in which such Distribution Date occurs.

Accrued Component Interest”: With respect to each Component of the Class IO Certificates for any Distribution Date, one month’s interest at the Class IO Strip Rate applicable

 

 

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to such Component for such Distribution Date, accrued on the Component Notional Amount of such Component outstanding immediately prior to such Distribution Date. Accrued Component Interest shall be calculated on a 30/360 Basis and, with respect to any Component and any Distribution Date, shall be deemed to accrue during the calendar month preceding the month in which such Distribution Date occurs.

Acquisition Date”: With respect to any REO Property, the first day on which such REO Property is considered to be acquired by the Trust Fund within the meaning of Treasury Regulations Section 1.856-6(b)(1), which is the first day on which the Trust Fund is treated as the owner of such REO Property for federal income tax purposes.

Actual/360 Basis”: The accrual of interest calculated on the basis of the actual number of days elapsed during any calendar month in a year assumed to consist of 360 days.

Actual/360 Mortgage Loan”: Each Mortgage Loan that accrues interest on an Actual/360 Basis and that is identified as an Actual/360 Mortgage Loan on the Mortgage Loan Schedule.

Additional Disclosure Notification”: The form of notification, which is attached hereto as Exhibit V, to be included with any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure Information.

Additional Form 10-D Disclosure”: As defined in Section 8.17(h).

Additional Form 10-K Disclosure”: As defined in Section 8.17(j).

Additional Interest”: With respect to any ARD Loan after its Anticipated Repayment Date, all interest accrued on the principal balance of such ARD Loan at the Additional Interest Rate (the payment of which interest shall, under the terms of such Mortgage Loan, be deferred until the entire outstanding principal balance of such ARD Loan has been paid), together with all interest, if any, accrued at the related Mortgage Rate on such deferred interest. For purposes of this Agreement, Additional Interest on an ARD Loan or any successor REO Loan shall be deemed not to constitute principal or any portion thereof and shall not be added to the unpaid principal balance or Stated Principal Balance of such ARD Loan or successor REO Loan, notwithstanding that the terms of the related Mortgage Loan documents so permit. To the extent that any Additional Interest is not paid on a current basis, it shall be deemed to be deferred interest.

Additional Interest Account”: The segregated account, accounts or subaccounts created and maintained by the Trustee pursuant to Section 3.04(d) which shall be entitled “Wells Fargo Bank, N.A., as Trustee, in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34, Additional Interest Account.” The Additional Interest Account shall not be an asset of any of the ED Loan REMICs, REMIC I or REMIC II.

Additional Interest Grantor Trust”: That certain “grantor trust” (within the meaning of the Grantor Trust Provisions), the assets of which are the Additional Interest Grantor Trust Assets.

 

 

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Additional Interest Grantor Trust Assets”: The segregated pool of assets consisting of (i) any Additional Interest with respect to the ARD Loans after their respective Anticipated Repayment Dates and (ii) amounts held from time to time in the Additional Interest Account.

Additional Interest Rate”: With respect to any ARD Loan after its Anticipated Repayment Date, the incremental increase in the per annum rate at which such Mortgage Loan accrues interest after the Anticipated Repayment Date (in the absence of defaults) as calculated and as set forth in the related Mortgage Loan documents.

Additional Servicer”: Each Affiliate of the Master Servicer that services any of the Mortgage Loans and each Person who is not an Affiliate of the Master Servicer, other than the Special Servicer or the Trustee, who services 10% or more of the Mortgage Loans.

Additional Trust Fund Expense”: Any Special Servicing Fees, Workout Fees, Liquidation Fees and, in accordance with Sections 3.03(d) and 4.03(d), interest payable to the Master Servicer and/or the Trustee on Advances (to the extent not offset by Penalty Interest and late payment charges), the cost of contracting with a Determination Party as set forth in Section 2.03(h) and amounts payable to the Special Servicer in connection with inspections of Mortgaged Properties required pursuant to the first sentence of Section 3.12(a) (and not otherwise paid from Penalty Interest and late payment charges), as well as (without duplication) any of the expenses of the Trust Fund that may be withdrawn (x) pursuant to any of clauses (ix), (x), (xiii), (xiv), (xv) and (xxi) of Section 3.05(a) out of general collections on the Mortgage Loans and any REO Properties on deposit in the Certificate Account or (y) pursuant to clause (ii) or any of clauses (iv) through (vi) of Section 3.05(b) out of general collections on the Mortgage Loans and any REO Properties on deposit in the Distribution Account; provided that for purposes of the allocations contemplated by Section 4.04, no such expense shall be deemed to have been incurred by the Trust Fund until such time as the payment thereof is actually made from the Certificate Account or the Distribution Account, as the case may be.

Additional Yield Amount”: (a) With respect to any Distribution Date and any Class of Regular Certificates (other than the Class IO Certificates and any Excluded Class) entitled to distributions of principal with respect to Loan Group 1 pursuant to Section 4.01(a) on such Distribution Date (provided that a Yield Maintenance Charge and/or Prepayment Premium was actually collected on a Mortgage Loan or an REO Loan in such Loan Group during the related Collection Period), the product of (a) such Yield Maintenance Charge and/or Prepayment Premium multiplied by (b) a fraction, which in no event will be greater than one, the numerator of which is equal to the positive excess, if any, of (i) the Pass-Through Rate for such Class of Regular Certificates then receiving principal over (ii) the related Discount Rate, and the denominator of which is equal to the positive excess, if any, of (i) the Mortgage Rate for such Mortgage Loan or REO Loan, as the case may be, over (ii) the related Discount Rate, multiplied by (c) a fraction, the numerator of which is equal to the amount of principal distributable on such Class of Regular Certificates on such Distribution Date pursuant to Section 4.01(a) with respect to Loan Group 1, and the denominator of which is equal to the Loan Group 1 Principal Distribution Amount for such Distribution Date.

 

 

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(a)       With respect to any Distribution Date and any Class of Regular Certificates (other than the Class IO Certificates and any Excluded Class) entitled to distributions of principal with respect to Loan Group 2 pursuant to Section 4.01(a) on such Distribution Date (provided that a Yield Maintenance Charge and/or Prepayment Premium was actually collected on a Mortgage Loan or an REO Loan in such Loan Group during the related Collection Period) the product of (a) such Yield Maintenance Charge and/or Prepayment Premium multiplied by (b) a fraction, which in no event will be greater than one, the numerator of which is equal to the positive excess, if any, of (i) the Pass-Through Rate for such Class of Regular Certificates then receiving principal over (ii) the related Discount Rate, and the denominator of which is equal to the positive excess, if any, of (i) the Mortgage Rate for such Mortgage Loan or REO Loan, as the case may be, over (ii) the related Discount Rate, multiplied by (c) a fraction, the numerator of which is equal to the amount of principal distributable on such Class of Regular Certificates on such Distribution Date pursuant to Section 4.01(a) with respect to Loan Group 2, and the denominator of which is equal to the Loan Group 2 Principal Distribution Amount for such Distribution Date.

(b)       For purposes of the foregoing, to the extent that payments of principal on any Class of Regular Certificates (other than the Class IO Certificates and any Excluded Class) could be made from principal amounts allocable to Loan Group 1 or principal amounts allocable to Loan Group 2, the Trustee shall assume that those payments of principal on that Class of Regular Certificates are made from amounts allocable to each Loan Group, on a pro rata basis in accordance with the respective amounts allocable to each Loan Group that were available for payment on that Class of Certificates.

Administration Agreement”: That certain administration agreement dated as of April 27, 2007, by and between Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company and American Capital Strategies, Ltd.

Adverse Grantor Trust Event”: As defined in Section 10.02(e).

Adverse REMIC Event”: As defined in Section 10.01(h).

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.

Affiliated Servicer”: Any Person that is a “servicer” under Item 1108(a)(2)(ii) of Regulation AB of the Securities Act.

Agreement”: This Pooling and Servicing Agreement and all amendments hereof and supplements hereto.

 

 

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Anticipated Repayment Date”: For each ARD Loan, the date specified in the related Mortgage Note after which the Mortgage Rate for such ARD Loan will increase as specified in the related Mortgage Note (other than as a result of a default thereunder).

Appraisal”: With respect to any Mortgage Loan, an appraisal of the related Mortgaged Property from an Independent Appraiser selected by the Special Servicer or the Master Servicer prepared in accordance with 12 CFR §225.62 and conducted in accordance with the standards of the American Appraisal Institute by an Independent Appraiser which Independent Appraiser shall be advised to take into account the factors specified in Section 3.09(a), any available environmental, engineering or other third party reports, and other factors that a prudent real estate appraiser would consider.

Appraisal Reduction Amount”: The excess, if any, of (a) the sum of (without duplication), as calculated by the Master Servicer as of the first Determination Date immediately succeeding the Master Servicer obtaining knowledge of the occurrence of the Required Appraisal Date if no new Required Appraisal is required or the date on which a Required Appraisal (or letter update or internal valuation, if applicable) is obtained and each Determination Date thereafter so long as the related Mortgage Loan remains a Required Appraisal Mortgage Loan (i) the Stated Principal Balance of the subject Required Appraisal Mortgage Loan and any related Companion Loans related thereto, (ii) to the extent not previously advanced by or on behalf of the Master Servicer or the Trustee, all unpaid interest on the Required Appraisal Mortgage Loan (including, for such purposes, any related Pari Passu Companion Loan or any related Subordinate Companion Loan serviced hereunder) through the most recent Due Date prior to such Determination Date at a per annum rate equal to the related Net Mortgage Rate and the related fixed annualized rate of interest scheduled to accrue for the related Companion Loans (exclusive of any portion thereof that constitutes Additional Interest), (iii) all accrued but unpaid Servicing Fees and all accrued but unpaid Additional Trust Fund Expenses in respect of such Required Appraisal Mortgage Loan and any related Companion Loans, plus, with respect to any Pari Passu Companion Loan, any similar fees and expenses, (iv) all related unreimbursed Advances and any Advances related to such Required Appraisal Mortgage Loan (including, for such purposes, any related Pari Passu Companion Loan or any related Subordinate Companion Loan serviced hereunder) that were reimbursed out of general collections from the pool of Mortgage Loans (plus accrued interest thereon) made by or on behalf of the Master Servicer or the Trustee with respect to such Required Appraisal Mortgage Loan and (v) all currently due and unpaid real estate taxes and unfunded improvement reserves and assessments, insurance premiums, and, if applicable, ground rents in respect of the related Mortgaged Property over (b) an amount equal to the sum of (i) the Required Appraisal Value and (ii) all escrows, reserves and letters of credit held for the purposes of reserves (provided such letters of credit may be drawn upon for reserve purposes under the related Mortgage Loan documents) held with respect to such Required Appraisal Mortgage Loan. If the Special Servicer fails to obtain a Required Appraisal (or letter update or internal valuation, if applicable) within the time limit described in Section 3.09(a), the Appraisal Reduction Amount for the related Required Appraisal Mortgage Loan will equal 25% of the outstanding principal balance of such Required Appraisal Mortgage Loan (including, for such purposes, any related Pari Passu Companion Loan or any related Subordinate Companion Loan serviced hereunder) to be adjusted upon receipt of a Required Appraisal or letter update or internal valuation, if applicable. In the event a Mortgagor fails to make a Balloon Payment on a scheduled maturity date and no Appraisal has been received

 

 

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within 120 days of such failure, the Appraisal Reduction Amount for the related Mortgage Loan (including, for such purposes, any related Pari Passu Companion Loan or any related Subordinate Companion Loan serviced hereunder) will equal 25% of the outstanding principal balance of such Mortgage Loan (including, for such purposes, any related Pari Passu Companion Loan or any related Subordinate Companion Loan serviced hereunder), to be adjusted upon receipt of the new Appraisal. Any Appraisal Reduction Amount for a Co-Lender Loan shall be allocated as provided in Section 4.04(d).

Appraisal Reduction Template”: The template substantially in the form of, and containing the information called for in, the downloadable form of the “Appraisal Reduction Template” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

Appraised Value”: With respect to each Mortgaged Property, the appraised value thereof based upon the most recent Appraisal (or letter update or internal valuation, if applicable) that is contained in the related Servicing File.

ARD Loan”: Any Mortgage Loan that provides that if the unamortized principal balance thereof is not repaid on its Anticipated Repayment Date, such Mortgage Loan will accrue Additional Interest at the rate specified in the related Mortgage Note and the Mortgagor is required to apply excess monthly cash flow generated by the related Mortgaged Property to the repayment of the outstanding principal balance on such Mortgage Loan.

Ashford Hospitality Pool 5 Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 1 on the Mortgage Loan Schedule).

Asset Status Report”: As defined in Section 3.21(d).

Assignment of Leases”: With respect to any Mortgaged Property, any assignment of leases, rents and profits or similar document or instrument executed by the Mortgagor in connection with the origination of the related Mortgage Loan.

Assumed Scheduled Payment”: With respect to any Balloon Mortgage Loan for its Stated Maturity Date (provided that such Mortgage Loan has not been paid in full and no other Liquidation Event has occurred in respect thereof on or before such Stated Maturity Date) and for any Due Date thereafter as of which such Mortgage Loan remains outstanding and part of the Trust Fund, the Periodic Payment of principal and/or interest deemed to be due in respect thereof on such Due Date that would have been due in respect of such Mortgage Loan on such Due Date if the related Mortgagor had been required to continue to pay principal in accordance with the amortization schedule, if any, and to accrue interest at the Mortgage Rate, in effect on the Closing Date and without regard to the occurrence of its Stated Maturity Date. With respect to any REO Loan, for any Due Date therefor as of which the related REO Property remains part of the Trust Fund, the Periodic Payment of principal and/or interest deemed to be due in respect thereof on such Due Date that would have been due in respect of the predecessor Mortgage Loan (or, if applicable, Companion Loans) on such Due Date had it remained outstanding (or, if the predecessor Mortgage Loan was a Balloon Mortgage Loan and such Due Date coincides with or

 

 

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follows what had been its Stated Maturity Date, the Assumed Scheduled Payment that would have been deemed due in respect of the predecessor Mortgage Loan on such Due Date had it remained outstanding).

Authenticating Agent”: Any authenticating agent appointed pursuant to Section 8.12 (or, in the absence of any such appointment, the Trustee).

Available Distribution Amount”: With respect to any Distribution Date, an amount equal to, with respect to each Mortgage Loan, (a) the sum of, without duplication, (i) the aggregate of the amounts on deposit in the Certificate Account and the Distribution Account as of the close of business on the last day of the related Collection Period and the amounts collected by or on behalf of the Master Servicer as of the close of business on the last day of such Collection Period and required to be deposited in the Certificate Account; (ii) the aggregate amount of any P&I Advances made by the Master Servicer or the Trustee for distribution on the Certificates on such Distribution Date pursuant to Section 4.03; (iii) the aggregate amount transferred from the REO Account (if established) to the Certificate Account as of the last day of the related Collection Period, on or prior to the P&I Advance Date in such month, pursuant to Section 3.16(c); (iv) the aggregate amount deposited by the Master Servicer in the Certificate Account for such Distribution Date pursuant to Section 3.19 in connection with Prepayment Interest Shortfalls; and (v) for each Distribution Date occurring in March, and for the final Distribution Date if the final Distribution Date occurs in February, the aggregate of the Interest Reserve Amounts in respect of each Interest Reserve Loan deposited into the Distribution Account pursuant to Section 3.05(f); and (vi) for the initial Distribution Date only, the Interest Shortfall Amount deposited into the Distribution Account pursuant to Section 3.05, net of (b) the portion of the amount described in subclauses (a)(i) and (a)(iii) of this definition that represents one or more of the following: (i) collected Periodic Payments that are due on a Due Date following the end of the related Collection Period, (ii) any amounts payable or reimbursable to any Person from the (A) Certificate Account pursuant to clauses (ii)-(xvi), (xx), (xxi) and (xxiii) of Section 3.05(a) or (B) the Distribution Account pursuant to clauses (ii)-(vii) of Section 3.05(b), (iii) Prepayment Premiums and Yield Maintenance Charges, (iv) Additional Interest, (v) with respect to the Distribution Date occurring in February of each year and in January of each year that is not a leap year (unless, in either case, the related Distribution Date is the final Distribution Date), the Interest Reserve Amounts with respect to the Interest Reserve Loans to be withdrawn from the Certificate Account and remitted to the Trustee for deposit in the Interest Reserve Account in respect of such Distribution Date and held for future distribution pursuant to Section 3.04(c), (vi) for the initial Distribution Date only and each Mortgage Loan originated in October 2007 that has its first Due Date in November 2007, any interest amounts relating to the period prior to the Cut-Off Date of such Mortgage Loan payable to the related Mortgage Loan Seller; and (vii) any amounts deposited in the Certificate Account or the Distribution Account in error. The Available Distribution Amount will not include any amounts required to be distributed pursuant to the terms of any Intercreditor Agreement or this Agreement to a Companion Holder.

Balloon Mortgage Loan”: Any Mortgage Loan that by its original terms or by virtue of any modification entered into as of the Closing Date provides for an amortization schedule extending beyond its Stated Maturity Date.

 

 

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Balloon Payment”: With respect to any Balloon Mortgage Loan as of any date of determination, the Scheduled Payment payable on the Stated Maturity Date of such Mortgage Loan.

Bankruptcy Code”: The federal Bankruptcy Code, as amended from time to time (Title 11 of the United States Code).

The Barrington Intercreditor Agreement”: The Co-Lender Agreement, dated as of November 13, 2007, between Barclays Capital Real Estate Inc., as Note A Holder, and Barclays Capital Real Estate Inc., as Note B Holder, relating to The Barrington Whole Loan.

The Barrington Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 23 on the Mortgage Loan Schedule).

The Barrington Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing The Barrington Loan and subordinate in right of entitlement to The Barrington Loan.

The Barrington Whole Loan”: The Barrington Loan, together The Barrington Subordinate Companion Loan.

BCRE”: Barclays Capital Real Estate Inc., or its successor in interest.

BCRE Mortgage Loan Purchase Agreement”: That certain mortgage loan purchase agreement, dated as of November 1, 2007, between the Depositor and BCRE, and relating to the transfer of the BCRE Mortgage Loans to the Depositor.

BCRE Mortgage Loans”: Each of the Mortgage Loans transferred and assigned to the Depositor pursuant to the BCRE Mortgage Loan Purchase Agreement.

Bid Allocation”: With respect to the Master Servicer and each Sub-Servicer and the proceeds of any bid pursuant to Section 7.01(c), the amount of such proceeds (net of any expenses incurred in connection with such bid and the transfer of servicing), multiplied by a fraction equal to (a) the Servicer Fee Amount for the Master Servicer or such Sub-Servicer, as the case may be, as of such date of determination, over (b) the aggregate of the Servicer Fee Amounts for the Master Servicer and all of the Sub-Servicers as of such date of determination.

Book-Entry Certificate”: Any Certificate registered in the name of the Depository or its nominee.

Breach”: As defined in Section 2.03(a).

Business Day”: Any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, or the cities in which the Corporate Trust Office of the Trustee (which as of the Closing Date is Columbia, Maryland), the offices of the Master Servicer (which as of the Closing Date is Charlotte, North Carolina) or the offices of the Special Servicer (which as of the Closing Date is Needham, Massachusetts) are located, are authorized or obligated by law or executive order to remain closed.

 

 

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Caplease Intercreditor Agreement”: The Amended and Restated Intercreditor Agreement Supplement, dated October 31, 2007, by and among Wachovia Bank, National Association, as Senior Note A-1 Holder, Wachovia Bank, National Association, as Senior Note A-2 Holder, Caplease Debt Funding, LP, as Junior Note A Holder and Caplease Debt Funding, LP, as Note B Holder, relating to the Caplease Whole Loan.

Caplease Junior Note A Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Caplease Loan and subordinate in right of entitlement to the Caplease Loan.

Caplease Loan”: The Nestle 94 Pool Loan which is included in the Trust Fund (identified as loan number 2 on the Mortgage Loan Schedule).

Caplease Note B Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Caplease Loan and subordinate in right of entitlement to the Caplease Loan.

Caplease Senior Note A-2 Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Caplease Loan and subordinate in right of entitlement to the Caplease Loan.

Caplease Subordinate Companion Loans”: Those certain mortgage loans evidenced by notes, which are not assets of the Trust Fund, secured by the Mortgaged Property securing the Caplease Loan and subordinate in right of entitlement to the Caplease Loan.

Caplease Whole Loan”: The Caplease Loan, together with the Caplease Subordinate Companion Loans.

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

Certificate ”: Any one of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34, as executed by the Certificate Registrar and authenticated and delivered hereunder by the Authenticating Agent.

Certificate Account”: The segregated account or accounts created and maintained by the Master Servicer pursuant to Section 3.04(a) on behalf of the Trustee in trust for Certificateholders, which shall be entitled “Wachovia Bank, National Association, as Master Servicer for Wells Fargo Bank, N.A., as Trustee, on behalf of and in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34.” Subject to the related Intercreditor Agreement and taking into account that (i) each Subordinate Companion Loan is subordinate to its related Co-Lender Loan to the extent set forth in the related Intercreditor Agreement, and (ii) the Pari Passu Companion Loans are pari passu with the related Co-Lender Loan, each subaccount described in the next to last paragraph of Section 3.04(a) that is part of the Certificate Account shall be for the benefit of

 

 

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the related Companion Holder, to the extent funds on deposit in such subaccount are attributed to the related Companion Loan.

Certificate Deferred Interest”: The amount by which interest distributable to any Class of Sequential Pay Certificates is reduced by the amount of Mortgage Deferred Interest allocable to such Class of Certificates on any Distribution Date.

Certificate Factor”: With respect to any Class of Regular Certificates as of any date of determination, a fraction, expressed as a decimal carried to eight places, the numerator of which is the then current Class Principal Balance, or Class IO Notional Amount, as applicable, of such Class of Regular Certificates and the denominator of which is the Original Class Principal Balance or Original Class IO Notional Amount of such Class of Regular Certificates.

Certificate Notional Amount”: With respect to any Class IO Certificate, as of any date of determination, the then notional amount of such Certificate equal to the product of (a) the Percentage Interest evidenced by such Certificate, multiplied by (b) the then applicable Class IO Notional Amount.

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 Depository or on the books of a Depository Participant or on the books of an indirect participating brokerage firm for which a Depository Participant acts as agent.

Certificate Principal Balance”: With respect to any Sequential Pay Certificate, as of any date of determination, the then outstanding principal amount of such Certificate equal to the product of (a) the Percentage Interest evidenced by such Certificate multiplied by (b) the then Class Principal Balance of the Class of Certificates to which such Certificate belongs.

Certificate Register” and “Certificate Registrar”: The register maintained and the registrar appointed pursuant to Section 5.02.

Certificateholder ”: The Person in whose name a Certificate is registered in the Certificate Register, except that (i) only a Permitted Transferee shall be the Holder of a Residual Certificate for any purpose hereof and, (ii) solely for the purposes of giving any consent, approval or waiver pursuant to this Agreement that relates to any of the Depositor, any Mortgage Loan Seller, the Master Servicer, the Special Servicer or the Trustee in its respective capacity as such (except with respect to amendments or waivers referred to in Sections 7.04 and 11.01 hereof and any consent, approval or waiver required or permitted to be made by the Majority Subordinate Certificateholder or the Controlling Class Representative and any election, removal or replacement of the Special Servicer or the Controlling Class Representative pursuant to Section 6.09), any Certificate registered in the name of the Depositor, any Mortgage Loan Seller, the Master Servicer, the Special Servicer or the Trustee, as the case may be, or any Certificate registered in the name of any of their respective Affiliates, shall be deemed not to be outstanding, and the Voting Rights to which it is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent, approval or waiver that relates to it has been obtained. The Certificate Registrar shall be entitled to request and rely upon a certificate of the Depositor, the Master Servicer or the Special Servicer in

 

 

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determining whether a Certificate is registered in the name of an Affiliate of such Person. All references herein to “Holders” or “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and the Depository Participants, except as otherwise specified herein; provided, however, the parties hereto shall be required to recognize as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.

Class”: Collectively, all of the Certificates bearing the same alphabetical and, if applicable, numerical class designation and each designated REMIC I Regular Interest.

Class A Certificates”: The Class A-1, Class A-2, Class A-PB, Class A-3 and Class A-1A Certificates.

Class A-1 Certificate”: Any one of the Certificates with a “Class A-1” designation on the face thereof, substantially in the form of Exhibit A-1 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-1A Certificate”: Any one of the Certificates with a “Class A-1A” designation on the face thereof, substantially in the form of Exhibit A-5 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-2 Certificate”: Any one of the Certificates with a “Class A-2” designation on the face thereof, substantially in the form of Exhibit A-2 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-3 Certificate”: Any one of the Certificates with a “Class A-3” designation on the face thereof, substantially in the form of Exhibit A-4 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-J Certificate”: Any one of the Certificates with a “Class A-J” designation on the face thereof, substantially in the form of Exhibit A-8 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-M Certificate”: Any one of the Certificates with a “Class A-M” designation on the face thereof, substantially in the form of Exhibit A-7 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-PB Certificate”: Any one of the Certificates with a “Class A-PB” designation on the face thereof, substantially in the form of Exhibit A-3 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class A-PB Planned Principal Balance”: The planned principal amount set forth on Exhibit R hereto relating to principal payments for the Class A-PB Certificates.

Class B Certificate”: Any one of the Certificates with a “Class B” designation on the face thereof, substantially in the form of Exhibit A-9 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

 

 

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Class C Certificate”: Any one of the Certificates with a “Class C” designation on the face thereof, substantially in the form of Exhibit A-10 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class D Certificate”: Any one of the Certificates with a “Class D” designation on the face thereof, substantially in the form of Exhibit A-11 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class E Certificate”: Any one of the Certificates with a “Class E” designation on the face thereof, substantially in the form of Exhibit A-12 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class F Certificate”: Any one of the Certificates with a “Class F” designation on the face thereof, substantially in the form of Exhibit A-13 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class G Certificate”: Any one of the Certificates with a “Class G” designation on the face thereof, substantially in the form of Exhibit A-14 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class H Certificate”: Any one of the Certificates with a “Class H” designation on the face thereof, substantially in the form of Exhibit A-15 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class IO Certificate”: Any one of the Certificates with a “Class IO” designation on the face thereof, substantially in the form of Exhibit A-6 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class IO Notional Amount”: With respect to the Class IO Certificates and any date of determination, the sum of the then Component Notional Amounts of all the Components.

Class IO Strip Rate”: With respect to any Component for any Distribution Date, a rate per annum equal to (i) the Weighted Average Net Mortgage Rate for such Distribution Date, minus (ii) the Pass-Through Rate for the Corresponding Certificates.

Class J Certificate”: Any one of the Certificates with a “Class J” designation on the face thereof, substantially in the form of Exhibit A-16 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class K Certificate”: Any one of the Certificates with a “Class K” designation on the face thereof, substantially in the form of Exhibit A-17 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class L Certificate”: Any one of the Certificates with a “Class L” designation on the face thereof, substantially in the form of Exhibit A-18 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

 

 

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Class M Certificate”: Any one of the Certificates with a “Class M” designation on the face thereof, substantially in the form of Exhibit A-19 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class N Certificate”: Any one of the Certificates with a “Class N” designation on the face thereof, substantially in the form of Exhibit A-20 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class O Certificate”: Any one of the Certificates with a “Class O” designation on the face thereof, substantially in the form of Exhibit A-21 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class P Certificate”: Any one of the Certificates with a “Class P” designation on the face thereof, substantially in the form of Exhibit A-22 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class Principal Balance”: The aggregate principal balance of any Class of Sequential Pay Certificates outstanding from time to time. As of the Closing Date, the Class Principal Balance of each Class of Sequential Pay Certificates shall equal the Original Class Principal Balance thereof. On each Distribution Date, the Class Principal Balance of each such Class shall be reduced by the amount of any distributions of principal made thereon on such Distribution Date pursuant to Section 4.01 or 9.01, as applicable, and shall be further reduced by the amount of any Realized Losses and Additional Trust Fund Expenses allocated thereto on such Distribution Date pursuant to Section 4.04(a). The Class Principal Balance of any Class of Sequential Pay Certificates will be increased on any Distribution Date by the amount of any Certificate Deferred Interest allocated to such Class on such Distribution Date. Distributions in respect of a reimbursement of Realized Losses and Additional Trust Fund Expenses previously allocated to a Class of Sequential Pay Certificates shall not constitute distributions of principal and shall not result in reduction of the related Class Principal Balance

Class Q Certificate”: Any one of the Certificates with a “Class Q” designation on the face thereof, substantially in the form of Exhibit A-23 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

Class R-I Certificate”: Any one of the Certificates with a “Class R-I” designation on the face thereof, substantially in the form of Exhibit A-25 attached hereto, and evidencing the sole class of residual interests in REMIC I and each ED Loan REMIC Residual Interest for purposes of the REMIC Provisions.

Class R-II Certificate”: Any one of the Certificates with a “Class R-II” designation on the face thereof, substantially in the form of Exhibit A-26 attached hereto, and evidencing the sole class of “residual interests” in REMIC II for purposes of the REMIC Provisions.

Class S Certificate”: Any one of the Certificates with a “Class S” designation on the face thereof, substantially in the form of Exhibit A-24 attached hereto, and evidencing a “regular interest” in REMIC II for purposes of the REMIC Provisions.

 

 

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Class Z Certificate”: Any one of the Certificates with a “Class Z” designation on the face thereof, substantially in the form of Exhibit A-27 attached hereto, and evidencing an undivided beneficial interest in the Additional Interest Grantor Trust that is described in Section 4.01(b).

Closing Date”: November 13, 2007.

CMSA”: The Commercial Mortgage Securities Association (formerly the Commercial Real Estate Secondary Market and Securitization Association) or any successor organization.

CMSA Advance Recovery Report”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Advance Recovery Report” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

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

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

CMSA Comparative Financial Status Report”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Comparative Financial Status Report” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally. In connection with preparing the CMSA Comparative Financial Status Report, the Master Servicer shall process (a) interim financial statements beginning with interim financial statements for the fiscal quarter ending December 31, 2007, and (b) annual financial statements beginning with annual financial statements for the 2008 fiscal year.

CMSA Delinquent Loan Status Report”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Delinquent Loan Status Report” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Financial File”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Financial File” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information

 

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and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Historical Loan Modification and Corrected Mortgage Loan Report”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Historical Loan Modification and Corrected Mortgage Loan Report” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Loan Level Reserve/LOC Report”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “CMSA Loan Level Reserve/LOC Report” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Loan Periodic Update File”: The monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Periodic Update File” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Loan Setup File”: The report substantially in the form of, and containing the information called for in, the downloadable form of the “Loan Setup File” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA NOI Adjustment Worksheet”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “NOI Adjustment Worksheet” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions and in any event, shall present the computations made in accordance with the methodology described in such form to “normalize” the full year net operating income and debt service coverage numbers used in the other reports required by this Agreement.

CMSA Operating Statement Analysis”: A report substantially in the form of, and containing the information called for in, the downloadable form of the “Operating Statement Analysis Report” available as of the Closing Date on the CMSA Website or in such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage-backed securities transactions generally. In connection with preparing the CMSA Operating Statement Analysis, the Master Servicer shall process (a) interim financial statements beginning with interim financial statements for the fiscal quarter ending December 31, 2007, and (b) annual financial statements beginning with annual financial statements for the 2008 fiscal year.

 

 

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

CMSA Reconciliation of Funds Report”: The monthly report in the “Reconciliation of Funds” format substantially in the form of and containing the information called for therein for the Mortgage Loans, or such other form for the presentation of such information as may be approved from time to time by the CMSA for commercial mortgage securities transactions generally.

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

CMSA Servicer Watchlist/Portfolio Review Guidelines”: For any Determination Date, a report substantially in the form of, and containing the information called for in, the downloadable form of the “Servicer Watchlist/Portfolio Review Guidelines” available as of the Closing Date on the CMSA Website, or in such other final form for the presentation of such information and containing such additional information as may from time to time be promulgated as approved by the CMSA for commercial mortgage securities transactions generally.

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

CMSA Total Loan Report”: A monthly report substantially in the form of, and containing the information called for in, the downloadable form of the “Total Loan Report” available as of the Closing Date on the CMSA Website, or in such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally.

CMSA Website”: The website maintained by the CMSA with an address, as of the Closing Date, of www.cmbs.org.

Code”: The Internal Revenue Code of 1986, as amended, and applicable temporary or final regulations of the U.S. Department of the Treasury promulgated thereunder.

Co-Lender Loans”: As defined in the Preliminary Statement.

 

 

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Collection Period”: With respect to any Distribution Date, the period that begins on the twelfth day in the month immediately preceding the month in which such Distribution Date occurs (or, in the case of the initial Distribution Date, commencing on the day after the related Cut-Off Date) and ending on and including the eleventh day in the month in which such Distribution Date occurs. Notwithstanding the foregoing, in the event that the last day of a Collection Period is not a Business Day, any Periodic Payments or Principal Prepayments with respect to the Mortgage Loans relating to a Due Date occurring in such Collection Period (but for the application of the next Business Day convention) received on the Business Day immediately following such day will be deemed to have been received during such Collection Period and not during any other Collection Period. In addition, notwithstanding the foregoing, with respect to any Distribution Date, in the event that the Due Date, including any grace period, with respect to any Mortgage Loan relating to such Distribution Date occurs after the last day of the related Collection Period, any payments received with respect to the related Mortgage Loan on or before such Due Date as extended by any applicable grace period (including without limitation, any prepayments) will be deemed to have been received during such Collection Period and not during any other Collection Period.

Commission”: The Securities and Exchange Commission or any successor agency.

Companion Distribution Account”: With respect to the Companion Loans, the separate account(s) or subaccount(s) created and maintained by the Companion Paying Agent pursuant to Section 3.04(b) and held on behalf of the Companion Holders, which shall be entitled “Wachovia Bank, National Association, as Companion Paying Agent for the Companion Holders of the Companion Loans relating to the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34.” The Companion Distribution Accounts shall not be assets of the Trust Fund, but instead each Companion Distribution Account shall be held by the Companion Paying Agent on behalf of the applicable Companion Holder. Any such account shall be an Eligible Account or a subaccount of an Eligible Account. Notwithstanding the foregoing, if the Master Servicer and the Companion Paying Agent are the same entity, the Companion Distribution Account may be the related subaccount or subaccounts of the Certificate Account referenced in the second to the last paragraph of Section 3.04(a).

Companion Holder”: With respect to any Companion Loan, the owner of the Mortgage Note representing such Companion Loan. As of the Closing Date, the Companion Holders of the Companion Loans are (i) Wachovia Bank, National Association, with respect to the Caplease Senior Note A-2 Subordinate Companion Loan, (ii) Caplease Debt Funding, LP, with respect to the Caplease Junior Note A Subordinate Companion Loan and the Caplease Note B Subordinate Companion Loan, (iii) Parkway Properties, Inc., with respect to the 2100 Ross Subordinate Companion Loan, (iv) Barclays Capital Real Estate Finance Inc., with respect to The Barrington Subordinate Companion Loan, (v) American Capital Strategies, Ltd., with respect to the Dean Foods - Opa-Locka, FL Subordinate Companion Loan, (vi) Barclays Capital Real Estate Finance Inc., with respect to the Glenbrooke at Palm Bay Subordinate Companion Loan, (vii) Barclays Capital Real Estate Finance Inc., with respect to the Llano Logistics Subordinate Companion Loan, (viii) Barclays Capital Real Estate Finance Inc., with respect to the Newforest Estates Subordinate Companion Loan, (ix) American Capital Strategies, Ltd.,

 

 

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with respect to the Winn-Dixie Distribution Center - Orlando, FL Subordinate Companion Loan, (x) American Capital Strategies, Ltd., with respect to the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Subordinate Companion Loan, (xi) American Capital Strategies, Ltd., with respect to the Winn-Dixie Distribution - Fitzgerald, GA Subordinate Companion Loan, (xii) American Capital Strategies, Ltd., with respect to the Winn-Dixie Distribution Center - Orlando, FL Pari Passu Companion Loans and (xiii) American Capital Strategies, Ltd., with respect to the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loan.

Companion Loan”: As defined in the Preliminary Statement.

Companion Loan Securities”: With respect to a Co-Lender Loan, any class of securities backed, wholly or partially, by the related Companion Loan.

Companion Paying Agent”: The paying agent appointed pursuant to Section 3.26.

Companion Register”: The register maintained by the Companion Paying Agent pursuant to Section 3.27.

Component”: Each of Component IO-A-1, Component IO-A-2, Component IO-A-PB, Component IO-A-3, Component IO-A-1A, Component IO-A-M, Component IO-A-J, Component IO-B, Component IO-C, Component IO-D, Component IO-E, Component IO-F, Component IO-G, Component IO-H, Component IO-J, Component IO-K, Component IO-L, Component IO-M, Component IO-N, Component IO-O, Component IO-P, Component IO-Q and Component IO-S.

Component IO-A-1”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-1 as of any date of determination.

Component IO-A-1A”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-1A as of any date of determination.

Component IO-A-2”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-2 as of any date of determination.

Component IO-A-3”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-3 as of any date of determination.

Component IO-A-J”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-J as of any date of determination.

 

 

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Component IO-A-M”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-M as of any date of determination.

Component IO-A-PB”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LA-PB as of any date of determination.

Component IO-B”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LB as of any date of determination.

Component IO-C”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LC as of any date of determination.

Component IO-D”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LD as of any date of determination.

Component IO-E”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LE as of any date of determination.

Component IO-F”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LF as of any date of determination.

Component IO-G”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LG as of any date of determination.

Component IO-H”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LH as of any date of determination.

Component IO-J”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LJ as of any date of determination.

Component IO-K”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LK as of any date of determination.

Component IO-L”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LL as of any date of determination.

 

 

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Component IO-M”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LM as of any date of determination.

Component IO-N”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LN as of any date of determination.

Component IO-O”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LO as of any date of determination.

Component IO-P”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LP as of any date of determination.

Component IO-Q”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LQ as of any date of determination.

Component IO-S”: One of the components of the Class IO Certificates having a Component Notional Amount equal to the then current REMIC I Principal Balance of REMIC I Regular Interest LS as of any date of determination.

Component Notional Amount”: With respect to Class IO Component and any date of determination, an amount equal to the then REMIC I Principal Balance of its Corresponding REMIC I Regular Interest.

Controlling Class”: With respect to each Mortgage Loan as of any date of determination, the Class of Sequential Pay Certificates, (i) which bears the latest payment priority and (ii) the Class Principal Balance of which is (a) greater than 25% of the Original Class Principal Balance thereof; and (b) equal to or greater than 1.0% of the sum of the Original Class Principal Balances of all the Sequential Pay Certificates; provided, however, that if no Class of Sequential Pay Certificates satisfies clause (ii) above, the Controlling Class shall be the outstanding Class of Sequential Pay Certificates bearing the latest payment priority. The groups of Classes comprised of the Class A-1, Class A-2, Class A-PB, Class A-3, Class A-1A will each be treated as one Class for purposes of determining the Controlling Class.

Controlling Class Representative”: As defined in Section 3.25(a).

Controlling Person”: With respect to any Person, any other Person who “controls” such Person within the meaning of the Securities Act.

Corporate Trust Office”: The corporate trust office of the Trustee at which at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at (i) with respect to maintenance of the Certificate Registrar and the transfer and exchange of Certificates, the office of the Trustee located at Wells Fargo Center, Sixth Street and Marquette Avenue,

 

 

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Minneapolis, Minnesota 55479-0113, Attention: Corporate Trust Services (CMBS) Wachovia Bank Commercial Mortgage Trust, Series 2007-C34 and (ii) for all other purposes, the office of the Trustee located at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951, Attention: Corporate Trust Services (CMBS) Wachovia Bank Commercial Mortgage Trust, Series 2007-C34.

Corrected Mortgage Loan”: Any Mortgage Loan and, if applicable, any Companion Loan that had been a Specially Serviced Mortgage Loan but has ceased to be a Specially Serviced Mortgage Loan in accordance with the definition of “Specially Serviced Mortgage Loan.”

Corresponding Certificate”: As defined in the Preliminary Statement with respect to any Corresponding Component or any Corresponding REMIC I Regular Interest.

Corresponding Component”: As defined in the Preliminary Statement with respect to any Corresponding Certificate or any Corresponding REMIC I Regular Interest.

Corresponding REMIC I Regular Interest”: As defined in the Preliminary Statement with respect to any Class of Corresponding Certificates or any Corresponding Component of the Class IO Certificates.

Crossed Group”: With respect to any Mortgage Loan, such Mortgage Loan and all other Mortgage Loans that are cross-collateralized and cross-defaulted with such Mortgage Loan.

Crossed Loan”: A Mortgage Loan that is cross-collateralized and cross-defaulted with one or more other Mortgage Loans.

Crossed Loan Repurchase Criteria”: (i) The Debt Service Coverage Ratio for all remaining related Crossed Loans for the four calendar quarters immediately preceding the repurchase or substitution is not less than the Debt Service Coverage Ratio for all such related Crossed Loans, including the affected Crossed Loan, for the four calendar quarters immediately preceding the repurchase or substitution, (ii) the Loan-to-Value Ratio for any remaining related Crossed Loans determined at the time of repurchase or substitution based upon an Appraisal obtained by the Special Servicer at the expense of the related Mortgage Loan Seller is not greater than the Loan-to-Value Ratio for all such related Crossed Loans, including the affected Crossed Loan, determined at the time of repurchase or substitution based upon an Appraisal obtained by the Special Servicer at the expense of the related Mortgage Loan Seller and (iii) the Mortgage Loan Seller, at its expense, shall have furnished the Trustee with an Opinion of Counsel that the repurchase of or substitution for a Crossed Loan, including, without limitation, any modification relating to such repurchase or substitution, shall not cause an Adverse REMIC Event.

Custodian”: A Person who is at any time appointed by the Trustee pursuant to Section 8.11 as a document custodian for the Mortgage Files, which Person shall not be the Depositor, a Mortgage Loan Seller or an Affiliate of the Depositor or a Mortgage Loan Seller. If no such custodian has been appointed or if such custodian has been so appointed, but the Trustee shall have terminated such appointment, then the Trustee shall be the Custodian.

 

 

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Cut-Off Date”: With respect to any Mortgage Loan or Companion Loan, the Due Date for such Mortgage Loan or Companion Loan in November 2007.

Cut-Off Date Balance”: With respect to any Mortgage Loan or Companion Loan, the outstanding principal balance of such Mortgage Loan or Companion Loan as of the Cut-Off Date, after application of all unscheduled payments of principal received on or before such date and the principal component of all Periodic Payments due on or before such date, whether or not received.

Dean Foods – Opa-Locka, FL ED Loan”: That certain Mortgage Loan identified on the Mortgage Loan Schedule as loan numbers 75.01 and 75.02.

Dean Foods – Opa-Locka, FL ED Loan REMIC”: The segregated pool of assets subject hereto with respect to which a separate REMIC election is to be made and consisting of the Dean Foods – Opa-Locka, FL ED Loan, proceeds thereof, amounts with respect thereto held in the Certificate Account, the Interest Reserve Account, the Distribution Account, and the REO Account, and those items with respect to the Dean Foods – Opa-Locka, FL ED Loan specified in clauses (iii), (iv) (with respect to the Wachovia Mortgage Loan Purchase Agreement) and (vi) of the definition of “REMIC I”, and the rights of the Depositor under Section 21 of the Wachovia Mortgage Loan Purchase Agreement.

Dean Foods – Opa-Locka, FL ED Loan REMIC Interests”: Collectively, the Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interests and the Dean Foods – Opa-Locka, FL ED Loan REMIC Residual Interests.

Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interest”: The uncertificated “regular interest,” within the meaning of Code Section 860G(a)(1), in the Dean Foods – Opa-Locka, FL ED Loan REMIC. The principal balance of the Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interest shall equal the outstanding Stated Principal Balance of the Dean Foods – Opa-Locka, FL ED Loan (or, if applicable, the deemed Stated Principal Balance of any successor REO Loan). The interest rate on the Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interest shall be the Net Mortgage Rate of the Dean Foods – Opa-Locka, FL ED Loan. Payments and other collections of amounts received on or in respect to the Dean Foods – Opa-Locka, FL ED Loan (or any related REO Property) shall be deemed distributable on the Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interest.

Dean Foods – Opa-Locka, FL ED Loan REMIC Residual Interest”: The sole class of “residual interest,” within the meaning of Code Section 860G(a)(2), in the Dean Foods – Opa-Locka, FL ED Loan REMIC. The Dean Foods – Opa-Locka, FL ED Loan REMIC Residual Interest shall be represented by the Class R-I Certificates.

Dean Foods – Opa-Locka, FL Intercreditor Agreement”: The Intercreditor Agreement Among Note Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Note AB Holder and American Capital Strategies, Ltd., as Note C Holder, relating to the Dean Foods – Opa-Locka, FL Whole Loan.

 

 

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Dean Foods – Opa-Locka, FL Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan numbers 75.01 and 75.02 on the Mortgage Loan Schedule).

Dean Foods – Opa-Locka, FL Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Dean Foods – Opa-Locka, FL Loan and subordinate in right of entitlement to the Dean Foods – Opa-Locka, FL Loan.

Dean Foods – Opa-Locka, FL Whole Loan”: The Dean Foods – Opa-Locka, FL Loan together with the Dean Foods – Opa-Locka, FL Subordinate Companion Loan.

Debt Service Coverage Ratio”: With respect to any Mortgage Loan, as of any date of determination, the ratio of (x) the annualized Net Operating Income (before payment of any debt service on such Mortgage Loan) generated by the related Mortgaged Property during the most recently ended period of not less than six months and not more than twelve months for which financial statements, if available (whether or not audited) have been received by or on behalf of the related Mortgage Loan Seller (prior to the Closing Date) or the Master Servicer or the Special Servicer (following the Closing Date), to (y) twelve times the amount of the Periodic Payment in effect for such Mortgage Loan as of such date of determination.

Defaulted Mortgage Loan”: A Mortgage Loan (i) that is delinquent 60 days or more with respect to a Periodic Payment (not including the Balloon Payment) or (ii) that is delinquent in respect of its Balloon Payment; provided, however, if the Mortgagor continues to make its Assumed Scheduled Payment and diligently pursues refinancing, such Mortgage Loan shall not be considered a Defaulted Mortgage Loan until 60 days following such default (or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and for which the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default) (provided that if such refinancing does not occur during such time specified in the commitment, the related Mortgage Loan will immediately become a Defaulted Mortgage Loan), in either case such delinquency to be determined without giving effect to any grace period permitted by the related Mortgage or Mortgage Note and without regard to any acceleration of payments under the related Mortgage and Mortgage Note, or (iii) as to which the Master Servicer or Special Servicer has, by written notice to the related Mortgagor, accelerated the maturity of the indebtedness evidenced by the related Mortgage Note.

Defaulting Party”: As defined in Section 7.01(b).

Defeasance Collateral”: With respect to any Defeasance Loan, the United States government securities required or permitted to be pledged in lieu of prepayment pursuant to the terms thereof.

Defeasance Loan”: Any Mortgage Loan identified as a Defeasance Loan on the Mortgage Loan Schedule which permits or requires the related Mortgagor (or permits the holder

 

 

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of such Mortgage Loan to require the related Mortgagor) to pledge Defeasance Collateral to such holder in lieu of prepayment.

Deficient Valuation”: With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

Definitive Certificate”: As defined in Section 5.03(a).

Depositor”: Wachovia Commercial Mortgage Securities, Inc. or its successor in interest.

Depository”: The Depository Trust Company, or any successor Depository hereafter named as contemplated by Section 5.03(a). The nominee of the initial Depository for purposes of registering those Certificates that are to be Book-Entry Certificates is Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.

Depository Participant”: A broker, dealer, bank or other financial institution or other Person for whom from time to time the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

Determination Date”: The eleventh day of each month, or if such eleventh day is not a Business Day, the Business Day immediately succeeding, commencing in December 2007.

Determination Party”: Midland Loan Services, Inc., or a second party that would qualify as a successor Special Servicer mutually agreeable to the Special Servicer, the Controlling Class Representative and the applicable Mortgage Loan Seller, or any successor in interest thereto; provided that (a) each such party is on the list of approved special servicers by Moody’s and is on S&P’s Select Servicer List as a U.S. Commercial Mortgage Special Servicer or (b) each Rating Agency has confirmed in writing that contracting with such Determination Party would not result in a downgrade, qualification or withdrawal of the then current rating assigned to any of the Certificates that are then currently rated by such Rating Agency.

Directly Operate”: With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management of such REO Property, the holding of such REO Property primarily for sale or lease or the performance of any construction work thereon, in each case other than through an Independent Contractor; provided, however, the Trustee (or the Special Servicer or any Sub-Servicer on behalf of the Trustee) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Special Servicer or any Sub-Servicer on behalf of the Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.

Discount Rate”: With respect to any prepaid Mortgage Loan or REO Loan for purposes of allocating any Yield Maintenance Charge or Prepayment Premium received thereon

 

 

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or with respect thereto among the respective Classes of the Sequential Pay Certificates (other than any Excluded Class thereof) an amount, calculated by the Master Servicer and reported to the Trustee pursuant to Section 4.02(b), will be equal to the discount rate stated in the related Mortgage Loan documents used in calculating the Yield Maintenance Charge or Prepayment Premium with respect to such principal prepayment. To the extent that a discount rate is not stated therein, the “Discount Rate” will be equal to the yield (when compounded monthly) on the U.S. Treasury issue with a maturity date closest to the maturity date for such prepaid Mortgage Loan or REO Loan. In the event there are two or more such U.S. Treasury issues (a) with the same coupon, the issue with the lowest yield shall apply, and (b) with maturity dates equally close to the maturity date for the prepaid Mortgage Loan or REO Loan, the issue with the earliest maturity date shall apply.

Disqualified Non-United States Person”: With respect to a Class R-I or Class R-II Certificate, any Non-United States Person or agent thereof other than (i) a Non-United States 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 W-8ECI (or successor form) or (ii) a Non-United States Person that has delivered to both the transferor and the Certificate Registrar an opinion of nationally recognized tax counsel to the effect that the transfer of the Class R-I 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”: Any of the following: (i) the United States or a possession thereof, any State or any political subdivision thereof, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax and, except for FHLMC, a majority of its board of directors is not selected by any such governmental unit), (ii) a foreign government, international organization, or any agency or instrumentality of either of the foregoing, (iii) any organization (except certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code (unless such organization is subject to the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives described in Section 1381 of the Code or (v) any other Person so designated by the Trustee or the Certificate Registrar based upon an Opinion of Counsel (which shall not be an expense of the Trustee) that the holding of an Ownership Interest in a Residual Certificate by such Person may cause the Trust Fund or any Person having an Ownership Interest in any Class of Certificates, other than such Person, to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Residual Certificate to such Person. The terms “United States,” “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.

Distributable Certificate Interest”: With respect to: (a) any Class of Sequential Pay Certificates for any Distribution Date, the Accrued Certificate Interest in respect of such Class of Certificates for such Distribution Date, reduced (to not less than zero) by (i) the product of (A) any Net Aggregate Prepayment Interest Shortfall for such Distribution Date, (B) a fraction, expressed as a decimal, the numerator of which is the Accrued Certificate Interest in

 

 

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respect of such Class of Certificates for such Distribution Date, and the denominator of which is the aggregate Accrued Certificate Interest in respect of all the Classes of Sequential Pay Certificates for such Distribution Date, and (ii) with respect to each such Class, such Class’ share of any Certificate Deferred Interest allocated to such Class of Certificates in accordance with Section 4.04(c); and (b) the Class IO Certificates for any Distribution Date, the Accrued Certificate Interest in respect of such Class of Certificates for such Distribution Date.

Distribution Account”: The segregated account, accounts or subaccounts created and maintained by the Paying Agent on behalf of the Trustee pursuant to Section 3.04(b) which shall be entitled “Wells Fargo Bank, N.A., as Trustee, in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34.”

Distribution Date”: With respect to any Determination Date, the fourth Business Day following such Determination Date.

Distribution Date Statement”: As defined in Section 4.02(a).

Do Not Hire List”: The list, as may be updated at any time, provided by the Depositor to the Master Servicer, the Special Servicer and the Trustee, which lists certain parties identified by the Depositor as having failed to comply with their respective obligations under Section 8.17 of this Agreement or as having failed to comply with any similar Regulation AB reporting requirements under any pooling and servicing agreement relating to any other series of certificates offered by the Depositor.

Document Defect”: As defined in Section 2.03(a).

Domestic Global Certificate”: Any of the single, permanent global certificates that represents the Certificates sold in reliance on Rule 144A under the Act.

Due Date”: With respect to (i) any Mortgage Loan on or prior to its Stated Maturity Date or any Companion Loan on or prior to its maturity date, the day of the month set forth in the related Mortgage Note on which each Periodic Payment on such Mortgage Loan or Companion Loan is scheduled to be first due; (ii) any Mortgage Loan after its Stated Maturity Date or any Companion Loan after its maturity date, the day of the month set forth in the related Mortgage Note on which each Periodic Payment on such Mortgage Loan or Companion Loan had been scheduled to be first due and (iii) any REO Loan, the day of the month set forth in the related Mortgage Note on which each Periodic Payment on the related Mortgage Loan had been scheduled to be first due.

EDGAR”: The Commission’s Electronic Data Gathering, Analysis and Retrieval system.

ED Loan”: Each of the Dean Foods – Opa-Locka, FL ED Loan, the Winn-Dixie Distribution Center – Orlando, FL ED Loan, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan.

 

 

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ED Loan REMIC”: Each of the Dean Foods – Opa-Locka, FL ED Loan REMIC, the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC.

ED Loan REMIC Interest”: Each of the Dean Foods – Opa-Locka, FL ED Loan REMIC Interests, the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Interests, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Interests and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Interests.

ED Loan REMIC Regular Interest”: Each of the Dean Foods – Opa-Locka, FL ED Loan REMIC Regular Interests, the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interests, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interests and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interests.

ED Loan REMIC Residual Interest”: Each of the Dean Foods – Opa-Locka, FL ED Loan REMIC Residual Interests, the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Residual Interests, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Residual Interests and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Residual Interests.

Eligible Account”: Any of (i) an account maintained with a federal or state chartered depository institution or trust company, and (a) with respect to deposits held for 30 days or more in such account, the  long-term deposit or unsecured debt obligations of which are rated at least (A) ”Aa3” by Moody’s (if then rated by Moody’s) and (B) “AA-“ by S&P (or “A-“; provided the short-term unsecured debt obligations are rated at least “A-1” by S&P) (or, with respect to any such Rating Agency, such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the applicable Rating Agency), at any time such funds are on deposit therein or (b) with respect to deposits held for less than 30 days in such account, the short-term deposits of which are rated at least “P-1” by Moody’s (if then rated by Moody’s) and “A-1” by S&P (or, with respect to any such Rating Agency, such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates) as evidenced in writing by the applicable Rating Agency at any time such funds are on deposit therein; or (ii) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity, which, in the case of a state chartered depository institution or trust company, is subject to regulations regarding fiduciary funds on deposit therein substantially similar to 12 CFR § 9.10(b), the long term deposits or unsecured debt of which, or if it is the wholly-owned subsidiary of an entity the long-term deposits or unsecured obligations of which, are rated at least “Baa3” by Moody’s and which has a combined capital and surplus of at least $50,000,000; or (iii) any other account, the use of which would not, in and of itself, cause a qualification, downgrading or withdrawal of the then-current rating assigned to any Class of Certificates, as confirmed in writing by each Rating Agency.

Environmental Assessment”: A “Phase I assessment” as described in, and meeting the criteria of, (i) Chapter 5 of the FNMA Multifamily Guide or any successor

 

 

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provisions covering the same subject matter in the case of a Specially Serviced Mortgage Loan as to which the related Mortgaged Property is multifamily property or (ii)  the American Society for Testing and Materials in the case of Specially Serviced Mortgage Loan as to which the related Mortgaged Property is not multifamily property.

ERISA”: The Employee Retirement Income Security Act of 1974, as amended, and any regulations and administrative pronouncements thereunder.

ERISA Restricted Certificate”: Any Class L, Class M, Class N, Class O, Class P, Class Q or Class S Certificate; provided that any such Certificate (a) will cease to be considered an ERISA Restricted Certificate and (b) will cease to be subject to the transfer restrictions related to ERISA Restricted Certificates contained in Section 5.02(c) if, as of the date of a proposed transfer of such Certificate, either (i) it is rated in one of the four highest generic ratings categories by a Rating Agency or (ii) relevant provisions of ERISA and the Code would permit transfer of such Certificate to a Plan without resulting in a non-exempt prohibited transaction.

Escrow Payment”: Any payment received by the Master Servicer or the Special Servicer for the account of any Mortgagor for application toward the payment of real estate taxes, assessments, insurance premiums, ground rents (if applicable) and other similar items in respect of the related Mortgaged Property.

Event of Default”: One or more of the events described in Section 7.01(a).

Exchange Act”: Securities Exchange Act of 1934, as amended.

Exchange Certificate”: The certificate necessary to exchange an interest in a Regulation S Global Certificate for an interest in a Domestic Global Certificate, which is in the form of Exhibit F-5 attached hereto, or the certificate necessary to exchange an interest in a Domestic Global Certificate for an interest in a Regulation S Global Certificate, which is in the form of Exhibit F-6, as applicable, hereto, in each case as described in Section 5.02(e).

Excluded Class”: Any Class of Sequential Pay Certificates other than the Class A-1 Certificates, Class A-2 Certificates, Class A-PB Certificates, Class A-3 Certificates, Class A-1A Certificates, Class A-M Certificates, Class A-J Certificates, Class B Certificates, Class C Certificates, Class D Certificates, Class E Certificates, Class F Certificates, Class G Certificates, Class H Certificates, Class J Certificates and Class K Certificates.

Exemptions”: Department of Labor Prohibited Transaction Exemption (“PTE”) 96-22, Final Authorization Number 2004-03E and PTE 91-14 each as amended from time to time, or any successor thereto.

FDIC”: Federal Deposit Insurance Corporation, or its successor in interest.

FHLMC”: Federal Home Loan Mortgage Corporation, or its successor in interest.

 

 

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Final Recovery Determination”: A determination by the Special Servicer with respect to any Defaulted Mortgage Loan (and, if applicable, any defaulted Companion Loan) or REO Property (other than a Mortgage Loan or REO Property, as the case may be, that was purchased by either Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement or by the Majority Subordinate Certificateholder, the applicable Companion Holder or the Special Servicer pursuant to Section 3.18(c), 3.18(d), 3.18(e) or 3.18(h), or by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder pursuant to Section 9.01) that there has been a recovery of all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries that the Special Servicer has determined, in accordance with the Servicing Standard, will be ultimately recoverable.

FNMA”: Federal National Mortgage Association, or any successor in interest.

Form 8-K Disclosure Information”: As defined in Section 8.17(i).

Gain-on-Sale Proceeds”: With respect to any Mortgage Loan, the excess of (i) Liquidation Proceeds of the Mortgage Loan or related REO Property net of any related Liquidation Expenses, over (ii) the Purchase Price for such Mortgage Loan on the date on which such Liquidation Proceeds were received.

Gain-on-Sale Reserve Account”: A segregated custodial account or accounts or subaccount of the Distribution Account created and maintained by the Paying Agent pursuant to Section 3.04(e) on behalf of the Trustee in trust for the Certificateholders, which shall be entitled “Wells Fargo Bank, N.A., as Trustee, in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34.” Any such account shall be an Eligible Account or a subaccount of an Eligible Account.

Glenbrooke at Palm Bay Intercreditor Agreement”: The Co-Lender Agreement, dated as of November 13, 2007, between Barclays Capital Real Estate Inc., as Note A Holder, and Barclays Capital Real Estate Inc., as Note B Holder, relating to the Glenbrooke at Palm Bay Whole Loan.

Glenbrooke at Palm Bay Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 11 on the Mortgage Loan Schedule).

Glenbrooke at Palm Bay Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Glenbrooke at Palm Bay Loan and subordinate in right of entitlement to the Glenbrooke at Palm Bay Loan.

Glenbrooke at Palm Bay Whole Loan”: The Glenbrooke at Palm Bay Loan, together with the Glenbrooke at Palm Bay Subordinate Companion Loan.

Global Certificates”: The Certificates represented by the Regulation S Global Certificates and/or the Domestic Global Certificates.

Grantor Trust”: the Additional Interest Grantor Trust.

 

 

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Grantor Trust Provisions”: Subpart E of Part I of subchapter J of the Code (including all Treasury Regulations thereunder) and Treasury Regulations Section 301.7701-4(c).

Ground Lease”: With respect to any Mortgage Loan for which the Mortgagor has a leasehold interest in the related Mortgaged Property or space lease within such Mortgaged Property, the lease agreement creating such leasehold interest.

Group 1 Mortgage Loan”: Any Mortgage Loan identified on the Mortgage Loan Schedule as belonging to Loan Group 1.

Group 2 Mortgage Loan”: Any Mortgage Loan identified on the Mortgage Loan Schedule as belonging to Loan Group 2.

Hazardous Materials”: Any dangerous, toxic or hazardous pollutants, chemicals, wastes, or substances, including, without limitation, those so identified pursuant to CERCLA or any other federal, state or local environmental related laws and regulations now existing or hereafter enacted, and specifically including, without limitation, asbestos and asbestos-containing materials, polychlorinated biphenyls (“PCBs”), radon gas, petroleum and petroleum products and urea formaldehyde.

Holder”: A Certificateholder.

HUD-Approved Servicer”: A servicer approved by the Secretary of Housing and Urban Development pursuant to Section 207 of the National Housing Act.

Impound Reserve”: As defined in Section 3.16(c) hereof.

Independent ”: When used with respect to any specified Person, any such Person who (i) is in fact independent of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Controlling Class Representative, the Trustee, any Companion Holder and any and all Affiliates thereof, (ii) does not have any direct financial interest in or any material indirect financial interest in any of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Controlling Class Representative, the Trustee, any Companion Holder or any Affiliate thereof, and (iii) is not connected with the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Controlling Class Representative, the Special Servicer, the Trustee, any Companion Holder or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, a Person shall not fail to be Independent of the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Controlling Class Representative, the Special Servicer, the Trustee or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor, the Mortgage Loan Sellers, the Master Servicer, the Special Servicer, the Controlling Class Representative, the Trustee or any Affiliate thereof, as the case may be.

Independent Appraiser”: An Independent professional real estate appraiser who is a member in good standing of the Appraisal Institute, and, if the State in which the subject Mortgaged Property is located certifies or licenses appraisers, certified or licensed in such State,

 

 

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and in each such case, who has a minimum of five years experience in the subject property type and market.

Independent Contractor”: Any Person that would be an “independent contractor” with respect to each ED Loan REMIC or REMIC I within the meaning of Section 856(d)(3) of the Code if each ED Loan REMIC or REMIC I were a real estate investment trust (except that the ownership test set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35 percent or more of any Class of Certificates, or such other interest in any Class of Certificates as is set forth in an Opinion of Counsel, which shall be delivered, at no expense to the Master Servicer, the Special Servicer, the Trustee or the Trust Fund, to the Trustee and the Master Servicer, so long as such ED Loan REMIC or REMIC I does not receive or derive any income from such Person; provided that the relationship between such Person and such ED Loan REMIC or REMIC I is at arm’s length, all within the meaning of Treasury Regulations Section 1.856-4(b)(5)), or any other Person upon receipt by the Trustee of an Opinion of Counsel, which shall be at no expense to the Master Servicer, the Special Servicer, the Trustee or the Trust Fund, to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code, or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property as defined in Section 856(d) of the Code.

Indenture Trustee”: As relating to the Winn-Dixie Indentures, Wells Fargo Bank, N.A., or its successor in interest.

Initial Purchaser”: Wachovia Capital Markets, LLC, or its respective successors in interest, individually or collectively as the context requires.

Institutional Accredited Investor”: Institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act or any entity in which all the equity holders fall within any such subsections.

Insurance Policy”: With respect to any Mortgage Loan, any hazard insurance policy, flood insurance policy, title policy or other insurance policy that is maintained from time to time in respect of such Mortgage Loan or the related Mortgaged Property.

Insurance Proceeds”: Proceeds paid under any Insurance Policy, to the extent such proceeds are not applied to the restoration of the related Mortgaged Property, released to the Mortgagor, or any tenants or ground lessors, as the case may be, pursuant to the terms of the related Mortgage or lease, in accordance with the Servicing Standard.

Insured Environmental Event”: As defined in Section 3.08(c).

Intercreditor Agreement”: Each of the Caplease Intercreditor Agreement, the 2100 Ross Intercreditor Agreement, the Llano Logistics Intercreditor Agreement, the Glenbrooke at Palm Bay Intercreditor Agreement, The Barrington Intercreditor Agreement, the Winn-Dixie Distribution Center – Orlando, FL Intercreditor Agreement, the Winn-Dixie Distribution Center – Orlando, FL Pari Passu Intercreditor Agreement, the Winn-Dixie Headquarters/Manufacturing

 

 

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Facility – Jacksonville, FL Intercreditor Agreement, the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Intercreditor Agreement, the Newforest Estates Intercreditor Agreement, the Winn-Dixie Distribution – Fitzgerald, GA Intercreditor Agreement, the Dean Foods – Opa-Locka, FL Intercreditor Agreement, individually or collectively, as the context may require.

Interest Accrual Period”: With respect to each Class of Regular Certificates interest at the applicable Pass-Through Rate will be payable monthly on each Distribution Date and will accrue during each Interest Accrual Period on the Class Principal Balance (or, in the case of the Class IO Certificates, the Notional Amount) of such Class of Certificates immediately following the Distribution Date in such Interest Accrual Period (after giving effect to all distributions of principal made on such Distribution Date). Interest on each Class of Regular Certificates will be calculated on the basis of a 360-day year consisting of twelve 30-day months. With respect to any Class of Regular Certificates and any Distribution Date, the Interest Accrual Period will be the preceding calendar month, which will be deemed to consist of 30 days; provided, however, for purposes of the initial Interest Accrual Period, such period commences on November 1, 2007 and continues through the calendar month preceding the month in which such Distribution Date occurs.

Interest Reserve Account”: The segregated account created and maintained by the Trustee pursuant to Section 3.04(c) in trust for Certificateholders, which shall be entitled “Wells Fargo Bank, N.A., as Trustee, on behalf of and in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34”.

Interest Reserve Amount”: With respect to each Interest Reserve Loan and each Distribution Date that occurs in February of each year and in January of each year that is not a leap year (unless, in either case, the related Distribution Date is the final Distribution Date), an amount equal to one day’s interest at the related Mortgage Rate (without regard to the second proviso in the definition thereof) on the related Stated Principal Balance as of the Due Date in the month in which such Distribution Date occurs (but prior to the application of any amounts owed on such Due Date), to the extent a Periodic Payment or P&I Advance is made in respect thereof for such Due Date as of the related P&I Advance Date.

Interest Reserve Loan”: Each Mortgage Loan that is an Actual/360 Mortgage Loan.

Interest Shortfall Account”: As defined in Section 3.04(g).

Interest Shortfall Amount”: $0.

Interested Person”: The Depositor, any Mortgage Loan Seller, the Master Servicer, the Special Servicer, any Independent Contractor hired by the Special Servicer, any Holder of a Certificate, each Companion Holder (but only with respect to the related Co-Lender Loan) or any Affiliate of any such Person.

Internet Website”: The Internet Websites maintained by the Trustee and, if applicable, the Master Servicer initially located at www.ctslink.com and

 

 

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www.wachovia.com, respectively, or such other address as provided to the parties hereto from time to time.

Investment Account”: As defined in Section 3.06(a).

Issue Price”: With respect to each Class of Certificates, the “issue price” as defined in the Code and Treasury regulations promulgated thereunder.

Late Collections”: With respect to any Mortgage Loan or Companion Loan, all amounts received thereon during any Collection Period, other than Penalty Interest, whether as payments, Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late collections of the principal and/or interest portions of a Scheduled Payment (other than a Balloon Payment) or an Assumed Scheduled Payment in respect of such Mortgage Loan or Companion Loan due or deemed due on a Due Date in a previous Collection Period, and not previously recovered. With respect to any REO Loan, all amounts received in connection with the related REO Property during any Collection Period, whether as Insurance Proceeds, Liquidation Proceeds, REO Revenues or otherwise, which represent late collections of the principal and/or interest portions of a Scheduled Payment (other than a Balloon Payment) or an Assumed Scheduled Payment in respect of the predecessor Mortgage Loan or of an Assumed Scheduled Payment in respect of such REO Loan due or deemed due on a Due Date in a previous Collection Period and not previously recovered.

Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made with respect to such Mortgage Loan; (iii) such Mortgage Loan is repurchased by a Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement; or (iv) such Mortgage Loan is purchased by the Majority Subordinate Certificateholder, the Companion Holders, the mezzanine lenders or the Special Servicer pursuant to Section 3.18(c), 3.18(d), 3.18(e) or 3.18(m), or by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder pursuant to Section 9.01. With respect to any REO Property (and the related REO Loan), any of the following events: (i) a Final Recovery Determination is made with respect to such REO Property; (ii) such REO Property is purchased by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder pursuant to Section 9.01; or (iii) such REO Property is purchased by the Companion Holder as described in Section 3.18(d).

Liquidation Fee”: With respect to each Specially Serviced Mortgage Loan and REO Loan, the fee payable to the Special Servicer out of certain related recoveries pursuant to the third paragraph of Section 3.11(c).

Liquidation Fee Rate”: With respect to all amounts set forth in the third paragraph of Section 3.11(c), 1.00%.

Liquidation Proceeds”: All cash amounts (other than Insurance Proceeds and REO Revenues) received by the Master Servicer or the Special Servicer in connection with: (i) the taking of all or a part of a Mortgaged Property or REO Property by exercise of the power of eminent domain or condemnation, subject, however, to the rights of any tenants and ground lessors, as the case may be, and the rights of the Mortgagor under the terms of the related

 

 

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Mortgage; (ii) the liquidation of a Mortgaged Property or other collateral constituting security for a Defaulted Mortgage Loan, through trustee’s sale, foreclosure sale, REO Disposition or otherwise, exclusive of any portion thereof required to be released to the related Mortgagor in accordance with applicable law and the terms and conditions of the related Mortgage Note and Mortgage; (iii) the realization upon any deficiency judgment obtained against a Mortgagor; (iv) the purchase of a Defaulted Mortgage Loan by the Majority Subordinate Certificateholder, the related Companion Holder, the mezzanine lenders or the Special Servicer pursuant to Section 3.18(c), Section 3.18(d), Section 3.18(e) or Section 3.18(m); (v) the repurchase of a Mortgage Loan by a Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement; (vi) the purchase of a Mortgage Loan or REO Property by the Master Servicer, the Special Servicer, or the Majority Subordinate Certificateholder pursuant to Section 9.01; (vii) the purchase of an REO Property by the Companion Holder pursuant to Section 3.18(d); or (viii) the remittance by the applicable Mortgage Loan Seller of amounts specified in Section 2.03(h).

Liquidity Termination Event”: Either of (i) a Put Option Termination Event or (ii) an Event of Default or Termination Event (each as defined in the Put Agreements).

Llano Logistics Intercreditor Agreement”: The Co-Lender Agreement, dated as of November 13, 2007, between Barclays Capital Real Estate Inc., as Note A Holder, and Barclays Capital Real Estate Inc., as Note B Holder, relating to the Llano Logistics Whole Loan.

Llano Logistics Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 7 on the Mortgage Loan Schedule).

Llano Logistics Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Llano Logistics Loan and subordinate in right of entitlement to the Llano Logistics Loan.

Llano Logistics Whole Loan”: The Llano Logistics Loan, together with the Llano Logistics Subordinate Companion Loan.

Loan Group”: Either Loan Group 1 or Loan Group 2.

Loan Group 1”: Collectively, all of the Mortgage Loans that are Group 1 Mortgage Loans and any successor REO Loans with respect thereto.

Loan Group 1 Available Distribution Amount”: With respect to any Distribution Date, that portion, if any, of the Available Distribution Amount attributable to Loan Group 1.

Loan Group 1 Principal Distribution Amount”: With respect to any Distribution Date, that portion, if any, of the Principal Distribution Amount attributable to Loan Group 1.

Loan Group 2”: Collectively, all of the Mortgage Loans that are Group 2 Mortgage Loans and any successor REO Loans with respect thereto.

Loan Group 2 Available Distribution Amount”: With respect to any Distribution Date, that portion, if any, of the Available Distribution Amount attributable to Loan Group 2.

 

 

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Loan Group 2 Principal Distribution Amount”: With respect to any Distribution Date, that portion, if any, of the Principal Distribution Amount attributable to Loan Group 2.

Loan Pair”: Collectively, any Co-Lender Loan and its related Companion Loan(s).

Loan-to-Value Ratio”: With respect to any Mortgage Loan, as of any date of determination, a fraction, expressed as a percentage, the numerator of which is the then current principal amount of such Mortgage Loan, and the denominator of which is the Appraised Value of the related Mortgaged Property.

Lockout Period”: With respect to any Mortgage Note that prohibits the Mortgagor from prepaying such Mortgage Loan until a date specified in such Mortgage Note, the period from the Closing Date until such specified date.

Majority Mortgage Loans”: All of the Mortgage Loans other than the ED Loans.

Majority Subordinate Certificateholder”: As of any date of determination, any single Holder of Certificates (other than any Holder which is an Affiliate of the Depositor or the Mortgage Loan Seller) entitled to greater than 50% of the Voting Rights allocated to the Controlling Class; provided, however, if there is no single Holder of Certificates entitled to greater than 50% of the Voting Rights allocated to such Class, then the Majority Subordinate Certificateholder shall be the single Holder of Certificates with the largest percentage of Voting Rights allocated to such Class. With respect to determining the Majority Subordinate Certificateholder, the groups of Classes comprised of the Class A-1, Class A-2, Class A-PB, Class A-3, and Class A-1A Certificates shall each be deemed to be a single Class of Certificates for purposes of determining the Controlling Class, in each case, with such Voting Rights allocated among the Holders of Certificates of such Classes in proportion to the respective Certificate Principal Balances of such Certificates as of such date of determination.

Master Servicer”: Wachovia Bank, National Association, its successor in interest (including the Trustee as successor pursuant to Section 7.02), or any successor master servicer appointed as herein provided.

Master Servicing Fee”: With respect to each Mortgage Loan and REO Loan the fee payable to the Master Servicer pursuant to Section 3.11(a).

Master Servicing Fee Rate”: With respect to each Mortgage Loan the percentage set forth under the column “Master Servicing Fee Rate” on the Mortgage Loan Schedule.

Material Core Documents”: As defined in Section 2.03.

Memorandum”: As defined in the Mortgage Loan Purchase Agreement.

Money Term”: With respect to any Mortgage Loan, the Stated Maturity Date, Mortgage Rate, Stated Principal Balance, amortization term or payment frequency thereof or any provision thereof requiring the payment of a Prepayment Premium or Yield Maintenance Charge in connection with a Principal Prepayment (but not any late fees or default interest provisions).

 

 

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Monthly Payment”: With respect to any Mortgage Loan or Companion Loan, the scheduled monthly payment of principal and/or interest (other than Additional Interest) on such Mortgage Loan or Companion Loan, including any Balloon Payment, which is payable (as the terms of the applicable Mortgage Loan or Companion Loan may be changed or modified in connection with a bankruptcy or similar proceedings involving the related Mortgagor or by reason of a modification, extension, waiver or amendment granted or agreed to pursuant to the terms hereof) by a Mortgagor from time to time under the related Mortgage Note and applicable law, without regard to any acceleration of principal of such Mortgage Loan or Companion Loan by reason of default thereunder and without respect to any Additional Interest.

Moody’s ”: Moody’s Investors Service, Inc., or its successor in interest. If Moody’s nor any successor remains in existence, “Moody’s” shall be deemed to refer to such other nationally recognized statistical rating agency or other comparable Person designated by the Depositor, notice of which designation shall be given to the Trustee, the Master Servicer and the Special Servicer, and specific ratings of Moody’s herein referenced shall be deemed to refer to the equivalent ratings of the party so designated.

Mortgage”: With respect to any Mortgage Loan, the mortgage, deed of trust, deed to secure debt or similar instrument that secures the Mortgage Note and creates a lien on the fee or leasehold interest in the related Mortgaged Property.

Mortgage Deferred Interest”: With respect to any Mortgage Loan as to which the Mortgage Rate has been reduced through a modification and any Distribution Date, the amount by which (a) interest accrued at such reduced rate is less than (b) the amount of interest that would have accrued on such Mortgage Loan at the Mortgage Rate before such reduction, to the extent such amount has been added to the outstanding principal balance of such Mortgage Loan.

Mortgage File”: With respect to any Mortgage Loan, collectively the following documents:

(i)       the original executed Mortgage Note including any power of attorney related to the execution thereof, together with any and all intervening endorsements thereon, endorsed on its face or by allonge attached thereto (without recourse, representation or warranty, express or implied) to the order of “Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34, and in the case of any Whole Loan serviced under this Agreement, in its capacity as “lead lender” on behalf of the related Companion Holder; or in blank (or a lost note affidavit and indemnity with a copy of such Mortgage Note attached thereto);

(ii)      an original or copy of the Mortgage, together with any and all intervening assignments thereof, in each case (unless not yet returned by the applicable recording office) with evidence of recording indicated thereon or certified by the applicable recording office;

 

 

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(iii)     an original or copy of any related Assignment of Leases (if such item is a document separate from the Mortgage), together with any and all intervening assignments thereof, in each case (unless not yet returned by the applicable recording office) with evidence of recording indicated thereon or certified by the applicable recording office;

(iv)      an original executed assignment, in recordable form (except for any missing recording information), of (a) the Mortgage, (b) any related Assignment of Leases (if such item is a document separate from the Mortgage and to the extent not already assigned pursuant to preceding clause (a)) and (c) any other recorded document relating to the Mortgage Loan otherwise included in the Mortgage File, in favor of “Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34”, and in the case of any Whole Loan serviced under this Agreement, in its capacity as “lead lender” on behalf of the related Companion Holder or in blank;

(v)       an original assignment of all unrecorded documents relating to the Mortgage Loan (to the extent not already assigned pursuant to clause (iv) above), in favor of “Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34” and in the case of any Whole Loan serviced under this Agreement, in its capacity as “lead lender” on behalf of the related Companion Holder, or in blank;

(vi)      originals or copies of any modification, consolidation, assumption and substitution agreements in those instances where the terms or provisions of the Mortgage or Mortgage Note have been consolidated or modified or the Mortgage Loan has been assumed or consolidated;

(vii)     the original or a copy of the policy or certificate of lender’s title insurance or, if such policy has not been issued or located, an original or copy of an irrevocable, binding commitment (which may be a marked version of the policy that has been executed by an authorized representative of the title company, a “pro forma” title policy, or an agreement to provide the same pursuant to binding escrow instructions executed by an authorized representative of the title company) to issue such title insurance policy;

(viii)    any filed copies (bearing evidence of filing) or other evidence of filing satisfactory to the Trustee of any prior UCC Financing Statements in favor of the originator of such Mortgage Loan or in favor of any assignee prior to the Trustee (but only to the extent the Mortgage Loan Seller had possession of such UCC Financing Statements prior to the Closing Date) and, if there is an effective UCC Financing Statement and continuation statement in favor of the Mortgage Loan Seller on record with the applicable public office for UCC Financing Statements, an original UCC Amendment, in form suitable for filing in favor of “Wells Fargo Bank, N.A., as trustee for the registered holders of Wachovia Bank

 

 

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Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34, and in the case of any Whole Loan, in its capacity as “lead lender” on behalf of the related Companion Holder, as assignee”, or in blank;

(ix)      an original or copy of (A) any Ground Lease, memorandum of ground lease and ground lessor estoppel, and (B) any loan guaranty or indemnity and (C) any environmental insurance policy;

(x)       any intercreditor agreement relating to permitted debt (including, without limitation, mezzanine debt) of the Mortgagor;

(xi)      copies of any loan agreement, escrow agreement or security agreement relating to such Mortgage Loan;

 

(xii)

 copies of any Indenture relating to the Winn-Dixie Loans;

(xiii)    a copy of any letter of credit and related transfer documents relating to such Mortgage Loan;

(xiv)     copies of any management agreements and applicable transfer or assignment documents;

(xv)      copies of any cash management agreements and applicable transfer or assignment documents;

(xvi)     copies of franchise agreements and franchisor comfort letters, if any, for hospitality properties and applicable transfer or assignment documents; and

(xvii)    with respect to any Companion Loan, all of the above documents with respect to such Companion Loan and the related Intercreditor Agreement; provided that a copy of each Mortgage Note relating to such Companion Loan, rather than the original, shall be provided, and no assignments shall be provided;

provided that whenever the term “Mortgage File” is used to refer to documents actually received by the Trustee or by a Custodian on its behalf, such term shall not be deemed to include such documents required to be included therein unless they are actually so received, and with respect to any receipt or certification by the Trustee or the Custodian for documents described in clauses (vi) and (ix) through and including (xv) of this definition, shall be deemed to include only such documents to the extent the Trustee or Custodian has actual knowledge of their existence.

Mortgage Loan”: Each of the mortgage loans transferred and assigned to the Trust Fund pursuant to Section 2.01 and listed on the Mortgage Loan Schedule and from time to time held in the Trust Fund. As used herein, the term “Mortgage Loan” includes the related Mortgage Note, Mortgage, and other security documents contained in the related Mortgage File.  Unless otherwise indicated, as used in this Agreement, the term “Mortgage Loan” does not include any Companion Loan.

 

 

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Mortgage Loan Purchase Agreement”: Each of the Wachovia Mortgage Loan Purchase Agreement and the BCRE Mortgage Loan Purchase Agreement, individually or collectively, as the context may require.

Mortgage Loan Schedule”: The list of Mortgage Loans transferred on the Closing Date to the Trustee as part of an ED Loan REMIC or REMIC I, as applicable, attached hereto as Exhibit B and in a computer readable format. Such list shall set forth the following information with respect to each Mortgage Loan:

 

(i)

the Mortgage Loan number;

(ii)     the street address (including city, county, state and zip code) and name of the related Mortgaged Property;

 

(iii)

the Cut-Off Date Balance;

(iv)    the amount of the Periodic Payment due on the first Due Date following the Closing Date;

 

(v)

the original Mortgage Rate;

(vi)   the (A) original term to stated maturity, (B) remaining term to stated maturity and (C) the Stated Maturity Date and, in the case of an ARD Loan, the Anticipated Repayment Date;

(vii)  in the case of a Balloon Mortgage Loan, the remaining amortization term;

 

(viii)   the original and remaining amortization term;

 

 

(ix)

whether the Mortgage Loan is secured by a Ground Lease;

 

(x)

the Master Servicing Fee Rate;

(xi)    whether such Mortgage Loan is an ARD Loan and if so the Anticipated Repayment Date and Additional Interest Rate for such ARD Loan;

 

(xii)

the related Mortgage Loan Seller;

(xiii)   whether such Mortgage Loan is insured by an environmental policy;

(xiv)  whether such Mortgage Loan is cross-defaulted or cross-collateralized with any other Mortgage Loan;

 

(xv)

whether such Mortgage Loan is a Defeasance Loan;

(xvi)      whether the Mortgage Loan is secured by a letter of credit;

 

 

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(xvii)     whether such Mortgage Loan is an Interest Reserve Loan;

(xviii)    whether payments on such Mortgage Loan are made to a lock-box;

(xix)      the amount of any Reserve Funds escrowed in respect of each Mortgage Loan;

(xx)      the number of units or square feet related to the Mortgaged Property;

(xxi)     the number of grace days after the Due Date until Periodic Payments incur late payment charges;

(xxii)     the applicable Loan Group to which such Mortgage Loan belongs; and

(xxiii)     whether such Mortgage Loan is an ED Loan.

Mortgage Loan Seller”: Each of Wachovia and BCRE, as the context may require, or their respective successors in interest, individually or collectively as the context may require.

Mortgage Note”: The original executed note evidencing the indebtedness of a Mortgagor under a Mortgage Loan or Companion Loan, together with any rider, addendum or amendment thereto, or any renewal, substitution or replacement of such note.

Mortgage Pool”: Collectively, all of the Mortgage Loans and any successor REO Loans.

Mortgage Rate”: With respect to (i) any Mortgage Loan or Companion Loan on or prior to its Stated Maturity Date, the fixed annualized rate, not including any Additional Interest Rate, at which interest is scheduled (in the absence of a default) to accrue on such Mortgage Loan or Companion Loan from time to time in accordance with the related Mortgage Note and applicable law; (ii) any Mortgage Loan or Companion Loan after its Stated Maturity Date, the annualized rate described in clause (i) above determined without regard to the passage of such Stated Maturity Date, but giving effect to any modification thereof as contemplated by Section 3.20; and (iii) any REO Loan, the annualized rate described in clause (i) or (ii), as applicable, above determined as if the predecessor Mortgage Loan or Companion Loan had remained outstanding; provided, however, if any Mortgage Loan or Companion Loan does not accrue interest on the basis of a 360-day year consisting of twelve 30-day months, then, solely for purposes of calculating the Pass-Through Rates, the Mortgage Rate of such Mortgage Loan or Companion Loan for any one-month period preceding a related Due Date will be the annualized rate at which interest would have to accrue in respect of such Mortgage Loan or Companion Loan on the basis of a 360-day year consisting of twelve 30-day months in order to produce the aggregate amount of interest actually accrued (exclusive of Penalty Interest or Additional Interest) in respect of such Mortgage Loan or Companion Loan during such one-month period at the related Mortgage Rate; provided, however, solely for the purposes of calculating the Pass-Through Rates, with respect to each Interest Reserve Loan, the Mortgage

 

 

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Rate for the one-month period (A) preceding the Due Dates that occur in January and February in any year which is not a leap year or preceding the Due Date that occurs in February in any year which is a leap year will be determined exclusive of the Interest Reserve Amounts for such months (in either case, unless such Due Date occurs in a January or February in which the final Distribution Date occurs), and (B) preceding the Due Date in March, and in the event the final Distribution Date occurs in February, preceding the Due Date in such February, will be determined inclusive of the Interest Reserve Amounts for the immediately preceding February and, if applicable, January; provided, further, if the Mortgage Rate of the related Mortgage Loan or Companion Loan has been modified in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20, solely for purposes of calculating the Pass-Through Rate, the Mortgage Rate for such Mortgage Loan or Companion Loan shall be calculated without regard to such event.

Mortgaged Property”: The property subject to the lien of a Mortgage.

Mortgagor”: The obligor or obligors on a Mortgage Note, including without limitation, any Person that has acquired the related Mortgaged Property and assumed the obligations of the original obligor under the Mortgage Note and/or, in the case of an indemnity deed of trust, the entity which granted the lien on such Mortgaged Property.

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 deposited by the Master Servicer in the Certificate Account for such Distribution Date pursuant to Section 3.19(a) in connection with such Prepayment Interest Shortfalls on the Mortgage Loans. For purposes of calculating the Prepayment Interest Shortfall with respect to the Co-Lender Loans, Prepayment Interest Shortfalls will be allocated, first, to the promissory note evidencing the related Subordinate Companion Loans, if any, and second, to the promissory note evidencing the related Co-Lender Loan.

Net Investment Earnings”: With respect to (i) the Certificate Account, any Servicing Account, any Special Reserve Account, any Reserve Account or the REO Account (if any) for any Collection Period and (ii) the Distribution Account, the Interest Reserve Account, the Additional Interest Account and the Companion Distribution Account (if any) for the related Distribution Date, the amount, if any, by which the aggregate of all interest and other income realized during such Collection Period with respect to the accounts described in clause (i) above and as of such related Distribution Date with respect to the accounts described in clause (ii) above on funds held in such accounts, exceeds the aggregate of all losses, if any, incurred during such Collection Period with respect to the accounts described in clause (i) above and as of such related Distribution Date with respect to the accounts described in clause (ii) above in connection with the investment of such funds in accordance with Section 3.06.

Net Investment Loss”: With respect to (i) the Certificate Account, any Servicing Account, any Special Reserve Account, any Reserve Account or the REO Account (if any)

 

 

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for any Collection Period and (ii) the Distribution Account, the Interest Reserve Account, the Additional Interest Account and the Companion Distribution Account (if any) for the related Distribution Date, the amount by which the aggregate of all losses, if any, incurred during such Collection Period with respect to the accounts described in clause (i) above and as of such related Distribution Date with respect to the accounts described in clause (ii) above in connection with the investment of funds held in such accounts in accordance with Section 3.06, exceeds the aggregate of all interest and other income realized during such Collection Period with respect to the accounts described in clause (i) above and as of such related Distribution Date with respect to the accounts described in clause (ii) above on such funds.

Net Mortgage Rate”: With respect to any Mortgage Loan or any REO Loan, as of any date of determination, a rate per annum equal to the related Mortgage Rate minus the sum of the Trustee Fee Rate and the applicable Master Servicing Fee Rate.

Net Operating Income” or “NOI”: As defined in and determined in accordance with the provisions of Exhibit E attached hereto.

Newforest Estates Intercreditor Agreement”: The Co-Lender Agreement, dated as of November 13, 2007, between Barclays Capital Real Estate Inc., as Note A Holder, and Barclays Capital Real Estate Inc., as Note B Holder, relating to the Newforest Estates Whole Loan.

Newforest Estates Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan number 36 on the Mortgage Loan Schedule).

Newforest Estates Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Newforest Estates Loan and subordinate in right of entitlement to the Newforest Estates Loan.

Newforest Estates Whole Loan”: The Newforest Estates Loan, together with the Newforest Estates Loan Subordinate Companion Loan.

New Lease”: Any lease of REO Property entered into at the direction of the Special Servicer on behalf of any ED Loan REMIC or REMIC I, as applicable, including any lease renewed, modified or extended on behalf of such REMIC if the Special Servicer has the right to renegotiate the terms of such lease.

NMWHFIT”: A “Non-Mortgage Widely Held Fixed Investment Trust” as that term is defined in Treasury Regulations Section 1.671-5(b)(12) or successor provisions.

Nonrecoverable Advance”: Any Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance; provided that Workout-Delayed Reimbursement Amounts shall constitute a Nonrecoverable Advance only when the Person making such determination in accordance with the procedures specified in the definition of Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, as applicable, and taking into account factors such as all other outstanding Advances, either (a) has determined in accordance with the Servicing Standard or the standards applicable to the Trustee as set forth in the definitions of “Nonrecoverable P&I

 

 

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Advance” and “Nonrecoverable Servicing Advance” that such Workout-Delayed Reimbursement Amounts would not ultimately be recoverable from Late Collections, Insurance Proceeds or Liquidation Proceeds, or any other recovery on or in respect of the related Mortgage Loan or REO Loan or (b) has determined in accordance with the Servicing Standard or such other applicable standard that such Workout-Delayed Reimbursement Amounts, along with any other Workout-Delayed Reimbursement Amounts and Nonrecoverable Advances, would not ultimately be recoverable from the portion of Late Collections, Insurance Proceeds or Liquidation Proceeds in respect of the pool of the Mortgage Loans or REO Loans allocable to principal, or any other recovery on or in respect of the pool of Mortgage Loans or REO Loans allocable to principal.

Nonrecoverable P&I Advance”: Any P&I Advance previously made or proposed to be made in respect of any Mortgage Loan or any REO Loan by the Master Servicer, the Special Servicer or the Trustee, as the case may be, that, as determined by the Master Servicer, the Special Servicer or the Trustee, as applicable, in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer), or the standard of care set forth in Section 8.01(a) (with respect to the Trustee), as applicable, with respect to such P&I Advance will not be ultimately recoverable from Late Collections, Insurance Proceeds or Liquidation Proceeds, or any other recovery on or in respect of such Mortgage Loan, Pari Passu Companion Loan or REO Loan; provided that the Master Servicer will be permitted to conclusively rely upon any such nonrecoverability determination made by the Special Servicer.

Nonrecoverable Servicing Advance”: Any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan, Pari Passu Companion Loan or REO Loan by the Master Servicer, the Special Servicer or the Trustee, as the case may be, that, as determined by the Master Servicer, the Special Servicer or the Trustee, as applicable, in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer) or the standard of care set forth in Section 8.01(a) (with respect to the Trustee), as applicable, will not be ultimately recoverable from Late Collections, Insurance Proceeds, Liquidation Proceeds, or any other recovery on or in respect of such Mortgage Loan, Pari Passu Companion Loan or REO Loan, as applicable; provided that the Master Servicer and the Trustee shall be permitted to conclusively rely upon any such nonrecoverability determination made by the Special Servicer.

Non-Registered Certificate”: Unless and until registered under the Securities Act, any Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class Z, Class R-I or Class R-II Certificate.

Non-United States Person”: Any Person other than a United States Person.

Officer’s Certificate”: A certificate signed by a Servicing Officer of the Master Servicer or the Special Servicer, as the case may be, or by a Responsible Officer of the Trustee.

Opinion of Counsel”: A written opinion of counsel (which counsel may be a salaried counsel for the Depositor, the Master Servicer or the Special Servicer) acceptable to and delivered to the Trustee or the Master Servicer, as the case may be, except that any opinion of counsel relating to (a) the qualification of any ED Loan REMIC, REMIC I or REMIC II as a

 

 

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REMIC; (b) the qualification of the Additional Interest Grantor Trust as a grantor trust; (c) compliance with the REMIC Provisions or the Grantor Trust Provisions; or (d) the resignation of the Master Servicer or the Special Servicer pursuant to Section 6.04 must be an opinion of counsel who is in fact Independent of the Master Servicer, the Special Servicer or the Depositor, as applicable.

Option Price”: As defined in Section 3.18(c).

Original Class IO Notional Amount”: $1,479,435,064.

Original Class Principal Balance”: With respect to any Class of Sequential Pay Certificates, the Original Class Principal Balance thereof as of the Closing Date, in each case as specified in the Preliminary Statement.

Other Pooling and Servicing Agreement”: Any pooling and servicing agreement or other agreement that creates a trust fund whose assets include any Companion Loan.

Other Securitization”: Any commercial mortgage securitization trust that holds a Companion Loan or any successor REO Loan with respect thereto.

OTS”: The Office of Thrift Supervision or any successor thereto.

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 or REO Loan, any advance made by the Master Servicer or the Trustee pursuant to Section 4.03(a) and (b), as applicable.

P&I Advance Date”: The Business Day immediately preceding each Distribution Date.

Pari Passu Companion Loans”: The Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loan and the Winn-Dixie Distribution Center - Orlando, FL Pari Passu Companion Loan.

Pari Passu Mortgage Loans”: The Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan and the Winn-Dixie Distribution Center - Orlando, FL Loan.

 

Pass-Through Rate”: With respect to:

(i)       the Class A-1 Certificates for any Distribution Date, 5.074% per annum;

(ii)      the Class A-2 Certificates for any Distribution Date, 5.569% per annum;

 

 

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(iii)      the Class A-PB Certificates for any Distribution Date, 5.617% per annum;

(iv)     the Class A-3 Certificates for any Distribution Date, 5.678% per annum;

(v)     the Class A-1A Certificates for any Distribution Date, the lesser of (1) 5.608% per annum and (2) the Weighted Average Net Mortgage Rate for such date;

(vi)     the Class IO Certificates for the initial Distribution Date, 0.357% per annum, and for any subsequent Distribution Date, the weighted average of the Class IO Strip Rates for the respective Class IO Components for such Distribution Date (weighted on the basis of the respective Component Notional Amounts of such Components outstanding immediately prior to such Distribution Date);

(vii)    the Class A-M Certificates for any Distribution Date, the lesser of (1) 5.818% per annum and (2) the Weighted Average Net Mortgage Rate for such date;

(viii)   the Class A-J Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date minus 0.075%;

(ix)     the Class B Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(x)      the Class C Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xi)     the Class D Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xii)    the Class E Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xiii)   the Class F Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xiv)   the Class G Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xv)   the Class H Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xvi)   the Class J Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

 

 

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(xvii)    the Class K Certificates for any Distribution Date, the Weighted Average Net Mortgage Rate for such date;

(xviii)   the Class L Certificates for any Distribution Date, 4.859% per annum;

(xix)     the Class M Certificates for any Distribution Date, 4.859% per annum;

(xx)      the Class N Certificates for any Distribution Date, 4.859% per annum;

(xxi)     the Class O Certificates for any Distribution Date, 4.859% per annum;

(xxii)    the Class P Certificates for any Distribution Date, 4.859% per annum;

(xxiii)   the Class Q Certificates for any Distribution Date, 4.859% per annum; and

(xxiv)  the Class S Certificates for any Distribution Date, 4.859% per annum.

Paying Agent”: The paying agent appointed pursuant to Section 8.16. If no such paying agent has been appointed or if such paying agent has been so appointed but the Trustee has terminated such appointment, then the Trustee shall be the Paying Agent.

Penalty Interest”: With respect to any Mortgage Loan or Companion Loan (or successor REO Loan), any amounts collected thereon, other than late payment charges, Additional Interest, Prepayment Premiums or Yield Maintenance Charges, that represent penalty interest (arising out of a default) in excess of interest on the Stated Principal Balance of such Mortgage Loan or Companion Loan (or successor REO Loan) accrued at the related Mortgage Rate.

Percentage Interest”: With respect to any Regular Certificate the portion of the relevant Class evidenced by such Certificate, expressed as a percentage, the numerator of which is the Certificate Principal Balance or Certificate Notional Amount, as the case may be, of such Certificate as of the Closing Date, as specified on the face thereof, and the denominator of which is the Original Class Principal Balance or Original Notional Amount, as the case may be, of the relevant Class. With respect to a Residual Certificate or Class Z Certificate, the percentage interest in distributions to be made with respect to the relevant Class, as stated on the face of such Certificate.

Periodic Payment”: With respect to any Mortgage Loan or Companion Loan as of any Due Date, the scheduled payment of principal and/or interest on such Mortgage Loan or Companion Loan (exclusive of Additional Interest), including any Balloon Payment, that is actually payable by the related Mortgagor from time to time under the terms of the related

 

 

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Mortgage Note (as such terms may be changed or modified in connection with a bankruptcy or similar proceeding involving the related Mortgagor or by reason of a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20).

Permitted Investments”: Any one or more of the following obligations or securities (including obligations or securities of the Trustee if otherwise qualifying hereunder):

(i)       direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States of America or any agency or instrumentality thereof (having original maturities of not more than 365 days); provided such obligations are backed by the full faith and credit of the United States of America. Such obligations must be limited to those instruments that have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change or be liquidated prior to maturity. Interest may either be fixed or variable. If such interest is variable, interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index;

(ii)      repurchase obligations with respect to any security described in clause (i) above (having original maturities of not more than 365 days); provided that the short-term deposit or debt obligations, of the party agreeing to repurchase such obligations are rated in the highest rating categories of each of Moody’s and S&P or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies. In addition, its terms must have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change. Interest may either be fixed or variable. If such interest is variable, interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index;

(iii)     certificates of deposit, time deposits, demand deposits and bankers’ acceptances of any bank or trust company organized under the laws of the United States of America or any state thereof (having original maturities of not more than 365 days), the short term obligations of which are rated in the highest rating categories of each of Moody’s and S&P or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, or any class of Companion Loan Securities, as evidenced in writing by the Rating Agencies. In addition, its terms should have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change. In addition, its terms must have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change. Interest may either be fixed or variable. If such interest is variable, interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index;

(iv)    commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States of America or any state thereof (or if not so incorporated, the commercial paper is

 

 

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United States Dollar denominated and amounts payable thereunder are not subject to any withholding imposed by any non-United States jurisdiction) which is rated in the highest rating category of each of Moody’s and S&P or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies. The commercial paper by its terms must have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change. Interest may either be fixed or variable. If such interest is variable, interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index;

(v)       units of money market funds that maintain a constant asset value and which, if rated, are rated in the highest applicable rating category by Moody’s and which are rated “AAAm” or “AAAm G” by S&P (or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, or any class of Companion Loan Securities, as evidenced in writing by the Rating Agencies) and which seeks to maintain a constant net asset value. In addition, its terms must have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change; and

(vi)     any other obligation or security that constitutes a “cash flow investment” within the meaning of Section 860G(a)(6) of the Code and is acceptable to each Rating Agency, evidence of which acceptability shall be provided in writing by each Rating Agency to the Master Servicer, the Special Servicer and the Trustee; provided, however, in no event shall such other obligation or security be rated less than “Aa3/P+” or “AA/A-1” by Moody’s or S&P, respectively;

provided that (1) no investment described hereunder shall evidence either the right to receive (x) only interest with respect to such investment or (y) a yield to maturity greater than 120% of the yield to maturity at par of the underlying obligations; and (2) no investment described hereunder may be purchased at a price greater than par if such investment may be prepaid or called at a price less than its purchase price prior to stated maturity.

Permitted Transferee”: Any Transferee of a Residual Certificate other than a (i) Disqualified Organization, (ii) a Plan, (iii) a Disqualified Non-United States Person, (iv) a United States Person treated as a partnership for federal income tax purposes, any partner of which, directly or indirectly (except through a U.S. corporation), is (or is permitted under the related partnership agreement to be) a Disqualified Non-United States Person, or (v) a United States Person with respect to whom income on the Residual Certificate is allocable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of such Person or any other United States Person.

Person”: Any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

 

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Plan”: As defined in Section 5.02(c).

Plurality Residual Certificateholder”: As to any taxable year of any of (i) an ED Loan REMIC, (ii) REMIC I or (iii) REMIC II, the Holder of Certificates holding the largest Percentage Interest of the related Class of Residual Certificates.

Preliminary Memorandum”: As defined in the Mortgage Loan Purchase Agreement.

Preliminary Prospectus Supplement”: As defined in the Mortgage Loan Purchase Agreement.

Prepayment Assumption”: For purposes of determining the accrual of original issue discount, market discount and premium, if any, on the Certificates for federal income tax purposes, 0% CPR (within the meaning of the Prospectus), except that it is assumed that each ARD Loan is repaid on its Anticipated Repayment Date.

Prepayment Interest Excess”: With respect to any Mortgage Loan that was subject to a Principal Prepayment in full or in part during any Collection Period, which Principal Prepayment was applied to such Mortgage Loan following such Mortgage Loan’s Due Date in such Collection Period, the amount of interest (net of the related Master Servicing Fee and, if applicable, the Additional Interest) accrued on the amount of such Principal Prepayment during the period from and after such Due Date and ending on the date such Principal Prepayment was applied to such Mortgage Loan, to the extent collected (exclusive of any related Prepayment Premium or Yield Maintenance Charge actually collected).

Prepayment Interest Shortfall”: With respect to any Mortgage Loan that was subject to a Principal Prepayment in full or in part during any Collection Period, which Principal Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan’s Due Date in such Collection Period, the amount of interest, to the extent not collected from the related Mortgagor (without regard to any Prepayment Premium or Yield Maintenance Charge actually collected), that would have accrued at a rate per annum equal to the sum of (x) the related Net Mortgage Rate for such Mortgage Loan and (y) the Trustee Fee Rate on the amount of such Principal Prepayment during the period commencing on the date as of which such Principal Prepayment was applied to such Mortgage Loan and ending on the day immediately preceding such Due Date, inclusive. A Prepayment Interest Shortfall in respect of any of the ED Loans shall be a Prepayment Interest Shortfall in respect of the related ED Loan REMIC Regular Interest.

Prepayment Premium”: Any premium, penalty or fee (other than a Yield Maintenance Charge) paid or payable, as the context requires, by a Mortgagor in connection with a Principal Prepayment.

Primary Collateral”: With respect to any Crossed Loan, that portion of the Mortgaged Property designated as directly securing such Crossed Loan and excluding any Mortgaged Property as to which the related lien may only be foreclosed upon by exercise of the cross-collateralization provisions of such Crossed Loan.

 

 

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Primary Servicer”: Bank of America, N.A. as primary servicer of the mortgage loans originated by Barclays Capital Real Estate Inc.

Prime Rate”: The “prime rate” published in the “Money Rates” section of The Wall Street Journal, as such “prime rate” may change from time to time. If The Wall Street Journal ceases to publish the “prime rate,” then the Master Servicer shall select an equivalent publication that publishes such “prime rate”; and if such “prime rate” is no longer generally published or is limited, regulated or administered by a governmental or quasi-governmental body, then the Master Servicer shall select a comparable interest rate index. In either case, such selection shall be made by the Master Servicer in its reasonable discretion and the Master Servicer shall notify the Trustee and the Special Servicer in writing of its selection.

Principal Distribution Amount”: With respect to any Distribution Date, the aggregate of the following:

(a)       the aggregate of the principal portions of all Scheduled Payments (other than Balloon Payments) and any Assumed Scheduled Payments due or deemed due in respect of the Mortgage Loans for their respective Due Dates occurring during the related Collection Period, to the extent not previously received or advanced with respect to a Distribution Date prior to the related Collection Period;

(b)       the aggregate of all Principal Prepayments received on the Mortgage Loans during the related Collection Period;

(c)       with respect to any Mortgage Loan as to which the related Stated Maturity Date occurred during or prior to the related Collection Period, any payment of principal (other than a Principal Prepayment) made by or on behalf of the related Mortgagor during the related Collection Period (including any Balloon Payment), in each case net of any portion of such payment that represents a recovery of the principal portion of any Scheduled Payment (other than a Balloon Payment) due, or the principal portion of any Assumed Scheduled Payment deemed due, in respect of such Mortgage Loan on a Due Date during or prior to the related Collection Period and not previously recovered;

(d)       the aggregate of the principal portion of all Liquidation Proceeds, Insurance Proceeds and, to the extent not otherwise included in clause (a), (b) or (c) above, payments that were received on the related Mortgage Loans during the related Collection Period and that were identified and applied by the Master Servicer and/or Special Servicer as recoveries of principal of such Mortgage Loans, in each case net of any portion of such amounts that represents a recovery of the principal portion of any Scheduled Payment (other than a Balloon Payment) due, or of the principal portion of any Assumed Scheduled Payment deemed due, in respect of the related Mortgage Loan on a Due Date during or prior to the related Collection Period and not previously recovered;

(e)       with respect to any REO Properties, the aggregate of the principal portions of all Assumed Scheduled Payments deemed due in respect of the related REO Loans for their respective Due Dates occurring during the related Collection Period;

 

 

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(f)        with respect to any REO Properties, the aggregate of all Liquidation Proceeds, Insurance Proceeds and REO Revenues that were received during the related Collection Period on such REO Properties and that were identified and applied by the Master Servicer and/or Special Servicer as recoveries of principal of the related REO Loans, in each case net of any portion of such amounts that represents a recovery of the principal portion of any Scheduled Payment (other than a Balloon Payment) due, or of the principal portion of any Assumed Scheduled Payment deemed due, in respect of the related REO Loan or the predecessor Mortgage Loan on a Due Date during or prior to the related Collection Period and not previously recovered;

(g)       if such Distribution Date is subsequent to the initial Distribution Date, the excess, if any, of the Principal Distribution Amount for the immediately preceding Distribution Date, over the aggregate distributions of principal made on the Sequential Pay Certificates on such immediately preceding Distribution Date pursuant to Section 4.01;

(h)       any amounts that were used to reimburse Nonrecoverable Advances (including interest on such Nonrecoverable Advances) from principal collections on the Mortgage Loans pursuant to Section 3.05(a) hereof which are subsequently recovered on the related Mortgage Loan with respect to the Distribution Date related to the period in which such recovery occurs;

(i)        any amounts that were used to reimburse Workout-Delayed Reimbursement Amounts (including interest on such Workout-Delayed Reimbursement Amounts) from principal collections on the Mortgage Loans pursuant to Section 3.05(a) hereof which are subsequently recovered on the related Mortgage Loan with respect to the Distribution Date related to the period in which such recovery occurs; less

(j)        the amount of any reimbursements of (i) Nonrecoverable Advances (including interest on such Nonrecoverable Advances) that are paid or reimbursed from principal collections on the Mortgage Loans pursuant to Section 3.05(a) hereof with respect to such Distribution Date and (ii) Workout-Delayed Reimbursement Amounts (including interest on such Workout-Delayed Reimbursement Amounts) that are paid or reimbursed from principal collections on the Mortgage Loans pursuant to Section 3.05(a) hereof with respect to such Distribution Date, in each case where such principal collections would have otherwise been included in the Principal Distribution Amount for such Distribution Date.

Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan or Companion Loan that is received in advance of its scheduled Due Date; provided that it shall not include a payment of principal that is accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

Privileged Person”: Any Certificateholder, Certificate Owner, any Person identified to the Trustee or the Master Servicer, as applicable, as a prospective transferee of a Certificate or interest therein, any Rating Agency, any Mortgage Loan Seller, any Companion

 

 

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Holders, any party hereto, any Underwriter or any designee of the Depositor; provided that no Certificate Owner or prospective transferee of a Certificate or interest therein shall be considered a “Privileged Person” or be entitled to a password or restricted access as contemplated by Section 3.15 or Section 4.02 unless such Person has delivered to the Trustee or the Master Servicer, as applicable, a certification in the form of Exhibit K-1 or Exhibit K-2, as applicable which certification is available on the Trustee’s Internet Website.

Prohibited Party”: Any party, in the case of the Master Servicer, the Special Servicer or the Trustee, that is listed on the Depositor’s Do Not Hire List.

Proposed Plan”: As defined in Section 3.17(a)(iii).

Prospectus”: The prospectus dated October 19, 2006, as supplemented by the Prospectus Supplement, relating to the Registered Certificates.

Prospectus Supplement”: The final prospectus supplement, dated November 1, 2007, of the Depositor relating to the registration of the Registered Certificates under the Securities Act.

Purchase Option”: As defined in Section 3.18(c).

Purchase Option Notice”: As defined in Section 3.18(e).

Purchase Price”: With respect to any Mortgage Loan or REO Loan to be purchased by a Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement, by the Majority Subordinate Certificateholder, the Companion Holder or the Special Servicer as described in Section 3.18(c), 3.18(d) or 3.18(e), or by the Depositor, the Special Servicer, the Majority Subordinate Certificateholder or the Master Servicer pursuant to Section 9.01, a cash price equal to the outstanding principal balance of such Mortgage Loan or REO Loan, as of the date of purchase, together with (a) all accrued and unpaid interest on such Mortgage Loan or REO Loan at the related Mortgage Rate to but not including the Due Date in the Collection Period of purchase (or, in the case of any Mortgage Loan for which the Due Date occurs on a day other than the eleventh day of each month, the Due Date occurring in the month in which such Collection Period ends) plus any accrued interest on P&I Advances made with respect to such Mortgage Loan, (b) all related and unreimbursed Servicing Advances plus any accrued and unpaid interest thereon, (c) any reasonable costs and expenses, including, but not limited to, the cost of any enforcement action, incurred by the Master Servicer, the Special Servicer or the Trust Fund in connection with any such purchase by a Mortgage Loan Seller (to the extent not included in clause (b) above) and (d) any other Additional Trust Fund Expenses in respect of such Mortgage Loan (including any Additional Trust Fund Expenses previously reimbursed or paid by the Trust Fund but not so reimbursed by the related Mortgagor or other party or from Insurance Proceeds or condemnation proceeds or any other collections in respect of the Mortgage Loan or the related Mortgaged Property from a source other than the Trust Fund), or in the case of any Loan Pair, the purchase price specified in the related Intercreditor Agreement; provided that the Purchase Price shall not be reduced by any outstanding P&I Advance.

Qualified Bidder”: As defined in Section 7.01(c).

 

 

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Qualified Institutional Buyer”: A qualified institutional buyer within the meaning of Rule 144A under the Securities Act.

Qualified Insurer”: An insurance company or security or bonding company qualified to write the related Insurance Policy in the relevant jurisdiction (i) with a minimum insurance financial strength or claims paying ability rating of at least “A3” by Moody’s and “A” by S&P (or the obligations of which are guaranteed or backed by a company having such a claims paying ability), and (ii) with respect to the fidelity bond and errors and omissions Insurance Policy required to be maintained pursuant to Section 3.07(c), an insurance company that has a claims paying ability rated no lower than two rating categories (without regard to pluses or minuses or numerical qualifications) below the rating assigned to the then highest rated outstanding Certificate (or, for purposes of general liability insurance only at least “A” by two nationally recognized statistical rating organizations (which must include S&P)), but in no event lower than “A3” by Moody’s or “A” by S&P (or, if not rated by Moody’s, then at least “A” by two other nationally recognized statistical rating organizations (which may include S&P)), or, in the case of clauses (i) and (ii), such other rating as each Rating Agency shall have confirmed in writing will not cause such Rating Agency to downgrade, qualify or withdraw the then-current rating assigned to any of the Certificates (or, if not rated by Moody’s, then at least “A” by two other nationally recognized statistical rating organizations (which may include S&P)) that are then currently being rated by such Rating Agency.

Qualified Substitute Mortgage Loan”: A mortgage loan which must, on the date of substitution: (i) have an outstanding Stated Principal Balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of the Stated Principal Balance of the deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs; (ii) have a Mortgage Rate not less than the Mortgage Rate of the deleted Mortgage Loan; (iii) have the same Due Date as the deleted Mortgage Loan; (iv) accrue interest on the same basis as the deleted Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve 30-day months); (v) have a remaining term to stated maturity not greater than, and not more than two years less than, the remaining term to stated maturity of the deleted Mortgage Loan; (vi) have an original Loan-to-Value Ratio not higher than that of the deleted Mortgage Loan and a current Loan-to-Value Ratio not higher than the then current Loan-to-Value Ratio of the deleted Mortgage Loan; (vii) comply as of the date of substitution with all of the representations and warranties set forth in the applicable Mortgage Loan Purchase Agreement; (viii) have an Environmental Assessment that indicates no adverse environmental conditions with respect to the related Mortgaged Property and which will be delivered as a part of the related Servicing File; (ix) have an original Debt Service Coverage Ratio (calculated to include the additional debt from any encumbrance) of not less than the original Debt Service Coverage Ratio (calculated to include the additional debt from any encumbrance) of the deleted Mortgage Loan and a current Debt Service Coverage Ratio (calculated to include the additional debt from any encumbrance) of not less than the current Debt Service Coverage Ratio (calculated to include the additional debt from any encumbrance) of the deleted Mortgage Loan; (x) be determined by an Opinion of Counsel (at the applicable Mortgage Loan Seller’s expense) to be a “qualified replacement mortgage” within the meaning of Section 860G(a)(4) of the Code; (xi) not have a maturity date after the date two years prior to the Rated Final Distribution Date; (xii) not be substituted for a deleted Mortgage Loan unless the Trustee has received prior confirmation in writing by each Rating Agency that such

 

 

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substitution will not result in the withdrawal, downgrade, or qualification of the rating assigned by the Rating Agency to any Class of Certificates then rated by the Rating Agency (the cost, if any, of obtaining such confirmation to be paid by the Mortgage Loan Seller); (xiii) have a date of origination that is not more than 12 months prior to the date of substitution; (xiv) have been approved by the Controlling Class Representative (or, if there is no Controlling Class Representative then serving, by the Holders of Certificates representing a majority of the Voting Rights allocated to the Controlling Class); (xv) not be substituted for a deleted Mortgage Loan if it would result in the termination of the REMIC status of any of the ED Loan REMICs, REMIC  I or REMIC II or the imposition of tax on any of such REMICs other than a tax on income expressly permitted or contemplated to be imposed by the terms of this Agreement, as determined by an Opinion of Counsel (at the applicable Mortgage Loan Seller’s expense); and (xvi) become a part of the same Loan Group as the deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more deleted Mortgage Loans, then the amounts described in clause (i) shall be determined on the basis of aggregate principal balances and the rates described in clause (ii) above and the remaining term to stated maturity referred to in clause (v) above shall be determined on a weighted average basis; provided that no individual Mortgage Loan shall have a Net Mortgage Rate that is less than the highest Pass-Through Rate of any Class of Sequential Pay Certificates bearing a fixed rate. When a Qualified Substitute Mortgage Loan is substituted for a deleted Mortgage Loan, the applicable Mortgage Loan Seller shall certify that the Mortgage Loan meets all of the requirements of the above definition and shall send such certification to the Trustee. No substitutions will be permitted for the Winn-Dixie Pari Passu Loans.

Rated Final Distribution Date”: The Distribution Date in May 2046, the first Distribution Date after the 24th month following the end of the amortization term for the Mortgage Loan that, as of the Cut-Off Date, has the longest remaining amortization term (without regard to the related Stated Maturity Date).

Rating Agency”: Each of Moody’s and S&P, or with respect to any Companion Loan that backs an issue of Companion Loan Securities, each rating agency then rating such Companion Loan Securities.

Realized Loss”: With respect to: (1) each Defaulted Mortgage Loan as to which a Final Recovery Determination has been made, or with respect to any successor REO Loan as to which a Final Recovery Determination has been made as to the related REO Property, an amount (not less than zero) equal to (a) the unpaid principal balance of such Mortgage Loan or REO Loan, as the case may be, as of the commencement of the Collection Period in which the Final Recovery Determination was made, plus (b) without taking into account the amount described in subclause (1)(d) of this definition, all accrued but unpaid interest on such Mortgage Loan or such REO Loan, as the case may be, at the related Mortgage Rate to but not including the Due Date in the Collection Period in which the Final Recovery Determination was made (exclusive of any portion thereof that constitutes default interest in excess of the Mortgage Rate, Additional Interest, Prepayment Premiums or Yield Maintenance Charges), plus (c) any related unreimbursed Servicing Advances and any unreimbursed interest on any Advances as of the commencement of the Collection Period in which the Final Recovery Determination was made, together with any new related Servicing Advances made during such Collection Period, minus (d) all payments and proceeds, if any, received in respect of such Mortgage Loan or the REO

 

 

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Property that relates to such REO Loan, as the case may be, during the Collection Period in which such Final Recovery Determination was made; (2) each Defaulted Mortgage Loan as to which any portion of the principal or previously accrued interest (other than Additional Interest and Penalty Interest) payable thereunder was canceled in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted or agreed to by the Special Servicer pursuant to Section 3.20, the amount of such principal and/or interest so canceled; (3) each Mortgage Loan as to which the Mortgage Rate thereon has been permanently reduced and not recaptured for any period in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted or agreed to by the Special Servicer pursuant to Section 3.20, the amount of the consequent reduction in the interest portion of each successive Periodic Payment due thereon (each such Realized Loss shall be deemed to have been incurred on the Due Date for each affected Periodic Payment); and (4) each Mortgage Loan for which a Final Recovery Determination has been made, to the extent not included in clause (1) above, Nonrecoverable Advances (including interest on such Nonrecoverable Advance) to the extent amounts have been paid from the Principal Distribution Amount pursuant to Section 3.05(a) hereof. A Realized Loss with respect to any of the ED Loans shall be a Realized Loss with respect to the related ED Loan REMIC Regular Interest.

Realized Loss Template”: The template substantially in the form of, and containing the information called for in, the downloadable form of the “Servicer Realized Loss Template” available as of the Closing Date on the CMSA Website, or such other form for the presentation of such information and containing such additional information as may from time to time be approved by the CMSA for commercial mortgage securities transactions generally and is reasonably acceptable to the Master Servicer.

Record Date”: With respect to any Distribution Date, the last Business Day of the month immediately preceding the month in which such Distribution Date occurs.

Registered Certificate”: Any Class A-1, Class A-2, Class A-PB, Class A-3, Class A-1A, Class IO, Class A-M, Class A-J, Class B, Class C, Class D, Class E or Class F Certificate.

Regular Certificate”: Any REMIC II Certificate other than a Class R-II Certificate.

Regulation AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506-1,631 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

Regulation AB Companion Loan Securitization”: As defined in Section 3.29(a).

Regulation S”: Regulation S under the Act.

Regulation S Certificate”: A certificate in the form of Exhibit F attached hereto.

 

 

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Regulation S Global Certificate”: A global certificate representing interests in a Class of Certificates as provided in Section 5.02(e), initially sold in offshore transactions in reliance on Regulation S in fully registered form without interest coupons.

Reimbursement Rate”: The rate per annum applicable to the accrual of interest on Servicing Advances in accordance with Section 3.03(d) and on P&I Advances in accordance with Section 4.03(d), which rate per annum is equal to the Prime Rate.

Release Date”: The 40th day after the later of (i) commencement of the offering of the Certificates and (ii) the Closing Date.

Relevant Servicing Criteria”: The Servicing Criteria applicable to the various parties, as set forth on Exhibit S attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to a Servicing Participant engaged by the Trustee, the Master Servicer or the Special Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria for each of the Master Servicer, the Special Servicer or the Trustee, as applicable.

REMIC”: A “real estate mortgage investment conduit” as defined in Section 860D of the Code.

REMIC Administrator”: The Trustee or any REMIC administrator appointed pursuant to Section 8.14.

REMIC I ”: The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder with respect to which a separate REMIC election is to be made and, consisting of: (i) all of the Majority Mortgage Loans as from time to time are subject to this Agreement and all payments under and proceeds of such Mortgage Loans received after the Closing Date (excluding all Additional Interest on such Mortgage Loans), together with all documents included in the related Mortgage Files and any related Escrow Payments and Reserve Funds; (ii) all amounts held from time to time with respect to a Mortgage Loan in the Interest Reserve Account, the Certificate Account, the Distribution Account, the Gain-on-Sale Reserve Account, the Interest Shortfall Account and any REO Account; (iii) any REO Property acquired in respect of a Majority Mortgage Loan to the extent of the Trust Fund’s interest therein; (iv) the rights of the Depositor under Sections 2, 3, 9, 10, 11, 12, 13, 14, 16, 17, 18 and 19 of each of the Mortgage Loan Purchase Agreements with respect to such Majority Mortgage Loans; (v) the ED Loan REMIC Regular Interest and collections thereon; and (vi) the rights of the mortgagee under all Insurance Policies with respect to such Mortgage Loans, in each of the foregoing clauses exclusive of the interest of the holder of a Companion Loan therein. The ED Loans, collections thereon, any related REO Property acquired in respect thereof and the related rights of the Depositor under clause (iv) and (vi) shall be held as assets of the related ED Loan REMIC.

REMIC I Pass-Through Rate”: As set forth in the Preliminary Statement.

REMIC I Principal Balance”: The principal balance of any REMIC I Regular Interest outstanding as of any date of determination. As of the Closing Date, the REMIC I Principal Balance of each REMIC I Regular Interest shall equal the original REMIC I Principal

 

 

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Balance corresponding to the Corresponding Certificates as set forth in the Preliminary Statement hereto. On each Distribution Date, the REMIC I Principal Balance of each REMIC I Regular Interest shall be permanently reduced by all distributions of principal deemed to have been made in respect of such REMIC I Regular Interest on such Distribution Date pursuant to Section 4.01(h), and shall be further permanently reduced on such Distribution Date by all Realized Losses and Additional Trust Fund Expenses deemed to have been allocated thereto on such Distribution Date pursuant to Section 4.04(b) and shall be increased on such Distribution Date by Certificate Deferred Interest deemed to have been allocated thereto on such Distribution Date pursuant to Section 4.04(c).

REMIC I Regular Interest”: Any of the separate uncertificated beneficial ownership interests in REMIC I issued hereunder, and designated as a “regular interest” in REMIC I, held as an asset of REMIC II and having the original REMIC I Principal Balance and REMIC I Pass-Through Rate as described in the Preliminary Statement hereto.

REMIC II ”: The segregated pool of assets consisting of all of the REMIC I Regular Interests and all amounts held from time to time, to the extent related to REMIC II, in the Distribution Account, conveyed in trust to the Trustee for the benefit of REMIC II, as holder of the REMIC I Regular Interests, and the Holders of the Class R-II Certificates pursuant to Section 2.9, with respect to which a separate REMIC election is to be made.

REMIC II Certificate”: Any Class A-1, Class A-2, Class A-PB, Class A-3, Class A-1A, Class IO, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S or Class R-II Certificate.

REMIC Provisions”: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and proposed, temporary and final Treasury regulations and any published rulings, notices and announcements promulgated thereunder, as the foregoing may be in effect from time to time.

Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code.

REO Account”: A segregated account or accounts created and maintained by the Special Servicer pursuant to Section 3.16 on behalf of the Trustee in trust for the Certificateholders, which shall be entitled “CWCapital Asset Management LLC, as Special Servicer, in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C34.”

REO Acquisition”: The acquisition of any REO Property by the Trust Fund pursuant to Section 3.09.

REO Disposition”: The sale or other disposition of any REO Property pursuant to Section 3.18(h).

REO Extension”: As defined in Section 3.16(a).

 

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REO Loan”: The Mortgage Loan deemed for purposes hereof to be outstanding with respect to each REO Property to the extent of the Trust Fund’s interest therein. Each REO Loan shall be deemed to be outstanding for so long as the related REO Property remains part of the related ED Loan REMIC or REMIC I and deemed to provide for Periodic Payments of principal and/or interest equal to its Assumed Scheduled Payment and otherwise to have the same terms and conditions as its predecessor Mortgage Loan (such terms and conditions to be applied without regard to the default on such predecessor Mortgage Loan and the acquisition of the related REO Property as part of the Trust Fund). Each REO Loan shall be deemed to have an initial unpaid principal balance and Stated Principal Balance equal to the unpaid principal balance and Stated Principal Balance, respectively, of its predecessor Mortgage Loan (or, if applicable, Companion Loan) as of the date of the related REO Acquisition. All Scheduled Payments (other than a Balloon Payment), Assumed Scheduled Payments (in the case of a Balloon Mortgage Loan delinquent in respect of its Balloon Payment) and other amounts due and owing, or deemed to be due and owing, in respect of the predecessor Mortgage Loan as of the date of the related REO Acquisition, shall be deemed to continue to be due and owing in respect of an REO Loan. In addition, Nonrecoverable Advances and Unliquidated Advances (including interest on such Nonrecoverable Advances or Unliquidated Advances) with respect to such REO Loan that were paid from collections on the Mortgage Loans and resulted in principal distributed to the Certificateholders being reduced pursuant to Section 3.05(a) hereof, shall be deemed outstanding until recovered or until a Final Recovery Determination is made. Collections in respect of each REO Loan (after provision for amounts to be applied to the payment of, or to be reimbursed to the Master Servicer, the Special Servicer or the Trustee for the payment of, the costs of operating, managing, selling, leasing and maintaining the related REO Property or for the reimbursement of the Master Servicer, the Special Servicer or the Trustee for Advances as provided in this Agreement) shall be treated: first, as a recovery of Nonrecoverable Advances and Unliquidated Advances (including interest on such Nonrecoverable Advances and Unliquidated Advances) with respect to such REO Loan, in each case that relate to Advances that were paid from collections on the Mortgage Loans and resulted in principal distributed to the Certificateholders being reduced pursuant to Section 3.05(a) hereof; second, as a recovery of accrued and unpaid interest on such REO Loan at the related Mortgage Rate to but not including the Due Date in the Collection Period of receipt (exclusive of any portion thereof that constitutes Additional Interest); third, as a recovery of principal of such REO Loan to the extent of its entire unpaid principal balance; and fourth, in accordance with the normal servicing practices of the Master Servicer, as a recovery of any other amounts due and owing in respect of such REO Loan, including, without limitation, (i) Yield Maintenance Charges, Prepayment Premiums and Penalty Interest and (ii) Additional Interest and other amounts, in that order. Notwithstanding the foregoing, all amounts payable or reimbursable to the Master Servicer, the Special Servicer or the Trustee in respect of the predecessor Mortgage Loan as of the date of the related REO Acquisition, including, without limitation, any unpaid Servicing Fees and any unreimbursed Servicing Advances and P&I Advances, together with any interest accrued and payable to the Master Servicer, the Special Servicer or the Trustee in respect of such Servicing Advances and P&I Advances in accordance with Sections 3.03(d) and 4.03(d), shall continue to be payable or reimbursable to the Master Servicer, the Special Servicer or the Trustee, as the case may be, in respect of an REO Loan pursuant to Section 3.05(a).

REO Property”: A Mortgaged Property acquired on behalf and in the name of the Trustee for the benefit of the Certificateholders (subject to the related Intercreditor

 

 

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Agreement with respect to a Mortgaged Property securing a Loan Pair) through foreclosure, acceptance of a deed-in-lieu of foreclosure or otherwise in accordance with applicable law in connection with the default or imminent default of a Mortgage Loan.

REO Revenues”: All income, rents, profits and proceeds derived from the ownership, operation or leasing of any REO Property.

REO Tax”: As defined in Section 3.17(a)(i).

Reportable Event”: As defined in Section 8.17(i).

Reporting Party”: The Master Servicer, the Special Servicer, the Trustee, an Additional Servicer or a Servicing Participant.

Request for Release”: A request signed by a Servicing Officer, as applicable, of the Master Servicer in the form of Exhibit D-1 attached hereto or of the Special Servicer in the form of Exhibit D-2 attached hereto.

Required Appraisal”: With respect to each Required Appraisal Mortgage Loan, an appraisal of the related Mortgaged Property from an Independent Appraiser selected by the Special Servicer.

Required Appraisal Date”: With respect to any Required Appraisal Mortgage Loan, the earliest date on which any of the items specified in clauses (i) through (vi) of the first paragraph of the definition of Required Appraisal Mortgage Loan occurs.

Required Appraisal Mortgage Loan”: (i) Any Mortgage Loan that is 60 days or more delinquent in respect of any Periodic Payments, (ii) any Mortgage Loan that becomes an REO Loan, (iii) any Mortgage Loan that has been modified by the Special Servicer to reduce the amount of any Periodic Payment (other than a Balloon Payment), (iv) any Mortgage Loan with respect to which a receiver is appointed and continues in such capacity in respect of the related Mortgaged Property, (v) any Mortgage Loan with respect to which a Mortgagor declares bankruptcy or with respect to which the related Mortgagor is subject to a bankruptcy proceeding, (vi) any Mortgage Loan with respect to which any Balloon Payment on such Mortgage Loan has not been paid by its scheduled maturity date; provided, however, if the related Mortgagor continues to make its Assumed Scheduled Payment and diligently pursues refinancing, such Mortgage Loan shall not become a Required Appraisal Mortgage Loan until 60 days following such default or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and for which the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default (provided that if such refinancing does not occur during such time specified in the commitment, the related Mortgage Loan will immediately become a Required Appraisal Mortgage Loan) or (vii) any Mortgage Loan that is outstanding 60 days after the third anniversary of an extension of its Stated Maturity Date; provided, however, a Required Appraisal Mortgage Loan will cease to be a Required Appraisal Mortgage Loan:

 

 

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(a)       with respect to the circumstances described in clauses (i) and (iii) above, when the related Mortgagor has made three consecutive full and timely Periodic Payments under the terms of such Mortgage Loan (as such terms may be changed or modified in connection with a bankruptcy or similar proceeding involving the related Mortgagor or by reason of a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20); and

(b)       with respect to the circumstances described in clauses (iv), (v) and (vi) above, when such circumstances cease to exist in the good faith reasonable judgment of the Special Servicer and in accordance with the Servicing Standard, but, with respect to any bankruptcy or insolvency proceedings described in clauses (iv) and (v), no later than the entry of an order or decree dismissing such proceeding, and with respect to the circumstances described in clause (vi) above, no later than the date that the Special Servicer agrees to an extension pursuant to Section 3.20 hereof;

so long as at that time no circumstance identified in clauses (i) through (vi) above exists that would cause the Mortgage Loan to continue to be characterized as a Required Appraisal Mortgage Loan.

Required Appraisal Value”: An amount equal to 90% of the Appraised Value (net of any prior liens and estimated liquidation expenses and any other downward adjustments the Special Servicer may deem appropriate (without implying any obligation to do so) based upon its review of the Appraisal and such other information as the Special Servicer may deem appropriate) of the Mortgaged Property related to the subject Required Appraisal Mortgage Loan as determined by a Required Appraisal or letter update or internal valuation, if applicable; provided that for purposes of determining any Appraisal Reduction Amount in respect of such Required Appraisal Mortgage Loan, such Appraisal Reduction Amount shall be amended annually to reflect the Required Appraisal Value determined pursuant to any Required Appraisal or letter update or internal valuation, if applicable, of a Required Appraisal conducted subsequent to the original Required Appraisal performed pursuant to Section 3.09(a).

Reserve Account”: The account or accounts created and maintained pursuant to Section 3.03(f).

Reserve Funds”: With respect to any Mortgage Loan, any amounts delivered by the related Mortgagor to be held in escrow by or on behalf of the mortgagee representing reserves for environmental remediation, repairs, capital improvements, tenant improvements and/or leasing commissions with respect to the related Mortgaged Property.

Residual Certificate”: A Class R-I Certificate or Class R-II Certificate.

Responsible Officer”: When used with respect to (i) the initial Trustee, any officer or assistant officer in the Corporate Trust Office of the initial Trustee, and (ii) any successor trustee, any officer or assistant officer in the corporate trust department of the successor trustee, or any other officer or assistant officer of the successor trustee customarily performing functions similar to those performed by any of the above designated officers to

 

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whom a particular matter is referred by the successor trustee because of such officer’s knowledge of and familiarity with the particular subject.

Restricted Period”: The 40-day period prescribed by Regulation S commencing on the later of (a) the date upon which the Certificates are first offered to persons other than the managers and any other distributor (as defined in Regulation S) of the Certificates, and (b) the Closing Date.

Restricted Servicer Reports”: Each of the CMSA Servicer Watchlist/Portfolio Review Guidelines, CMSA Operating Statement Analysis, CMSA NOI Adjustment Worksheet and CMSA Comparative Financial Status Report. If a Restricted Servicer Report is filed with the Commission, it shall thereafter be an Unrestricted Servicer Report.

S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or its successor in interest. If neither such Rating Agency nor any successor remains in existence, “S&P” shall be deemed to refer to such other nationally recognized statistical rating agency or other comparable Person designated by the Depositor, notice of which designation shall be given to the Trustee, the Master Servicer and the Special Servicer, and specific ratings of S&P herein referenced shall be deemed to refer to the equivalent ratings of the party so designated.

Sarbanes-Oxley Act”: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).

Sarbanes-Oxley Certification”: A written certification signed by an officer of the Depositor that complies with (i) the Sarbanes-Oxley Act of 2002, as amended from time to time, including all necessary Regulation AB certification requirements, and (ii) Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time.

Scheduled Payment”: With respect to any Mortgage Loan, for any Due Date following the Cut-Off Date as of which it is outstanding, the scheduled Periodic Payment of principal and interest (other than Additional Interest) on such Mortgage Loan that is or would be, as the case may be, payable by the related Mortgagor on such Due Date under the terms of the related Mortgage Note as in effect on the Closing Date, without regard to any subsequent change in or modification of such terms in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted or agreed to by the Special Servicer pursuant to Section 3.20 or acceleration of principal by reason of default, and assuming that each prior Scheduled Payment has been made in a timely manner.

Securities Act”: The Securities Act of 1933, as amended.

Senior Certificate”: Any Class A-1, Class A-2, Class A-PB, Class A-3, Class A-1A Certificate or Class IO Certificate.

Sequential Pay Certificates”: Any Class A-1, Class A-2, Class A-PB, Class A-3, Class A-1A, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G,

 

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Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q or Class S Certificate.

Serviced Securitized Companion Loan”: Any Companion Loan that is a component of a Whole Loan that is lead serviced under this Agreement, if and for so long as each such Companion Loan is included in a Regulation AB securitization.

Serviced Whole Loan”: The Mortgage Loans that are identified on the Mortgage Loan Schedule as the Caplease Loan (loan number 2), the 2100 Ross Loan (loan number 5), the Llano Logistics Loan (loan number 7), the Glenbrooke at Palm Bay Loan (loan number 11), The Barrington Loan (loan number 23), the Winn-Dixie Distribution Center – Orlando, FL Loan (loan numbers 24.01 and 24.02), the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan (loan numbers 25.01 and 25.02), the Newforest Estates Loan (loan number 36), the Winn-Dixie Distribution – Fitzgerald, GA Loan (loan numbers 44.01 and 44.02) and the Dean Foods – Opa-Locka, FL Loan (loan numbers 75.01 and 75.02) in each case, together with its related Companion Loan(s).

Servicer Fee Amount”: With respect to each Sub-Servicer and any date of determination, the aggregate of the products obtained by multiplying, for each Mortgage Loan serviced by such Sub-Servicer, (a) the Stated Principal Balance of such Mortgage Loan as of the end of the immediately preceding Collection Period and (b) the servicing fee rate specified in the related Sub-Servicing Agreement for such Mortgage Loan. With respect to the Master Servicer and any date of determination, the aggregate of the products obtained by multiplying, for each Mortgage Loan (a) the Stated Principal Balance of such Mortgage Loan as of the end of the immediately preceding Collection Period and (b) the difference between the Master Servicing Fee Rate for such Mortgage Loan over the servicing fee rate (if any) applicable to such Mortgage Loan as specified in any Sub-Servicing Agreement related to such Mortgage Loan.

Servicer Reports”: Any of the Restricted Servicer Reports, the Unrestricted Servicer Reports, the CMSA Loan Setup File, the CMSA Loan Periodic Update File, the CMSA Financial File, CMSA Property File, the CMSA Advance Recovery Report, the CMSA Total Loan Report and a report reconciling Penalty Interest and late payment charges collected with interest on Advances and Additional Trust Fund Expenses.

Servicing Account”: The account or accounts created and maintained pursuant to Section 3.03(a).

Servicing Advances”: All customary, reasonable and necessary “out of pocket” costs and expenses incurred by or on behalf of the Master Servicer, the Special Servicer or the Trustee in connection with the servicing of a Mortgage Loan or a Companion Loan, or in connection with the administration of any related REO Property, including, but not limited to, the cost of (a) compliance with the obligations of the Master Servicer and the Special Servicer, if any, set forth in Section 3.02 and Section 3.03(c), (b) the preservation, insurance, restoration, protection and management of a Mortgaged Property, including the cost of any “forced placed” insurance policy purchased by the Master Servicer to the extent such cost is allocable to a particular Mortgaged Property that the Master Servicer or the Special Servicer is required to cause to be insured pursuant to Section 3.07(a), (c) obtaining any Insurance Proceeds or any

 

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Liquidation Proceeds of the nature described in clauses (i) through (v) of the definition of “Liquidation Proceeds,” (d) any enforcement or judicial proceedings with respect to a Mortgaged Property, including, without limitation, foreclosures, (e) any Required Appraisal or other appraisal expressly required or permitted to be obtained hereunder, (f) the operation, management, maintenance and liquidation of any such REO Property, including, without limitation, appraisals and compliance with Section 3.16(a) (to the extent not covered by available funds in the REO Account) and Section 3.20(h) (to the extent not paid by the related Mortgagor) and (g) compliance with the obligations of the Master Servicer or the Trustee set forth in Section 2.03(a) or (b). Notwithstanding anything to the contrary, “Servicing Advances” shall not include allocable overhead of the Master Servicer or the Special Servicer, such as costs for office space, office equipment, supplies and related expenses, employee salaries and related expenses and similar internal costs and expenses or costs and expenses incurred by any such party in connection with its purchase of a Mortgage Loan or REO Property, or costs or expenses expressly required to be borne by the Master Servicer or Special Servicer without reimbursement pursuant to the terms of this Agreement.

Servicing Criteria”: The “servicing criteria” set forth in Item 1122(d) of Regulation AB.

Servicing Fees”: With respect to each Mortgage Loan, Companion Loan and REO Loan, the Master Servicing Fee and the Special Servicing Fee.

Servicing File”: Any documents, certificates, opinions and reports (other than documents required to be part of the related Mortgage File) delivered by the related Mortgagor in connection with, or relating to the origination and servicing of any Mortgage Loan or Companion Loan which are reasonably required for the ongoing administration of the Mortgage Loan and the Companion Loan, including management agreements, cash management agreements, lockbox agreements, franchise agreements, franchise comfort letters (and evidence of required notification of transfer), appraisals, surveys, engineering reports, environmental reports, operation and maintenance (O&M) plans, financial statements, leases, rent rolls and tenant estoppels.

Servicing Officer”: Any officer or employee of the Master Servicer, the Special Servicer or any Additional Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by such party to the Trustee and the Depositor on the Closing Date, as such list may be amended from time to time.

Servicing Participant”: Any Additional Servicer, Sub-Servicer, Subcontractor or any other Person, other than the Master Servicer, the Special Servicer and the Trustee, that is performing activities addressed by the Servicing Criteria, unless such Person’s activities relate only to 5% or less of the Mortgage Loans or the Servicer has taken responsibility for the servicing activities as permitted under Regulation AB.

Servicing-Released Bid”: As defined in Section 7.01(c).

Servicing-Retained Bid”: As defined in Section 7.01(c).

 

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Servicing Standard”: With respect to the Master Servicer or the Special Servicer, as applicable, the servicing and administration of the Mortgage Loans and the Companion Loans for which it is responsible hereunder (a) in the same manner in which, and with the same care, skill, prudence and diligence with which the Master Servicer or the Special Servicer, as the case may be, generally services and administers similar mortgage loans with similar mortgagors (i) for other third-parties, giving due consideration to customary and usual standards of practice of prudent institutional commercial mortgage lenders servicing their own loans or (ii) held in its own portfolio, whichever standard is higher, (b) with a view to the maximization of the recovery on such Mortgage Loan on a net present value basis and the best interests of the Certificateholders and the Trust Fund or, if a Loan Pair is involved, with a view towards the maximization of recovery on such Loan Pair to the Certificateholders, the related Companion Holders and the Trust Fund (as a collective whole, taking into account that the Subordinate Companion Loans are subordinate to the related Co-Lender Loans and the Pari Passu Companion Loans are pari passu in right of payment with the Pari Passu Mortgage Loans, in each case to the extent set forth in the related Intercreditor Agreement) and (c) without regard to (i) any relationship that the Master Servicer or the Special Servicer, as the case may be, or any Affiliate thereof may have with the related Mortgagor, the Depositor, any Mortgage Loan Seller or any other party to the transaction or any Affiliate thereof; (ii) the ownership of any Certificate, mezzanine loan or Companion Loan (or other interest in any Mortgage Loan, mezzanine loan or Companion Loan) by the Master Servicer or the Special Servicer, as the case may be, or by any Affiliate thereof; (iii) the right of the Master Servicer or the Special Servicer, as the case may be, to receive compensation or other fees for its services rendered pursuant to this Agreement; (iv) the obligations of the Master Servicer to make Advances; (v) the ownership, servicing or management by the Master Servicer or the Special Servicer, as the case may be, or any Affiliate thereof for others of any other mortgage loans or mortgaged property; (vi) any obligation of the Master Servicer or any Affiliate of the Master Servicer to repurchase or substitute a Mortgage Loan as a Mortgage Loan Seller; (vii) any obligation of the Master Servicer or any Affiliate of the Master Servicer to cure a breach of a representation and warranty with respect to a Mortgage Loan; and (viii) any debt the Master Servicer or Special Servicer or any Affiliate of either has extended to any Mortgagor or any Affiliate of such Mortgagor.

Servicing Transfer Event”: With respect to any Mortgage Loan, the occurrence of any of the events described in clauses (a) through (h) of the definition of “Specially Serviced Mortgage Loan”.

Single Certificate”: For purposes of Section 4.02, a hypothetical Certificate of any Class of Regular Certificates evidencing a $1,000 denomination.

Significant Obligor”: With respect to any date of determination, any Mortgage Loan meeting the definition of “significant obligor” under Regulation AB. As of the Closing Date, the Significant Obligor is the Ashford Hospitality Pool 5 Loan.

Special Reserve Account”: As used herein, the Trustee may create a segregated custodial account or accounts pursuant to Section 2.02(d) in trust for the Certificateholders, which shall be entitled “Wells Fargo Bank, N.A., as Trustee, in trust for the registered holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,

 

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Series 2007-C34 and [name of party providing the funds]”. Any such account will be an Eligible Account.

Special Servicer”: With respect to each Mortgage Loan, CWCapital Asset Management LLC, or, any successor special servicer appointed as herein provided.

Special Servicing Fee”: With respect to each Specially Serviced Mortgage Loan and each REO Loan, the fee designated as such and payable to the Special Servicer pursuant to the first paragraph of Section 3.11(c).

Special Servicing Fee Rate”: With respect to each Specially Serviced Mortgage Loan and each REO Loan, 0.25% per annum.

Specially Serviced Mortgage Loan”: Any Mortgage Loan or Companion Loan as to which any of the following events have occurred:

(a)       the related Mortgagor shall have (i) failed to make any Balloon Payment; provided, however, if the Mortgagor continues to make its Assumed Scheduled Payment and diligently pursues refinancing, a Servicing Transfer Event shall not occur until 60 days following such default (or, if the Master Servicer has, within 60 days after the Due Date of such Balloon Payment, received written evidence from an institutional lender of such lender’s binding commitment (which is reasonably acceptable to the Special Servicer and for which the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 Business Days)) to refinance such Mortgage Loan, 120 days following such default) (provided that if such refinancing does not occur during the time period specified in such written refinancing commitment, a Servicing Transfer Event will be deemed to occur); or (ii) failed to make when due any Periodic Payment (other than a Balloon Payment), and such failure has continued unremedied for 60 days; or

(b)       the Master Servicer or Special Servicer (in the case of the Special Servicer, with the consent of the Controlling Class Representative) shall have determined (with written notice of any such determination by the Special Servicer to be promptly given by the Special Servicer to the Master Servicer and with written notice of any such determination by the Master Servicer to be promptly given by the Master Servicer to the Special Servicer), in its good faith reasonable judgment, and in accordance with the Servicing Standard, based on communications with the related Mortgagor, that a default in making a Periodic Payment (including a Balloon Payment) or any other default under the applicable Mortgage Loan documents that would (with respect to such other default) materially impair the value of the Mortgaged Property as security for the Mortgage Loan and, if applicable, Companion Loan or otherwise would materially adversely affect the interests of Certificateholders and would continue unremedied beyond the applicable grace period under the terms of the Mortgage Loan (or, if no grace period is specified, for 60 days; provided that a default that would give rise to an acceleration right without any grace period shall be deemed to have a grace period equal to zero) is likely to occur and is likely to remain unremedied for at least 60 days; or

 

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(c)       there shall have occurred a default (other than as described in clause (a) above) that the Master Servicer or the Special Servicer (in the case of the Special Servicer, with the consent of the Controlling Class Representative) shall have determined (with written notice of any such determination by the Special Servicer to be promptly given by the Special Servicer to the Master Servicer and with written notice of any such determination by the Master Servicer to be promptly given by the Master Servicer to the Special Servicer), in its good faith and reasonable judgment, and in accordance with the Servicing Standard, materially impairs the value of the Mortgaged Property as security for the Mortgage Loan and, if applicable, Companion Loan, or otherwise materially adversely affects the interests of Certificateholders and if applicable, holders of the related Companion Loans, as a collective whole, and is likely to continue unremedied beyond the applicable grace period under the terms of the Mortgage Loan (or, if no grace period is specified, for 60 days; provided that a default that gives rise to an acceleration right without any grace period shall be deemed to have a grace period equal to zero); provided, however, in the event the Special Servicer with the consent of the Controlling Class Representative determines that the related Mortgagor does not need to maintain terrorism insurance as provided in Section 3.07(a), no default related to the failure to obtain such insurance shall be deemed to be outstanding for purposes of this clause(c); or

(d)       a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the related Mortgagor; provided that if such decree or order is discharged, dismissed or stayed within 60 days it shall not be a Specially Serviced Mortgage Loan (and no Special Servicing Fees shall be payable); or

(e)       the related Mortgagor shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to such Mortgagor or of or relating to all or substantially all of its property; or

(f)        the related Mortgagor 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, bankruptcy or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or

(g)       the Master Servicer shall have force placed insurance against damages or losses arising from acts of terrorism due to the failure of the related Mortgagor to maintain or cause such insurance to be maintained and (1) subsequent to such force placement such Mortgagor fails to maintain or cause to be maintained insurance coverage against damages for losses arising from acts of terrorism for a period of 60 days (or such shorter time period as the Controlling Class Representative may consent to) or (2) the Master Servicer fails to have been reimbursed from any Servicing Advances made in connection with the force placement of such insurance coverage (unless the

 

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circumstances giving rise to such forced placement of such insurance coverage have otherwise been cured and the Master Servicer has been reimbursed for any Servicing Advances made in connection with the forced placement of such insurance coverage); or

(h)       the Master Servicer shall have received notice of the commencement of foreclosure or similar proceedings with respect to the related Mortgaged Property;

provided, however, a Companion Loan shall be deemed to be a Specially Serviced Mortgage Loan if the related Co-Lender Loan becomes a Specially Serviced Mortgage Loan and a Co-Lender Loan shall be deemed to be a Specially Serviced Mortgage Loan if the related Companion Loan becomes a Specially Serviced Mortgage Loan; provided, further, however, a Mortgage Loan or Companion Loan will cease to be a Specially Serviced Mortgage Loan:

(i)       with respect to the circumstances described in clause (a) above, when the related Mortgagor has made three consecutive full and timely Periodic Payments under the terms of such Mortgage Loan or Companion Loan (as such terms may be changed or modified in connection with a bankruptcy or similar proceeding involving the related Mortgagor or by reason of a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20);

(ii)      with respect to the circumstances described in clauses (b), (d), (e) and (f) above, when such circumstances cease to exist in the good faith reasonable judgment of the Special Servicer and in accordance with the Servicing Standard, but, with respect to any bankruptcy or insolvency proceedings described in clauses (d), (e) and (f), no later than the entry of an order or decree dismissing such proceeding;

(iii)     with respect to the circumstances described in clause (c) and (g) above, when such default is cured; and

(iv)      with respect to the circumstances described in clause (h) above, when such proceedings are terminated;

so long as at that time no circumstance identified in clauses (a) through (h) above exists that would cause the Mortgage Loan (or, with respect to a Co-Lender Loan, the related Companion Loan, or, with respect to a Companion Loan, the related Co-Lender Loan) to continue to be characterized as a Specially Serviced Mortgage Loan; provided no additional default is foreseeable in the reasonable good faith judgment of the Special Servicer.

Startup Day”: With respect to each ED Loan REMIC, REMIC I and REMIC II, the day designated as such in Section 10.01(c).

State or Local Tax”: Any tax imposed by the States of New York, North Carolina and Minnesota and by any other state or local taxing authorities; provided that such states and such other state and local taxing authorities, by notice to the Trustee, assert jurisdiction over the Trust Fund or any portion thereof, or which, according to an Opinion of Counsel addressed to the Trustee, have such jurisdiction.

 

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Stated Maturity Date”: With respect to any Mortgage Loan or Companion Loan, the Due Date specified in the Mortgage Note (as in effect on the Closing Date) on which the last payment of principal is due and payable under the terms of the Mortgage Note (as in effect on the Closing Date), without regard to any change in or modification of such terms in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan or Companion Loan granted or agreed to by the Special Servicer pursuant to Section 3.20 and, in the case of an ARD Loan, without regard to its Anticipated Repayment Date.

Stated Principal Balance”: With respect to any Mortgage Loan, as of any date of determination, an amount (which amount shall not be less than zero) equal to (x) the Cut-Off Date Balance of such Mortgage Loan (or, in the case of a Qualified Substitute Mortgage Loan, the unpaid principal balance after application of all principal payments due on or before the related date of substitution, whether or not received), plus (y) any Mortgage Deferred Interest added to the principal balance of such Mortgage Loan on or before the end of the immediately preceding Collection Period minus (z) the sum of:

(i)       the principal portion of each Periodic Payment due on such Mortgage Loan after the Cut-Off Date or the related date of substitution, as the case may be, to the extent received from the Mortgagor or advanced by the Master Servicer or the Trustee and distributed to Certificateholders on or before such date of determination;

(ii)      all Principal Prepayments received with respect to such Mortgage Loan after the Cut-Off Date or the related date of substitution, as the case may be, to the extent distributed to Certificateholders on or before such date of determination;

(iii)     the principal portion of all Insurance Proceeds and Liquidation Proceeds received with respect to such Mortgage Loan after the Cut-Off Date or the related date of substitution, as the case may be, to the extent distributed to Certificateholders on or before such date of determination;

(iv)     the principal portion of any Realized Loss incurred in respect of such Mortgage Loan during the related Collection Period; and

(v)      any amount of reduction in the outstanding principal balance of such Mortgage Loan resulting from a Deficient Valuation that occurred prior to the end of the Collection Period for the most recent Distribution Date.

With respect to any REO Loan, as of any date of determination, an amount equal to (x) the Stated Principal Balance of the predecessor Mortgage Loan as of the date of the related REO Acquisition, minus (y) the sum of:

(A)      the principal portion of any P&I Advance made with respect to the predecessor Mortgage Loan on or after the date of the related REO Acquisition, to the extent distributed to Certificateholders on or before such date of determination; and

 

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(B)      the principal portion of all Insurance Proceeds, Liquidation Proceeds and REO Revenues received with respect to such REO Loan, to the extent distributed to Certificateholders on or before such date of determination.

A Mortgage Loan or an REO Loan shall be deemed to be part of the Trust Fund and to have an outstanding Stated Principal Balance until the Distribution Date on which the payments or other proceeds, if any, received in connection with a Liquidation Event in respect thereof are to be (or, if no such payments or other proceeds are received in connection with such Liquidation Event, would have been) distributed to Certificateholders. In addition, to the extent that principal from general collections is used to reimburse Nonrecoverable Advances pursuant to Sections 3.05(a)(vii) and (viii) or Workout Delayed Reimbursement Amounts pursuant to Sections 3.05(a)(vii) and (viii) (which are only reimbursable from principal collections on the Mortgage Pool as set forth in this Agreement) and such amount has not been included as part of the Principal Distribution Amount, such amount shall nevertheless be deemed to be part of the Principal Distribution Amount for purposes of clauses (i), (ii) and (iii) above. Notwithstanding the foregoing, if any Mortgage Loan is paid in full, liquidated or otherwise removed from the Trust Fund, commencing as of the first Distribution Date following the Collection Period during which such event occurred, the Stated Principal Balance of such Mortgage Loan will be zero.

With respect to any Companion Loan on any date of determination, the Stated Principal Balance shall equal the unpaid principal balance of such Companion Loan (subject to the related Intercreditor Agreement). In the case of the ED Loans, the principal balance of the related ED Loan REMIC Regular Interest shall equal the Stated Principal Balance of the related ED Loan.

Subcontractor ”: Any third-party or affiliated vendor, subcontractor or other Person utilized by a Servicer, a Sub-Servicer, the Trustee or the Custodian, as applicable, that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the commercial mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans.

Subordinate Companion Holder”: The holders of any of the Subordinate Companion Loans.

Subordinate Companion Loan”: Each of the Caplease Subordinate Companion Loans, the 2100 Ross Subordinate Companion Loan, the Llano Logistics Subordinate Companion Loan, the Glenbrooke at Palm Bay Subordinate Companion Loan, The Barrington Subordinate Companion Loan, the Winn-Dixie Distribution Center - Orlando, FL Subordinate Companion Loan, the Winn-Dixie Headquarters/Manufacturing Facility - Subordinate Companion Loan, the Newforest Estates Subordinate Companion Loan, the Winn-Dixie Distribution - Fitzgerald, GA Subordinate Companion Loan and the Dean Foods - Opa-Locka, FL Subordinate Companion Loan individually or collectively, as the context may require.

 

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Subordinated Certificate”: Any Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class S, Class Z, Class R-I or Class R-II Certificate.

Sub-Servicer ”: Any Person with which the Master Servicer, the Special Servicer or an Additional Servicer has entered into a Sub-Servicing Agreement for the performance (whether directly or through Sub-Servicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Master Servicer or the Special Servicer under this Agreement or by an Additional Servicer under a servicing agreement, with respect to some or all of the Mortgage Loans, that are identified in Item 1122(d) of Regulation AB.

Sub-Servicing Agreement”: The written contract between the Master Servicer or the Special Servicer, on the one hand, and any Sub-Servicer, on the other hand, relating to servicing and administration of Mortgage Loans as provided in Section 3.22.

Substitution Shortfall Amount”: With respect to a substitution pursuant to Section 2.03(a) hereof, an amount equal to the excess, if any, of the Purchase Price of the Mortgage Loan being replaced calculated as of the date of substitution over the Stated Principal Balance of the related Qualified Substitute Mortgage Loan as of the date of substitution. In the event that one or more Qualified Substitute Mortgage Loans are substituted (at the same time) for one or more deleted Mortgage Loans, the Substitution Shortfall Amount shall be determined as provided in the preceding sentence on the basis of the aggregate Purchase Prices of the Mortgage Loan or Mortgage Loans being replaced and the aggregate Stated Principal Balances of the related Qualified Substitute Mortgage Loan or Mortgage Loans.

Successful Bidder”: As defined in Section 7.01(c).

Tax Matters Person”: With respect to each ED Loan REMIC, REMIC I and REMIC II, the Person designated as the “tax matters person” of such REMIC in the manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1, which Person shall be the applicable Plurality Residual Certificateholder.

Tax Returns”: The federal income tax returns on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) 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 ED Loan REMIC, REMIC I and REMIC II due to its classification as a REMIC under the REMIC Provisions, and the federal income tax return to be filed on behalf of each of the Grantor Trusts due to their classification as a grantor trust under the Grantor Trust 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 Internal Revenue Service under any applicable provisions of federal tax law or any other governmental taxing authority under applicable State and Local Tax laws.

 

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Tenants in Common Loan”: Those certain Mortgage Loans which are identified on Exhibit Z hereto for which the related Mortgagors own the related Mortgaged Property as tenants-in-common and the related Mortgagor is subject to further syndication.

Time of Sale”: As defined in that certain Underwriting Agreement, dated as of November 1, 2007, among the Depositor, Wachovia and the Underwriters.

Transfer”: Any direct or indirect transfer, sale, pledge, hypothecation, or other form of assignment of any Ownership Interest in a Certificate.

Transferee”: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.

Transferor”: Any Person who is disposing by Transfer any Ownership Interest in a Certificate.

Trust Fund”: Collectively, (i) all of the assets of each ED Loan REMIC, REMIC I and REMIC II and (ii) the Additional Interest Grantor Trust Assets.

Trust-Related Litigation”: As defined in Section 3.30.

Trustee”: Wells Fargo Bank, N.A., its successor in interest, or any successor trustee appointed as herein provided.

Trustee Fee”: With respect to each Mortgage Loan and REO Loan for any Distribution Date, an amount equal to one month’s interest for the most recently ended calendar month (calculated on a 30/360 Basis), accrued at the Trustee Fee Rate on the Stated Principal Balance of such Mortgage Loan or REO Loan, as the case may be, outstanding immediately following the prior Distribution Date (or, in the case of the initial Distribution Date, as of the Closing Date).

Trustee Fee Rate”: 0.0015% per annum.

UCC”: The Uniform Commercial Code in effect in the applicable jurisdiction.

UCC Financing Statement”: A financing statement executed and filed pursuant to the Uniform Commercial Code, as in effect in any relevant jurisdiction.

Underwriter ”: Each of Wachovia Capital Markets, LLC, Barclays Capital Inc. and Lehman Brothers Inc. or, in each case, its successor in interest.

United States Person”: A citizen or resident of the United States, a corporation or partnership (including an entity treated as a corporation or partnership for federal income tax purposes) created or organized in, or under the laws of, the United States, any State thereof or the District of Columbia unless in the case of a partnership, Treasury Regulations are adopted that provide otherwise, an estate whose income is includable in gross income for United States federal income tax purposes regardless of its source or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more

 

 

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United States Persons have the authority to control all substantial decisions of the trust, all within the meaning of Section 7701(a)(30) of the Code (or, to the extent provided in applicable Treasury regulations, certain trusts in existence on August 20, 1996, that are eligible to elect to be treated as United States Persons).

Unliquidated Advance”: Any Advance previously made by a party hereto that has been previously reimbursed, as between the Person that made the Advance hereunder, on the one hand, and the Trust Fund, on the other, as part of a Workout-Delayed Reimbursement Amount pursuant to subsections (ii) and (vi) of Section 3.05(a) but that has not been recovered from the Mortgagor or otherwise from collections on or the proceeds of the Mortgage Loan or REO Property in which the Trust Fund holds a beneficial interest in respect of which the Advance was made.

Unrestricted Servicer Reports”: Each of the CMSA Delinquent Loan Status Report, CMSA Historical Loan Modification and Corrected Mortgage Loan Report, CMSA Loan Level Reserve/LOC Report, CMSA REO Status Report, the CMSA Advance Recovery Report and the CMSA Total Loan Report.

Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. At all times during the term of this Agreement, 100% of the voting rights for the Certificates will be allocated among the respective Classes of Certificates as follows: (i) 4.0% in the case of the Class IO Certificates and (ii) in the case of any Class of Sequential Pay Certificates, a percentage equal to the product of 96.0% and a fraction, the numerator of which is equal to the aggregate Certificate Principal Balance of such Class of Certificates (as adjusted by treating any Appraisal Reduction Amount as a Realized Loss solely for the purposes of adjusting Voting Rights) and the denominator of which is equal to the aggregate Certificate Principal Balances of all Classes of Sequential Pay Certificates, determined as of the Distribution Date immediately preceding such time; provided, however, the treatment of any Appraisal Reduction Amount as a Realized Loss shall not reduce the Certificate Principal Balances of any Class for the purpose of determining the Controlling Class, the Controlling Class Representative or the Majority Subordinate Certificateholder. The holders of the Class R-I Certificates, Class R-II Certificates and Class Z Certificates will not be entitled to any Voting Rights. Voting Rights allocated to a Class of Certificates will be allocated among the related Certificateholders in proportion to the percentage interests in such Class evidenced by their respective Certificates. The Class A-1 Certificates, Class A-2 Certificates, Class A-PB Certificates, Class A-3 Certificates and Class A-1A Certificates will be treated as one Class for determining the Controlling Class. In addition, if either the Master Servicer or the Special Servicer is the holder of any Sequential Pay Certificate, neither the Master Servicer nor Special Servicer, in its capacity as a Certificateholder, will have Voting Rights with respect to matters concerning compensation affecting the Master Servicer or the Special Servicer.

Wachovia”: Wachovia Bank, National Association, or its successor in interest.

Wachovia Mortgage Loan Purchase Agreement”: That certain mortgage loan purchase agreement, dated as of November 1, 2007 between the Depositor and Wachovia and relating to the transfer of the Wachovia Mortgage Loans to the Depositor.

 

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Wachovia Mortgage Loans”: Each of the Mortgage Loans transferred and assigned to the Depositor pursuant to the Wachovia Mortgage Loan Purchase Agreement.

Weighted Average Net Mortgage Rate”: With respect to any Distribution Date, the rate per annum equal to the weighted average, expressed as a percentage and rounded to six decimal places, of the respective Net Mortgage Rates applicable to the Mortgage Loans as of the first day of the related Collection Period, weighted on the basis of their respective Stated Principal Balances immediately following the preceding Distribution Date; provided, however, that in the case of the ED Loans, “Mortgage Loan” shall refer to each ED Loan REMIC Regular interest for purposes of this definition.

WHFIT”: A “Widely Held Fixed Investment Trust” as that term is defined in Treasury Regulations Section 1.671-5(b)(22) or successor provisions.

WHFIT Regulations”: Treasury Regulations section 1.671-5, as amended.

WHMT”: A “Widely Held Mortgage Trust” as that term is defined in Treasury Regulations section 1.671-5(b)(23) or successor provisions.

Whole Loan”: Collectively, each Co-Lender Loan and their related Companion Loans.

Winn-Dixie Distribution – Fitzgerald, GA ED Loan”: That certain Mortgage Loan identified on the Mortgage Loan Schedule as loan numbers 44.01 and 44.02.

Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC”: The segregated pool of assets subject hereto with respect to which a separate REMIC election is to be made and consisting of the Winn-Dixie Distribution – Fitzgerald, GA ED Loan, proceeds thereof, amounts with respect thereto held in the Certificate Account, the Interest Reserve Account, the Distribution Account, and the REO Account, and those items with respect to the Winn-Dixie Distribution – Fitzgerald, GA ED Loan specified in clauses (iii), (iv) (with respect to the Wachovia Mortgage Loan Purchase Agreement) and (vi) of the definition of “REMIC I”, and the rights of the Depositor under Section 21 of the Wachovia Mortgage Loan Purchase Agreement.

Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Interests”: Collectively, the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interests and the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Residual Interests.

Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interest”: The uncertificated “regular interest,” within the meaning of Code Section 860G(a)(1), in the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC. The principal balance of the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interest shall equal the outstanding Stated Principal Balance of the Winn-Dixie Distribution – Fitzgerald, GA ED Loan (or, if applicable, the deemed Stated Principal Balance of any successor REO Loan). The interest rate on the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interest shall be the Net Mortgage Rate of the Winn-Dixie Distribution – Fitzgerald, GA ED Loan. Payments and other collections of amounts received on or in respect to the Winn-Dixie Distribution – Fitzgerald, GA ED Loan (or any related REO Property) shall be deemed distributable

 

 

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on the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Regular Interest.

Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Residual Interest”: The sole class of “residual interest,” within the meaning of Code Section 860G(a)(2), in the Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC. The Winn-Dixie Distribution – Fitzgerald, GA ED Loan REMIC Residual Interest shall be represented by the Class R-I Certificates.

Winn-Dixie Distribution – Fitzgerald, GA Intercreditor Agreement”: The Intercreditor Agreement Among Note Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Note AB Holder and American Capital Strategies, Ltd., as Note C Holder, relating to the Winn-Dixie Distribution – Fitzgerald, GA Whole Loan.

Winn-Dixie Distribution – Fitzgerald, GA Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan numbers 44.01 and 44.02 on the Mortgage Loan Schedule).

Winn-Dixie Distribution – Fitzgerald, GA Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Winn-Dixie Distribution – Fitzgerald, GA Loan and subordinate in right of entitlement to the Winn-Dixie Distribution – Fitzgerald, GA Loan.

Winn-Dixie Distribution – Fitzgerald, GA Whole Loan”: The Winn-Dixie Distribution – Fitzgerald, GA Loan together with the Winn-Dixie Distribution – Fitzgerald, GA Subordinate Companion Loan.

Winn-Dixie Distribution Center – Orlando, FL ED Loan”: That certain Mortgage Loan identified on the Mortgage Loan Schedule as loan numbers 24.01 and 24.02.

Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC”: The segregated pool of assets subject hereto with respect to which a separate REMIC election is to be made and consisting of the Winn-Dixie Distribution Center – Orlando, FL ED Loan, proceeds thereof, amounts with respect thereto held in the Certificate Account, the Interest Reserve Account, the Distribution Account, and the REO Account, and those items with respect to the Winn-Dixie Distribution Center – Orlando, FL ED Loan specified in clauses (iii), (iv) (with respect to the Wachovia Mortgage Loan Purchase Agreement) and (vi) of the definition of “REMIC I”, and the rights of the Depositor under Section 21 of the Wachovia Mortgage Loan Purchase Agreement.

Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Interests”: Collectively, the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interests and the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Residual Interests.

Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interest”: The uncertificated “regular interest,” within the meaning of Code Section 860G(a)(1), in the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC. The principal balance

 

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of the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interest shall equal the outstanding Stated Principal Balance of the Winn-Dixie Distribution Center – Orlando, FL ED Loan (or, if applicable, the deemed Stated Principal Balance of any successor REO Loan). The interest rate on the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interest shall be the Net Mortgage Rate of the Winn-Dixie Distribution Center – Orlando, FL ED Loan. Payments and other collections of amounts received on or in respect to the Winn-Dixie Distribution Center – Orlando, FL ED Loan (or any related REO Property) shall be deemed distributable on the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Regular Interest.

Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Residual Interest”: The sole class of “residual interest,” within the meaning of Code Section 860G(a)(2), in the Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC. The Winn-Dixie Distribution Center – Orlando, FL ED Loan REMIC Residual Interest shall be represented by the Class R-I Certificates.

Winn-Dixie Distribution Center – Orlando, FL Intercreditor Agreement”: The Intercreditor Agreement Among Note Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Note AB1 Holder and American Capital Strategies, Ltd., as Note C Holder, relating to the Winn-Dixie Distribution Center – Orlando, FL Whole Loan.

Winn-Dixie Distribution Center – Orlando, FL Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan numbers 24.01 and 24.02 on the Mortgage Loan Schedule).

Winn-Dixie Distribution Center – Orlando, FL Pari Passu Intercreditor Agreement”: The Intercreditor Agreement Among Note AB Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Lead Lender and American Capital Strategies, Ltd., as Co-Lender, relating to the Winn-Dixie Distribution Center – Orlando, FL Whole Loan.

Winn-Dixie Distribution Center – Orlando, FL Pari Passu Companion Loans”: Those certain mortgage loans evidenced by certain notes, none of which is an asset of the Trust Fund, secured by the Mortgaged Property securing the Winn-Dixie Distribution Center – Orlando, FL Loan and pari passu in right of entitlement with the Winn-Dixie Distribution Center – Orlando, FL Loan.

Winn-Dixie Distribution Center – Orlando, FL Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Winn-Dixie Distribution Center – Orlando, FL Loan and subordinate in right of entitlement to the Winn-Dixie Distribution Center – Orlando, FL Loan.

Winn-Dixie Distribution Center – Orlando, FL Whole Loan”: The Winn-Dixie Distribution Center – Orlando, FL Loan together with the Winn-Dixie Distribution Center – Orlando, FL Subordinate Companion Loan and the Winn-Dixie Distribution Center – Orlando, FL Pari Passu Companion Loans.

 

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“Section 1.01 Definition of “Class H Certificate”Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan”: That certain Mortgage Loan identified on the Mortgage Loan Schedule as loan numbers 25.01 and 25.02.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC”: The segregated pool of assets subject hereto with respect to which a separate REMIC election is to be made and consisting of the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan, proceeds thereof, amounts with respect thereto held in the Certificate Account, the Interest Reserve Account, the Distribution Account, and the REO Account, and those items with respect to the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan specified in clauses (iii), (iv) (with respect to the Wachovia Mortgage Loan Purchase Agreement) and (vi) of the definition of “REMIC I”, and the rights of the Depositor under Section 21 of the Wachovia Mortgage Loan Purchase Agreement.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Interests”: Collectively, the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interests and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Residual Interests.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interest”: The uncertificated “regular interest,” within the meaning of Code Section 860G(a)(1), in the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC. The principal balance of the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interest shall equal the outstanding Stated Principal Balance of the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan (or, if applicable, the deemed Stated Principal Balance of any successor REO Loan). The interest rate on the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interest shall be the Net Mortgage Rate of the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan. Payments and other collections of amounts received on or in respect to the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan (or any related REO Property) shall be deemed distributable on the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Regular Interest.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Residual Interest”: The sole class of “residual interest,” within the meaning of Code Section 860G(a)(2), in the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC. The Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL ED Loan REMIC Residual Interest shall be represented by the Class R-I Certificates

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Intercreditor Agreement”: The Intercreditor Agreement Among Note Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Note AB1 Holder and American Capital Strategies, Ltd., as Note C Holder, relating to the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Whole Loan.

 

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Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan”: That certain Mortgage Loan which is included in the Trust Fund (identified as loan numbers 25.01 and 25.02 on the Mortgage Loan Schedule).

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Intercreditor Agreement”: The Intercreditor Agreement Among Note AB Holders, dated November 13, 2007, by and between Wachovia Bank, National Association, as Lead Lender and American Capital Strategies, Ltd., as Co-Lender, relating to the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Whole Loan.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Companion Loans”: Those certain mortgage loans evidenced by certain notes, none of which is an asset of the Trust Fund, secured by the Mortgaged Property securing the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan and pari passu in right of entitlement with the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Subordinate Companion Loan”: That certain mortgage loan evidenced by a note, which is not an asset of the Trust Fund, secured by the Mortgaged Property securing the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan and subordinate in right of entitlement to the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan.

Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Whole Loan”: The Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Loan together with the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Subordinate Companion Loan and the Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Companion Loans.

Winn-Dixie Indentures”: The indenture dated as of August 10, 1999 between ZSF/WD Jacksonville, LLC, as issuer and Deutsche Bank Trust Company Americas, f/k/a Bankers Trust Company, as trustee; the indenture dated as of August 10, 1999 between ZSF/WD Opa Locka, LLC, as issuer and Deutsche Bank Trust Company Americas, f/k/a Bankers Trust Company, as trustee; the indenture dated as of August 10, 1999 between ZSF/WD Orlando, LLC, as issuer and Deutsche Bank Trust Company Americas, f/k/a Bankers Trust Company, as trustee; and the indenture dated as of August 10, 1999 between ZSF/WD Fitzgerald, LLC, as issuer and Deutsche Bank Trust Company Americas, f/k/a Bankers Trust Company, as trustee.

Winn-Dixie Subordinate Intercreditor Agreements”: The Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Intercreditor Agreement, the Winn-Dixie Distribution – Fitzgerald, GA Intercreditor Agreement; the Dean Foods – Opa-Locka, FL Intercreditor Agreement and the Winn-Dixie Distribution Center – Orlando, FL Intercreditor Agreement.

Winn-Dixie Loans”: The Winn-Dixie Distribution Center - Orlando, FL Loan, the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan, the Dean Foods - Opa-Locka, FL Loan and the Winn-Dixie Distribution - Fitzgerald, GA Loan.

 

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Winn-Dixie Pari Passu Intercreditor Agreements”: The Winn-Dixie Headquarters/Manufacturing Facility – Jacksonville, FL Pari Passu Intercreditor Agreement and the Winn-Dixie Distribution Center – Orlando, FL Pari Passu Intercreditor Agreement.

Winn-Dixie Pari Passu Loans”: The Winn-Dixie Distribution Center - Orlando, FL Loan and the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Loan.

Workout-Delayed Reimbursement Amounts”: With respect to any Mortgage Loan, the amount of any Advance made with respect to such Mortgage Loan on or before the date such Mortgage Loan becomes (or, but for the making of three Monthly Payments under its modified terms, would then constitute) a Corrected Mortgage Loan, together with (to the extent accrued and unpaid) interest on such Advances, to the extent that (i) such Advance (and any interest thereon) is not reimbursed to the Person who made such Advance on or before the date, if any, on which such Mortgage Loan becomes a Corrected Mortgage Loan and (ii) the amount of such Advance (and any interest thereon) becomes an obligation of the Mortgagor to pay such amount over a period of time rather than immediately or on the next Due Date under the terms of the modified loan documents.

Workout Fee”: With respect to each Corrected Mortgage Loan, the fee designated as such and payable to the Special Servicer pursuant to the second paragraph of Section 3.11(c).

Workout Fee Rate”: With respect to each Corrected Mortgage Loan, 1.00%.

Yield Maintenance Charge”: Payments paid or payable, as the context requires, on a Mortgage Loan or Companion Loan as the result of a Principal Prepayment thereon, not otherwise due thereon in respect of principal or interest, which have been calculated (based on Scheduled Payments on such Mortgage Loan or Companion Loan) to compensate the holder for reinvestment losses based on the value of an interest rate index at or near the time of prepayment. Any other prepayment premiums, penalties and fees not so calculated will not be considered “Yield Maintenance Charges.” In the event that a Yield Maintenance Charge shall become due for any particular Mortgage Loan or Companion Loan, the Master Servicer shall be required to follow the terms and provisions contained in the applicable Mortgage Note; provided, however, in the event the particular Mortgage Note shall not specify the U.S. Treasuries which shall be used in determining the discount rate or the reinvestment yield to be applied in such calculation, the Master Servicer shall be required to use those U.S. Treasuries having maturity dates most closely approximating the maturity of such Mortgage Loan or Companion Loan. Accordingly if either no U.S. Treasury issue, or more than one U.S. Treasury issue, shall coincide with the term over which the Yield Maintenance Charge shall be calculated (which depending on the applicable Mortgage Note is based on the remaining average life of the Mortgage Loan or Companion Loan or the actual term remaining through the Maturity Date), the Master Servicer shall use the U.S. Treasury whose reinvestment yield is the lowest, with such yield being based on the bid price for such issue as published in The Wall Street Journal on the date that is fourteen (14) days prior to the date that the Yield Maintenance Charge shall become due and payable (or, if such bid price is not published on that date, the next preceding date on which such bid price is so published) and converted to a monthly compounded nominal yield. The monthly compounded nominal yield (“MEY”) is derived from the reinvestment yield or discount rate and 

 

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shall be defined as MEY = (12X {(1+”BEY”/2)^1/6}-1) where BEY is defined as the U.S. Treasury Reinvestment Yield which is in decimal form and not in percentage, and 1/6 is the exponential power to which a portion of the equation is raised. For example, using a BEY of 5.50%, the MEY = (12 X {(1+ 0.055/2)^0.16667}-1) where 0.055 is the decimal version of the percentage 5.50% and 0.16667 is the decimal version of the exponential power. The MEY in the above calculation is 5.44%.

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS

AND WARRANTIES; ORIGINAL ISSUANCE OF CERTIFICATES

 

 

Section 2.01

Conveyance of Mortgage Loans and ED Loan REMIC Interests.

(a)       The Depositor, concurrently with the execution and delivery hereof, does hereby assign, sell, transfer, set over and otherwise convey to the Trustee, in trust, without recourse, for the benefit of the Certificateholders (and for the benefit of the other parties to this Agreement as their respective interests may appear) all the right, title and interest of the Depositor, in, to and under (i) the Mortgage Loans and all documents included in the related Mortgage Files and Servicing Files, (ii) the rights of the Depositor under Sections 2, 3, 9, 10, 11, 12, 13, 14, 16, 17, 18 and 19 of each of the Mortgage Loan Purchase Agreements, and (iii) all other assets included or to be included in the Trust Fund. Such assignment includes all interest and principal received or receivable on or with respect to the Mortgage Loans and due after the Cut-Off Date. The transfer of the Mortgage Loans and the related rights and property accomplished hereby is absolute and, notwithstanding Section 11.07, is intended by the parties to constitute a sale.

(b)       In connection with the Depositor’s assignment pursuant to Section 2.01(a) above the Depositor shall direct, and hereby represents and warrants that it has directed, each Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement, to deliver to and deposit with, or cause to be delivered to and deposited with, the Trustee or a Custodian appointed thereby (with a copy to the Master Servicer and Special Servicer), on or before the Closing Date, the Mortgage File for each Mortgage Loan so assigned and the Servicing File to the Master Servicer. The Special Servicer may request the Master Servicer to deliver a copy of the Servicing File for any Mortgage Loan (other than a Specially Serviced Mortgage Loan, which will not be at the expense of the Special Servicer) at the expense of the Special Servicer. None of the Trustee, any Custodian, the Master Servicer or the Special Servicer shall be liable for any failure by any Mortgage Loan Seller or the Depositor to comply with the document delivery requirements of the applicable Mortgage Loan Purchase Agreement and this Section 2.01(b). Notwithstanding anything herein to the contrary, with respect to letters of credit, the applicable Mortgage Loan Seller shall deliver to the Master Servicer and the Master Servicer shall hold the original (or copy, if such original has been submitted by the applicable Mortgage Loan Seller to the issuing bank to effect an assignment or amendment of such letter of credit (changing the beneficiary thereof to the Trust (in care of the Master Servicer) that may be required in order for the Master Servicer to draw on such letter of credit on behalf of the Trust in accordance with the applicable terms thereof

 

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and/or of the related Mortgage Loan documents) and the applicable Mortgage Loan Seller shall be deemed to have satisfied any delivery requirements of the related Mortgage Loan Purchase Agreement and this Section 2.01(b) by delivering with respect to any letter(s) of credit a copy thereof to the Trustee together with an officer’s certificate of the applicable Mortgage Loan Seller certifying that such document has been delivered to the Master Servicer or an officer’s certificate from the Master Servicer certifying that it holds the letter(s) of credit pursuant to this Section 2.01(b); the original or a copy shall be delivered to the Trustee on the Closing Date. If a letter of credit referred to in the previous sentence is not in a form that would allow the Master Servicer to draw on such letter of credit on behalf of the Trust in accordance with the applicable terms thereof and/or of the related Mortgage Loan documents, the applicable Mortgage Loan Seller shall deliver the appropriate assignment or amendment documents (or copies of such assignment or amendment documents if the related Mortgage Loan Seller has submitted the originals to the related issuer of such letter of credit for processing) to the Master Servicer within 90 days of the Closing Date. In the interim, if a draw becomes necessary, the applicable Mortgage Loan Seller shall take action at the direction of the Master Servicer or Special Servicer to draw on the letter of credit for the benefit of the Trust. The applicable Mortgage Loan Seller shall pay any costs of assignment or amendment of such letter(s) of credit required in order for the Master Servicer to draw on such letter(s) of credit on behalf of the Trust and shall cooperate with the reasonable requests of the Master Servicer or the Special Servicer, as applicable, in connection with effectuating a draw under any such letter of credit prior to the date such letter of credit is assigned or amended in order that it may be drawn by the Master Servicer on behalf of the Trust.

(c)       If any Mortgage Loan Seller cannot deliver, or cause to be delivered, on the Closing Date, as to any Mortgage Loan, any of the documents and/or instruments referred to in clauses (ii), (iii), (vi) (if recorded) and (viii) of the definition of “Mortgage File”, with evidence of recording thereon, solely because of a delay caused by the public recording office where such document or instrument has been delivered for recordation, the delivery requirements of the related Mortgage Loan Purchase Agreement and Section 2.01(b) shall be deemed to have been satisfied as to such non-delivered document or instrument, and such non-delivered document or instrument shall be deemed to have been included in the Mortgage File; provided that a photocopy of such non-delivered document or instrument (certified by the applicable Mortgage Loan Seller to be a true and complete copy of the original thereof submitted for recording) is delivered to the Trustee or a Custodian appointed thereby on or before the Closing Date, and either the original of such non-delivered document or instrument, or a photocopy thereof, with evidence of recording thereon, is delivered to the Trustee or such Custodian within 120 days of the Closing Date (or within such longer period after the Closing Date as the Trustee may consent to, which consent shall not be unreasonably withheld so long as the applicable Mortgage Loan Seller is, in good faith, attempting to obtain from the appropriate county recorder’s office such original or photocopy). If the applicable Mortgage Loan Seller cannot deliver, or cause to be delivered, as to any Mortgage Loan, any of the documents and/or instruments referred to in clauses (ii), (iii), (vi) (if recorded) and (viii) of the definition of “Mortgage File” with evidence of recording thereon, for any other reason, including, without limitation, that such non-delivered document or instrument has been lost, the delivery requirements of the applicable Mortgage Loan

 

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Purchase Agreement and Section 2.01(b) shall be deemed to have been satisfied as to such non-delivered document or instrument and such non-delivered document or instrument shall be deemed to have been included in the Mortgage File; provided that a photocopy of such non-delivered document or instrument (with evidence of recording thereon) is delivered to the Trustee or a Custodian appointed thereby on or before the Closing Date.

If, on the Closing Date as to any Mortgage Loan, the applicable Mortgage Loan Seller does not deliver in complete and recordable form any one of the assignments in favor of the Trustee referred to in clause (iv) or (v) of the definition of “Mortgage File”, the applicable Mortgage Loan Seller may provisionally satisfy the delivery requirements of the related Mortgage Loan Purchase Agreement and Section 2.01(b) by delivering with respect to such Mortgage Loan on the Closing Date an omnibus assignment of such Mortgage Loan; provided that all required original assignments with respect to such Mortgage Loan in fully complete and recordable form shall be delivered to the Trustee or its Custodian within 120 days of the Closing Date (or within such longer period as the Trustee in its discretion may permit).

(d)       The Trustee shall, for a fee paid to the Trustee by the Depositor on the Closing Date as to each Mortgage Loan promptly (and in any event within 90 days following the latest of (i) the Closing Date, (ii) the delivery of all assignments and UCC Financing Statements to the Trustee and (iii) the date on which the Trustee receives, with respect to the original recorded or filed documents relating to such assignments and UCC Financing Statements, all necessary recording and filing information required for the recording or filing of such assignments and UCC Financing Statements) cause to be submitted for recording or filing, as the case may be, in the appropriate public office for real property records or UCC Financing Statements, as appropriate and to the extent timely delivered to the Trustee in final, recordable form, each assignment of Mortgage, assignment of Assignment of Leases and any other recordable documents (to the extent the Trustee has actual knowledge that such documents are to be recorded) relating to each such Mortgage Loan, in favor of the Trustee referred to in clause (iv)(a), (b) and (c), respectively, of the definition of “Mortgage File” and each UCC-2 and UCC-3 assignment in favor of the Trustee and so delivered to the Trustee and referred to in clause (viii) of the definition of “Mortgage File.” The applicable Mortgage Loan Seller shall reimburse the Trustee for all reasonable costs and expenses incurred for recording any documents described in clause (iv)(c) of the definition of “Mortgage File.” Each such assignment, UCC-2 and UCC-3 shall reflect that the recorded original should be returned by the public recording office to the Trustee or its designee following recording, and each such UCC-2 and UCC-3 assignment shall reflect that the file copy thereof should be returned to the Trustee or its designee following filing; provided that in those instances where the public recording office retains the original assignment of Mortgage or assignment of Assignment of Leases, the Trustee shall obtain therefrom a certified copy of the recorded original, at the expense of the Depositor. If any such document or instrument is lost or returned unrecorded or unfiled, as the case may be, because of a defect therein, the Trustee shall direct the related Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement to promptly prepare or cause to be prepared a substitute therefor or cure such defect, as the case may be, and thereafter the Trustee shall upon receipt thereof cause the same to be duly recorded or filed, as

 

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appropriate. Upon request, the Trustee shall forward to the Master Servicer a copy of each of the aforementioned recorded assignments following the Trustee’s receipt thereof, to the extent not previously provided.

(e)       All documents and records in the Servicing File in possession of the Depositor or the Mortgage Loan Sellers (except attorney client privileged communications, draft documents and any documents or materials prepared by the Mortgage Loan Sellers or their Affiliates for internal uses, including, without limitation, internal correspondence and credit analysis of the Mortgage Loan Sellers) that relate to the Mortgage Loans and that are not required to be a part of a Mortgage File in accordance with the definition thereof (including any original letters of credit), together with all Escrow Payments and Reserve Accounts in the possession thereof, shall be delivered to the Master Servicer or such other Person as may be directed by the Master Servicer (at the expense of the applicable Mortgage Loan Seller) on or before the Closing Date and shall be held by the Master Servicer on behalf of the Trustee in trust for the benefit of the Certificateholders and with respect to a Serviced Whole Loan, the related Companion Holders(s); provided, however, the Master Servicer shall have no responsibility for holding documents created or maintained by the Special Servicer hereunder and not delivered to the Master Servicer.

(f)        In connection with the Depositor’s assignment pursuant to Section 2.01(a) above, the Depositor shall deliver to the Custodian and the Master Servicer on or before the Closing Date and hereby represents and warrants that it has delivered a copy of a fully executed counterpart of each Mortgage Loan Purchase Agreement, as in full force and effect on the Closing Date.

 

 

Section 2.02

Acceptance of the Trust Fund by Trustee.

(a)       The Trustee, by its execution and delivery of this Agreement, acknowledges receipt of the Depositor’s assignment to it of the Depositor’s right, title and interest in the assets that constitute the Trust Fund, and further acknowledges receipt by it or a Custodian on its behalf, subject to the provisos in the definition of “Mortgage File” and the provisions of Section 2.01 and subject to the further limitations on review provided for in Section 2.02(b) and the exceptions noted on the schedule of exceptions of (i) the Mortgage File delivered to it for each Mortgage Loan and (ii) a copy of a fully executed counterpart of each Mortgage Loan Purchase Agreement, all in good faith and without notice of any adverse claim, and declares that it or a Custodian on its behalf holds and will hold such documents and the other documents received by it that constitute portions of the Mortgage Files, and that it holds and will hold the Mortgage Loans and other assets included in the Trust Fund, in trust for the exclusive use and benefit of all present and future Certificateholders and, with respect to any original document in the Mortgage File for a Loan Pair, any present or future Companion Holders. The Trustee hereby certifies to each of the Depositor, the Master Servicer, the Special Servicer and each Mortgage Loan Seller that, except as identified in the schedule of exceptions, which is attached hereto as Exhibit C-1 without regard to the proviso in the definition of “Mortgage File,” each of the original executed Mortgage Notes (or lost note affidavit), the Mortgage (or an executed copy thereof), the lender’s title policy (original or copy or

 

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marked-up title commitment marked as binding and countersigned by the title company or its authorized agent or an agreement to provide the same pursuant to binding escrow instructions executed by an authorized representative of the title company), a copy of any related Ground Leases, the original (or copy if the original has been delivered to the Master Servicer) of any related letters of credit (and the related transfer or assignment documents, if applicable), as described in clauses (i), (ii), (vii), (ix)(A) and (xii), respectively, of the definition of Mortgage File are in its possession.

With respect to the schedule of exceptions described in the preceding paragraph, within 15 Business Days (or, in the Controlling Class Representative’s reasonable discretion, 30 Business Days) of the Closing Date, with respect to the documents specified in clauses (i), (ii), (vii), (ix) (solely with respect to Ground Leases) and (xii) of the definition of Mortgage File, the related Mortgage Loan Seller shall cure any material exception listed therein (for the avoidance of doubt, any deficiencies with respect to the documents specified in clause (ii) resulting solely from a delay in the return of the related documents from the applicable recording office, shall be cured in the time and manner described in Section 2.01(c)). If such exception is not so cured, the related Mortgage Loan Seller shall either (1) repurchase the related Mortgage Loan, (2) with respect to exceptions relating to clause (xii) of the definition of “Mortgage File”, deposit with the Paying Agent (who shall promptly notify the Master Servicer thereof) an amount, to be held in a Special Reserve Account, equal to the amount of the undelivered letter of credit (in the alternative, the related Mortgage Loan Seller may deliver to the Paying Agent, with a certified copy to the Master Servicer and Trustee, a letter of credit for the benefit of the Master Servicer on behalf of the Trustee and upon the same terms and conditions as the undelivered letter of credit) which the Master Servicer on behalf of the Trustee may use (or draw upon, as the case may be) under the same circumstances and conditions as the Master Servicer would have been entitled to draw on the undelivered letter of credit, or (3) with respect to any exceptions relating to clauses (i), (ii) and (vii), deposit with the Paying Agent on behalf of the Trustee an amount, to be held in trust in a Special Reserve Account, equal to 25% of the Stated Principal Balance of the related Mortgage Loan. Any letter of credit or funds deposited pursuant to clauses (2) and (3) shall be held pursuant to the related Mortgage Loan Purchase Agreement by the Paying Agent until the earlier of (x) the date on which the Master Servicer certifies to the Trustee and the Controlling Class Representative that such exception has been cured (or the Trustee certifies the same to the Controlling Class Representative), at which time such funds or letter of credit, as applicable, shall be returned to the related Mortgage Loan Seller and (y) 30 Business Days or, if the Controlling Class Representative extends the cure period, 45 Business Days after the Closing Date; provided, however, if such exception is not cured within such 30 Business Days or 45 Business Days, as the case may be, (A) in the case of clause (2), the Paying Agent shall retain such funds on deposit in the related Special Reserve Account, or (B) in the case of clause (3), the related Mortgage Loan Seller shall repurchase the related Mortgage Loan in accordance with the terms and conditions of Section 2.03(b) or the related Mortgage Loan Purchase Agreement, at which time such funds shall be applied to the Purchase Price of the related Mortgage Loan.

(b)       In addition, within 90 days after the Closing Date (and if any exceptions are noted, a schedule of exceptions again every 90 days thereafter until the second anniversary of the Closing Date, and a schedule of exceptions every 180 days thereafter until the fifth anniversary of the Closing Date, and thereafter upon request by

 

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any party hereto, any Mortgage Loan Seller or the Majority Subordinate Certificateholder), the Trustee or the Custodian on its behalf will review the Mortgage Files and certify (in a certificate substantially in the form of Exhibit C-2) to each of the Depositor, the Master Servicer, the Special Servicer and each Mortgage Loan Seller (with copies to the Majority Subordinate Certificateholder) that, with respect to each Mortgage Loan listed in the Mortgage Loan Schedule, except as specifically identified in the schedule of exceptions annexed thereto, (i) without regard to the proviso in the definition of “Mortgage File,” all documents specified in clauses (i), (ii), (iv)(a), (v) and (vii), and to the extent provided in the related Mortgage File and actually known by a Responsible Officer of the Trustee to be required, clauses (iii), (iv)(b), (iv)(c), (vi), (viii) and (ix) through and including (xv) of the definition of “Mortgage File” are in its possession, (ii) all documents delivered or caused to be delivered by the applicable Mortgage Loan Seller constituting the related Mortgage File have been reviewed by it and appear regular on their face and appear to relate to such Mortgage Loan, (iii) based on such examination and only as to the foregoing documents, the information set forth in the Mortgage Loan Schedule for such Mortgage Loan with respect to the items specified in clauses (v) and (vi)(C) of the definition of “Mortgage Loan Schedule” is correct and (iv) solely with respect to the Companion Loans, all documents specified in clause (xvi) of the definition of Mortgage File are in its possession. Further, with respect to the documents described in clause (viii) of the definition of Mortgage File, the Trustee may assume, for purposes of the certification delivered in this Section 2.02(b) and for purposes of determining (subject to the proviso at the end of this sentence) where to file UCC Financing Statements, that the related Mortgage File should include one state level UCC Financing Statement filing in the state of incorporation of the Mortgagor for each Mortgaged Property (or with respect to any Mortgage Loan that has two or more Mortgagors, for each Mortgagor); provided, however, to the extent the Trustee has actual knowledge or is notified of any fixture or real property UCC Financing Statements filed in the county of the state where the related Mortgaged Property is located, the Trustee shall file an assignment to the Trust Fund with respect to such UCC Financing Statements in the appropriate jurisdiction under the UCC at the expense of the related Mortgage Loan Seller. The UCC Financing Statements to be assigned to the Trust Fund pursuant to Section 2.01(d) will be delivered by the related Mortgage Loan Seller to the Trustee on the new national forms, in recordable form and completed pursuant to Revised Article IX of the UCC. The Trustee will submit such UCC Financing Statements for filing in the state of incorporation of the related Mortgagor as so indicated on the documents provided.

(c)       None of the Trustee, the Master Servicer, the Special Servicer or any Custodian is under any duty or obligation to inspect, review or examine any of the documents, instruments, certificates or other papers relating to the Mortgage Loans delivered to it to determine that the same are valid, legal, effective, genuine, enforceable, in recordable form, sufficient or appropriate for the represented purpose or that they are other than what they purport to be on their face.

(d)       The Trustee may establish a Special Reserve Account which shall be an Eligible Account, and the Trustee or its designee shall deposit any amount required to be deposited in a Special Reserve Account within 1 Business Day of receipt. The

 

 

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related Mortgage Loan Seller may direct the Trustee to invest or cause the investment of the funds deposited in the Special Reserve Account in Permitted Investments that bear interest or are sold at a discount and that mature, unless payable on demand, no later than the Business Day prior to the next P&I Advance Date. The Trustee shall act upon the written instructions of the related Mortgage Loan Seller with respect to the investment of the funds in the Special Reserve Account in such Permitted Investments; provided that in the absence of appropriate and timely written instructions from the related Mortgage Loan Seller, the Trustee shall not have any obligation to invest or direct the investment funds in such Special Reserve Account. All income and gain realized from the investment of funds deposited in such Special Reserve Account shall be for the benefit of the related Mortgage Loan Seller and shall be withdrawn by the Trustee or its designees and remitted to the related Mortgage Loan Seller on each P&I Advance Date (net of any losses incurred), and the related Mortgage Loan Seller shall remit to the Trustee from the related Mortgage Loan Seller’s own funds for deposit into such Special Reserve Account the amount of any Net Investment Loss (net of Net Investment Earnings) in respect of such Permitted Investments immediately upon realization of such Net Investment Losses and receipt of written notice thereof from the Trustee; provided that the related Mortgage Loan Seller shall not be required to deposit any loss on an investment of funds in the Special Reserve Account if such loss is incurred solely as a result of the insolvency of the federal or state chartered depository institution or trust company that holds such Special Reserve Account; provided that such depository institution is not the same entity as such Mortgage Loan Seller. The Special Reserve Account shall be considered an “outside reserve fund” within the meaning of the REMIC Provisions, and such Special Reserve Account (or any reimbursement from any ED Loan REMIC, REMIC I or REMIC II with respect thereto) will be beneficially owned by the related Mortgage Loan Seller, who shall be taxable on all income, if any, with respect thereto.

(e)       With respect to exceptions related to clause (xii) of the definition of “Mortgage File” and any cash or substitute letters of credit held by the Trustee in the Special Reserve Account from time to time, if circumstances arise in servicing the related Mortgage Loan such that the Master Servicer or Special Servicer, as the case may be, is entitled to draw upon the undelivered letter of credit, the Master Servicer or Special Servicer, as the case may be, shall present an Officer’s Certificate to the Trustee requesting that the cash or substitute letter of credit held in the Special Reserve Account, be remitted or released, as the case may be, and the Trustee shall remit such cash or release such substitute letter of credit within 1 Business Day of receipt of such Officer’s Certificate. Upon release of any substitute letter of credit to the Master Servicer or Special Servicer, the Trustee shall no longer be responsible for such letter of credit.

Section 2.03     Mortgage Loan Seller’s Repurchase or Substitution of Mortgage Loans for Document Defects and Breaches of Representations and Warranties.

(a)       If any party hereto discovers or receives notice that any document or documents constituting a part of a Mortgage File has not been properly executed, is missing (beyond the time period required for its delivery hereunder), contains information that does not conform in any material respect with the corresponding information set forth in the Mortgage Loan Schedule, or does not appear to be regular on

 

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its face (each a “Document Defect”), or discovers or receives notice of a breach of any representation or warranty relating to any Mortgage Loan set forth in the applicable Mortgage Loan Purchase Agreement (a “Breach”), the party discovering such Document Defect or Breach shall give written notice (which notice, in respect of any obligation of the Trustee to provide notice of a Document Defect, shall be deemed given by the delivery of the certificate as required by Section 2.02(a)) to the other parties hereto, to the Majority Subordinate Certificateholder and to the Rating Agencies of such Document Defect or Breach. Promptly upon becoming aware of any Document Defect or Breach (including through such written notice provided by any party hereto or the Majority Subordinate Certificateholder as provided above), if any party hereto determines that such Document Defect or Breach materially and adversely affects the value of the affected Mortgage Loan, the interest of the Trust Fund therein or the interests of any Certificateholder, such party shall notify the Master Servicer of such determination and promptly after receipt of such notice, the Master Servicer, or with respect to a Specially Serviced Mortgage Loan, the Special Servicer, shall request in writing (with a copy to the other parties hereto, the Majority Subordinate Certificateholder, the Rating Agencies and the Controlling Class Representative (if different from the Majority Subordinate Certificateholder)) that the applicable Mortgage Loan Seller, not later than 90 days from receipt of such written request (or, in the case of a Document Defect or Breach relating to a Mortgage Loan not being a “qualified mortgage” within the meaning of the REMIC Provisions, not later than 90 days after any party to this Agreement discovers such Document Defect or Breach) (i) cure such Document Defect or Breach, as the case may be, in accordance with Section 3(c) of the applicable Mortgage Loan Purchase Agreement, (ii) repurchase the affected Mortgage Loan in accordance with Section 3(c) of the related Mortgage Loan Purchase Agreement, or (iii) within two years of the Closing Date, substitute a Qualified Substitute Mortgage Loan for such affected Mortgage Loan and pay the Master Servicer for deposit into the Certificate Account any Substitution Shortfall Amount in connection therewith in accordance with Sections 3(c) and 3(d) of the applicable Mortgage Loan Purchase Agreement; provided, however, if such Document Defect or Breach is capable of being cured, but not within such 90 day period, such Document Defect or Breach does not relate to the Mortgage Loan not being treated as a “qualified mortgage” within the meaning of the REMIC Provisions, and the applicable Mortgage Loan Seller has commenced and is diligently proceeding with the cure of such Document Defect or Breach within such 90 day period, the applicable Mortgage Loan Seller shall have an additional 90 days to complete such cure (or, failing such cure, to repurchase the related Mortgage Loan); provided, further, with respect to such additional 90 day period the applicable Mortgage Loan Seller shall have delivered an Officer’s Certificate to the Trustee setting forth what actions the applicable Mortgage Loan Seller is pursuing in connection with the cure thereof and stating that the applicable Mortgage Loan Seller anticipates such Document Defect or Breach will be cured within the additional 90 day period; provided, further, no Document Defect (other than with respect to a Mortgage Note, Mortgage, title insurance policy, Ground Lease, any letter of credit, franchise agreement or any comfort letter and comfort letter transfer documents (collectively, the “Material Core Documents”)) shall be considered to materially and adversely affect the interests of any Certificateholder, the interest of the Trust Fund therein or the value of the related Mortgage Loan unless the document with respect to

 

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which the Document Defect exists is required in connection with an imminent enforcement of the mortgagee’s rights or remedies under the related Mortgage Loan, defending any claim asserted by any Mortgagor or third party with respect to the Mortgage Loan, establishing the validity or priority of any lien on any collateral securing the Mortgage Loan or for any immediate significant servicing obligations; provided, further, with respect to Document Defects which materially and adversely affect the interest of any Certificateholder, the interests of the Trust therein or the value of the related Mortgage Loan, other than with respect to Document Defects relating to the Material Core Documents, any applicable cure period following the initial 90 day cure period may be extended by the Master Servicer or the Special Servicer if the document involved is not needed imminently. Such extension will end upon 30 days notice of such need as reasonably determined by the Master Servicer or Special Servicer (with a possible 30 day extension if the Master Servicer or Special Servicer agrees that the applicable Mortgage Loan Seller is diligently pursuing a cure). Pursuant to the related Mortgage Loan Purchase Agreement, the related Mortgage Loan Seller shall cure all Document Defects which materially and adversely affect the interests of any Certificateholder, the interests of the Trust Fund therein or the value of the related Mortgage Loan, regardless of the document involved, no later than two years following the Closing Date; provided, however, the initial 90 day cure period referenced above shall not be reduced. For a period of two years from the Closing Date, so long as there remains any Mortgage File as to which there is any uncured Document Defect and so long as the applicable Mortgage Loan Seller shall provide the Officer’s Certificate pursuant to Section 3(c) of the applicable Mortgage Loan Purchase Agreement, the Trustee shall on a quarterly basis prepare and deliver to the other parties a written report as to the status of such uncured Document Defects as provided in this Section 2.03. If the affected Mortgage Loan is to be repurchased or substituted, the Master Servicer shall designate the Certificate Account as the account to which funds in the amount of the Purchase Price or the Substitution Shortfall Amount, as applicable, are to be wired. Any such repurchase or substitution of a Mortgage Loan shall be on a whole loan, servicing released basis. In connection with a repurchase of an ED Loan, as contemplated by this Section 2.03(a), the REMIC Administrator shall effect a “qualified liquidation” of such ED Loan REMIC in accordance with the REMIC Provisions. In the case of a substitution for an ED Loan (except with respect to the Winn-Dixie Pari Passu Loans where no substitution is permitted), all references in this Agreement to such ED Loan shall be to the Qualified Substitute Mortgage Loan substituted therefor.

If (i) any Mortgage Loan is required to be repurchased or substituted for in the manner described in the immediately preceding paragraph, (ii) such Mortgage Loan is a Crossed Loan, and (iii) the applicable Document Defect or Breach does not constitute a Document Defect or Breach, as the case may be, as to any other Crossed Loan in such Crossed Group (without regard to this paragraph), then the applicable Document Defect or Breach, as the case may be, will be deemed to constitute a Document Defect or Breach, as the case may be, as to any other Crossed Loan in the Crossed Group for purposes of this paragraph, and the related Mortgage Loan Seller will be required to repurchase or substitute for such other Crossed Loan(s) in the related Crossed Group as provided in the immediately preceding paragraph unless such other Crossed Loans satisfy the Crossed Loan Repurchase Criteria and satisfy all other criteria for substitution and repurchase of Mortgage Loans set forth herein. In the event that the remaining

 

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Crossed Loans in such Crossed Group satisfy the aforementioned criteria, the Mortgage Loan Seller may elect either to repurchase or substitute for only the affected Crossed Loan as to which the related Breach or Document Defect exists or to repurchase or substitute for all of the Crossed Loans in the related Crossed Group. Any reserve or other cash collateral or letters of credit securing the Crossed Loans shall be allocated between such Mortgage Loans in accordance with the Mortgage Loan documents. All other terms of the Mortgage Loans shall remain in full force and effect without any modification thereof.

With respect to any Crossed Loan, to the extent that the applicable Mortgage Loan Seller is required to repurchase or substitute for such Mortgage Loan in the manner prescribed in this Section 2.03(a) while the Trustee continues to hold any other Crossed Loans in the related Crossed Group, the applicable Mortgage Loan Seller and the Depositor will, as set forth in the related Mortgage Loan Purchase Agreement (any expenses incurred by the Trustee or the Master Servicer in connection with any modification or accommodation referred to in such Mortgage Loan Purchase Agreement (including but not limited to reasonable attorney fees) shall be paid by the related Mortgage Loan Seller), forbear from enforcing any remedies against the other’s Primary Collateral but each will be permitted to exercise remedies against the Primary Collateral securing its respective Mortgage Loans, including with respect to the Trustee, the Primary Collateral securing Mortgage Loans still held by the Trustee.

(b)       In connection with any repurchase or substitution of one or more Mortgage Loans contemplated by this Section 2.03, upon receipt of a Request for Release (in the form of Exhibit D-1 attached hereto) of a Servicing Officer of the Master Servicer certifying as to the receipt of the applicable Purchase Price(s) in the Certificate Account (in the case of any such repurchase) or the receipt of the applicable Substitution Shortfall Amount(s) in the Certificate Account and upon the delivery of the Mortgage File(s) and the Servicing File(s) for the related Qualified Substitute Mortgage Loan(s) to the Custodian and the Master Servicer, respectively (in the case of any such substitution), (i) the Trustee shall execute and deliver such endorsements and assignments as are provided to it, in each case without recourse, representation or warranty, as shall be necessary to vest in the applicable Mortgage Loan Seller the legal and beneficial ownership of each repurchased Mortgage Loan or substituted Mortgage Loan, as applicable, being released pursuant to this Section 2.03, and (ii) the Trustee, the Custodian, the Master Servicer, and the Special Servicer shall each tender to the applicable Mortgage Loan Seller, upon delivery to each of them of a receipt executed by the applicable Mortgage Loan Seller, all portions of the Mortgage File and other documents pertaining to each such Mortgage Loan possessed by it, other than documents that relate to the repurchase by the Mortgage Loan Seller and are subject to privilege or work product protection, and the Master Servicer and the Special Servicer shall release to the applicable Mortgage Loan Seller any Escrow Payments and Reserve Funds held by it in respect of such repurchased or substituted Mortgage Loan; provided that such tender by the Trustee or the Custodian shall be conditioned upon its receipt from the Master Servicer or the Special Servicer of a Request for Release. Thereafter, the Trustee, the Custodian, the Master Servicer and the Special Servicer shall have no further responsibility with regard to the related repurchased Mortgage Loan(s) or deleted Mortgage Loan(s), as applicable, and the related Mortgage File(s) and Servicing File(s). The Master Servicer shall, and is hereby authorized and empowered by the Trustee to,

 

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prepare, execute and deliver in its own name, on behalf of the Certificateholders and the Trustee or any of them, the endorsements and assignments contemplated by this Section 2.03, and the Trustee shall execute any powers of attorney that are prepared and delivered to the Trustee by the Master Servicer and are necessary to permit the Master Servicer to do so. The Master Servicer shall indemnify the Trustee for any reasonable costs, fees, liabilities and expenses incurred by the Trustee in connection with the negligent or willful misuse by the Master Servicer of such powers of attorney. At the time a substitution is made, the related Mortgage Loan Purchase Agreement will provide that the Mortgage Loan Seller shall deliver the related Mortgage File to the Trustee and certify that the substitute Mortgage Loan is a Qualified Substitute Mortgage Loan.

(c)       No substitution of a Qualified Substitute Mortgage Loan or Loans may be made in any calendar month after the Determination Date for such month. Periodic Payments due with respect to any Qualified Substitute Mortgage Loan after the related date of substitution shall be part of REMIC I or, in the case of a substitution for an ED Loan (except with respect to the Winn-Dixie Pari Passu Loans where no substitution is permitted), the related ED Loan REMIC. Periodic Payments due with respect to any Qualified Substitute Mortgage Loan on or prior to the related date of substitution shall not be part of the Trust Fund or any ED Loan REMIC or REMIC I and will (to the extent received by the Master Servicer) be remitted by the Master Servicer to the applicable Mortgage Loan Seller promptly following receipt.

(d)       Each Mortgage Loan Purchase Agreement provides the sole remedies available to the Certificateholders, or the Trustee on behalf of the Certificateholders, respecting any Document Defect or Breach with respect to the Mortgage Loans purchased by the Depositor thereunder.

(e)       The Trustee with the cooperation of the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall, for the benefit of the Certificateholders, enforce the obligations of the Mortgage Loan Sellers under Section 3 of the applicable Mortgage Loan Purchase Agreement. The Trustee shall include in the immediately succeeding Distribution Date Statement a notification to the recipients of such Distribution Date Statement of any repurchase or substitution of a Mortgage Loan required pursuant to the terms of the related Mortgage Loan Purchase Agreement.

(f)        Notwithstanding the foregoing, if there exists a Breach relating to whether or not the Mortgage Loan documents or any particular Mortgage Loan document requires the related Mortgagor to bear the costs and expenses associated with any particular action or matter under such Mortgage Loan document(s) with respect to matters described in Representations 23 and 43 of the applicable Mortgage Loan Purchase Agreement, then the Master Servicer shall (and the Special Servicer may) direct the related Mortgage Loan Seller in writing to wire transfer to the Certificate Account, within 90 days of such Mortgage Loan Seller’s receipt of such direction, the amount of any such costs and expenses borne by the Trust Fund that are the basis of such Breach. Upon its making such deposit, the related Mortgage Loan Seller shall be deemed to have cured such Breach in all respects. Provided such payment is made in full, this paragraph describes the sole remedy available to the Certificateholders, the Master Servicer, the

 

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Special Servicer, and the Trustee on their behalf regarding any such Breach and the related Mortgage Loan Seller shall not be obligated to repurchase the affected Mortgage Loan on account of such Breach or otherwise cure such Breach. Amounts deposited in the Certificate Account pursuant to this paragraph shall be used for the reimbursement or payment of costs related to such Breach.

(g)       In the event that the Master Servicer or the Special Servicer receives notice from the Mortgagor under an ED Loan that such Mortgagor intends to defease the related ED Loan before the second anniversary of the Startup Day, the Master Servicer or the Special Servicer shall promptly notify the Trustee and the Paying Agent and the applicable Mortgage Loan Seller of such Mortgagor’s intention, and the Trustee shall direct such Mortgage Loan Seller to repurchase such ED Loan at the Purchase Price on or before the date of such defeasance. In the event the applicable Mortgage Loan Seller fails to purchase such ED Loan as required, the Special Servicer shall sell such ED Loan from the Trust Fund at the highest available price and shall effect a “qualified liquidation” of such ED Loan REMIC, within the meaning of Section 860F(a)(4) of the Code, as soon as reasonably practicable and, in any event, prior to the date of such early defeasance. The Trust shall be indemnified by the applicable Mortgage Loan Seller for any amount by which the Purchase Price exceeds the proceeds received by the Trust with respect to such sale and liquidation of such ED Loan.

(h)       With respect to any Mortgage Loan which has become a Defaulted Mortgage Loan under this Agreement or with respect to which the related Mortgaged Property has been foreclosed and which is the subject of a repurchase claim under the related Mortgage Loan Purchase Agreement, the Special Servicer, with the consent of the Controlling Class Representative, shall notify the related Mortgage Loan Seller in writing of its intention to sell such Defaulted Mortgage Loan or REO Property at least 45 days prior to any such action. The related Mortgage Loan Seller shall have 10 Business Days to determine whether or not to consent to such sale. If the related Mortgage Loan Seller consents to such sale or a court of competent jurisdiction determines that the related Mortgage Loan Seller was liable under the related Mortgage Loan Purchase Agreement to repurchase such Defaulted Mortgage Loan or REO Property then such Mortgage Loan Seller shall be liable for the difference (if any) between the price of the Mortgage Loan or REO Property as sold and the price which the related Mortgage Loan Seller would have to pay if it repurchased such Defaulted Mortgage Loan or REO Property. If the related Mortgage Loan Seller does not consent to such sale, the Special Servicer shall contract with a Determination Party as to the merits of such sale. If the related Determination Party determines that such sale is in accordance with the Servicing Standard and the provisions of this Agreement with respect to the sale of Defaulted Mortgage Loans or REO Properties and subsequent to such a sale, a court of competent jurisdiction determines that related Mortgage Loan Seller was liable under the related Mortgage Loan Purchase Agreement and required to repurchase such Defaulted Mortgage Loan or REO Property in accordance with the terms thereof, then pursuant to the related Mortgage Loan Purchase Agreement, the related Mortgage Loan Seller shall remit to the Special Servicer an amount equal to the difference (if any) between the proceeds of the related action and the price at which the related Mortgage Loan Seller would have been obligated to pay had the related Mortgage Loan Seller repurchased such Defaulted Mortgage Loan

 

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or REO Property in accordance with the terms of the related Mortgage Loan Purchase Agreement, including the costs related to contracting with the related Determination Party. If the related Determination Party determines that the sale of the related Defaulted Mortgage Loan or REO Property is not in accordance with the Servicing Standard and the provision of this Agreement with respect to the sale of Defaulted Mortgage Loans or REO Properties and the Special Servicer subsequently sells such Mortgage Loan or REO Property, then the related Mortgage Loan Seller shall not be liable for any such difference (nor any cost of contracting with the Determination Party). In the event that (a) the Special Servicer ignores the determination of the Determination Party and sells the related Defaulted Mortgage Loan or REO Property and/or (b) a court of competent jurisdiction determines that the related Mortgage Loan Seller is not obligated to repurchase the related Defaulted Mortgage or REO Property, the costs of contracting with the Determination Party will constitute an Additional Trust Fund Expense. If the related Mortgage Loan Seller is required pursuant to the related Mortgage Loan Purchase Agreement to remit the amounts set forth in this Section 2.03(h), the Special Servicer shall designate the Certificate Account as the account to which such funds shall be wired.

 

 

Section 2.04

Representations and Warranties of Depositor.

(a)       The Depositor hereby represents and warrants to the Trustee, for its own benefit and the benefit of the Certificateholders, and to the Master Servicer, the Paying Agent and the Special Servicer, 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 North Carolina;

(ii)      The execution and delivery of this Agreement by the Depositor, and the performance and compliance with the terms of this Agreement by the Depositor, will not violate the Depositor’s certificate of incorporation or bylaws or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other instrument to which it is a party or which is applicable to it or any of its assets;

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

(iv)      This Agreement, assuming due authorization, execution and delivery by each of the other parties hereto, constitutes a valid, legal and binding obligation of the Depositor, enforceable against the Depositor in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law;

 

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(v)       The Depositor is not in violation of, and its execution and delivery of this Agreement and its performance and compliance with the terms of this Agreement will not

constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Depositor’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Depositor to perform its obligations under this Agreement or the financial condition of the Depositor;

(vi)      The transfer of the Mortgage Loans to the Trustee as contemplated herein requires no regulatory approval, other than any such approvals as have been obtained, and is not subject to any bulk transfer or similar law in effect in any applicable jurisdiction;

(vii)     No litigation is pending or, to the best of the Depositor’s knowledge, threatened against the Depositor that, if determined adversely to the Depositor, would prohibit the Depositor from entering into this Agreement or that, in the Depositor’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Depositor to perform its obligations under this Agreement or the financial condition of the Depositor;

(viii)     Immediately prior to the transfer of the Mortgage Loans to the Trust Fund pursuant to this Agreement, (A) the Depositor had good and marketable title to, and was the sole owner and holder of, each Mortgage Loan; and (B) the Depositor has full right and authority to sell, assign and transfer the Mortgage Loans and all servicing rights pertaining thereto; and

(ix)      The Depositor is transferring the Mortgage Loans to the Trust Fund free and clear of any liens, pledges, charges and security interests.

(b)       The representations and warranties of the Depositor set forth in Sections 2.04(a) and 8.17 shall survive the execution and delivery of this Agreement and shall inure to the benefit of the Persons for whose benefit they were made for so long as the Trust Fund remains in existence. Upon discovery by any party hereto of any breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to the other parties.

Section 2.05     Conveyance of Majority Mortgage Loans and ED Loan REMIC; Acceptance of each ED Loan REMIC, REMIC I and Additional Interest Grantor Trust by Trustee.

The Depositor, as of the Closing Date, and concurrently with the execution and delivery of this Agreement, does hereby assign without recourse all the right, title and interest of the Depositor in and to (a) each ED Loan and the other property comprising the ED Loan REMICs, (b) the Majority Mortgage Loans (other than any Additional Interest), each ED Loan REMIC Regular Interest and the other property comprising REMIC I to the Trustee for the benefit of the Holders of the Class R-I Certificates and REMIC II as the holder of the REMIC I Regular Interests and (c) the Additional Interest and the other property comprising the Additional

 

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Interest Grantor Trust to the Trustee for the benefit of the Holders of the Class Z Certificates. The Trustee acknowledges the assignment to it of the Mortgage Loans and the other property comprising each ED Loan REMIC and REMIC I and the Additional Interest Grantor Trust, and declares that it holds and will hold the same in trust for the exclusive use and benefit of all present and future holders of the Certificates (other than the Class Z Certificates), and, as to the Additional Interest Grantor Trust, for the benefit of the Holders of the Class Z Certificates.

Section 2.06     Issuance of the REMIC I Regular Interests; Execution, Authentication and Delivery of Class R-I Certificates.

Concurrently with the assignment to the Trustee of the Majority Mortgage Loans (other than any Additional Interest related thereto) and each ED Loan REMIC Regular Interest and in exchange therefor, the Trustee acknowledges the issuance of the REMIC I Regular Interests, to or upon the order of the Depositor and, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, as the Certificate Registrar and the Authenticating Agent has authenticated and delivered to or upon the order of the Depositor, the Class R-I Certificates.

Section 2.07     Conveyance of REMIC I Regular Interests; Acceptance of REMIC II by Trustee.

The Depositor, as of the Closing Date, and concurrently with the execution and delivery of this Agreement, does hereby assign without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests to the Trustee for the benefit of the respective Holders of the REMIC II Certificates. The Trustee acknowledges the assignment to it of the REMIC I Regular Interests and declares that it holds and will hold the same in trust for the exclusive use and benefit of all present and future Holders of the REMIC II Certificates.

 

 

Section 2.08

Execution, Authentication and Delivery of REMIC II Certificates.

Concurrently with the assignment to the Trustee of the REMIC I Regular Interests and in exchange therefor, and pursuant to the written request of the Depositor, executed by an affiliate of the Depositor, the Trustee, as Certificate Registrar, has executed, and the Trustee, as Authenticating Agent, has authenticated and delivered to or upon the order of the Depositor, the REMIC II Certificates in authorized denominations evidencing the entire beneficial ownership of REMIC II. The rights of the holders of the respective Classes of REMIC II Certificates to receive distributions from the proceeds of REMIC II in respect of their REMIC II Certificates, and all ownership interests evidenced or constituted by the respective Classes of REMIC II Certificates in such distributions, shall be as set forth in this Agreement.

 

 

Section 2.09

Execution, Authentication and Delivery of Class Z Certificates.

Concurrently with the assignment to the Trustee of the Additional Interest, and in exchange therefor and the establishment of the Additional Interest Account, the Trustee, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, as Certificate Registrar, authenticated, as Authenticating Agent and delivered to or upon the order of the Depositor, the Class Z Certificates.

 

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ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE TRUST FUND

 

 

Section 3.01

Administration of the Mortgage Loans.

(a)       Each of the Master Servicer and the Special Servicer shall service and administer the Mortgage Loans and Companion Loans that each is obligated to service and administer pursuant to this Agreement on behalf of the Trustee, for the benefit of the Certificateholders and in the case of the Companion Loans, the related Companion Holder, in accordance with any and all applicable laws, the terms of this Agreement (and, with respect to a Loan Pair, the related Intercreditor Agreement), the terms of the respective Mortgage Loans, and, if applicable, the Companion Loans and, to the extent consistent with the foregoing, in accordance with the Servicing Standard. With respect to any Loan Pair, in the event of a conflict between this Agreement and the related Intercreditor Agreement, the Intercreditor Agreement will control; provided that in no event shall the Master Servicer or Special Servicer take any action or omit to take any action in accordance with the terms of any Intercreditor Agreement that would cause such servicer to violate the Servicing Standard or the REMIC Provisions. As further described below in Section 3.01(h), with respect to the Winn-Dixie Loans, the Master Servicer and the Special Servicer, as applicable, shall perform the servicing functions required of the Indenture Trustee under the related Winn-Dixie Indentures. Without limiting the foregoing, and subject to Section 3.21(a), (i) the Master Servicer shall service and administer all Mortgage Loans and the Companion Loans that are not Specially Serviced Mortgage Loans, and (ii) the Special Servicer shall service and administer each Specially Serviced Mortgage Loan and related REO Property and shall render such services with respect to all such Mortgage Loans, Companion Loans and REO Properties as are specifically provided for herein; provided that the Master Servicer shall continue to receive payments, make all calculations, and prepare, or cause to be prepared, all reports required hereunder with respect to the Specially Serviced Mortgage Loans, except for the reports specified herein as prepared by the Special Servicer, as if no Servicing Transfer Event had occurred and with respect to the REO Properties (and the related REO Loans) as if no REO Acquisition had occurred, and to render such incidental services with respect to such Specially Serviced Mortgage Loans and REO Properties as are specifically provided for herein or as the Special Servicer reasonably requests to enable it to perform its responsibilities under this Agreement; provided, further, however, the Master Servicer shall not be liable for its failure to comply with such duties insofar as such failure results from a failure by the Special Servicer to provide sufficient information to the Master Servicer to comply with such duties or failure by the Special Servicer to otherwise comply with its obligations hereunder; provided, further, the Special Servicer shall not be liable for its failure to comply with such duties insofar as such failure results from a failure by the Master Servicer to provide sufficient information to the extent required herein to the Special Servicer to comply with such duties or failure by the Master Servicer to otherwise comply with its obligations hereunder. All references herein to the respective duties of the Master Servicer and the Special Servicer, and to the areas in which they may exercise discretion, shall be subject to Section 3.21.

 

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(b)       Subject to Section 3.01(a) and Section 6.11, the Master Servicer and the Special Servicer each shall have full power and authority, acting alone, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable, including filing or initiating legal actions or proceedings as the named plaintiff in their representative capacities on behalf of the Trust. Without limiting the generality of the foregoing, each of the Master Servicer and the Special Servicer, on behalf of the Trustee and by referencing its representative capacity, with respect to each of the Mortgage Loans and Companion Loans it is obligated to service hereunder, is hereby authorized and empowered by the Trustee and, pursuant to each Intercreditor Agreement, the Companion Holders to execute and deliver, on behalf of the Certificateholders, the Companion Holders and the Trustee or any of them, (i) any and all financing statements, continuation statements and other documents or instruments necessary to maintain the lien created by any Mortgage or other security document in the related Mortgage File on the related Mortgaged Property and related collateral; (ii) in accordance with the Servicing Standard and subject to Section 3.20 and Section 6.11, any and all modifications, waivers, amendments or consents to or with respect to any documents contained in the related Mortgage File; (iii) any and all instruments of satisfaction or cancellation, or of partial or full release, discharge, or assignment, and all other comparable instruments; and (iv) pledge agreements and other defeasance documents in connection with a defeasance contemplated pursuant to Section 3.20(h). Subject to Section 3.10, the Trustee shall, at the written request of the Master Servicer or the Special Servicer, promptly execute any limited powers of attorney and other documents furnished by the Master Servicer or the Special Servicer that are necessary or appropriate to enable them to carry out their servicing and administrative duties hereunder; provided, however, the Trustee shall not be held liable for any misuse of any such power of attorney by the Master Servicer or the Special Servicer; provided, further, the Master Servicer and the Special Servicer shall not, without the Trustee’s written consent, (A) initiate any action in the Trustee’s name without indicating the Master Servicer’s or Special Servicer’s representative capacity or (B) cause the Trustee to be registered to do business in any state.

(c)       The relationship of each of the Master Servicer and the Special Servicer to the Trustee under this Agreement is intended by the parties to be that of an independent contractor and not that of a joint venture, partner or agent. Unless the same Person acts as both Master Servicer and Special Servicer, the Master Servicer shall not be responsible for the actions of or failure to act by the Special Servicer and the Special Servicer shall not be responsible for the actions of or the failure to act by the Master Servicer.

(d)       Notwithstanding anything herein to the contrary, in no event shall the Master Servicer make a Servicing Advance with respect to any Companion Loan to the extent the related Co-Lender Loan has been paid in full or is no longer included in the Trust Fund.

(e)       Servicing and administration of each Companion Loan shall continue hereunder for so long as the corresponding Co-Lender Loan or any related REO Property is part of the Trust Fund or for such longer period as any amounts payable by

 

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the related Companion Holder to or for the benefit of the Trust Fund or any party hereto in accordance with the related Intercreditor Agreement remain due and owing; provided, however, if any Companion Loan is securitized, the Master Servicer’s servicing obligations and duties with respect to the related Companion Loan shall be limited to those obligations and duties described in the related Intercreditor Agreement and this Agreement.

(f)        Notwithstanding anything herein to the contrary, the parties hereto acknowledge and agree that the servicing and administration of a Serviced Whole Loan shall continue hereunder (without any further obligation to make P&I Advances) even if the related Mortgage Loan is no longer part of the Trust Fund, until such time as a separate servicing agreement is entered into in accordance with the related Intercreditor Agreement (it being acknowledged that neither the Master Servicer, the Trustee nor the Special Servicer shall be obligated under a separate agreement to which it is not a party). At such time as a separate servicing agreement is entered into, all amounts due to the Master Servicer or Special Servicer, as applicable, including advances and interest thereon, for the period that the Serviced Whole Loan was not part of the Trust Fund, but was serviced by the Master Servicer or the Special Servicer, as applicable, shall be paid to the Master Servicer or the Special Servicer by the holder of such Serviced Whole Loan or as otherwise agreed to by such holder and the Master Servicer or the Special Servicer, as applicable.

(g)       Notwithstanding anything herein to the contrary, the parties hereto acknowledge and agree that the Master Servicer’s obligations and responsibilities hereunder and the Master Servicer’s authority with respect to the Serviced Whole Loans are limited by and subject to the terms of the related Intercreditor Agreement. The Master Servicer (or, if a Serviced Whole Loan becomes a Specially Serviced Loan, the Special Servicer) shall use reasonable efforts consistent with the Servicing Standard to obtain the benefits of the rights of the Trust Fund (as holder of the related Serviced Mortgage Loan) under the related Intercreditor Agreement.

(h)       Master Servicer hereby assumes all duties and obligations of the Administrator as provided for in the Administration Agreement with respect to the Winn-Dixie Loans. The Indenture Trustee hereby consents to the assumption of such duties by the Master Servicer. Notwithstanding the foregoing, if any of the Winn-Dixie Loans becomes a Specially Serviced Mortgage Loan, the Special Servicer will assume all duties and obligations of the Administrator as provided in the Administration Agreement with respect to the related Winn-Dixie Loan.

 

 

Section 3.02

Collection of Mortgage Loan Payments.

(a)       Each of the Master Servicer or the Special Servicer shall undertake reasonable efforts consistent with the Servicing Standard to collect all payments required under the terms and provisions of the Mortgage Loans and Companion Loans, and any guaranties thereof, it is obligated to service hereunder and shall, to the extent such procedures shall be consistent with this Agreement, follow such collection procedures in accordance with the Servicing Standard; provided, however, nothing herein shall be

 

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construed as an express or implied guarantee by the Master Servicer or the Special Servicer of collectibility; provided, further, with respect to the Mortgage Loans that have Anticipated Repayment Dates, so long as the related Mortgagor is in compliance with each provision of the related Mortgage Loan documents, the Master Servicer and Special Servicer (including the Special Servicer in its capacity as a Certificateholder), shall not take any enforcement action with respect to the failure of the related Mortgagor to make any payment of Additional Interest or principal in excess of the principal component of the constant Periodic Payment, other than requests for collection, until the maturity date of the related Mortgage Loan; provided that the Master Servicer or Special Servicer, as the case may be, may take action to enforce the Trust Fund’s right to apply excess cash flow to principal in accordance with the terms of the Mortgage Loan documents. Consistent with the foregoing and subject to Section 3.20, the Special Servicer, with regard to a Specially Serviced Mortgage Loan, or the Master Servicer, with regard to a Mortgage Loan or Companion Loan that is not a Specially Serviced Mortgage Loan, may waive any Penalty Interest or late payment charge in connection with any payment on a Mortgage Loan or Companion Loan.

(b)       All amounts collected in respect of any Mortgage Loan or Companion Loan in the form of payments from Mortgagors, and/or guaranties, Liquidation Proceeds (insofar as such Liquidation Proceeds are of the nature described in clauses (i) through (iii) of the definition thereof) or Insurance Proceeds shall be applied to either amounts due and owing under the related Mortgage Note and Mortgage (including, without limitation, for principal and accrued and unpaid interest) in accordance with the express provisions of the related Mortgage Note and Mortgage (and, with respect to a Loan Pair, the related Intercreditor Agreement) or, if required pursuant to the express provisions of the related Mortgage, or as determined by the Master Servicer or Special Servicer in accordance with the Servicing Standard, to the repair or restoration of the related Mortgaged Property, and, in the absence of such express provisions, shall be applied for purposes of this Agreement: first, as a recovery of any related and unreimbursed Advances plus unreimbursed interest accrued thereon; second, as a recovery of Nonrecoverable Advances, Unliquidated Advances and Workout Delayed Reimbursement Amounts (including interest on such Nonrecoverable Advances), that were paid from collections on the Mortgage Loans (allocable to principal) and resulted in principal from the Mortgage Pool distributed to the Certificateholders being reduced pursuant to Section 3.05(a) hereof; third, as a recovery of accrued and unpaid interest at the related Mortgage Rate on such Mortgage Loan, to the extent such amounts have not been previously advanced, and exclusive of any portion thereof that constitutes Additional Interest; fourth, as a recovery of principal of such Mortgage Loan then due and owing, to the extent such amounts have not been previously advanced, including, without limitation, by reason of acceleration of the Mortgage Loan following a default thereunder; fifth, in accordance with the normal servicing practices of the Master Servicer or the Special Servicer, as a recovery of any other amounts then due and owing under such Mortgage Loan (other than Additional Interest), including, without limitation, Prepayment Premiums, Yield Maintenance Charges and Penalty Interest; sixth, as a recovery of any remaining principal of such Mortgage Loan to the extent of its entire remaining unpaid principal balance; and seventh, with respect to any ARD Loan after its Anticipated Repayment Date, as a recovery of any unpaid Additional Interest. All

 

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amounts collected on any Mortgage Loan in the form of Liquidation Proceeds of the nature described in clauses (iv) through (vi) of the definition thereof shall be deemed to be applied: first, as a recovery of any related and unreimbursed Advances plus interest accrued thereon; second, as a recovery of accrued and unpaid interest at the related Mortgage Rate on such Mortgage Loan to but not including the Due Date in the Collection Period of receipt, to the extent such amounts have not been previously advanced, and exclusive of any portion thereof that constitutes Additional Interest; third, as a recovery of principal, to the extent such amounts have not been previously advanced, of such Mortgage Loan to the extent of its entire unpaid principal balance; and fourth, with respect to any ARD Loan after its Anticipated Repayment Date, as a recovery of any unpaid Additional Interest. No such amounts shall be applied to the items constituting additional servicing compensation as described in the first sentence of either Section 3.11(b) or 3.11(d) unless and until all principal and interest then due and payable on such Mortgage Loan has been collected. Amounts collected on any REO Loan shall be deemed to be applied in accordance with the definition thereof. The provisions of this paragraph with respect to the application of amounts collected on any Mortgage Loan shall not alter in any way the right of the Master Servicer, the Special Servicer or any other Person to receive payments from the Certificate Account as set forth in clauses (ii) through (xvi) of Section 3.05(a) from amounts so applied.

(c)       Within 60 days after the later of (i) the Closing Date and (ii) the Master Servicer’s receipt of the applicable letter of credit, the Master Servicer shall notify each provider of a letter of credit for each Mortgage Loan identified as having a letter of credit on the Mortgage Loan Schedule, that the Master Servicer or the Special Servicer on behalf of the Trustee for the benefit of the Certificateholders shall be the beneficiary under each such letter of credit. If a draw upon a letter of credit is needed before its transfer to the Trust Fund can be completed, the applicable Mortgage Loan Seller shall draw upon such letter of credit for the benefit of the Trust Fund pursuant to written instructions from the Master Servicer or Special Servicer.

(d)       In the event that the Master Servicer or Special Servicer receives Additional Interest in any Collection Period, or receives notice from the related Mortgagor that the Master Servicer or Special Servicer will be receiving Additional Interest in any Collection Period, the Master Servicer or Special Servicer, as applicable, will promptly notify the Trustee. Subject to the provisions of Section 3.02(a) hereof, none of the Master Servicer, the Trustee or the Special Servicer shall be responsible for any such Additional Interest not collected after notice from the related Mortgagor.

(e)       With respect to any Mortgage Loan in connection with which the Mortgagor was required to escrow funds or to post a letter of credit related to obtaining certain performance objectives described in the applicable Mortgage Loan documents, the Master Servicer shall, to the extent consistent with the Servicing Standard, hold such escrows, letters of credit and proceeds thereof as additional collateral and not apply such items to reduce the principal balance of such Mortgage Loan unless otherwise required to do so pursuant to the applicable Mortgage Loan documents.

 

 

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Section 3.03     Collection of Taxes, Assessments and Similar Items; Servicing Accounts; Reserve Accounts.

(a)       The Master Servicer shall, as to all Mortgage Loans and Companion Loans, establish and maintain one or more accounts (the “Servicing Accounts”), into which all Escrow Payments shall be deposited and retained, and shall administer such accounts in accordance with the terms of the Mortgage Loan documents. Each Servicing Account shall be an Eligible Account. Withdrawals of amounts so collected from a Servicing Account may be made (to the extent amounts have been escrowed for such purpose) only to: (i) effect payment of items for which Escrow Payments were collected and comparable items; (ii) reimburse the Master Servicer or the Trustee for any unreimbursed Servicing Advances; (iii) refund to Mortgagors any sums as may be determined to be overages; (iv) pay interest, if required and as described below, to Mortgagors on balances in the Servicing Account; (v) pay itself interest and investment income on balances in the Servicing Account as described in Section 3.06(b), if and to the extent not required by law or the terms of the applicable Mortgage Loan to be paid to the Mortgagor; (vi) withdraw amounts deposited in error or (vii) clear and terminate the Servicing Account at the termination of this Agreement in accordance with Section 9.01. To the extent permitted by law or the applicable Mortgage Loan, funds in the Servicing Accounts may be invested only in Permitted Investments in accordance with the provisions of Section 3.06 and in accordance with the terms of the related Mortgage Loan documents. The Master Servicer shall pay or cause to be paid to the Mortgagors interest, if any, earned on the investment of funds in Servicing Accounts maintained thereby, if required by law or the terms of the related Mortgage Loan. If the Master Servicer shall deposit in a Servicing Account any amount not required to be deposited therein, it may at any time withdraw such amount from such Servicing Account, any provision herein to the contrary notwithstanding. The Servicing Accounts shall not be considered part of the segregated pool of assets constituting any ED Loan REMIC, REMIC I, REMIC II or the Grantor Trusts.

(b)       The Master Servicer or the Special Servicer (for REO Loans) shall (i) maintain accurate records with respect to the related Mortgaged Property reflecting the status of real estate taxes, assessments and other similar items that are or may become a lien thereon and the status of insurance premiums and any ground rents payable in respect thereof and (ii) use reasonable efforts to obtain, from time to time, all bills for the payment of such items (including renewal premiums) and shall effect payment thereof prior to the applicable penalty or termination date and, in any event, prior to the institution of foreclosure or similar proceedings with respect to the related Mortgaged Property for nonpayment of such items. For purposes of effecting any such payment for which it is responsible, the Master Servicer shall apply Escrow Payments (at the direction of the Special Servicer for Specially Serviced Mortgage Loans and REO Loans) as allowed under the terms of the related Mortgage Loan or Companion Loan or, if such Mortgage Loan or Companion Loan does not require the related Mortgagor to escrow for the payment of real estate taxes, assessments, insurance premiums, ground rents (if applicable) and similar items, the Master Servicer shall, as to all Mortgage Loans or Companion Loans, use reasonable efforts consistent with the Servicing Standard to enforce the requirement of the related Mortgage that the Mortgagor make payments in

 

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respect of such items at the time they first become due, and, in any event, prior to the institution of foreclosure or similar proceedings with respect to the related Mortgaged Property for nonpayment of such items.

(c)       The Master Servicer shall, as to all Mortgage Loans and Companion Loans, subject to Section 3.01(d), make a Servicing Advance with respect to the related Mortgaged Property in an amount equal to all such funds as are necessary for the purpose of effecting the payment of (i) real estate taxes, assessments, penalties and other similar items, (ii) ground rents (if applicable), and (iii) premiums on Insurance Policies in each instance if and to the extent Escrow Payments (if any) collected from the related Mortgagor are insufficient to pay such item when due and the related Mortgagor has failed to pay such item on a timely basis; provided that the Master Servicer shall not make any Servicing Advance prior to the penalty date or cancellation date, as applicable, if the Master Servicer reasonably anticipates in accordance with the Servicing Standard that the Mortgagor will pay such amount on or before the penalty date or cancellation date; provided, further, the Master Servicer shall not be obligated to make any Servicing Advance that would, if made, constitute a Nonrecoverable Servicing Advance but may, but is not required to, pay such amounts out of funds in the Certificate Account if it determines that such payment would be in the best interests of the Certificateholders and such payment may be withdrawn from amounts in the Certificate Account; provided that the Master Servicer may conclusively rely upon any such nonrecoverability determination by the Special Servicer. All such Servicing Advances or amounts withdrawn from the Certificate Account shall be reimbursable in the first instance from related collections from the Mortgagors, and further as provided in Section 3.05(a). No costs incurred by the Master Servicer or the Trustee in effecting the payment of real estate taxes, assessments and, if applicable, ground rents on or in respect of such Mortgaged Properties shall, for purposes of this Agreement, including, without limitation, the Paying Agent’s calculation of monthly distributions to Certificateholders, be added to the unpaid Stated Principal Balances of the related Mortgage Loans or Companion Loans, notwithstanding that the terms of such Mortgage Loans or Companion Loans so permit. The foregoing shall in no way limit the Master Servicer’s ability to charge and collect from the Mortgagor such costs together with interest thereon.

The Special Servicer shall give the Master Servicer and the Trustee not less than 5 Business Days’ notice with respect to Servicing Advances to be made on any Specially Serviced Mortgage Loan or REO Property, before the date on which the Master Servicer is required to make any Servicing Advance with respect to a given Mortgage Loan, Companion Loan or REO Property; provided, however, only 2 Business Days’ notice shall be required in respect of Servicing Advances required to be made on an urgent or emergency basis (which may include, without limitation, Servicing Advances required to make tax or insurance payments). In addition, the Special Servicer shall provide the Master Servicer and the Trustee with such information in its possession as the Master Servicer or the Trustee, as applicable, may reasonably request to enable the Master Servicer or the Trustee, as applicable, to determine whether a requested Servicing Advance would constitute a Nonrecoverable Servicing Advance. Any request by the Special Servicer that the Master Servicer make a Servicing Advance shall be deemed to be a determination by the Special Servicer that such requested Servicing Advance is not a Nonrecoverable Servicing Advance, and the Master Servicer shall be entitled to

 

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conclusively rely on such determination. On the fourth Business Day before each Distribution Date, the Special Servicer shall report to the Master Servicer the Special Servicer’s determination as to whether any Servicing Advance previously made with respect to a Specially Serviced Mortgage Loan or REO Loan is a Nonrecoverable Servicing Advance. The Master Servicer shall be entitled to conclusively rely on such a determination.

If the Master Servicer is required under any provision of this Agreement (including, but not limited to, this Section 3.03(c)) to make a Servicing Advance, but does not do so within 15 days after such Advance is required to be made (or such shorter period as may be required to avoid foreclosure of liens for delinquent real estate taxes or a lapse in insurance coverage), the Trustee shall, if a Responsible Officer of the Trustee has actual knowledge of such failure on the part of the Master Servicer, give written notice of such failure to the Master Servicer. If such Servicing Advance is not made by the Master Servicer within 3 Business Days after such notice then (subject to a determination that such Servicing Advance would not be a Nonrecoverable Servicing Advance) the Trustee shall make such Servicing Advance. Any failure by the Master Servicer to make a Servicing Advance hereunder shall constitute an Event of Default by the Master Servicer subject to and as provided in Section 7.01.

(d)       In connection with its recovery of any Servicing Advance from the Certificate Account pursuant to Section 3.05(a), each of the Master Servicer and the Trustee shall be entitled to receive, out of any amounts then on deposit in the Certificate Account, any unpaid interest at the Reimbursement Rate in effect from time to time, compounded annually, accrued on the amount of such Servicing Advance (to the extent made with its own funds) from the date made to but not including the date of reimbursement such interest to be payable, subject to the terms of the related Intercreditor Agreement with respect to a Loan Pair, first out of late payment charges and Penalty Interest received on the related Mortgage Loan or REO Property during the Collection Period in which such reimbursement is made, and to the extent that such late payment charges and Penalty Interest are insufficient, but only after or at the same time the related Advance has been or is reimbursed pursuant to this Agreement, then from general collections on the Mortgage Loans then on deposit in the Certificate Account. The Master Servicer shall reimburse itself or the Trustee, as applicable, for any outstanding Servicing Advance made thereby as soon as practicable after funds available for such purpose have been received by the Master Servicer, and in no event shall interest accrue in accordance with this Section 3.03(d) on any Servicing Advance as to which the corresponding Escrow Payment or other similar payment by the Mortgagor was received by the Master Servicer on or prior to the date the related Servicing Advance was made. Notwithstanding anything herein to the contrary, in no event shall the Master Servicer or the Trustee make any Servicing Advances with respect to any Companion Loan after the related Co-Lender Loan has been paid in full.

(e)       The determination by the Master Servicer or the Special Servicer that the Master Servicer has made a Nonrecoverable Servicing Advance or that any proposed Servicing Advance, if made, would constitute a Nonrecoverable Servicing Advance, shall be made in accordance with the Servicing Standard and shall be evidenced by an Officer’s Certificate delivered promptly to the Trustee and the Depositor, setting forth the basis for such determination, together with a copy of any

 

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Appraisal (the cost of which may be paid out of the Certificate Account pursuant to Section 3.05(a)) of the related Mortgaged Property or REO Property, as the case may be; which Appraisal shall be conducted pursuant to Section 3.09(a) by the Master Servicer, or by or on behalf of the Special Servicer if the Mortgage Loan is a Specially Serviced Mortgage Loan or, if no such Appraisal has been performed, a copy of an Appraisal of the related Mortgaged Property or REO Property, performed within the twelve months preceding such determination and the party delivering such appraisal has no actual knowledge of a material adverse change in the condition of the related Mortgaged Property that would draw into question the applicability of such Appraisal, by an Independent Appraiser or other expert in real estate matters, and further accompanied by related Mortgagor operating statements and financial statements, budgets and rent rolls of the related Mortgaged Property and any engineers’ reports, environmental surveys or similar reports that the Master Servicer or the Special Servicer may have obtained and that support such determination. The Master Servicer shall be entitled to rely, conclusively, on any determination by the Special Servicer that a Servicing Advance, if made, would be a Nonrecoverable Advance. The Trustee shall be entitled to rely, conclusively, on any determination by the Master Servicer or the Special Servicer that a Servicing Advance, if made, would be a Nonrecoverable Advance; provided, however, if the Master Servicer has failed to make a Servicing Advance for reasons other than a determination by the Master Servicer or the Special Servicer that such Servicing Advance would be a Nonrecoverable Advance, the Trustee shall make such Servicing Advance within the time periods required by Section 3.03(c) unless the Trustee in good faith, makes a determination that such Servicing Advance would be a Nonrecoverable Advance.

(f)        The Master Servicer shall, as to all Mortgage Loans and Companion Loans, establish and maintain, as applicable, one or more accounts (the “Reserve Accounts”), into which all Reserve Funds, if any, shall be deposited and retained. Withdrawals of amounts so deposited may be made (i) to pay for, or to reimburse the related Mortgagor in connection with, the related environmental remediation, repairs and/or capital improvements at the related Mortgaged Property if the repairs and/or capital improvements have been completed, and such withdrawals are made in accordance with the Servicing Standard and the terms of the related Mortgage Note, Mortgage and any agreement with the related Mortgagor governing such Reserve Funds and any other items for which such Reserve Funds were intended pursuant to the related Mortgage Loan documents and (ii) to pay the Master Servicer interest and investment income earned on amounts in the Reserve Accounts as described below if permitted under the related Mortgage Loan documents. To the extent permitted in the applicable Mortgage, funds in the Reserve Accounts to the extent invested may be only invested in Permitted Investments in accordance with the provisions of Section 3.06. All Reserve Accounts shall be Eligible Accounts. The Reserve Accounts shall not be considered part of the segregated pool of assets comprising each ED Loan REMIC, REMIC I, REMIC II or the Grantor Trusts. Consistent with the Servicing Standard, the Master Servicer may waive or extend the date set forth in any agreement governing such Reserve Funds by which the required repairs and/or capital improvements at the related Mortgaged Property must be completed.

 

 

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Section 3.04     Certificate Account, Interest Reserve Account, Gain-on-Sale Reserve Account, Additional Interest Account, Distribution Account and Companion Distribution Account.

(a)       The Master Servicer shall establish and maintain one or more accounts (collectively, the “Certificate Account”), held on behalf of the Trustee in trust for the benefit of the Certificateholders and, to the extent funds on deposit in the Certificate Account are allocable to the related Companion Loans, the related Companion Holders, but solely to the extent set forth in the related Intercreditor Agreement and subject to any provisions relating to subordination of rights with respect to the Co-Lender Loans. The Certificate Account shall be an Eligible Account. The Master Servicer shall deposit or cause to be deposited in the Certificate Account, within 1 Business Day of receipt of available funds (in the case of payments by Mortgagors or other collections on the Mortgage Loans or the Companion Loans) or as otherwise required hereunder, the following payments and collections received or made by the Master Servicer or on its behalf subsequent to the Cut-Off Date (other than in respect of principal and interest on the Mortgage Loans or the Companion Loans due and payable on or before the Cut-Off Date, which payments shall be delivered promptly to the applicable Mortgage Loan Seller or its designee, with negotiable instruments endorsed as necessary and appropriate without recourse), other than amounts received from Mortgagors which are to be used to purchase defeasance collateral, or payments (other than Principal Prepayments) received by it on or prior to the Cut-Off Date but allocable to a period subsequent thereto:

(i)       all payments on account of principal of the Mortgage Loans or Companion Loans, including Principal Prepayments;

(ii)      all payments on account of interest on the Mortgage Loans or Companion Loans, including Additional Interest;

(iii)     all Prepayment Premiums and Yield Maintenance Charges;

(iv)      all Insurance Proceeds and Liquidation Proceeds (other than Liquidation Proceeds described in clause (vi) of the definition thereof that are required to be deposited in the Distribution Account pursuant to Section 9.01) received in respect of any Mortgage Loan or Companion Loan (including, without limitation, any amounts representing recoveries of Nonrecoverable Advances or Unliquidated Advances, including interest on such Nonrecoverable Advances or Unliquidated Advances in respect of the related Mortgage Loans);

(v)       any amounts required to be deposited by the Master Servicer pursuant to Section 3.06(b) in connection with losses incurred with respect to Permitted Investments of funds held in the Certificate Account;

(vi)     any amounts required to be deposited by the Master Servicer or the Special Servicer pursuant to Section 3.07(b) in connection with losses resulting from a deductible clause in a blanket hazard policy;

 

 

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(vii)     any amounts required to be transferred from an REO Account pursuant to Section 3.16(c) and any amounts received from a Mortgage Loan Seller with respect to a Special Reserve Account pursuant to Section 2.02(d);

(viii)    any amount in respect of Purchase Prices and Substitution Shortfall Amounts pursuant to Section 2.03(b);

(ix)      any amount required to be deposited by the Master Servicer pursuant to Section 3.19(a) in connection with Prepayment Interest Shortfalls;

(x)        any amount required to be deposited by the Master Servicer pursuant to Section 3.03(d) and 4.03(d) in connection with reimbursing the Trust Fund for interest paid on a P&I Advance or Servicing Advance, as applicable;

(xi)      any amount paid by a Mortgagor to cover items for which a Servicing Advance has been previously made and for which the Master Servicer, the Special Servicer or the Trustee, as applicable, has been previously reimbursed out of the Certificate Account;

(xii)     any amount required to be deposited by the Master Servicer or the Special Servicer pursuant to Section 3.11(b) and 3.11(d), respectively, in connection with reimbursing the Trust Fund for Additional Trust Fund Expenses; and

The foregoing requirements for deposit in the Certificate Account shall be exclusive. Notwithstanding the foregoing, actual payments from Mortgagors in the nature of Escrow Payments, amounts to be deposited in Reserve Accounts, and amounts that the Master Servicer and the Special Servicer are entitled to retain as additional servicing compensation pursuant to Sections 3.11(b) and 3.11(d), need not be deposited by the Master Servicer in the Certificate Account. If the Master Servicer shall deposit in the Certificate Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Certificate Account, any provision herein to the contrary notwithstanding. The Master Servicer shall promptly deliver to the Special Servicer as additional servicing compensation in accordance with Section 3.11(d), assumption fees, late payment charges (to the extent not applied to pay interest on Advances as provided in Sections 3.03(d) or 4.03(d) or Additional Trust Fund Expenses as provided in Section 3.11(d)) and other transaction fees or other expenses received by the Master Servicer to which the Special Servicer is entitled pursuant to either of such Sections upon receipt of a certificate of a Servicing Officer of the Special Servicer describing the item and amount. The Certificate Account shall be maintained as a segregated account, separate and apart from trust funds created for mortgage pass-through certificates of other series and the other accounts of the Master Servicer.

The Master Servicer may maintain, as part of the Certificate Account, a subaccount for each Companion Loan on behalf of and in trust for the benefit of the related Companion Holder, into which subaccount the Master Servicer shall deposit or cause to be deposited all amounts described in the first paragraph of this Section 3.04(a) to the extent allocable to the related Companion Loan in accordance with this Agreement and the related Intercreditor Agreement, and out of which subaccount the Master Servicer may make

 

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withdrawals to the extent withdrawals of such funds are provided for in Section 3.05(a) of this Agreement or in the related Intercreditor Agreement. Each such subaccount shall be an Eligible Account or a subaccount of an Eligible Account and shall be entitled “Wachovia Bank, National Association, as Master Servicer, on behalf of and in trust for the related Companion Holder.”

Upon receipt of any of the amounts described in clauses (i) through (iv), (xi), (xii) and (xiii) above with respect to any Mortgage Loan or Companion Loan, the Special Servicer shall promptly, but in no event later than one Business Day after receipt of available funds, remit such amounts (net of any reimbursable expenses incurred by the Special Servicer) to or at the direction of the Master Servicer for deposit into the Certificate Account in accordance with the second preceding paragraph, unless the Special Servicer determines, consistent with the Servicing Standard, that a particular item should not be deposited because of a restrictive endorsement. Any such amounts received by the Special Servicer with respect to an REO Property shall be deposited by the Special Servicer into the REO Account and remitted to the Master Servicer for deposit into the Certificate Account pursuant to Section 3.16(c). With respect to any such amounts paid by check to the order of the Special Servicer, the Special Servicer shall endorse such check to the order of the Master Servicer and shall deliver promptly, but in no event later than three Business Days after receipt, any such check to the Master Servicer by overnight courier, unless the Special Servicer determines, consistent with the Servicing Standard, that a particular item cannot be so endorsed and delivered because of a restrictive endorsement or other appropriate reason.

(b)       The Trustee shall establish and maintain one or more trust accounts (collectively, the “Distribution Account”) at the office of the Trustee to be held in trust for the benefit of the Certificateholders (other than the Class Z Certificateholders). The Distribution Account shall be an Eligible Account. The Trustee hereby authorizes the Paying Agent to make deposits in and withdrawals from the Distribution Account in accordance with the terms of this Agreement. The Master Servicer shall deliver to the Paying Agent each month no later than 1:30 p.m. New York City time on the P&I Advance Date therein, for deposit in the Distribution Account, an aggregate amount of immediately available funds equal to that portion of the Available Distribution Amount (calculated without regard to clauses (a)(ii), (a)(v) and (b)(ii)(B) of the definition thereof) for the related Distribution Date then on deposit in the Certificate Account, together with (i) any Prepayment Premiums and/or Yield Maintenance Charges received on the Mortgage Loans during the related Collection Period, and (ii) in the case of the final Distribution Date, any additional amounts contemplated by the third paragraph of Section 9.01.

The Companion Paying Agent shall establish and maintain one or more trust accounts for distributions to the Companion Loans (collectively, the “Companion Distribution Account”) to be held on behalf of the related Companion Holder(s). The Companion Distribution Account shall be an Eligible Account and may be a subaccount of the Certificate Account. The Master Servicer hereby authorizes the Companion Paying Agent to make deposits in and withdrawals from the Companion Distribution Account in accordance with the terms of this Agreement. Unless the Companion Distribution Account is the related subaccount or subaccounts of the Certificate Account as allowed by the last sentence of the definition of Companion Distribution Account, the Master Servicer shall deliver to the Companion Paying

 

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Agent each month no later than 2:00 p.m. New York City time on the P&I Advance Date therein for deposit in the Companion Distribution Account, an aggregate amount of immediately available funds equal to the amount available to be distributed to the related Companion Holder(s) pursuant to the related Intercreditor Agreement.

In addition, the Master Servicer shall, as and when required hereunder, deliver to the Paying Agent for deposit in the Distribution Account:

(i)       any P&I Advances required to be made by the Master Servicer in accordance with Section 4.03(a); and

(ii)      the Purchase Price paid in connection with the purchase by the Master Servicer of all of the Mortgage Loans and any REO Properties, pursuant to Section 9.01, exclusive of the portion of such amounts required to be deposited in the Certificate Account pursuant to Section 9.01.

The Paying Agent shall, upon receipt, deposit in the Distribution Account any and all amounts received by the Paying Agent that are required by the terms of this Agreement to be deposited therein.

All such amounts deposited in respect of the ED Loans shall be deemed to be assets of the related ED Loan REMIC and distributed in respect of the related ED Loan REMIC Regular Interest and the related ED Loan REMIC Residual Interest.

(c)       The Trustee shall establish and maintain one or more accounts (collectively, the “Interest Reserve Account”), held in trust for the benefit of the Certificateholders. The Interest Reserve Account shall be an Eligible Account. On or before each Distribution Date in February and, during each year that is not a leap year, January (unless, in each case, the related Distribution Date is the final Distribution Date), the Master Servicer shall withdraw from the Certificate Account and remit to the Trustee for deposit in the Interest Reserve Account, with respect to each Interest Reserve Loan, an amount equal to the Interest Reserve Amount in respect of such Interest Reserve Loan, for such Distribution Date (such withdrawal from the Certificate Account to be made out of general collections on the Mortgage Pool where any related P&I Advance was deposited in the Distribution Account).

(d)       Prior to any Collection Period during which Additional Interest is received, and upon notification from the Master Servicer or Special Servicer pursuant to Section 3.02(d), the Trustee (on behalf of the Certificateholders) shall establish and maintain the Additional Interest Account in the name of the Trustee in trust for the benefit of the Class Z Certificateholders. The Additional Interest Account shall be established and maintained as an Eligible Account. Prior to the applicable Distribution Date, the Master Servicer shall remit to the Trustee for deposit in the Additional Interest Account an amount equal to the Additional Interest received during the applicable Collection Period.

Following the distribution of Additional Interest to the Class Z Certificateholders, on the first Distribution Date after which there are no longer any Mortgage Loans outstanding

 

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which pursuant to their terms could pay Additional Interest, the Trustee shall terminate the Additional Interest Account.

(e)       The Paying Agent, on behalf of the Trustee for the benefit of the Certificateholders, shall establish (upon notice from Special Servicer of an event occurring that generates Gain-on-Sale Proceeds) and maintain the Gain-on-Sale Reserve Account in the name of the Paying Agent on behalf of the Trustee for the benefit of the Certificateholders. The Gain-on-Sale Reserve Account shall be maintained as a segregated account, separate and apart from trust funds for mortgage pass-through certificates of other series administered by the Paying Agent and other accounts of the Paying Agent. Upon the disposition of any REO Property in accordance with Section 3.09 or Section 3.18, the Special Servicer will calculate the Gain-on-Sale Proceeds, if any, realized in connection with such sale and remit such funds to the Paying Agent for deposit into the Gain-on-Sale Reserve Account. Any Gain on Sale Proceeds realized with respect to any ED Loan shall be deemed distributed in respect of the related ED Loan REMIC Residual Interest and immediately deposited into the Gain on Sale Reserve Account in REMIC I.

(f)        Funds in the Certificate Account, the Interest Reserve Account, the Distribution Account, the Additional Interest Account, the Interest Shortfall Account and the Gain-on-Sale Reserve Account may be invested only in Permitted Investments in accordance with the provisions of Section 3.06. The Master Servicer shall give written notice to the Trustee, the Special Servicer and the Rating Agencies of the location of the Certificate Account as of the Closing Date and of the new location of the Certificate Account prior to any change thereof. The Paying Agent shall give written notice to the Trustee, the Master Servicer, the Special Servicer and the Rating Agencies of any new location of the Distribution Account prior to any change thereof.

(g)       On or before the Closing Date, the Trustee shall establish and maintain one or more accounts (collectively, the “Interest Shortfall Account”), held on behalf of the Trustee in trust for the benefit of the Certificateholders. On the Closing Date, the Depositor shall deposit or cause to be deposited the Interest Shortfall Amount.

Section 3.05     Permitted Withdrawals from the Certificate Account, Distribution Account, Interest Reserve Account, Additional Interest Account, Gain-on-Sale Reserve Account, Companion Distribution Account and Interest Shortfall Account.

(a)       The Master Servicer may, from time to time, make withdrawals from the Certificate Account for any of the following purposes (the order set forth below not constituting an order of priority for such withdrawals):

(i)        (A) to remit to the Paying Agent for deposit in the Distribution Account the amounts required to be so deposited pursuant to the first paragraph of Section 3.04(b) and any amount that may be applied to make P&I Advances pursuant to Section 4.03(a); and (B) to deposit in and remit to the Companion Paying Agent for deposit in each Companion Distribution Account the amounts required to be so deposited pursuant to the

 

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third paragraph of Section 3.04(b) and any amount relating to a Companion Loan that may be applied to make P&I Advances pursuant to Section 4.03(a);

(ii)      to reimburse the Trustee and itself, in that order, for unreimbursed P&I Advances (the Trustee’s and Master Servicer’s right to reimbursement pursuant to this clause (ii) with respect to any P&I Advance (other than Nonrecoverable Advances and Workout-Delayed Reimbursement Amounts that are reimbursed pursuant to clause (vii) below) being limited to amounts that represent Late Collections of interest (net of the related Servicing Fees) and principal (net of any related Workout Fee or Liquidation Fee) received in respect of the particular Mortgage Loan, REO Loan or Companion Loan as to which such P&I Advance was made);

(iii)     to pay to itself earned and unpaid Master Servicing Fees in respect of each Mortgage Loan and REO Loan, the Master Servicer’s right to payment pursuant to this clause (iii) with respect to any Mortgage Loan or REO Loan being limited to amounts received on or in respect of such Mortgage Loan (whether in the form of payments, Liquidation Proceeds or Insurance Proceeds) or such REO Loan (whether in the form of REO Revenues, Liquidation Proceeds or Insurance Proceeds) that are allocable as a recovery of interest thereon;

(iv)      to pay to the Special Servicer earned and unpaid Special Servicing Fees in respect of each Specially Serviced Mortgage Loan and REO Loan;

(v)       to pay the Special Servicer (or, if applicable, a predecessor Special Servicer) earned and unpaid Workout Fees or Liquidation Fees in respect of each Specially Serviced Mortgage Loan, Corrected Mortgage Loan, and REO Loan, the Special Servicer’s (or, if applicable, any predecessor Special Servicer’s) right to payment pursuant to this clause (v) with respect to any such Mortgage Loan or REO Loan being limited to amounts received on or in respect of such Specially Serviced Mortgage Loan or Corrected Mortgage Loan (whether in the form of payments or Liquidation Proceeds) or such REO Loan (whether in the form of REO Revenues or Liquidation Proceeds) that are allocable as a recovery of principal or interest thereon (provided that no Liquidation Fee shall be payable out of (i) Insurance Proceeds and (ii) any Liquidation Proceeds received in connection with the purchase of any Mortgage Loan or REO Property by a Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement (if purchased within the required time period set forth in such Mortgage Loan Purchase Agreement), by the Special Servicer, the Companion Holder or the Majority Subordinate Certificateholder, as described in Section 3.18(c), Section 3.18(d), Section 3.18(e) or Section 3.18(h), or by any mezzanine lender pursuant to the terms of the related mezzanine intercreditor agreement, or by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder or the purchasing Certificateholder pursuant to Section 9.01);

(vi)      to reimburse the Trustee, itself or the Special Servicer, in that order, for any unreimbursed Servicing Advances, the Trustee’s, the Master Servicer’s and the Special Servicer’s respective rights to reimbursement pursuant to this clause (vi) with respect to any Servicing Advance (other than Nonrecoverable Advances and

 

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Workout-Delayed Reimbursement Amounts that are reimbursed pursuant to clause (vii) below) being limited to payments made by the related Mortgagor that are allocable to such Servicing Advance, or to Liquidation Proceeds, Insurance Proceeds and, if applicable, REO Revenues received in respect of the particular Mortgage Loan, Companion Loan or REO Property as to which such Servicing Advance was made (provided that in case of such reimbursement relating to any Co-Lender Loan, such reimbursements shall be made first, from amounts collected on the related Subordinate Companion Loan and then from the related Co-Lender Loan (and Pari Passu Companion Loan, if any) in accordance with the terms of the related Intercreditor Agreement);

(vii)     to reimburse the Trustee, itself or the Special Servicer, in that order, (A) for any unreimbursed Advances (including interest at the Reimbursement Rate) that have been or are determined to be Nonrecoverable Advances and for any Workout-Delayed Reimbursement Amounts, in that order, and (B) to pay itself, with respect to any Mortgage Loan, Companion Loan or any REO Property, any related earned Master Servicing Fee that remained unpaid in accordance with clause (iii) above, in the case of clause (B), following a Final Recovery Determination made with respect to such Mortgage Loan, Companion Loan or REO Property and the deposit into the Certificate Account of all amounts received in connection therewith; provided, however, any reimbursement of Nonrecoverable Advances or Workout Delayed Reimbursement Amounts payable pursuant to this clause (vii), with respect to Nonrecoverable Advances shall be deemed to be recovered, first, from collections or receipts on the Mortgage Loans and REO Properties in respect of principal and then in respect of interest and other collections, and, with respect to Workout Delayed Reimbursement Amounts, only out of collections and receipts on the Mortgage Loans and REO Properties in respect of principal;

(viii)    at such time as it reimburses the Trustee, itself or the Special Servicer, in that order, for any unreimbursed Advance (including any Advance that constitutes a Workout-Delayed Reimbursement Amount) pursuant to clause (ii), (vi), or (vii) above, to pay the Trustee, itself, or the Special Servicer, as the case may be, in that order, any interest accrued and payable thereon in accordance with Section 3.03(d) or 4.03(d), as applicable; provided that the Trustee’s, the Master Servicer’s and the Special Servicer’s, rights to payment pursuant to this clause (viii) with respect to interest on any Advance shall be satisfied (A) subject to and in accordance with the terms of the Intercreditor Agreement with respect to the related Loan Pair, first out of late payment charges and Penalty Interest collected on or in respect of the related Mortgage Loan (and if the Advance was a Servicing Advance made with respect to a Co-Lender Loan out of such amounts collected on or in respect of the related Companion Loan(s)) and REO Loan, during the Collection Period in which such Advance is reimbursed (the use of such late payment charges and Penalty Interest to be allocated between the Master Servicer and the Special Servicer on a pro rata basis based on the amount of late payment charges and Penalty Interest that the Master Servicer and the Special Servicer have received as additional servicing compensation during such period), and (B) to the extent that the late payment charges and Penalty Interest described in the immediately preceding clause (A) are insufficient, but only at the same time or after such Advance has been reimbursed, out of general collections on the Mortgage Loans, Companion Loans and any

 

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REO Properties on deposit in the Certificate Account (provided that, in case of such reimbursement relating to a Serviced Whole Loan, such reimbursements shall be made first, from amounts collected on the related subordinate Companion Loan, if any, and then from the related Mortgage Loan, subject to, and in accordance with, the terms of the related Intercreditor Agreement prior to being payable out of general collections on the Mortgage Loans and any REO Properties);

(ix)      to pay for costs and expenses incurred by the Trust Fund pursuant to the first sentence of Section 3.12(a) or, pursuant to Section 3.12, as to any Mortgage Loan that is a Specially Serviced Mortgage Loan;

(x)       to pay itself, as additional servicing compensation in accordance with Section 3.11(b), (A) interest and investment income earned in respect of amounts held in the Certificate Account as provided in Section 3.06(b), but only to the extent of the Net Investment Earnings with respect to the Certificate Account for any Collection Period; (B) any Prepayment Interest Excesses, and (C) Penalty Interest and late payment charges on Mortgage Loans that are not Specially Serviced Mortgage Loans (to the extent such Penalty Interest and/or late payment charges were not applied to offset interest on Advances pursuant to Section 3.05(a)(viii)(A) or Additional Trust Fund Expenses pursuant to Section 3.11(b) or inspection expenses pursuant to Section 3.12(a));

(xi)      to pay to the Special Servicer, as additional servicing compensation in accordance with Section 3.11(d) (to the extent such Penalty Interest and/or late payment charges were not applied to offset interest on Advances pursuant to clause (viii)(A) of this Section or Additional Trust Fund Expenses pursuant to Section 3.11(d) or inspection expenses pursuant to Section 3.12(a));

(xii)     to pay for the cost of an independent appraiser or other expert in real estate matters retained pursuant to Section 3.03(e), 3.09(a), 3.18(b), 4.03(c) or 9.01;

(xiii)     to pay itself, the Special Servicer, the Depositor, or any of their respective directors, officers, members, managers, employees and agents, as the case may be, any amounts payable to any such Person pursuant to Section 6.03;

(xiv)     to pay for (A) the advice of counsel and tax accountants contemplated by Section 3.17(a)(iii), (B) the cost of the Opinions of Counsel contemplated by Sections 3.09(b)(ii), 3.20(d) and 11.02(a), (C) the cost of an Opinion of Counsel contemplated by Section 11.01(a) or 11.01(c) in connection with any amendment to this Agreement requested by the Master Servicer or the Special Servicer that protects or is in furtherance of the rights and interests of Certificateholders, and (D) the cost of recording this Agreement in accordance with Section 11.02(a);

(xv)      to pay itself, the Special Servicer, any of the Mortgage Loan Sellers, the Majority Subordinate Certificateholder, a Companion Holder, a mezzanine lender or any other Person, as the case may be, with respect to each Mortgage Loan, if any, previously purchased by such Person pursuant to this Agreement, all amounts received thereon subsequent to the date of purchase;

 

 

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(xvi)     to withdraw any Interest Reserve Amount and remit such Interest Reserve Amount to the Trustee for deposit into the Interest Reserve Account pursuant to Section 3.04(c);

(xvii)    to remit to the Trustee for deposit into the Additional Interest Account the amounts required to be deposited pursuant to Section 3.04(d);

(xviii)   to remit to the Paying Agent for deposit into the Distribution Account the amounts required to be deposited pursuant to Section 3.04(b);

(xix)     to remit to the Companion Paying Agent for deposit into the Companion Distribution Account the amounts required to be deposited pursuant to Section 3.04(b);

(xx)      to pay the cost of any Environmental Assessment or any remedial, corrective or other action pursuant to Section 3.09(c);

(xxi)      to withdraw any amounts deposited in error;

(xxii)    to withdraw any other amounts that this Agreement expressly provides may be withdrawn from the Certificate Account; and

(xxiii)    to clear and terminate the Certificate Account at the termination of this Agreement pursuant to Section 9.01.

The Master Servicer shall keep and maintain separate accounting records, on a loan-by-loan basis when appropriate, in connection with any withdrawal from the Certificate Account pursuant to clauses (ii)-(xxiii) above. Upon request, the Master Servicer shall provide to the Trustee such records and any other information in the possession of the Master Servicer to enable the Trustee to determine the amounts attributable to each ED Loan REMIC (with respect to the ED Loans) and REMIC I (with respect to the Majority Mortgage Loans) and each ED Loan REMIC Regular Interest and the Companion Loans. The Master Servicer shall, to the extent permitted by the terms of the related Intercreditor Agreement, make claims for reimbursement from the related Companion Holder in connection with related Servicing Advances and interest thereon and other related expenses so as to minimize the total amount of withdrawals on the Certificate Account for such items. Nothing in the foregoing sentence shall limit the Master Servicer’s rights to be reimbursed for claims relating to the Companion Loans that are reimbursable claims pursuant to the terms of this Agreement and the related Intercreditor Agreement. Notwithstanding anything in this Section 3.05(a) to the contrary, in no event shall the Master Servicer withdraw from funds on deposit in the Certificate Account any amount to be applied to, or to provide reimbursement for, any amounts referenced in this Section 3.05(a) (other than amounts referenced in clause (xix)) which relate to any Companion Loan to the extent the related Co-Lender Loan has been paid in full in a prior Collection Period.

With respect to each Serviced Whole Loan, the Master Servicer shall also make withdrawals from time to time, from the Certificate Account of amounts necessary for the payments or reimbursements provided for under the related Intercreditor Agreement with respect to the related Companion Loan(s) within the time periods specified for such payments or reimbursements specified in the related Intercreditor Agreement. For the avoidance of doubt, in

 

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no event shall the Master Servicer withdraw from funds on deposit in the Certificate Account any amounts allocable to the Winn-Dixie Distribution Center - Orlando, FL Pari Passu Companion Loans or the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loans (other than Penalty Interest and late payment charges) to be applied to, or to provide reimbursement for, any costs, expenses, indemnities, losses or liabilities relating or allocable to any Mortgage Loan or Companion Loan other than for the Winn-Dixie Distribution Center–Orlando, FL Pari Passu Companion Loans or the Winn-Dixie Headquarters/Manufacturing Facility - Jacksonville, FL Pari Passu Companion Loans, respectively.

The Master Servicer shall pay to the Special Servicer (or to third party contractors at the direction of the Special Servicer) or the Trustee from the Certificate Account amounts permitted to be paid to the Special Servicer (or to such third party contractors) or the Trustee therefrom promptly upon receipt of a certificate of a Servicing Officer of the Special Servicer or of a Responsible Officer of the Trustee, describing the item and amount to which the Special Servicer (or such third party contractors) or the Trustee is entitled. The Master Servicer may rely conclusively on any such certificate and shall have no duty to re-calculate the amounts stated therein. The Special Servicer shall keep and maintain separate accounting for each Specially Serviced Mortgage Loan and REO Property, on a loan-by-loan and property-by-property basis, for the purpose of justifying any request for withdrawal from the Certificate Account. With respect to each Mortgage Loan or Companion Loan for which it makes an Advance, the Trustee shall similarly keep and maintain separate accounting for each Mortgage Loan or Companion Loan, on a loan-by-loan and property-by-property basis, for the purpose of justifying any request for withdrawal from the Certificate Account for reimbursements of Advances or interest thereon.

Upon the determination that a previously made Advance is a Nonrecoverable Advance, instead of obtaining reimbursement out of general collections immediately, the Master Servicer or the Trustee, as applicable, may, in its sole discretion, elect to obtain reimbursement for such Nonrecoverable Advance over time (not to exceed 12 months or such longer period of time as agreed to by the Master Servicer or the Trustee, as applicable, and the Controlling Class Representative, each in its sole discretion) and the unreimbursed portion of such Advance will accrue interest at the Prime Rate. At any time after such a determination to obtain reimbursement over time, the Master Servicer, the Special Servicer or the Trustee, as applicable, may, in its sole discretion and subject to the immediately following paragraph, decide to obtain reimbursement immediately. The fact that a decision to recover such Nonrecoverable Advances over time, or not to do so, benefits some Classes of Certificateholders to the detriment of other Classes shall not, with respect to the Master Servicer, constitute a violation of the Servicing Standard and/or with respect to the Trustee, constitute a violation of any fiduciary duty to Certificateholders or contractual duty hereunder.

The Master Servicer or the Trustee, as applicable, shall give Moody’s and S&P at least 15 days notice prior to any reimbursement to it of Nonrecoverable Advances from amounts in the Certificate Account allocable to interest on the Mortgage Loans unless (1) the Master Servicer or the Trustee, as applicable, determines in its sole discretion that waiting 15 days after such a notice could jeopardize the Master Servicer’s or the Trustee’s ability, as applicable, to recover such Nonrecoverable Advances, (2) changed circumstances or new or different information becomes known to the Master Servicer or the Trustee, as applicable, that could

 

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affect or cause a determination of whether any Advance is a Nonrecoverable Advance, whether to defer reimbursement of a Nonrecoverable Advance or the determination in clause (1) above, or (3) the Master Servicer has not timely received from the Trustee information requested by the Master Servicer to consider in determining whether to defer reimbursement of a Nonrecoverable Advance; provided that if clause (1), (2) or (3) applies, the Master Servicer or the Trustee, as applicable, shall give Moody’s and S&P notice of an anticipated reimbursement to it of Nonrecoverable Advances from amounts in the Certificate Account or Distribution Account, as applicable, allocable to interest on the Mortgage Loans as soon as reasonably practicable in such circumstances. The Master Servicer and the Trustee, as applicable, shall have no liability for any loss, liability or expense resulting from any notice provided to Moody’s and S&P contemplated by the immediately preceding sentence.

If the Master Servicer or the Trustee, as applicable, is reimbursed out of general collections for any unreimbursed Advances that are determined to be Nonrecoverable Advances (together with any interest accrued and payable thereon), then (for purposes of calculating distributions on the Certificates) such reimbursement and payment of interest shall be deemed to have been made: first, out of the Principal Distribution Amount, which, but for its application to reimburse a Nonrecoverable Advance and/or to pay interest thereon, would be included in the Available Distribution Amount, for any subsequent Distribution Date, and second, out of other amounts which, but for their application to reimburse a Nonrecoverable Advance and/or to pay interest thereon, would be included in the Available Distribution Amount for any subsequent Distribution Date. If and to the extent that any payment is deemed to be applied in accordance with clause first above to reimburse a Nonrecoverable Advance or to pay interest thereon, then the Principal Distribution Amount for such Distribution Date shall be reduced, to not less than zero, by the amount of such reimbursement. If and to the extent (i) any Advance is determined to be a Nonrecoverable Advance, (ii) such Advance and/or interest thereon is reimbursed out of the Principal Distribution Amount as contemplated by clause first of the immediately preceding sentence and (iii) the particular item for which such Advance was originally made is subsequently collected out of payments or other collections in respect of the related Mortgage Loan, then the Principal Distribution Amount for the Distribution Date that corresponds to the Collection Period in which such item was recovered shall be increased by an amount equal to the lesser of (A) the amount of such item and (B) any previous reduction in the Principal Distribution Amount for a prior Distribution Date pursuant to clause first above resulting from the reimbursement of the subject Advance and/or the payment of interest thereon.

(b)       The Paying Agent may, from time to time, make withdrawals from the Distribution Account for any of the following purposes (in no particular order of priority):

(i)       to be deemed to transfer from each ED Loan REMIC to REMIC I amounts distributable in respect of the related ED Loan REMIC Regular Interest and to distribute to the Holder of the Class R-I Certificates the amounts distributable with respect to such ED Loan REMIC Residual Interest, to make deemed distributions to itself as holder of the REMIC I Regular Interests and to make distributions to Certificateholders on each Distribution Date, pursuant to Sections 4.01 and 9.01, as applicable;

 

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(ii)      to pay the Trustee or any of its directors, officers, employees and agents, as the case may be, any amounts payable or reimbursable to any such Person pursuant to Section 8.05;

(iii)     to pay the Trustee the Trustee Fee as contemplated by Section 8.05(a) hereof with respect to each Mortgage Loan and REO Loan and to pay the Trustee, as additional compensation, interest and investment income, if any, earned in respect of amounts held in the Distribution Account as provided in Section 3.06, but only to the extent of the Net Investment Earnings with respect to such account for the related Distribution Date;

(iv)      to pay for the cost of the Opinions of Counsel sought by the Trustee (A) as provided in clause (v) of the definition of “Disqualified Organization”, (B) as contemplated by Section 3.20(d), 9.02(a) and 10.01(h), or (C) as contemplated by Section 11.01(a) or 11.01(c) in connection with any amendment to this Agreement requested by the Trustee which amendment is in furtherance of the rights and interests of Certificateholders;

(v)       to pay any and all federal, state and local taxes imposed on each ED Loan REMIC, REMIC I or REMIC II or on the assets or transactions of either such REMIC, together with all incidental costs and expenses, to the extent none of the Trustee, the REMIC Administrator, the Master Servicer or the Special Servicer is liable therefor pursuant to Section 10.01(i);

(vi)      to pay the REMIC Administrator any amounts reimbursable to it pursuant to Section 10.01(e);

(vii)     to pay to the Master Servicer any amounts deposited by the Master Servicer in the Distribution Account not required to be deposited therein; and

(viii)     to clear and terminate the Distribution Account at the termination of this Agreement pursuant to Section 9.01.

Taxes imposed on any ED Loan REMIC, REMIC I or REMIC II shall be allocated to the related REMIC, and amounts withdrawn from the Distribution Account pursuant to clauses (ii) and (iv) above shall be allocated by the Paying Agent between such ED Loan REMIC and REMIC I in proportion to the Stated Principal Balances of their related Mortgage Loans.

(c)       The Companion Paying Agent may, from time to time, make withdrawals from the Companion Distribution Account as contemplated by Section 4.01(n).

(d)       The Trustee shall on each P&I Advance Date to occur in March of each year, and in the event the final Distribution Date occurs in February on the P&I Advance Date to occur in such February, withdraw from the Interest Reserve Account and deposit into the Distribution Account in respect of each Interest Reserve Loan, an amount equal to the aggregate of the Interest Reserve Amounts deposited into the Interest

 

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Reserve Account pursuant to Section 3.04(c) during the immediately preceding Collection Period and, if applicable, the second preceding Collection Period.

(e)       The Paying Agent shall, on any Distribution Date, make withdrawals from the Additional Interest Account to the extent required to make the distributions of Additional Interest required by Section 4.01(b).

(f)        The Paying Agent shall, on any Distribution Date, make withdrawals from the Gain-On-Sale Reserve Account as contemplated by Section 4.01(m).

(g)       The Paying Agent shall withdraw the Interest Shortfall Amount from the Interest Shortfall Account on the first P&I Advance Date only and deposit such amount into the Distribution Account.

Section 3.06     Investment of Funds in the Servicing Accounts, Reserve Accounts, Certificate Account, Interest Reserve Account, Distribution Account, Companion Distribution Account, Additional Interest Account, Gain-on-Sale Reserve Account, REO Account and Interest Shortfall Account.

(a)       The Master Servicer may direct in writing any depository institution maintaining a Servicing Account, a Reserve Account or the Certificate Account (each, for purposes of this Section 3.06, an “Investment Account”); the Companion Paying Agent may direct in writing any depository institution maintaining the Companion Distribution Account (also, for purposes of this Section 3.06, an “Investment Account”); the Special Servicer may direct in writing any depository institution maintaining the REO Account (also, for purposes of this Section 3.06, an “Investment Account”); and the Trustee may direct in writing any depository institution maintaining the Distribution Account, the Gain-on-Sale Reserve Account, the Interest Reserve Account, the Interest Shortfall Account, or the Additional Interest Account (also, for purposes of this Section 3.06, an “Investment Account”) to invest, or if it is such depository institution, may itself invest, the funds held therein only in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, no later than the Business Day immediately preceding the next succeeding date on which such funds are required to be withdrawn from such account pursuant to this Agreement. Funds held in the Distribution Account, the Companion Distribution Account, the Additional Interest Account, the Interest Reserve Account, the Interest Shortfall Account and the Gain-on-Sale Reserve Account may remain uninvested. In the event that the Master Servicer shall have failed to give investment directions for any Servicing Account, any Reserve Account or the Certificate Account (exclusive of any accounts as are held by the Master Servicer) or the Special Servicer shall have failed to give investment directions for the REO Account by 11:00 a.m. New York time on any Business Day on which there may be uninvested cash, such funds held in the REO Account shall be invested in securities described in clause (i) of the definition of the term “Permitted Investments”; and such funds held in such other accounts shall be invested in securities described in clause (v) of such definition. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an

 

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Investment Account shall be made in the name of the Trustee (in its capacity as such). The Master Servicer on behalf of the Trustee for the benefit of Certificateholders (with respect to Permitted Investments of amounts in the Servicing Accounts, the Reserve Accounts or the Certificate Account), the Special Servicer on behalf of the Trustee for the benefit of Certificateholders (with respect to Permitted Investments of amounts in the REO Account) and the Trustee (with respect to Permitted Investments of amounts in the Distribution Account, the Gain-on-Sale Reserve Account, the Interest Reserve Account, the Interest Shortfall Account, or the Additional Interest Account) for the benefit of the Certificateholders, and the Companion Paying Agent with respect to the Companion Distribution Account, shall (and the Trustee hereby designates the Master Servicer and the Special Servicer, with respect to any Investment Account maintained by them, and itself, with respect to the Distribution Account, the Additional Interest Account, the Interest Reserve Account, the Interest Shortfall Account, and the Gain-on-Sale Reserve Account, as applicable, as the Person that shall) maintain continuous possession of any Permitted Investment that is either (i) a “certificated security”, as such term is defined in the UCC, or (ii) other property in which a secured party may perfect its security interest by possession under the UCC or any other applicable law. Possession of any such Permitted Investment by the Master Servicer, the Special Servicer or the Trustee shall constitute possession by the Trustee, as secured party, for purposes of Section 9-313 of the UCC and any other applicable law. If amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Master Servicer (in the case of the Certificate Account, Servicing Accounts and Reserve Accounts), the Special Servicer (in the case of the REO Account), the Trustee (with respect to Permitted Investments of amounts in the Distribution Account, the Gain-on-Sale Reserve Account, the Interest Reserve Account, the Interest Shortfall Account, or the Additional Interest Account) or the Companion Paying Agent with respect to the Companion Distribution Account, shall:

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

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

(b)       Whether or not the Master Servicer directs the investment of funds in any of the Servicing Accounts, the Reserve Accounts or the Certificate Account, interest and investment income realized on funds deposited therein, to the extent of the related Net Investment Earnings, if any, for each Collection Period and, in the case of a Reserve Account or a Servicing Account, to the extent not otherwise payable to the related Mortgagor in accordance with applicable law or the related Mortgage Loan documents, shall be for the sole and exclusive benefit of the Master Servicer and shall be subject to its withdrawal in accordance with Section 3.03(a), 3.03(f) or 3.05(a), as applicable. Whether or not the Companion Paying Agent directs the investment of funds

 

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in the Companion Distribution Account, interest and investment income realized on funds deposited therein, to the extent of the related Net Investment Earnings, if any, for each Collection Period shall be for the sole and exclusive benefit of the Companion Paying Agent and shall be subject to its withdrawal in accordance with Section 3.04(b). Whether or not the Special Servicer directs the investment of funds in the REO Account, interest and investment income realized on funds deposited therein, to the extent of the Net Investment Earnings, if any, for each Collection Period, shall be for the sole and exclusive benefit of the Special Servicer and shall be subject to its withdrawal in accordance with Section 3.16(b). Whether or not the Trustee directs the investment of funds in the Distribution Account, the Interest Reserve Account, the Additional Interest Account, or the Gain-on-Sale Reserve Account, interest and investment income realized on funds deposited therein, to the extent of the Net Investment Earnings, if any, for each related Distribution Date, shall be for the sole and exclusive benefit of the Trustee and shall be subject to its (or the Paying Agent’s on its behalf) withdrawal in accordance with Section 3.05(b). If any loss shall be incurred in respect of any Permitted Investment on deposit in any Investment Account, the Master Servicer (in the case of the Servicing Accounts, the Reserve Accounts and the Certificate Account, excluding any accounts containing amounts invested solely for the benefit of, and at the direction of, the Mortgagor under the terms of the Mortgage Loan or applicable law), the Companion Paying Agent (in the case of the Companion Distribution Account), the Special Servicer (in the case of the REO Account) and the Trustee (with respect to Permitted Investments of amounts in the Distribution Account, the Additional Interest Account, the Interest Reserve Account, or the Gain-on-Sale Reserve Account) shall promptly deposit therein from its own funds, without right of reimbursement, no later than, in the case of the Master Servicer and Special Servicer, the end of the Collection Period during which such loss was incurred and in the case of the Trustee, no later than 12:00 noon, New York City time, on the Distribution Date, the amount of the Net Investment Loss, if any, for such Collection Period or on such Distribution Date; provided that none of the Master Servicer, the Special Servicer or the Trustee shall be required to deposit any loss on an investment of funds in an Investment Account if such loss is incurred solely as a result of the insolvency of the federal or state chartered depository institution or trust company that holds such Investment Account, so long as such depository institution or trust company satisfied the qualifications set forth in the definition of Eligible Account at the time such investment was made.

(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 and the Trustee, the Special Servicer or the Master Servicer fails to deposit any losses with respect to such Permitted Investment pursuant to Section 3.06(b), the Trustee may (or, in the event of a default by the Trustee, the Master Servicer or Special Servicer shall) and, subject to Section 8.02, upon the request of Holders of Certificates entitled to not less than 25% of the Voting Rights allocated to any Class, shall take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.

 

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(d)       Notwithstanding the investment of funds held in any Investment Account, for purposes of the calculations hereunder, including, without limitation, the calculation of the Available Distribution Amount, the amounts so invested shall be deemed to remain on deposit in such Investment Account.

Section 3.07     Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage.

(a)       The Master Servicer (with respect to Mortgage Loans and Companion Loans to the extent that the Trust Fund has an insurable interest) and the Special Servicer (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard, cause to be maintained for each Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if and to the extent that any such Mortgage permits the holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Mortgagor is required to maintain, the Master Servicer shall exercise such discretion in a manner consistent with the Servicing Standard; provided, further, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers and required insurance coverage obtained by the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Majority Subordinate Certificateholder. Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a “standard” mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days’ prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer under any such policies

 

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(other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Mortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Certificate Account, subject to withdrawal pursuant to Section 3.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit.

Notwithstanding the foregoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case of the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts or windstorm coverage, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan, in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates (which determination as to whether such insurance is available at commercially reasonable rates shall be made subject to consultation with the Special Servicer in consultation with and subject to the approval of the Controlling Class Representative with respect to all Mortgage Loans) and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the Mortgagor to maintain terrorism insurance or windstorm coverage (provided that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as applicable, to violate the Servicing Standard); provided, however, the Controlling Class Representative’s approval shall be deemed to have been given if it has not responded within 5 Business Days of receipt of the Master Servicer’s or the Special Servicer’s written recommendation and the information upon which such recommendation is based; provided, further, upon the Master Servicer’s or the Special Servicer’s determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so; provided, further, during the period that the Special Servicer or Controlling Class Representative is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance or windstorm coverage and shall not be in default of its obligations hereunder as a

 

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result of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.

(b)       If the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans and/or REO Properties that it is required to service and administer, then, to the extent such policy (i) is obtained from a Qualified Insurer and (ii) provides protection equivalent to the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties and/or REO Properties. Such blanket policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as appropriate, shall, if there shall not have been maintained on the related Mortgaged Property or REO Property a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such policy, promptly deposit into the Certificate Account from its own funds the amount not otherwise payable under the blanket policy because of such deductible clause. The Master Servicer or the Special Servicer, as appropriate, shall prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket policy in a timely fashion in accordance with the terms of such policy.

(c)       Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans or REO Properties are part of the Trust Fund) keep in force a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide for ten days’ written notice to the Trustee prior to any cancellation.

Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special

 

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Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days’ written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c).

For so long as the long-term debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least “A” or the equivalent by all of the Rating Agencies (or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.

 

 

Section 3.08

Enforcement of Alienation Clauses.

(a)       (i) Subject to section 3.08(a)(iii) below, upon receipt of any request of a waiver in respect of a due-on-sale or due-on-encumbrance provision, the Master Servicer, with respect to Mortgage Loans, (other than the Tenants in Common Loans) that are not Specially Serviced Mortgage Loans, and the Special Servicer, with respect to Specially Serviced Mortgage Loans, shall promptly analyze such waiver, including the preparation of written materials in connection with such analysis, and will close the related transaction, subject to the consent rights (if any) of each Companion Holder pursuant to the related Intercreditor Agreement as provided in this Section 3.08. With respect to all Mortgage Loans other than Specially Serviced Mortgage Loans and the Tenants in Common Loans, the Master Servicer or, in the case of Specially Serviced Mortgage Loans, the Special Servicer, on behalf of the Trustee as the mortgagee of record, shall, to the extent permitted by applicable law, enforce the restrictions contained in the related Mortgage on transfers or further encumbrances of the related Mortgaged Property and on transfers of interests in the related Mortgagor, unless following its receipt of a request of a waiver in respect of a due-on-sale or due-on-encumbrance provision the Master Servicer (with the written consent of the Special Servicer, which consent shall be deemed given if not denied within the later of (a) 15 Business Days after the Special Servicer’s receipt of the written recommendation of the Master Servicer for such action and any additional information the Special Servicer may reasonably request for the analysis of such request (such recommendation and information may be delivered in an electronic format reasonably acceptable to the Master Servicer and the Special Servicer) and (b) 5 Business Days after the Controlling Class Representative’s receipt of the written recommendation of the Special Servicer for such action and any additional information the Controlling Class Representative may reasonably request for the analysis of such request, which notice shall be given by the Special Servicer no later than 10 Business Days after the commencement of the 15 Business Day period described in the preceding clause (a)) or the Special Servicer (with the written consent of the Controlling Class Representative, which consent shall be deemed given if not denied within 5 Business Days after the Controlling Class Representative’s receipt of the written recommendation of the Special Servicer for such action and any additional information

 

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the Controlling Class Representative may reasonably request for the analysis of such request), as applicable, has determined, consistent with the Servicing Standard, that the waiver of such restrictions would be in accordance with the Servicing Standard. Promptly after the Master Servicer (with the written consent of the Special Servicer to the extent required in the preceding sentence) or the Special Servicer (with the written consent of the Controlling Class Representative to the extent required in the preceding sentence), as applicable, has made any such determination, the Master Servicer or the Special Servicer shall deliver to the Trustee, the Rating Agencies and each other party hereto an Officer’s Certificate setting forth the basis for such determination.

(i)       Subject to Section 3.08(a)(iii) below, with respect to any Tenants in Common Loan, the Master Servicer, on behalf of the Trustee as the mortgagee of record, shall review (A) each request for a sale, transfer or syndication of any Mortgagor’s equity interests in the related Mortgagor and shall promptly analyze such request, including, with regard to each proposed Mortgagor transferee, the financial statements, credit information, organizational documents and other written materials set forth on the applicable schedule on Exhibit Z hereto, to determine, in accordance with the Servicing Standard, whether the requested sale, transfer or syndication meets the applicable requirements and to obtain any consents required under any related Intercreditor Agreement, and (B) the corresponding waiver of any applicable due-on-sale or due-on-encumbrance provision and determine whether approval of such waiver is consistent with the Servicing Standard. Promptly after the Master Servicer has made any such affirmative determination that such sale, transfer or syndication meets the applicable requirements on Exhibit Z, the Master Servicer shall deliver to the Special Servicer, the Trustee, the Rating Agencies, the Controlling Class Representative and each other party hereto, no later than five (5) Business Days prior to such sale, transfer or syndication, an Officer’s Certificate setting forth notice of the approval or disapproval and the basis for such determination, set forth in Exhibit AA, including evidence of compliance with each of the requirements for such Mortgage Loan described on Exhibit Z, provided, however, if the proposed investor/transferee is a single member limited liability company not organized in Delaware or is not an accredited investor, the provisions of this Section 3.08(a)(ii) shall not apply and approval of any such transfer shall follow the procedures set forth in Section 3.08(a)(i), and provided further that notwithstanding Section 3.11(c), with respect to any transfer approved pursuant to this Section 3.08(a)(ii), the Special Servicer shall be entitled to certain of the fees as set forth on Exhibit Z paid by the Mortgagor, and the Master Servicer shall not waive any such fees without the consent of the Special Servicer.

(ii)      With respect to all Mortgage Loans, neither the Master Servicer nor the Special Servicer shall exercise (and the Special Servicer shall not consent to) any waiver in respect of a due-on-encumbrance provision of any Mortgage Loan (i) with respect to which the aggregate of the Stated Principal Balance of such Mortgage Loan and the Stated Principal Balance of all other Mortgage Loans that are cross-collateralized, cross-defaulted or have been made to Mortgagors affiliated with the Mortgagor on such Mortgage Loan, are one of the ten largest Mortgage Loans or concentrations of Mortgage Loans, as of the date of such waiver request, without receiving prior written confirmation from Moody’s and S&P that such action would not result in a downgrading, qualification

 

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or withdrawal of the ratings then assigned to the Certificates or (ii) with respect to which (a) the aggregate of the Stated Principal Balance of such Mortgage Loan and the Stated Principal Balance of all other Mortgage Loans that are cross-collateralized, cross-defaulted or have been made to Mortgagors affiliated with the Mortgagor on such Mortgage Loan, is equal to or in excess of $20,000,000, (b) the aggregate of the Stated Principal Balance of such Mortgage Loan and the Stated Principal Balance of all other Mortgage Loans that are cross-collateralized, cross-defaulted or have been made to Mortgagors affiliated with the Mortgagor on such Mortgage Loan, are greater than 2% of the aggregate Stated Principal Balance of all Mortgage Loans, (c) such Mortgage Loan is one of the ten largest Mortgage Loans as of the date of the waiver (by Stated Principal Balance), or (d) such Mortgage Loan has a Loan-to-Value Ratio (calculated to include the additional indebtedness secured by any encumbrance) that is equal to or greater than 85% and a Debt Service Coverage Ratio (calculated to include the additional debt from any encumbrance) of 1.20x or less, without receiving a prior written confirmation from S&P that such action would not result in a downgrading, qualification or withdrawal of the ratings then assigned to the Certificates. With respect to a waiver of a due-on-sale provision, neither the Master Servicer nor the Special Servicer shall waive any such restriction without receiving prior written confirmation from Moody’s and S&P that such action would not result in a downgrading, qualification or withdrawal of the ratings then assigned to the Certificates; provided that, if the Mortgage Loan (a) does not have an aggregate Stated Principal Balance (including the Stated Principal Balance of all other Mortgage Loans that are cross-collateralized, cross-defaulted or have been made to Mortgagors affiliated with the Mortgagor on such Mortgage Loan) equal to or in excess of $35,000,000 (or $25,000,000 with respect to Moody’s), (b) does not have an aggregate Stated Principal Balance (including the Stated Principal Balance of all other Mortgage Loans that are cross-collateralized, cross-defaulted or have been made to Mortgagors affiliated with the Mortgagor on such Mortgage Loan) greater than 5% of the aggregate Stated Principal Balance of all Mortgage Loans or (c) is not one of the ten largest Mortgage Loans as of the date of the waiver (by Stated Principal Balance), the Master Servicer or the Special Servicer, as applicable, may waive such requirement without confirmation by S&P in accordance with the Servicing Standard; provided, further, that, if the Mortgage Loan does not meet the criteria set forth in clause (ii) of the immediately preceding sentence, the Master Servicer or Special Servicer, as applicable, may waive such requirement without approval by Moody’s or S&P in accordance with the Servicing Standard. With respect to each Co-Lender Loan, no waiver of a due-on-sale or due-on-encumbrance provision will be effective unless the Master Servicer or Special Servicer, as applicable, first consults with the related Subordinate Companion Holder if required under the applicable Intercreditor Agreement.

(b)       Notwithstanding any other provisions of this Section 3.08, the Master Servicer (with respect to Mortgage Loans other than Specially Serviced Mortgage Loans) (without the Special Servicer’s consent) or the Special Servicer (with respect to Specially Serviced Mortgage Loans) may grant, without any Rating Agency confirmation as provided in paragraph (a) above, a Mortgagor’s request for consent to subject the related Mortgaged Property to an easement or right-of-way for utilities, access, parking, public improvements or another purpose, and may consent to subordination of the related Mortgage Loan to such easement or right-of-way; provided the Master Servicer or the

 

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Special Servicer, as applicable, shall have determined in accordance with the Servicing Standard that such easement or right-of-way shall not materially interfere with the then-current use of the related Mortgaged Property, or the security intended to be provided by such Mortgage, the related Mortgagor’s ability to repay the Mortgage Loan, or materially or adversely affect the value of such Mortgaged Property or cause the Mortgage Loan to cease to be a “qualified mortgage” for REMIC purposes.

(c)       Within 90 days of the Closing Date, with respect to each of the Mortgage Loans covered by an environmental insurance policy, if any, the Master Servicer shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for the Master Servicer, on behalf of the Trust Fund, to make claims) under such environmental insurance policy. In the event that the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under any environmental insurance policy in respect of any Mortgage Loan covered thereby, the Master Servicer shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full value thereof for the benefit of the Certificateholders and any related Companion Holders. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance. With respect to each environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy to realize the full value thereof for the benefit of the Certificateholders and any related Companion Holders in the event the Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy.

In the event that the Master Servicer receives notice of any termination of any environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall, within five Business Days after receipt of such notice, notify the Special Servicer, the Controlling Class Representative, the related Companion Holder (in the case of a Co-Lender Loan), the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, the Master Servicer with respect to non-Specially Serviced Mortgage Loans, and the Special Servicer with respect to Specially Serviced Mortgage Loans, shall address such termination in accordance with Section 3.07(a) in the same manner as it would the termination of any other Insurance Policy required under the related Mortgage Loan documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with a resolution of such termination of an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance.

(d)       For the avoidance of doubt, any servicing obligation set forth under this Section 3.08 of the Master Servicer or Special Servicer, as applicable, for any Co-Lender Loan shall also apply to the related Companion Loan.

 

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Section 3.09     Realization Upon Defaulted Mortgage Loans; Required Appraisals.

(a)       The Special Servicer shall, subject to Sections 3.09(b) through 3.09(d) and Section 6.11, exercise reasonable efforts, consistent with the Servicing Standard, to foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans or Companion Loans as come into and continue in default and as to which satisfactory arrangements cannot be made for collection of delinquent payments, including, without limitation, pursuant to Section 3.20. Subject to the second paragraph of Section 3.03(c), the Master Servicer shall advance all costs and expenses (other than costs or expenses that would, if incurred, constitute a Nonrecoverable Servicing Advance) incurred by the Special Servicer in any such proceedings, and shall be entitled to reimbursement therefor as provided in Section 3.05(a). Nothing contained in this Section 3.09 shall be construed so as to require the Special Servicer, on behalf of the Trust Fund, to make a bid on any Mortgaged Property at a foreclosure sale or similar proceeding that is in excess of the fair market value of such property, as determined by the Special Servicer in accordance with the Servicing Standard and in its reasonable and good faith judgment taking into account, as applicable, among other factors, the period and amount of any delinquency on the affected Mortgage Loan or Companion Loan, the occupancy level and physical condition of the Mortgaged Property or REO Property, the state of the local economy, the obligation to dispose of any REO Property within the time period specified in Section 3.16(a) and the results of any appraisal obtained pursuant to the following sentence, all such bids to be made in a manner consistent with the Servicing Standard. If and when the Master Servicer or the Special Servicer deems it necessary and prudent for purposes of establishing the fair market value of any Mortgaged Property securing a Specially Serviced Mortgage Loan, Defaulted Mortgage Loan or defaulted Companion Loan, whether for purposes of bidding at foreclosure or otherwise, it may, at the expense of the Trust Fund, have an appraisal performed with respect to such property by an Independent Appraiser or other expert in real estate matters; which appraisal shall take into account, as applicable, among other factors, the period and amount of any delinquency on the affected Mortgage Loan, the occupancy level and physical condition of the Mortgaged Property or REO Property, the state of the local economy and the obligation to dispose of any REO Property within the time period specified in Section 3.16(a), including without limitation, any environmental, engineering or other third party reports available, and other factors that a prudent real estate appraiser would consider.

With respect to each Required Appraisal Mortgage Loan, the Special Servicer will be required to obtain a Required Appraisal (or with respect to any Mortgage Loan with an outstanding principal balance less than $2,000,000, an internal valuation performed by the Special Servicer) within 60 days of a Mortgage Loan becoming a Required Appraisal Mortgage Loan (unless an appraisal meeting the requirements of a Required Appraisal was obtained for such Required Appraisal Mortgage Loan within the prior 12 months and the Special Servicer has no actual knowledge of a material adverse change in the condition of the related Mortgaged Property in which case such appraisal may be a letter update of the Required Appraisal) and thereafter shall obtain a Required Appraisal (or with respect to any Mortgage Loan with an

 

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outstanding principal balance less than $2,000,000, and in lieu of an Appraisal, an internal valuation performed by the Special Servicer) once every 12 months (or sooner if the Special Servicer has actual knowledge of a material adverse change in the condition of the related Mortgaged Property) if such Mortgage Loan remains a Required Appraisal Mortgage Loan. The Special Servicer will deliver a copy of each Required Appraisal (or letter update or internal valuation) to the Master Servicer, the Controlling Class Representative and the Trustee (and, if such Required Appraisal Mortgage Loan is a Co-Lender Loan, to the related Companion Holder) within 10 Business Days of obtaining such Required Appraisal (or letter update or internal valuation). Subject to the second paragraph of Section 3.03(c), the Master Servicer shall advance the cost of such Required Appraisal; provided, however, such expense will be subject to reimbursement to the Master Servicer as a Servicing Advance out of the Certificate Account pursuant to Section 3.05(a)(vi) and 3.05(a)(vii).

Notwithstanding the foregoing, in no event shall the Master Servicer or the Special Servicer obtain an appraisal of a Companion Loan pursuant to this Section 3.09(a) to the extent the related Co-Lender Loan has been paid in full.

(b)       The Special Servicer shall not acquire any personal property pursuant to this Section 3.09 unless either:

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

(ii)      the Special Servicer shall have obtained an Opinion of Counsel (the cost of which may be withdrawn from the Certificate Account pursuant to Section 3.05(a)) to the effect that the holding of such personal property as part of the Trust Fund (to the extent not allocable to a Companion Loan) will not cause the imposition of a tax on any ED Loan REMIC, REMIC I or REMIC II under the REMIC Provisions or cause either of ED Loan REMIC, REMIC I or REMIC II to fail to qualify as a REMIC at any time that any Certificate is outstanding.

(c)       Notwithstanding the foregoing provisions of this Section 3.09, neither the Master Servicer nor the Special Servicer shall, on behalf of the Trustee (which may include through a single member limited liability company owned by the Trust), initiate foreclosure proceedings, obtain title to a Mortgaged Property by deed in lieu of foreclosure or otherwise, or take any other action with respect to any Mortgaged Property, if, as a result of any such action, the Trustee, on behalf of the Certificateholders, could, in the reasonable judgment of the Master Servicer or the Special Servicer, as the case may be, made in accordance with the Servicing Standard, be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within the meaning of CERCLA or any comparable law (a “potentially responsible party”), unless (as evidenced by an Officer’s Certificate to such effect delivered to the Trustee that shall specify all of the bases for such determination) the Special Servicer has previously determined in accordance with the Servicing Standard, and based on an Environmental Assessment of such Mortgaged Property performed by an Independent Person who regularly conducts Environmental Assessments and performed within six months prior to any such acquisition of title or

 

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other action (a copy of which Environmental Assessment shall be delivered to the Trustee, the Controlling Class Representative and the Master Servicer), that:

(i)       the Mortgaged Property is in compliance with applicable environmental laws and regulations or, if not, that it would maximize the recovery to the Certificateholders on a present value basis (the relevant discounting of anticipated collections that will be distributable to Certificateholders to be performed at the related Net Mortgage Rate) to acquire title to or possession of the Mortgaged Property and to take such actions as are necessary to bring the Mortgaged Property into compliance therewith in all material respects; and

(ii)      there are no circumstances or conditions present at the Mortgaged Property relating to the use, management or disposal of Hazardous Materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any applicable environmental laws and regulations or, if such circumstances or conditions are present for which any such action could reasonably be expected to be required, that it would maximize the recovery to the Certificateholders on a present value basis (the relevant discounting of anticipated collections that will be distributable to Certificateholders to be performed at the related Net Mortgage Rate) to acquire title to or possession of the Mortgaged Property and to take such actions with respect to the affected Mortgaged Property.

The Special Servicer shall undertake, in good faith, reasonable efforts to make the determination referred to in the preceding paragraph and may conclusively rely on the Environmental Assessment referred to above in making such determination. The cost of any such Environmental Assessment, as well as the cost of any remedial, corrective or other further action contemplated by clause (i) and/or clause (ii) of the preceding paragraph shall be at the expense of the Trust Fund (except to the extent that such Additional Trust Fund Expense is payable out of the proceeds of any Companion Loan pursuant to the related Intercreditor Agreement and this Agreement); and if any such Environmental Assessment so warrants, the Special Servicer shall perform such additional environmental testing as it deems necessary and prudent to determine whether the conditions described in clauses (i) and (ii) of the preceding paragraph have been satisfied, the cost of which shall be at the expense of the Trust Fund.

(d)       If the environmental testing contemplated by Section 3.09(c) above establishes that any of the conditions set forth in clauses (i) and (ii) thereof has not been satisfied with respect to any Mortgaged Property securing a Defaulted Mortgage Loan and there is no breach of a representation or warranty requiring repurchase under the applicable Mortgage Loan Purchase Agreement, the Special Servicer shall take such action as is in accordance with the Servicing Standard (other than proceeding against the Mortgaged Property) and, at such time as it deems appropriate, may, on behalf of the Trustee, release all or a portion of such Mortgaged Property from the lien of the related Mortgage; provided that if such Mortgage Loan has a then outstanding principal balance of greater than $1,000,000, then prior to the release of all or a portion of the related Mortgaged Property from the lien of the related Mortgage, (i) the Special Servicer shall have notified the Rating Agencies, the Trustee, the Controlling Class Representative and the Master Servicer in writing of its intention to so release all or a portion of such

 

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Mortgaged Property and the bases for such intention, (ii) the Trustee shall have notified the Certificateholders in writing of the Special Servicer’s intention to so release all or a portion of such Mortgaged Property and (iii) the Holders of Certificates entitled to a majority of the Voting Rights shall have consented to such release within 30 days of the Trustee’s distributing such notice (failure to respond by the end of such 30-day period being deemed consent).

(e)       The Special Servicer shall report to the Master Servicer, the Controlling Class Representative and the Trustee monthly in writing as to any actions taken by the Special Servicer with respect to any Mortgaged Property that represents security for a Defaulted Mortgage Loan as to which the environmental testing contemplated in Section 3.09(c) above has revealed that any of the conditions set forth in clauses (i) and (ii) thereof has not been satisfied, in each case until the earlier to occur of satisfaction of all such conditions and release of the lien of the related Mortgage on such Mortgaged Property.

(f)        The Special Servicer shall have the right to determine, in accordance with the Servicing Standard, the advisability of seeking to obtain a deficiency judgment if the state in which the Mortgaged Property is located and the terms of the Mortgage Loan or Companion Loan permit such an action and shall, in accordance with the Servicing Standard, seek such deficiency judgment if it deems advisable.

(g)       The Master Servicer shall, with the reasonable cooperation of the Special Servicer, prepare and file information returns with respect to reports of foreclosures and abandonments of any Mortgaged Property and the information returns relating to any Mortgaged Property securing a Mortgage Loan and, if applicable, Companion Loan required by Sections 6050J and 6050P of the Code and each year deliver to the Trustee an Officer’s Certificate stating that such reports have been filed. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by Sections 6050J and 6050P of the Code.

(h)       The Special Servicer shall maintain accurate records, prepared by a Servicing Officer, of each Final Recovery Determination in respect of any Mortgage Loan, Companion Loan or REO Property and the basis thereof. Each Final Recovery Determination shall be evidenced by an Officer’s Certificate (together with the basis and back-up documentation for the determination) delivered to the Trustee, the Controlling Class Representative and the Master Servicer no later than one Business Day following the Determination Date.

(i)        Upon reasonable request of the Master Servicer, the Special Servicer shall deliver to it and the related Sub-Servicer any other information and copies of any other documents in its possession with respect to a Specially Serviced Mortgage Loan or the related Mortgaged Property.

 

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Section 3.10     Trustee and Custodian to Cooperate; Release of Mortgage Files.

(a)       Upon the payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full shall be escrowed in a manner customary for such purposes, the Master Servicer shall promptly notify the Trustee in writing, who shall release or cause the related Custodian to release, by a certification (which certification shall be in the form of a Request for Release in the form of Exhibit D-1 attached hereto and shall be accompanied by the form of a release or discharge and shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Certificate Account pursuant to Section 3.04(a) have been or will be so deposited) of a Servicing Officer and shall request delivery to it of the related Mortgage File; provided, however, in the case of the payment in full of a Serviced Whole Loan, the Mortgage File with respect to the related Serviced Whole Loan shall not be released by the Trustee (and the Master Servicer shall not request such release) unless such Mortgage Loan that is paid in full is the sole remaining portion of the related Serviced Whole Loan. Upon receipt of such certification and request, the Trustee shall release, or cause any related Custodian to release, the related Mortgage File to the Master Servicer and shall deliver to the Master Servicer such release or discharge, duly executed. No expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Certificate Account or the Distribution Account.

(b)       If from time to time, and as appropriate for servicing or foreclosure of any Mortgage Loan (including any related Companion Loan), the Master Servicer or the Special Servicer shall otherwise require any Mortgage File (or any portion thereof), the Trustee, upon request of the Master Servicer and receipt from the Master Servicer of a Request for Release in the form of Exhibit D-1 attached hereto signed by a Servicing Officer thereof, or upon request of the Special Servicer and receipt from the Special Servicer of a Request for Release in the form of Exhibit D-2 attached hereto, shall release, or cause any related Custodian to release, such Mortgage File (or portion thereof) to the Master Servicer or the Special Servicer, as the case may be. Upon return of such Mortgage File (or portion thereof) to the Trustee or related Custodian, or the delivery to the Trustee of a certificate of a Servicing Officer of the Special Servicer stating that such Mortgage Loan was liquidated and that all amounts received or to be received in connection with such liquidation that are required to be deposited into the Certificate Account pursuant to Section 3.04(a) have been or will be so deposited, or that such Mortgage Loan has become an REO Property, a copy of the Request for Release shall be released by the Trustee or related Custodian to the Master Servicer or the Special Servicer, as applicable.

(c)       Within seven Business Days (or within such shorter period (but no less than 3 Business Days) as execution and delivery can reasonably be accomplished if the Special Servicer notifies the Trustee of an exigency) of the Special Servicer’s request therefor, the Trustee shall execute and deliver to the Special Servicer (or the Special Servicer may, subject to Section 3.01(b), execute and deliver in the name of the Trustee based on a limited power of attorney issued in favor of the Special Servicer pursuant to Section 3.01(b)), in the form supplied to the Trustee, any court pleadings, requests for

 

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trustee’s sale or other documents stated by the Special Servicer to be reasonably necessary to the foreclosure or trustee’s sale in respect of a Mortgaged Property or REO Property or to any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note (including any note evidencing a related Companion Loan) or Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or rights provided by the Mortgage Note, Mortgage, Guaranty, this Agreement or the Mortgage Loan Purchase Agreement or otherwise available at law or in equity or to defend any legal action or counterclaim filed against the Trust Fund, the Master Servicer or the Special Servicer. Together with such documents or pleadings, the Special Servicer shall deliver to the Trustee a certificate of a Servicing Officer requesting that such pleadings or documents be executed by the Trustee and certifying as to the reason such documents or pleadings are required and that the execution and delivery thereof by the Trustee will not invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon completion of the foreclosure or trustee’s sale.

 

 

Section 3.11

Servicing Compensation.

(a)       As compensation for its activities hereunder, the Master Servicer shall be entitled to receive the Master Servicing Fee with respect to each Mortgage Loan (including each Specially Serviced Mortgage Loan) and REO Loan. As to each such Mortgage Loan and REO Loan, the Master Servicing Fee shall accrue at the related Master Servicing Fee Rate and on the same principal amount respecting which the related interest payment due on such Mortgage Loan or deemed to be due on such REO Loan is computed and calculated on the basis of a 360-day year consisting of twelve 30-day months (or, in the event of a Principal Prepayment in full or other Liquidation Event with respect to a Mortgage Loan or REO Loan, on the basis of the actual number of days to elapse from and including the related Due Date to but excluding the date of such Principal Prepayment or Liquidation Event in a month consisting of 30 days). No Master Servicing Fee shall be payable with respect to any Companion Loan unless such fee is expressly set forth in the related Intercreditor Agreement. The Master Servicing Fee with respect to any Mortgage Loan or REO Loan shall cease to accrue if a Liquidation Event occurs in respect thereof. Earned but unpaid Master Servicing Fees shall be payable monthly, on a loan-by-loan basis, from payments of interest on each Mortgage Loan and REO Revenues allocable as interest on each REO Loan. The Master Servicer shall be entitled to recover unpaid Master Servicing Fees in respect of any Mortgage Loan or REO Loan out of that portion of related Insurance Proceeds or Liquidation Proceeds allocable as recoveries of interest, to the extent permitted by Section 3.05(a)(iii) and otherwise as provided in Section 3.05(a)(vii). The right to receive the Master Servicing Fee may not be transferred in whole or in part except in connection with the transfer of all of the Master Servicer’s responsibilities and obligations under this Agreement.

(b)       Additional servicing compensation in the form of: (i) all late payment charges, Penalty Interest, assumption application fees if the related assumption is completed, Tenant-in-Common Loan transfer and assumption application fees if the related transfer and assumption application is completed and an assumption fee is collected on such Tenant-in-Common Loan, modification fees for modifications to Mortgage Loans or Companion Loans that are not Specially Serviced Mortgage Loans

 

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made by the Master Servicer pursuant to Section 3.20(i), defeasance fees, charges for beneficiary statements or demands, amounts collected for checks returned for insufficient funds and any similar fees (excluding Prepayment Premiums or Yield Maintenance Charges), in each case to the extent actually paid by a Mortgagor with respect to a Mortgage Loan or Companion Loan and, with respect to late payment charges and penalty charges, accrued during the time that such Mortgage Loan or Companion Loan was not a Specially Serviced Mortgage Loan, and (ii) fifty percent (50%) of (A) any assumption fees or Tenant-in-Common Loan assumption fees and (B) any assumption application fees and Tenant-in-Common Loan transfer and assumption application fees if the related assumption or Tenant-in-Common Loan transfer and assumption fails to be completed or no assumption fee is collected with respect to a Tenant-In-Common Loan, in each case to the extent actually paid by a Mortgagor with respect to any Mortgage Loan or Companion Loan if such Mortgage Loan or Companion Loan is not a Specially Serviced Mortgage Loan, may be retained by the Master Servicer and are not required to be deposited in the Certificate Account; provided that the Master Servicer’s right to receive late payment charges and Penalty Interest pursuant to clause (i) above shall be limited to the portion of such items that have not been applied to pay interest on Advances as provided in Sections 3.03(d) and 4.03(d) or Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) or interest on Advances pursuant to this Section 3.11(b). To the extent the Master Servicer or the Special Servicer receives late payment charges or Penalty Interest on a Mortgage Loan for which interest on Advances or Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) related to such Mortgage Loan and not previously reimbursed to the Trust Fund, the Master Servicer shall deposit in the Certificate Account, on or prior to the P&I Advance Date following the collection of such late payment charges or Penalty Interest, an amount equal to the lesser of (i) the amount of late payment charges or Penalty Interest received on such Mortgage Loan or (ii) the sum of the amount of interest paid to the Master Servicer on Advances related to such Mortgage Loan since the Closing Date for which the Trust Fund has not been previously reimbursed and the amount of Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) related to such Mortgage Loan incurred since the Closing Date and not previously reimbursed to the Trust Fund. To the extent that the Master Servicer is not entitled to late payment charges or Penalty Interest pursuant to the immediately preceding sentence, the Master Servicer shall deposit such late payment charges and Penalty Interest in the Certificate Account. Penalty Interest or late payment charges in respect of any Mortgage Loan or Companion Loan which has accrued during the period when the related Mortgage Loan or Companion Loan is not a Specially Serviced Mortgage Loan shall be additional compensation to the Master Servicer even if collected during the period when the related Mortgage Loan or Companion Loan is a Specially Serviced Mortgage Loan. The Master Servicer shall also be entitled to additional servicing compensation in the form of (i) Prepayment Interest Excesses; (ii) interest or other income earned on deposits in the Certificate Account and the Interest Reserve Account, in accordance with Section 3.06(b) (but only to the extent of the Net Investment Earnings, if any, with respect to such account for each Collection Period), and (iii) to the extent not required to be paid to any Mortgagor under applicable law or the terms of the related Mortgage Loan or Companion Loan, any interest or other

 

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income earned on deposits in the Reserve Accounts and Servicing Accounts maintained thereby.

The Master Servicer shall be required to pay out of its own funds all expenses incurred by it in connection with its servicing activities hereunder (including, without limitation, payment of any amounts due and owing to any of its Sub-Servicers and the premiums for any blanket policy insuring against hazard losses pursuant to Section 3.07(b)), if and to the extent such expenses are not payable directly out of the Certificate Account, and the Master Servicer shall not be entitled to reimbursement therefor except as expressly provided in this Agreement. The Master Servicer shall not waive or agree to any discount of any portion of assumption fees to which the Special Servicer is entitled.

(c)       As compensation for its activities hereunder, the Special Servicer shall be entitled to receive the Special Servicing Fee with respect to each Specially Serviced Mortgage Loan and each REO Loan. As to each Specially Serviced Mortgage Loan and REO Loan, the Special Servicing Fee shall accrue at the Special Servicing Fee Rate and on the same principal amount respecting which the related interest payment due on such Specially Serviced Mortgage Loan or deemed to be due on such REO Loan is computed and calculated on the basis of a 360-day year consisting of twelve 30-day months (or, in the event of a Principal Prepayment in full or other Liquidation Event with respect to a Mortgage Loan or REO Loan, on the basis of the actual number of days to elapse from and including the related Due Date to but excluding the date of such Principal Prepayment or Liquidation Event in a month consisting of 30 days). The Special Servicing Fee with respect to any Specially Serviced Mortgage Loan or REO Loan shall cease to accrue as of the date a Liquidation Event occurs in respect thereof or it becomes a Corrected Mortgage Loan. Earned but unpaid Special Servicing Fees shall be payable monthly out of general collections on the Mortgage Loans, Companion Loans and any REO Properties on deposit in the Certificate Account pursuant to Section 3.05(a).

As further compensation for its activities hereunder, the Special Servicer shall be entitled to receive the Workout Fee with respect to each Corrected Mortgage Loan, so long as such loan remains a Corrected Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee shall be payable out of, and shall be calculated by application of the Workout Fee Rate to, each collection of interest (other than Additional Interest and Penalty Interest) and principal received on such Mortgage Loan or Companion Loan for so long as it remains a Corrected Mortgage Loan (net of any portion of such collection payable or reimbursable to the Master Servicer, the Special Servicer, or the Trustee for any related unpaid or unreimbursed Master Servicing Fees and/or Advances) received on such Mortgage Loan or Companion Loan for so long as it remains a Corrected Mortgage Loan; provided that, with respect to any Intercreditor Agreement or any mezzanine intercreditor agreement which expressly excludes payment of a Workout Fee as part of any exercise of a purchase option thereunder, no Workout Fee shall be payable hereunder and instead, to the extent provided in the related Intercreditor Agreement, or any mezzanine intercreditor agreement and herein, a Liquidation Fee shall be payable. The Workout Fee with respect to any Corrected Mortgage Loan will cease to be payable if a Servicing Transfer Event occurs with respect thereto or if the related Mortgaged Property becomes an REO Property; provided that a new Workout Fee would become payable if

 

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and when such Mortgage Loan and, if applicable, Companion Loan again became a Corrected Mortgage Loan. If the Special Servicer is terminated or resigns, it will retain the right to receive any and all Workout Fees payable with respect to any Specially Serviced Mortgage Loan that became a Corrected Mortgage Loan during the period that it acted as Special Servicer and remained a Corrected Mortgage Loan at the time of its termination or resignation or if the Special Servicer resolved the circumstances and/or conditions (including by way of a modification of the related Mortgage Loan documents) causing the Mortgage Loan to be a Specially Serviced Mortgage Loan, but the Mortgage Loan had not as of the time the Special Servicer is terminated or resigns become a Corrected Mortgage Loan because the related Mortgagor had not made three consecutive monthly debt service payments (but made the most recent monthly debt service payment prior to the termination of the Special Servicer) and subsequently becomes a Corrected Mortgage Loan as a result of making three such consecutive payments. The successor Special Servicer will not be entitled to any portion of those Workout Fees.

In addition, with respect to each Specially Serviced Mortgage Loan and REO Loan or Mortgage Loan subject to repurchase by the applicable Mortgage Loan Seller (to the extent such Mortgage Loan was not repurchased within the cure period specified in the related Mortgage Loan Purchase Agreement) (or Qualified Substitute Mortgage Loan substituted in lieu thereof), the Special Servicer shall be entitled to the Liquidation Fee payable out of, and calculated by application of the Liquidation Fee Rate to, all amounts (whether in the form of payments of Liquidation Proceeds or REO Revenues or a full or discounted payoff by the Mortgagor) received in respect of such Mortgage Loan or Companion Loan (or, in the case of an REO Loan in respect of the related REO Property) and allocable as a full or partial recovery of principal, interest and expenses in accordance with Section 3.02(b) or the definition of “REO Loan,” as applicable; provided that no Liquidation Fee shall be payable in connection with, or out of (i) Insurance Proceeds and (ii) Liquidation Proceeds resulting from the purchase of any Mortgage Loan or REO Property by a Mortgage Loan Seller pursuant to the applicable Mortgage Loan Purchase Agreement if purchased within the cure period set forth in Section 3(c) of such Mortgage Loan Purchase Agreement, by the Majority Subordinate Certificateholder, the Companion Holder, or the Special Servicer pursuant to Section 3.18(c), Section 3.18(d), Section 3.18(e), Section 3.18(h) or by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder or the purchasing Certificateholder pursuant to Section 9.01, or any mezzanine lender pursuant to the related mezzanine intercreditor agreement if purchased by the mezzanine lender within 90 days of the related Mortgage Loan becoming a Specially Serviced Mortgage Loan; and (iii) Liquidation Proceeds resulting from the remittance by the related Mortgage Loan Seller pursuant to Section 2.03 (if remitted within the cure period set forth for repurchase in the related Mortgage Loan Purchase Agreement); provided, further, no Liquidation Fee shall be payable (i) in connection with a Periodic Payment received in connection with such Mortgage Loan or (ii) to the extent a Workout Fee is payable concerning the Liquidation Proceeds.

The Special Servicer’s right to receive the Special Servicing Fee, the Workout Fee and the Liquidation Fee may not be transferred in whole or in part except in connection with the transfer of all of the Special Servicer’s responsibilities and obligations under Sections 6.02, 6.04 and 6.09.

 

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(d)       Additional servicing compensation in the form of: (i) all late payment charges, Penalty Interest received on or with respect to Specially Serviced Mortgage Loans actually collected that, with respect to late payment charges and penalty charges, accrued during the time that the related Mortgage Loan was a Specially Serviced Mortgage Loan, (ii) one hundred percent (100%) of any assumption application fees and assumption fees with respect to any Specially Serviced Mortgage Loan and fifty percent (50%) of (A) any assumption fees or Tenant-in-Common Loan assumption fees and (B) any assumption application fees and Tenant-in-Common Loan transfer and assumption application fees if the related Tenant-in-Common Loan transfer and assumption fails to be completed or no assumption fee is collected with respect to a Tenant-In-Common Loan with respect to any Mortgage Loan or Companion Loan if such Mortgage Loan or Companion Loan is not a Specially Serviced Mortgage Loan, in each case to the extent actually paid by a Mortgagor, and (iii) modification fees collected on all Mortgage Loans or Companion Loans (other than modifications made by the Master Servicer pursuant to Section 3.20(i)), in each case to the extent actually paid by the related Mortgagor, shall be retained by the Special Servicer or promptly paid to the Special Servicer by the Master Servicer and shall not be required to be deposited in the Certificate Account; provided that the Special Servicer’s right to receive late payment charges and Penalty Interest pursuant to clause (i) above shall be limited to the portion of such items that have not been applied to pay interest on Advances and property inspection costs in respect of the related Mortgage Loan as provided in Sections 3.03(d), 3.12(a) and 4.03(d) or Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) pursuant to this Section 3.11(d). To the extent the Master Servicer or the Special Servicer receives late payment charges or Penalty Interest on a Mortgage Loan for which interest on Advances or Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) related to such Mortgage Loan and not previously reimbursed to the Trust Fund, the Special Servicer shall transfer to the Master Servicer for deposit in the Certificate Account, on or prior to the P&I Advance Date following the collection of such late payment charges or Penalty Interest, an amount equal to the lesser of (i) the amount of late payment charges or Penalty Interest received on such Mortgage Loan or (ii) the sum of the amount of interest paid to the Master Servicer on Advances related to such Mortgage Loan incurred since the Closing Date for which the Trust Fund has not been previously reimbursed and the amount of Additional Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or Liquidation Fees) related to such Mortgage Loan since the Closing Date and not previously reimbursed to the Trust Fund. To the extent that the Special Servicer is not entitled to late payment charges or Penalty Interest pursuant to the immediately preceding sentence, the Special Servicer shall promptly transfer such late payment charges and Penalty Interest to the Master Servicer who shall deposit such late payment charges and Penalty Interest in the Certificate Account. The Special Servicer shall also be entitled to additional servicing compensation in the form of: (i) interest or other income earned on deposits in the REO Account, if established, in accordance with Section 3.06(b) (but only to the extent of the Net Investment Earnings, if any, with respect to the REO Account for each Collection Period); and (ii) to the extent not required to be paid to any Mortgagor under applicable law, any interest or other income earned on deposits in the Servicing Accounts maintained by the Special Servicer.

 

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The Special Servicer shall be required to pay out of its own funds all general and administrative expenses incurred by it in connection with its servicing activities hereunder, and the Special Servicer shall not be entitled to reimbursement therefor except as expressly provided in Section 3.05(a) if and to the extent such expenses are not payable directly out of the Certificate Account or the REO Account.

(e)       The Master Servicing Fee, Special Servicing Fee, Workout Fee, Liquidation Fee and additional servicing compensation described in Section 3.11(b) and Section 3.11(d) with respect to each ED Loan shall be deemed to be an expense of the related ED Loan REMIC.

Section 3.12     Property Inspections; Collection of Financial Statements; Delivery of Certain Reports.

(a)       The Special Servicer shall perform or cause to be performed a physical inspection of a Mortgaged Property as soon as practicable after a related Mortgage Loan becomes a Specially Serviced Mortgage Loan; provided that with respect to inspections prepared by the Special Servicer, such expense shall be reimbursable first out of Penalty Interest and late payment charges otherwise payable to the Special Servicer and received in the Collection Period during which such inspection related expenses were incurred, then as an Additional Trust Fund Expense (except to the extent that such Additional Trust Fund Expense is payable out of the proceeds of any Companion Loan pursuant to the related Intercreditor Agreement and this Agreement). The Master Servicer, for each Mortgage Loan (other than a Specially Serviced Mortgage Loan or REO Loan), and the Special Servicer, for each Specially Serviced Mortgage Loan and REO Loan, shall (and, in the case of the Master Servicer, at its expense) perform or cause to be performed an inspection of all the Mortgaged Properties at least once per calendar year (or, in the case of each Mortgaged Property securing a Mortgage Loan (other than a Specially Serviced Mortgage Loan) with a then current principal balance (or allocated loan amount) of less than $2,000,000 at the time of such inspection, every other calendar year) beginning in 2008; provided, however, the Master Servicer shall not be required to inspect any Mortgaged Property that has been inspected by the Special Servicer during the immediately preceding six months. The Special Servicer and the Master Servicer shall each prepare (and, in the case of the Special Servicer, shall deliver to the Master Servicer) a written report of each such inspection performed by it that sets forth in detail the condition of the Mortgaged Property and that specifies the existence of: (i) any sale, transfer or abandonment of the Mortgaged Property of which it is aware, (ii) any change in the condition or value of the Mortgaged Property that it, in its reasonable judgment, considers material, or (iii) any visible waste committed on the Mortgaged Property. The Master Servicer shall deliver such reports to the Trustee within 45 days of the related inspection and the Trustee shall, subject to Section 3.15, make copies of all such inspection reports available for review by Certificateholders and Certificate Owners during normal business hours at the offices of the Trustee at all times after the Trustee’s receipt thereof. Upon written request and at the expense of the requesting party, the Trustee shall deliver copies of any such inspection reports to Certificateholders and Certificate Owners. The Special Servicer shall have the right to inspect or cause to be inspected (at its own expense) every calendar year any Mortgaged

 

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Property related to a loan that is not a Specially Serviced Mortgage Loan; provided that the Special Servicer obtains the approval of the Master Servicer prior to such inspection, and provides a copy of such inspection to the Master Servicer; provided, further, the Master Servicer and the Special Servicer shall not both inspect a Mortgaged Property that is not securing a Specially Serviced Mortgage Loan in the same calendar year. If the Special Servicer performs such inspection, such inspection shall satisfy the Master Servicer’s inspection obligations pursuant to this paragraph (a).

With respect to site inspection information, the Master Servicer shall make such inquiry of any Mortgagor under any related Mortgage Loan as the Special Servicer may reasonably request.

If the Special Servicer initiates a servicing transfer under clause (b) or (c) of the definition of “Specially Serviced Mortgage Loan,” the Special Servicer shall give written notice thereof to the Master Servicer, the Controlling Class Representative and the Trustee in order to effectuate such transfer.

(b)       No later than 2:00 p.m. (New York City time) on the second Business Day prior to each Determination Date, the Special Servicer shall deliver or cause to be delivered to the Master Servicer the following reports, with respect to the Specially Serviced Mortgage Loans and any REO Properties, providing the required information as of the end of the preceding calendar month: (i) a CMSA Special Servicer Loan File; and (ii) to the extent applicable, the Realized Loss Template.

(c)       No later than 4:00 p.m. (New York City time) on the third Business Day after each Determination Date, the Master Servicer shall deliver or cause to be delivered to the Trustee (in electronic format acceptable to the Master Servicer and the Trustee) (A) the most recent CMSA Historical Loan Modification and Corrected Mortgage Loan Report and CMSA REO Status Report based upon information received from the Special Servicer pursuant to Section 3.12(b); (B) a CMSA Property File, a CMSA Comparative Financial Status Report and a CMSA Financial File, each with the required information as of the end of the preceding calendar month (in each case combining the reports prepared by the Special Servicer and the Master Servicer); (C) a CMSA Loan Level Reserve/LOC Report and CMSA Delinquent Loan Status Report, each with the required information as of such Determination Date (in each case combining the reports prepared by the Special Servicer and the Master Servicer); (D) a CMSA Servicer Watchlist/Portfolio Review Guidelines with the required information as of such Determination Date; and (E) a CMSA Advance Recovery Report, with the required information as of such Determination Date.

(d)       The Special Servicer will deliver to the Master Servicer the reports set forth in Section 3.12(b) and this Section 3.12(d) and the Master Servicer shall deliver to the Trustee the reports set forth in this Section 3.12 in an electronic format reasonably acceptable to the Special Servicer and the Master Servicer with respect to the reports set forth in Section 3.12(b) and this Section 3.12(d) and the Master Servicer and the Trustee with respect to the reports set forth in Section 3.12(c). The Master Servicer may, absent manifest error, conclusively rely on the reports to be provided by the Special Servicer

 

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pursuant to Section 3.12(b) and this Section 3.12(d). The Trustee may, absent manifest error, conclusively rely on the CMSA Loan Periodic Update File to be provided by the Master Servicer pursuant to Section 4.02(b). In the case of information or reports to be furnished by the Master Servicer to the Trustee pursuant to this Section 3.12, to the extent that such information is based on reports to be provided by the Special Servicer pursuant to Section 3.12(b) and this Section 3.12(d) and, to the extent that such reports are to be prepared and delivered by the Special Servicer pursuant to Section 3.12(b) and this Section 3.12(d), the Master Servicer shall have no obligation to provide such information or reports until it has received such information or reports from the Special Servicer and the Master Servicer shall not be in default hereunder due to a delay in providing the reports required by this Section 3.12 to the extent caused by the Special Servicer’s failure to timely provide any report required under Section 3.12(b) and this Section 3.12(d) of this Agreement.

The Special Servicer, in the case of any Specially Serviced Mortgage Loan and REO Loan, and the Master Servicer, in the case of all other Mortgage Loans, shall endeavor, consistent with the Servicing Standard, to obtain quarterly and annual operating statements and rent rolls with respect to the related Mortgage Loans and REO Properties, which efforts shall include (i) in the case of the Mortgage Loans, a letter sent to the related Mortgagor each quarter (followed up with telephone calls) requesting such quarterly and annual operating statements and rent rolls until they are received to the extent such action is consistent with applicable law and the related Mortgage Loan documents, and (ii) with respect to the Serviced Whole Loans, a letter sent to the related Companion Holder(s) requesting such information to the extent such action is consistent with applicable law and the related Intercreditor Agreement.

The Special Servicer shall promptly, following receipt, deliver copies of the operating statements and rent rolls received or obtained by it to the Master Servicer, and the Master Servicer shall deliver copies of the operating statements and rent rolls received or obtained by it to the Rating Agencies, the Trustee, the Special Servicer or the Controlling Class Representative in each case (other than the Rating Agencies and the Controlling Class Representative which shall be sent copies within 30 days following the Master Servicer’s receipt) upon request.

Within 30 days after receipt by the Master Servicer (with respect to any Mortgaged Property other than a REO Property) or the Special Servicer (with respect to any REO Property) of any annual operating statements with respect to any Mortgaged Property or REO Property, as applicable, each of the Master Servicer (with respect to any Mortgaged Property other than a REO Property) and the Special Servicer (with respect to any REO Property) shall prepare or update and, with respect to any CMSA NOI Adjustment Worksheet prepared or updated by the Special Servicer, forward to the Master Servicer, a CMSA NOI Adjustment Worksheet for such Mortgaged Property or REO Property (with the annual operating statements attached thereto as an exhibit).

The Special Servicer with respect to each REO Loan, and the Master Servicer with respect to each other Mortgage Loan, shall each prepare and maintain and forward to each other one CMSA Operating Statement Analysis for each Mortgaged Property and REO Property, as applicable. The CMSA Operating Statement Analysis for each Mortgaged Property and REO

 

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Property is to be updated by each of the Master Servicer and the Special Servicer, as applicable, within thirty days after its respective receipt of updated operating statements for such Mortgaged Property and REO Property, as the case may be, but in no event less frequently than annually by June 30th of each year. The Master Servicer and the Special Servicer shall each use the “Normalized” column from the CMSA NOI Adjustment Worksheet for any Mortgaged Property or REO Property, as the case may be, to update the corresponding CMSA Operating Statement Analysis and shall use any operating statements received with respect to any Mortgaged Property or REO Property, as the case may be, to prepare the CMSA NOI Adjustment Worksheet for such property. Copies of CMSA Operating Statement Analyses and CMSA NOI Adjustment Worksheets are to be made available by the Master Servicer to the Trustee, the Special Servicer or the Controlling Class Representative in each case upon request.

Section 3.13     Annual Reports on Assessment of Compliance with Servicing Criteria and Annual Statement as to Compliance.

(a)       On or before noon (Eastern Time) on March 15 (or if March 15 is not a Business Day the preceding Business Day) of each year (with no cure period), commencing in March 2008, the Master Servicer, the Special Servicer and the Trustee, each at its own expense, shall furnish, and the Master Servicer and Special Servicer shall cause each Servicing Participant with which it has entered into a relationship with respect to the Mortgage Loans to furnish and the Master Servicer shall cause each Additional Servicer to furnish to the Trustee and the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing), with a copy to the Rating Agencies and the Controlling Class Representative, a report on an assessment of compliance with the Servicing Criteria that contains (i) a statement by such Reporting Party of its responsibility for assessing compliance with the Servicing Criteria applicable to it, (ii) a statement that such Reporting Party used the Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (iii) such Reporting Party’s assessment of compliance with the Relevant Servicing Criteria as of and for the period ending the end of the fiscal year covered by the Form 10-K required to be filed pursuant to Section 8.17, including, if there has been any material instance of noncompliance with the Relevant Servicing Criteria, a discussion of each such failure and the nature and status thereof, and (iv) a statement that a registered public accounting firm has issued an attestation report on such Reporting Party’s assessment of compliance with the Relevant Servicing Criteria as of and for such period. Promptly after receipt of each such report, the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) may review each such report and, if applicable, consult with the Trustee, the Master Servicer and the Special Servicer as to the nature of any material instance of noncompliance with the Relevant Servicing Criteria by the Trustee, the Master Servicer, the Special Servicer or any Servicing Participant with which it has entered into a servicing relationship with respect to the Mortgage Loans. Neither the Master Servicer nor the Special Servicer shall be required to cause the delivery of any such statements until April 15 in any given year so long as it has received written confirmation from the Depositor that a Report on Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year.

 

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Each such report shall be addressed to the Depositor and signed by an authorized officer of the applicable company, and shall address each of the Relevant Servicing Criteria specified on a certification substantially in the form of Exhibit S hereto delivered to the Depositor on the Closing Date. Promptly after receipt of each such report, (i) the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) may review each such report and, if applicable, consult with the Master Servicer, the Special Servicer and/or the Trustee as to the nature of any material instance of noncompliance with the Relevant Servicing Criteria (and each Sub-Servicer or Servicing Participant engaged or utilized by the Master Servicer, the Special Servicer or the Trustee, as applicable), and (ii) the Trustee shall confirm that the assessments taken individually address the Relevant Servicing Criteria as set forth on Exhibit S and notify the Depositor of any exceptions. None of the Master Servicer, the Special Servicer, the Trustee or any Servicing Participant shall be required to cause the delivery of any such assessments until April 15 in any given year so long as it has received written confirmation from the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) that a Report on Form 10-K is not required to be filed in respect of the Trust for the preceding calendar year. To the extent the Trustee has actual knowledge of a deficiency in the reporting of the Relevant Servicing Criteria (whether individually with respect to the Relevant Servicing Criteria, or in the aggregate with respect to the Servicing Criteria taken as a whole), the Trustee shall promptly notify in accordance with the last paragraph of Section 8.17(m) the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) and whichever of the Master Servicer or the Special Servicer failed to provide the Relevant Servicing Criteria.

No later than the end of each fiscal year for the Trust Fund, the Master Servicer and the Special Servicer shall notify the Trustee, the Master Servicer or the Special Servicer, as applicable, and the Depositor as to the name of each Sub-Servicer engaged by it and each Servicing Participant utilized by it, and the Trustee shall notify the Depositor as to the name of each Servicing Participant utilized by it, and each such notice will specify which Relevant Servicing Criteria will be addressed in the report on assessment of compliance prepared by such Servicing Participant and/or Sub-Servicer. When the Master Servicer, the Special Servicer and the Trustee submit their assessments pursuant to Section 3.13(a), the Master Servicer, the Special Servicer and the Trustee, as applicable, will also at such time include the assessment (and related attestation pursuant to Section 3.14) of each Servicing Participant and/or Sub-Servicer engaged by it.

In the event the Master Servicer, the Special Servicer or the Trustee is terminated or resigns pursuant to the terms of this Agreement, such party shall provide, and each such party shall cause any Servicing Participant engaged by it or formerly engaged by it to provide, and the Master Servicer shall use its reasonable efforts to cause any Additional Servicer that resigns or is terminated under any applicable servicing agreement to provide, an annual assessment of compliance pursuant to this Section 3.13, coupled with an attestation as required in Section 8.17 with respect to the period of time that the Master Servicer, the Special Servicer or the Trustee was subject to this Agreement or the period of time that the Additional Servicer was subject to such other servicing agreement.

 

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(b)       The Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer (or, in the case of the Master Servicer with respect to the Sub-Servicers identified on Exhibit Y hereto, shall use reasonable efforts to cause) and Special Servicer shall cause each Servicing Participant and Affiliated Servicer with which it has entered into a relationship with respect to the Mortgage Loans, to deliver to the Depositor and the Trustee on or before March 15 (or if March 15 is not a Business Day the preceding Business Day) of each year (with no cure period), commencing in March 2008, an Officer’s Certificate stating, as to the Trustee, the Master Servicer, the Special Servicer, the Additional Servicer or the Affiliated Servicer, as applicable, that (i) a review of such entity’s activities during the preceding calendar year or portion thereof and of such entity’s performance under this Agreement, or the applicable servicing agreement in the case of any Additional Servicer or Affiliated Servicer, has been made under such officer’s supervision and (ii) to the best of such officer’s knowledge, based on such review, such entity has fulfilled all its obligations under this Agreement, or the applicable Sub-Servicing Agreement or primary servicing agreement in the case of any Additional Servicer or Affiliated Servicer, in all material respects throughout such year or portion thereof, or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such failure known to such officer and the nature and status thereof. The Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer (or, in the case of the Master Servicer with respect to the Sub-Servicers identified on Exhibit Y hereto, shall use reasonable efforts to cause) and the Special Servicer shall cause each Additional Servicer or Affiliated Servicer with which it has entered into a servicing relationship with respect to the Mortgage Loans to, forward, or make available a copy of each such statement to the Rating Agencies and the Controlling Class Representative. Promptly after receipt of each such Officer’s Certificate, the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) may review such Officer’s Certificate and, if applicable, consult with the Trustee, the Master Servicer or the Special Servicer, as applicable, as to the nature of any failures by the Trustee, the Master Servicer or the Special Servicer, respectively, or any related any Additional Servicer or Affiliated Servicer with which the Master Servicer or the Special Servicer, as applicable, has entered into a servicing relationship with respect to the Mortgage Loans in the fulfillment of any of the Master Servicer’s or Special Servicer’s obligations hereunder or under the applicable servicing agreement. None of the Trustee, the Master Servicer or the Special Servicer shall be required to cause the delivery of such Officer’s Certificate until April 15 in any given year so long as it has received written confirmation from the Depositor (and each such other depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) that a Report on Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year.

The obligations of the Master Servicer, the Special Servicer, the Trustee and each Additional Servicer and Affiliated Servicer under this Section apply to the Master Servicer, the Special Servicer, the Trustee and each Additional Servicer and Affiliated Servicer that serviced a Mortgage Loan during the applicable period, whether or not the Master Servicer, the Special Servicer, the Trustee, Additional Servicer or Affiliated Servicer is acting as the Master Servicer,

 

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the Special Servicer, the Trustee or Additional Servicer or the Affiliated Servicer at the time such Officer’s Certificate is required to be delivered.

In the event the Master Servicer, the Special Servicer or the Trustee is terminated or resigns pursuant to the terms of this Agreement, such party shall provide, and the Master Servicer shall use its reasonable efforts to cause any Additional Servicer that resigns or is terminated under any applicable servicing agreement to provide, an annual statement of compliance pursuant to this Section 3.13 with respect to the period of time that the Master Servicer, the Special Servicer or the Trustee was subject to this Agreement or the period of time that the Additional Servicer was subject to such other servicing agreement.

 

 

Section 3.14

Attestation by Independent Public Accountants.

On or before noon (Eastern Time) on March 15 (or if March 15 is not a Business Day the preceding Business Day) of each year (with no cure period), commencing in March 2008, or April 15 of each year in which the Trust Fund is not required to file a Form 10-K, the Master Servicer, the Special Servicer and the Trustee, each at its own expense, shall cause, and the Master Servicer (or, in the case of the Master Servicer with respect to the Sub-Servicers identified on Exhibit Y hereto, shall use reasonable efforts to cause), the Special Servicer and the Trustee shall cause each Servicing Participant with which it has entered into a relationship with respect to the Mortgage Loans to cause, and the Master Servicer shall cause each Additional Servicer to cause, a registered public accounting firm (which may also render other services to the Master Servicer, the Special Servicer, the Trustee or the applicable Servicing Participant, as the case may be) and that is a member of the American Institute of Certified Public Accountants to furnish a report to the Trustee and the Depositor (and to any depositor and trustee for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing), with a copy to the Rating Agencies and the Controlling Class Representative, to the effect that (i) it has obtained a representation regarding certain matters from the management of such Reporting Party, which includes an assertion that such Reporting Party has complied with the Relevant Servicing Criteria and (ii) on the basis of an examination conducted by such firm in accordance with standards for attestation engagements issued or adopted by the Public Company Accounting Oversight Board, attests to and reports on such Reporting Party’s assessment of compliance with the Relevant Servicing Criteria. In the event that an overall opinion cannot be expressed, such registered public accounting firm shall state in such report why it was unable to express such an opinion. Each such related accountant’s attestation report shall be made in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act. Such report must be available for general use and not contain restricted use language. Promptly after receipt of such report from the Trustee, the Master Servicer, the Special Servicer or any Servicing Participant, the Depositor (and to any depositor for any other securitization trust relating to a Serviced Securitized Companion Loan to the extent such depositor has been identified to the Trustee in writing) may review the report and, if applicable, consult with the Trustee, the Master Servicer or the Special Servicer as to the nature of any defaults by the Trustee, the Master Servicer, the Special Servicer or any Servicing Participant with which it has entered into a servicing relationship with respect to the Mortgage Loans, as the case may be, in the fulfillment of any of the Trustee’s, the Master Servicer’s, the Special Servicer’s or the applicable Servicing Participant’s obligations hereunder or under the applicable servicing agreement. The Trustee,

 

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the Master Servicer and the Special Servicer shall not be required to cause the delivery of such reports until April 15 in any given year so long as it has received written confirmation from the Depositor that a Report on Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year (or, in the case of a securitized Serviced Securitized Companion Loan, the related securitization trust). The Trustee shall confirm that each accountants’ attestation report submitted pursuant to this Section relates to an assessment of compliance that on its face meets the requirements of Section 3.13(a) and notify the Depositor of any exceptions.

 

 

Section 3.15

Access to Certain Information.

(a)       Upon reasonable prior written notice, not required to be greater than ten days, the Master Servicer (with respect to the items in clauses (a), (b) (other than Distribution Date Statements), (c), (d), (e), (f), (h) and (i) below, unless such item was not delivered to the Master Servicer), the Special Servicer (with respect to the items in clauses (c), (d), (g), (h) and (i) below) to the extent such items are in its possession and the Trustee (with respect to the items in clauses (b) and (i) below and any other items, to the extent in its possession) shall make available at their respective offices primarily responsible for administration of the Mortgage Loans (or in the case of the Trustee, at its Corporate Trust Office, except with respect to documents which constitute part of the Mortgage Files, which will be maintained at its offices in Minnesota), during normal business hours, or send to the requesting party, such party having been certified to the Trustee, the Master Servicer or the Special Servicer, as applicable, in accordance with (a) and (b) in the following paragraph, as appropriate, at the expense of such requesting party (unless otherwise provided in this Agreement), for review by any Certificate Owner or Certificateholder or any Person identified by a Certificate Owner or Certificateholder or its designated agent to the Trustee, the Master Servicer or the Special Servicer, as the case may be, as a prospective transferee of any Certificate or interest therein or a Companion Loan or any interest therein (to the extent such information is related to such Companion Loan or the related Mortgage Loan), the Trustee, the Rating Agencies, the Underwriters and any applicable regulator or potential purchaser specified thereby and the Depositor, originals or copies of the following items: (a) this Agreement and any amendments thereto, (b) all Distribution Date Statements delivered to holders of the relevant Class of Certificates since the Closing Date and all reports, statements and analyses delivered by the Master Servicer since the Closing Date pursuant to Section 3.12(c), (c) all Officer’s Certificates delivered by the Master Servicer or the Special Servicer since the Closing Date pursuant to Section 3.13, (d) all accountants’ reports delivered to the Master Servicer in respect of itself or the Special Servicer since the Closing Date as described in Section 3.14, (e) the most recent property inspection report prepared by or on behalf of the Master Servicer in respect of each Mortgaged Property and any Environmental Assessments prepared pursuant to Section 3.09, (f) the most recent Mortgaged Property annual operating statements and rent roll, if any, collected by or on behalf of the Master Servicer, (g) any and all modifications, waivers and amendments of the terms of a Mortgage Loan entered into by the Special Servicer and the Asset Status Report prepared pursuant to Section 3.21(d), (h) the Servicing File relating to each Mortgage Loan and (i) any and all Officer’s Certificates and other evidence delivered by the Master Servicer or the Special Servicer, as the case may be, to support its determination that any Advance was, or if made, would be, a Nonrecoverable

 

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Advance pursuant to Sections 3.03(e) or 4.03(c), including appraisals affixed thereto and any Required Appraisal prepared pursuant to Section 3.09(a); provided, however, that none of the Master Servicer, Special Servicer or Trustee shall be obligated to release any information that is subject to attorney client, work product or other confidentiality agreement or protections, unless otherwise required to be delivered in accordance with any applicable Intercreditor Agreement. Copies of any and all of the foregoing items will be available from the Master Servicer, the Special Servicer or the Trustee, as the case may be, upon request and shall be provided to any of the Rating Agencies at no cost pursuant to their reasonable requests.

In connection with providing access to or copies of the items described in the preceding paragraph pursuant to this Section 3.15, or with respect to the Controlling Class Representative, in connection with providing access to or copies of any items in accordance with this Agreement, the Trustee, the Master Servicer or the Special Servicer, as applicable, shall require: (a) in the case of Certificate Owners and the Controlling Class Representative, a confirmation (which in the case of the Controlling Class Representative may be a standing confirmation) executed by the requesting Person substantially in the form of Exhibit K-1 hereto (or such other form as may be reasonably acceptable to the Trustee, the Master Servicer or the Special Servicer, as applicable) generally to the effect that such Person is a beneficial holder of Book-Entry Certificates, or a representative of a beneficial holder of Book-Entry Certificates, and, subject to the last sentence of this paragraph, will keep such information confidential (except that such Certificate Owner and the Controlling Class Representative may provide such information to any other Person that holds or is contemplating the purchase of any Certificate or interest therein; provided that such other Person confirms in writing such ownership interest or prospective ownership interest and agrees to keep such information confidential); and (b) in the case of a prospective purchaser of a Certificate or an interest therein, confirmation executed by the requesting Person substantially in the form of Exhibit K-2 hereto (or such other form as may be reasonably acceptable to the Trustee, the Master Servicer or the Special Servicer, as applicable) generally to the effect that such Person is a prospective purchaser of a Certificate or an interest therein, is requesting the information for use in evaluating a possible investment in Certificates and, subject to the last sentence of this paragraph, will otherwise keep such information confidential. The Holders of the Certificates, by their acceptance thereof, and the Controlling Class Representative, by its acceptance of its appointment, will be deemed to have agreed, subject to the last sentence of this paragraph, to keep such information confidential (except that any Holder may provide such information obtained by it to any other Person that holds or is contemplating the purchase of any Certificate or interest therein; provided that such other Person confirms in writing such ownership interest or prospective ownership interest and agrees to keep such information confidential) and agrees not to use such information in any manner that would violate federal, state or local securities laws. Notwithstanding the foregoing, no Certificateholder, Certificate Owner or prospective Certificateholder or Certificate Owner shall be obligated to keep confidential any information received from the Trustee, the Master Servicer or the Special Servicer, as applicable, pursuant to this Section 3.15 that has previously been made available via the Trustee’s, the Master Servicer’s or Special Servicer’s Internet Website without restriction as to access as permitted pursuant to the terms of this Agreement, as applicable, or has previously been filed with the Commission, and the Trustee, the Master Servicer or the Special Servicer, as applicable, shall not require either of the certifications contemplated by the second preceding sentence in connection with providing any information

 

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pursuant to this Section 3.15 that has previously been made available via the Trustee’s, the Master Servicer’s or Special Servicer’s Internet Website without restriction as to access in compliance with the terms of this Agreement, as applicable, or has previously been filed with the Commission.

Each of the Master Servicer and the Special Servicer shall afford to the Trustee, the Rating Agencies and the Depositor, and to the OTS, the FDIC, the Federal Reserve Board and any other banking or insurance regulatory authority that may exercise authority over any Certificateholder or a Companion Loan or any interest therein (to the extent such information is related to such Companion Loan or the related Mortgage Loan), access to any records regarding the Mortgage Loans and the servicing thereof within its control, except to the extent it is prohibited from doing so by applicable law or contract or to the extent such information is subject to a privilege under applicable law to be asserted on behalf of the Certificateholders or the Companion Holders. Such access shall be afforded only upon reasonable prior written request and during normal business hours at the offices of the Master Servicer or the Special Servicer, as the case may be, designated by it.

The Trustee, the Master Servicer, the Special Servicer and the Underwriters may require payment from the Certificateholder or Certificate Owner or holder of a Companion Loan, as applicable, of a sum sufficient to cover the reasonable costs and expenses of providing any such information or access pursuant to this Section 3.15 to, or at the request of, the Certificateholders or Certificate Owners or prospective transferees or holder of a Companion Loan, as applicable, including, without limitation, copy charges and, in the case of Certificateholders or Certificate Owners or holder of a Companion Loan, if applicable, requiring on site review in excess of 3 Business Days, reasonable fees for employee time and for space.

(b)       The Trustee shall, and the Master Servicer may, but is not required to, make available on or prior to the Distribution Date in each month to the general public (i) the Distribution Date Statement via their respective Internet Websites, (ii) as a convenience for the general public, the Prospectus Supplement, the Prospectus and this Agreement on their respective Internet Websites and (iii) any other items at the request of the Depositor via their respective Internet Websites. In addition, the Trustee shall make available each month, on each Distribution Date, the Unrestricted Servicer Reports, the CMSA Loan Periodic Update File, the CMSA Loan Setup File, the CMSA Bond File and the CMSA Collateral Summary File to the general public on its Internet Website (on a password protected basis). The Trustee shall, upon written request, make available each month, on each Distribution Date, (i) the Restricted Servicer Reports, and (ii) the CMSA Property File and the CMSA Financial File to any Privileged Person and to any other Person upon the direction of the Depositor.

The Master Servicer may, but is not required to, make available each month via its Internet Website (i) to any interested party, the Unrestricted Servicer Reports, the CMSA Loan Setup File and the CMSA Loan Periodic Update File, and (ii) to any Privileged Person, with the use of a password provided by the Master Servicer, the Restricted Servicer Reports, the CMSA Financial File and the CMSA Property File. Any Restricted Servicer Report or Unrestricted Servicer Report that is not available on the Master Servicer’s Internet Website as described in the immediately preceding sentence by 5:00 p.m. (New York City time) on the

 

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related Distribution Date shall be provided (in electronic format, or if electronic mail is unavailable, by facsimile) by the Master Servicer, upon request, to any Person otherwise entitled to access such report on the Master Servicer’s Internet Website.

In connection with providing access to the Trustee’s Internet Website or the Master Servicer’s Internet Website, the Trustee or the Master Servicer, as applicable, may require registration and the acceptance of a disclaimer.

If three or more Holders or the Controlling Class Representative (hereinafter referred to as “Applicants” with a single Person which (together with its Affiliates) is the Holder of more than one Class of Certificates being viewed as a single Applicant for these purposes) apply in writing to Trustee, and such application states that the Applicants’ desire to communicate with other Holders with respect to their rights under this Agreement or under the Certificates and is accompanied by a copy of the communication which such Applicants propose to transmit, then the Trustee shall, within 5 Business Days after the receipt of such application, send, at the Applicants’ expense, the written communication proffered by the Applicants to all Certificateholders at their addresses as they appear in the Certificate Register.

(c)       The Master Servicer and the Special Servicer shall not be required to confirm, represent or warrant the accuracy or completeness of any other Person’s information or report included in any communication from the Master Servicer or the Special Servicer under this Agreement. Neither the Master Servicer nor the Trustee shall be liable for the dissemination of information in accordance with this Section 3.15(c). The Trustee makes no representations or warranties as to the accuracy or completeness of any report, document or other information made available on the Trustee’s Website and assumes no responsibility therefor. In addition, the Trustee, the Master Servicer and the Special Servicer may disclaim responsibility for any information distributed by the Trustee, the Master Servicer or the Special Servicer, respectively, for which it is not the original source.

(d)       Upon the request of the Controlling Class Representative made not more frequently than once a month (which request may be a standing, continuing request), or at such mutually acceptable time each month as the Controlling Class Representative shall reasonably designate, each of the Master Servicer and Special Servicer shall, without charge, make a knowledgeable Servicing Officer available, at the option of the Controlling Class Representative either by telephone or at the office of such Servicing Officer, to answer questions from the Controlling Class Representative regarding the performance and servicing of the Mortgage Loans and/or REO Properties for which such Master Servicer or Special Servicer, as the case may be, is responsible. The Master Servicer and the Special Servicer each shall condition such disclosure upon the Controlling Class Representative entering into a reasonable and customary confidentiality agreement reasonably acceptable to such servicer and the Controlling Class Representative regarding such disclosure to it. Neither the Master Servicer nor the Special Servicer shall be required to provide any information or disclosures in violation of any applicable law, rule or regulation.

 

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(e)       With respect to any Companion Loan, the Companion Holders shall receive and have access to any information described in this Section 3.15 which such Companion Holder is entitled to pursuant to the related Intercreditor Agreement.

 

 

Section 3.16

Title to REO Property; REO Account.

(a)       If title to any REO Property is acquired, the deed or certificate of sale shall be issued to the Trustee or its nominee on behalf of the Certificateholders and, if applicable, the Companion Holder, as their interests shall appear. The Special Servicer, on behalf of the Trust Fund, shall sell any such REO Property as soon as practicable in accordance with the Servicing Standard, but prior to the end of the third year following the calendar year in which the related ED Loan REMIC, REMIC I acquires ownership of such REO Property (or applicable portion thereof) for purposes of Section 860G(a)(8) of the Code, unless the Special Servicer either (i) applies for, more than 60 days prior to the end of such third succeeding year, and is not denied an extension of time (an “REO Extension”) by the Internal Revenue Service to sell such REO Property or (ii) obtains for the Trustee an Opinion of Counsel, addressed to the Trustee, the Special Servicer and the Master Servicer, to the effect that the holding by any ED Loan REMIC or REMIC I of such REO Property subsequent to the end of such third succeeding year will not result in the imposition of taxes on “prohibited transactions” (as defined in Section 860F of the Code) of any ED Loan REMIC, REMIC I or REMIC II or cause any ED Loan REMIC, REMIC I or REMIC II to fail to qualify as a REMIC at any time that any Certificates are outstanding. If the Special Servicer is granted the REO Extension contemplated by clause (i) of the immediately preceding sentence or obtains the Opinion of Counsel contemplated by clause (ii) of the immediately preceding sentence, the Special Servicer shall sell such REO Property within such extended period as is permitted by such REO Extension or such Opinion of Counsel, as the case may be. Any expense incurred by the Special Servicer in connection with its obtaining the REO Extension contemplated by clause (i) of the second preceding sentence or its obtaining the Opinion of Counsel contemplated by clause (ii) of the second preceding sentence, shall first be payable from the related REO Account to the extent of available funds and then be a Servicing Advance by the Master Servicer.

(b)       The Special Servicer shall segregate and hold all funds collected and received in connection with any REO Property separate and apart from its own funds and general assets. If an REO Acquisition shall occur, the Special Servicer shall establish and maintain one or more accounts (collectively, the “REO Account”), held on behalf of the Trustee in trust for the benefit of the Certificateholders and, if applicable, the Companion Holder, as their interests shall appear, for the retention of revenues and other proceeds derived from each REO Property. The REO Account shall be an Eligible Account. The Special Servicer shall deposit, or cause to be deposited, in the REO Account, upon receipt, all REO Revenues, Insurance Proceeds and Liquidation Proceeds (net of Liquidation Expenses) received in respect of an REO Property within 2 Business Days of receipt. Funds in the REO Account may be invested in Permitted Investments in accordance with Section 3.06. The Special Servicer shall be entitled to make withdrawals from the REO Account to pay itself, as additional servicing compensation in accordance with Section 3.11(d), interest and investment income earned in respect of

 

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amounts held in the REO Account as provided in Section 3.06(b) (but only to the extent of the Net Investment Earnings with respect to the REO Account for any Collection Period). The Special Servicer shall give written notice to the Trustee and the Master Servicer of the location of the REO Account when first established and of the new location of the REO Account prior to any change thereof.

(c)       The Special Servicer shall withdraw from the REO Account funds necessary for the proper operation, management, maintenance and disposition of any REO Property, but only to the extent of amounts on deposit in the REO Account relating to such REO Property (including any monthly reserve or escrow amounts necessary to accumulate sufficient funds for taxes, insurance and anticipated capital expenditures (the “Impound Reserve”)). On the last day of the related Collection Period, the Special Servicer shall withdraw from the REO Account and deposit into the Certificate Account or deliver to the Master Servicer or such other Person as may be directed by the Master Servicer (which shall deposit such amounts into the Certificate Account) the aggregate of all amounts received in respect of each REO Property during the most recently ended Collection Period, net of any withdrawals made out of such amounts pursuant to the preceding sentence; provided that in addition to the Impound Reserve, the Special Servicer may retain in the REO Account such portion of proceeds and collections as may be necessary to maintain a reserve of sufficient funds for the proper operation, management and maintenance of the related REO Property (including, without limitation, the creation of a reasonable reserve for repairs, replacements and other related expenses).

(d)       The Special Servicer shall keep and maintain separate records, on a property-by-property basis, for the purpose of accounting for all deposits to, and withdrawals from, the REO Account pursuant to Section 3.16(b) or (c). The Special Servicer shall provide the Master Servicer any information with respect to the REO Account as is reasonably requested by the Master Servicer.

 

 

Section 3.17

Management of REO Property.

(a)       Prior to the acquisition of title to a Mortgaged Property, the Special Servicer shall review the operation of such Mortgaged Property and determine the nature of the income that would be derived from such property if it were acquired by the Trust Fund. If the Special Servicer determines from such review in compliance with the Servicing Standard that in its good faith and reasonable judgment:

(i)       None of the income from Directly Operating such REO Property would be subject to tax as “net income from foreclosure property” within the meaning of the REMIC Provisions (such tax referred to herein as an “REO Tax”), and the Special Servicer does not engage in any of the activities described in the definition of “Directly Operate” that would cause the REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code, then such Mortgaged Property may be Directly Operated by the Special Servicer as REO Property;

(ii)      Directly Operating such Mortgaged Property as an REO Property could result in income from such property that would be subject to an REO Tax, but that a lease

 

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of such property to another party to operate such property, or the performance of some services by an Independent Contractor with respect to such property, or another method of operating such property would not result in income subject to an REO Tax, then the Special Servicer may (provided that in the good faith and reasonable judgment of the Special Servicer, such alternative is commercially feasible and would result in a greater net recovery on a present value basis than earning income subject to an REO Tax) acquire such Mortgaged Property as REO Property and so lease or manage such REO Property; or

(iii)     It is reasonable to believe that Directly Operating such property as REO Property could result in income subject to an REO Tax and that such method of operation is commercially feasible and would result in a greater net recovery on a present value basis than leasing or other method of operating the REO Property that would not incur an REO Tax, the Special Servicer shall deliver to the REMIC Administrator, in writing, a proposed plan (the “Proposed Plan”) to manage such property as REO Property. Such plan shall include potential sources of income, and to the extent commercially feasible, estimates of the amount of income from each such source. Within a reasonable period of time after receipt of such plan, the REMIC Administrator shall consult with the Special Servicer and shall advise the Special Servicer of the REMIC Administrator’s federal income tax reporting position with respect to the various sources of income that the Trust Fund would derive under the Proposed Plan. In addition, the REMIC Administrator shall (to the extent reasonably possible) advise the Special Servicer of the estimated amount of taxes that the Trust Fund would be required to pay with respect to each such source of income. After receiving the information described in the two preceding sentences from the REMIC Administrator, the Special Servicer shall either (A) implement the Proposed Plan (after acquiring the respective Mortgaged Property as REO Property) or (B) manage such property in a manner that would not result in the imposition of an REO Tax on the income derived from such property. All of the REMIC Administrator’s expenses (including any fees and expenses of counsel or other experts reasonably retained by it) incurred pursuant to this Section shall be reimbursed to it from the Trust Fund in accordance with Section 10.01(e).

The Special Servicer’s decision as to how each REO Property shall be managed shall be based on the Servicing Standard and in any case on the good faith and reasonable judgment of the Special Servicer as to which means would be in the best interest of the Certificateholders (or, if the REO Property was formerly a Mortgaged Property securing a Co-Lender Loan, the Certificateholders and the related Companion Holder (as a collective whole in accordance with the Servicing Standard, taking into account the subordinate nature of the Companion Loan, if applicable)) by maximizing (to the extent commercially feasible and consistent with Section 3.17(b)) the net after-tax REO Revenues received by the Trust Fund with respect to such property and, to the extent consistent with the foregoing, in the same manner as would prudent mortgage loan servicers operating acquired mortgaged property comparable to the respective Mortgaged Property. Both the Special Servicer and the REMIC Administrator may, at the expense of the Trust Fund payable pursuant to Section 3.05(a)(xv), consult with counsel.

(b)       If title to any REO Property is acquired, the Special Servicer shall manage, conserve and protect such REO Property for the benefit of the Certificateholders

 

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(or, if the REO Property was formerly a Mortgaged Property securing a Co-Lender Loan, the Certificateholders and the related Companion Holder (as a collective whole in accordance with the Servicing Standard, taking into account the subordinate nature of the Companion Loan, if applicable)) solely for the purpose of its prompt disposition and sale in a manner that does not and will not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or either result in the receipt by any ED Loan REMIC or REMIC I, as applicable, of any “income from non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code or result in an Adverse REMIC Event. Subject to the foregoing, however, the Special Servicer shall have full power and authority to do any and all things in connection therewith as are consistent with the Servicing Standard and, consistent therewith, shall withdraw from the REO Account, to the extent of amounts on deposit therein with respect to any such REO Property, funds necessary for the proper management, maintenance and disposition of such REO Property, including without limitation:

(i)       all insurance premiums due and payable in respect of such REO Property;

(ii)     all real estate taxes and assessments in respect of such REO Property that may result in the imposition of a lien thereon;

(iii)     any ground rents in respect of such REO Property; and

(iv)    all costs and expenses necessary to maintain, lease, sell, protect, manage and restore such REO Property.

To the extent that amounts on deposit in the REO Account in respect of any REO Property are insufficient for the purposes set forth in the preceding sentence with respect to such REO Property, the Master Servicer, subject to the second paragraph of Section 3.03(c), shall make Servicing Advances in such amounts as are necessary for such purposes unless (as evidenced by an Officer’s Certificate delivered to the Trustee) the Master Servicer would not make such advances if the Master Servicer owned such REO Property or the Master Servicer determines, in accordance with the Servicing Standard, that such payment would be a Nonrecoverable Advance; provided, however, the Master Servicer may make any such Servicing Advance without regard to recoverability if it is a necessary fee or expense incurred in connection with the defense or prosecution of legal proceedings.

(c)       Unless Section 3.17(a)(i) applies, the Special Servicer shall contract with any Independent Contractor (if required by the REMIC Provisions for the REO Property to remain classified as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code) for the operation and management of any REO Property; provided that:

(i)       the terms and conditions of any such contract may not be inconsistent herewith and shall reflect an agreement reached at arm’s length;

(ii)      the fees of such Independent Contractor (which shall be expenses of the Trust Fund) shall be reasonable and customary in consideration of the nature and locality of the REO Property;

 

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(iii)     except as permitted under Section 3.17(a), any such contract shall require, or shall be administered to require, that the Independent Contractor, in a timely manner, pay all costs and expenses incurred in connection with the operation and management of such REO Property, including, without limitation, those listed in Section 3.17(b) above, and remit all related revenues collected (net of its fees and such costs and expenses) to the Special Servicer upon receipt;

(iv)      none of the provisions of this Section 3.17(c) relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Special Servicer of any of its duties and obligations hereunder with respect to the operation and management of any such REO Property; and

(v)        the Special Servicer shall be obligated with respect thereto to the same extent as if it alone were performing all duties and obligations in connection with the operation and management of such REO Property.

The Special Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Special Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. No agreement entered into pursuant to this Section 3.17(c) shall be deemed a Sub-Servicing Agreement for purposes of Section 3.22.

(d)       Without limiting the generality of the foregoing, the Special Servicer shall not:

(i)       permit the Trust Fund to enter into, renew or extend any New Lease with respect to any REO Property, if the New Lease by its terms will give rise to any income that does not constitute Rents from Real Property;

(ii)      permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents from Real Property;

(iii)     authorize or permit any construction on any REO Property, other than the repair or maintenance thereof or the completion of a building or other improvement thereon, to the extent provided in Section 856(e)(4)(B) of the Code; or

(iv)      except as otherwise provided for in Section 3.17(a)(i) and (a)(ii) above, Directly Operate, or allow any other Person, other than an Independent Contractor, to Directly Operate, any REO Property on any date more than 90 days after its Acquisition Date;

unless, in any such case, the Special Servicer has obtained an Opinion of Counsel (the cost of which shall be paid by the Master Servicer as a Servicing Advance unless nonrecoverable, in which case it shall be paid by the Master Servicer as an Additional Trust Fund Expense from amounts on deposit in the Certificate Account) to the effect that such action will not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund, in which case the

 

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Special Servicer may take such actions as are specified in such Opinion of Counsel. Except as limited above in this Section 3.17 and by this Section 3.17(d), the Special Servicer shall be permitted to cause the Trust Fund to earn “net income from foreclosure property”, subject to the Servicing Standard.

 

 

Section 3.18

Resolution of Defaulted Mortgage Loans and REO Properties.

(a)       The Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Mortgage Loan or an REO Property only on the terms and subject to the conditions set forth in this Section 3.18 or as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01.

(b)       Within 60 days after a Mortgage Loan becomes a Defaulted Mortgage Loan, the Special Servicer shall determine the fair value of such Mortgage Loan in accordance with the Servicing Standard; provided, however, such determination shall be made without taking into account any effect the restrictions on the sale of such Mortgage Loan contained herein may have on the value of such Defaulted Mortgage Loan; provided, further, the Special Servicer shall use reasonable efforts to obtain an Appraisal with respect to the related Mortgaged Property unless it has an Appraisal that is less than 12 months old and has no actual knowledge of, or notice of, any event which in the Special Servicer’s judgment would materially affect the validity of such Appraisal. The Special Servicer shall make its fair value determination as soon as reasonably practicable (but in any event within 30 days) after its receipt of such new Appraisal, if applicable. The Special Servicer is permitted to change, from time to time, its determination of the fair value of a Defaulted Mortgage Loan based upon changed circumstances, new information or otherwise, in accordance with the Servicing Standard; provided, however, the Special Servicer shall update its determination of the fair value at least once every 90 days. The Special Servicer shall notify the Trustee, the Master Servicer, each Rating Agency and the Majority Subordinate Certificateholder promptly upon its fair value determination and any adjustment thereto. In determining the fair value of any Defaulted Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the Mortgaged Property is located, and the time and expense associated with a purchaser’s foreclosing on the related Mortgaged Property. In addition, the Special Servicer shall refer to all other relevant information obtained by it or otherwise contained in the Mortgage Loan File; provided that the Special Servicer shall take account of any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would, in the Special Servicer’s reasonable judgment, materially affect the value of the related Mortgaged Property reflected in the most recent related Appraisal. Furthermore, the Special Servicer shall consider all available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may conclusively rely on the opinion and reports of Independent third parties in making such determination.

 

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(c)       Subject to the terms set forth in Section 2.03, in the event a Mortgage Loan becomes a Defaulted Mortgage Loan, each of the Majority Subordinate Certificateholder and the Special Servicer shall have an assignable option (a “Purchase Option”) to purchase such Defaulted Mortgage Loan from the Trust Fund at a price (the “Option Price”) equal to (i) the Purchase Price, if the Special Servicer has not yet determined the fair value of the Defaulted Mortgage Loan, or (ii) the fair value of the Defaulted Mortgage Loan as determined by the Special Servicer in the manner described in Section 3.18(b) and in accordance with the Servicing Standard, if the Special Servicer has made such fair value determination. Any holder of a Purchase Option may sell, transfer, assign or otherwise convey its Purchase Option with respect to any Defaulted Mortgage Loan to any party other than the related Mortgagor or an Affiliate of the related Mortgagor under the Mortgage Loan at any time after the related Mortgage Loan becomes a Defaulted Mortgage Loan. The transferor of any Purchase Option shall notify the Trustee and the Master Servicer of such transfer and such notice shall include the transferee’s name, address, telephone number, facsimile number and appropriate contact person(s) and shall be acknowledged in writing by the transferee at least five (5) Business Days in advance of such intended transfer. Notwithstanding the foregoing, and subject to Section 3.18(d) of this Agreement, the Majority Subordinate Certificateholder shall have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by any other holder of a Purchase Option; provided, however, if the Purchase Option is not exercised by the Majority Subordinate Certificateholder or any assignee thereof within 60 days of a Mortgage Loan becoming a Defaulted Mortgage Loan, then the Special Servicer shall have the right to exercise its Purchase Option prior to any exercise by the Majority Subordinate Certificateholder and the Special Servicer or its assignee may exercise such Purchase Option at any time during the fifteen day period immediately following the expiration of such 60-day period. Following the expiration of such fifteen day period, the Majority Subordinate Certificateholder shall again have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer. If not exercised earlier, the Purchase Option with respect to any Defaulted Mortgage Loan will automatically terminate (i) once the related Defaulted Mortgage Loan is no longer a Defaulted Mortgage Loan; provided, however, if such Mortgage Loan subsequently becomes a Defaulted Mortgage Loan, the related Purchase Option shall again be exercisable, (ii) upon the acquisition, by or on behalf of the Trust Fund, of title to the related Mortgaged Property through foreclosure or deed in lieu of foreclosure or (iii) the modification or pay-off, in full or at a discount, of such Defaulted Mortgage Loan in connection with a workout.

(d)       Notwithstanding the provisions of Section 3.18(c), Section 3.18(g) or Section 3.18(h), pursuant to the terms of the Intercreditor Agreements, a Companion Holder will have the right to purchase the related Co-Lender Loan or related REO Property in certain circumstances. Such right of the related Companion Holder shall have priority over any provision described in Section 3.18(c), Section 3.18(g) or Section 3.18(h). If the Co-Lender Loan or REO Property is purchased by the related Companion Holder, repurchased by the applicable Mortgage Loan Seller or otherwise ceases to be subject to this Agreement, the related Companion Loan will no longer be subject to this Agreement. Neither the Trustee nor the Trust Fund shall acquire a Companion Loan; provided, however, the Master Servicer or an affiliate may own or

 

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acquire the Companion Loans. With respect to each Loan Pair, the related Companion Holder shall be entitled to exercise any cure rights given to it under the related Intercreditor Agreement, in each case subject to any conditions or restrictions described in or incorporated by reference into such sections.

(e)       Upon receipt of notice from the Special Servicer indicating that a Mortgage Loan has become a Defaulted Mortgage Loan, the holder (whether the original grantee of such option or any subsequent transferee) of the Purchase Option may exercise the Purchase Option by providing the Master Servicer and the Trustee written notice thereof (the “Purchase Option Notice”), in the form of Exhibit M, which notice shall identify the Person that, on its own or through an Affiliate, will acquire the related Mortgage Loan upon closing and shall specify a cash exercise price at least equal to the Option Price.

(f)        If the Special Servicer or the Majority Subordinate Certificateholder, or any of their respective Affiliates, is identified in the Purchase Option Notice as the Person expected to acquire the related Mortgage Loan, the Trustee shall determine as soon as reasonably practicable (and, in any event, within 30 days) after the Trustee has received the written notice, whether the Option Price represents fair value for the Defaulted Mortgage Loan; provided that if the Special Servicer is then in the process of obtaining a new Appraisal with respect to the related Mortgaged Property, then the Trustee shall, in accordance with its good faith and reasonable judgment, make its fair value determination with respect to such Mortgage Loan as soon as reasonably practicable (but in any event within 30 days) after the Trustee’s receipt of such new Appraisal. The Trustee may rely on the opinion and reports of Independent third parties in making such determination; provided that the Trustee may rely on the most current Appraisal obtained for the related Mortgaged Property pursuant to this Agreement. In determining the fair value of any Defaulted Mortgage Loan, the Trustee shall take into account, and any Independent third party shall be instructed to take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the Mortgaged Property is located, and the time and expense associated with a purchaser’s foreclosing on the related Mortgaged Property. In addition, the Trustee shall refer, and any Independent third party shall be instructed to refer, to all relevant information delivered to it by the Special Servicer or otherwise contained in the Mortgage Loan File. Furthermore, the Trustee shall consider, and any Independent third party shall be instructed to consider, all available objective third-party information obtained from generally available sources, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The reasonable costs of all appraisals, inspection reports and broker opinions of value, reasonably incurred by the Trustee or any such third party pursuant to this subsection shall be advanced by the Master Servicer and shall constitute, and be reimbursable as, Servicing Advances (or if such Advance is deemed to be a Nonrecoverable Advance such costs shall be reimbursable as Additional Trust Fund Expenses from the Certificate Account pursuant to Section 3.05(a)). The other parties to this Agreement shall cooperate with all reasonable requests for information.

 

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(g)       Unless and until the Purchase Option with respect to a Defaulted Mortgage Loan is exercised, the Special Servicer shall pursue such other resolution strategies available hereunder with respect to such Defaulted Mortgage Loan, including, without limitation, workout and foreclosure, as the Special Servicer may deem appropriate consistent with the Servicing Standard; provided, however, the Special Servicer will not be permitted to sell the Defaulted Mortgage Loan other than in connection with the exercise of the related Purchase Option.

(h)       In the event that title to any REO Property is acquired by the Trust Fund in respect of any Defaulted Mortgage Loan, the deed or certificate of sale shall be issued to the Trust Fund, the Trustee or to its nominees. The Special Servicer, after notice to the Controlling Class Representative, shall use its reasonable best efforts to sell any such REO Property as soon as practicable in accordance with Section 3.16(a). If the Special Servicer on behalf of the Trustee has not received an REO Extension or an Opinion of Counsel described in Section 3.16(a) and the Special Servicer is not able to sell such REO Property within the period specified above, or if an REO Extension has been granted and the Special Servicer is unable to sell such REO Property within the extended time period, the Special Servicer shall, after consultation with the Controlling Class Representative, before the end of such period or extended period, as the case may be, auction the REO Property to the highest bidder (which may be the Special Servicer) in accordance with the Servicing Standard. The Special Servicer shall give the Controlling Class Representative, the Master Servicer and the Trustee not less than 5 days’ prior written notice of its intention to sell any REO Property, and in respect of such sale, the Special Servicer shall offer such REO Property in a commercially reasonable manner. Where any Interested Person is among those bidding with respect to an REO Property, the Special Servicer shall require that all bids be submitted in writing and be accompanied by a refundable deposit of cash in an amount equal to 5% of the bid amount. No Interested Person shall be permitted to purchase the REO Property at a price less than the Purchase Price; provided, further, if the Special Servicer intends to bid on any REO Property, (i) the Special Servicer shall notify the Trustee of such intent, (ii) the Trustee shall promptly obtain, at the expense of the Trust Fund, an Appraisal of such REO Property and (iii) the Special Servicer shall not bid less than the greater of (a) the fair market value set forth in such Appraisal or (b) the Purchase Price.

(i)        Subject to the REMIC Provisions, 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 REO Property or the exercise of a Purchase Option, including the collection of all amounts payable in connection therewith. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may bid for or purchase any REO Property or purchase any Defaulted Mortgage Loan. Any sale of a Defaulted Mortgage Loan (pursuant to a Purchase Option) or an REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, the Special Servicer, the Master Servicer, any Mortgage Loan Seller or the Trust Fund. Notwithstanding the foregoing, nothing herein shall limit the liability of the Master Servicer, the Special Servicer or the Trustee to the Trust Fund and the Certificateholders for failure to perform its duties in accordance herewith. None of the Special Servicer, the Master Servicer, the Depositor or the Trustee

 

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shall have any liability to the Trust Fund or any Certificateholder with respect to the price at which a Defaulted Mortgage Loan is sold if the sale is consummated in accordance with the terms of this Agreement.

(j)        Upon exercise of a Purchase Option, the holder of such Purchase Option shall be required to pay the purchase price specified in its Purchase Option Notice to the Special Servicer within 10 Business Days of exercising its Purchase Option. The proceeds of any sale of a Defaulted Mortgage Loan, after deduction of the expenses of such sale incurred in connection therewith, shall be remitted by the Special Servicer to the Master Servicer within 1 Business Day of receipt for deposit into the Certificate Account. The Special Servicer shall immediately notify the Trustee upon the holder of the effective Purchase Option’s failure to remit the purchase price specified in its Purchase Option Notice pursuant to this Section 3.18(j). Thereafter, the Special Servicer shall notify each holder of a Purchase Option of such failure and such holder of a Purchase Option may then exercise its Purchase Option in accordance with this Section 3.18.

(k)       Notwithstanding anything herein to the contrary, the Special Servicer shall not take or refrain from taking any action pursuant to instructions from the Controlling Class Representative that would cause it to violate applicable law or any term or provision of this Agreement, including the REMIC Provisions and the Servicing Standard.

(l)        The amount paid for a Defaulted Mortgage Loan or related REO Property purchased under this Agreement shall be deposited into the Certificate Account, or if applicable, applied in accordance with the related Intercreditor Agreement (except that portion of any purchase price constituting Gain-on-Sale Proceeds which shall be deposited in the Gain-on-Sale Reserve Account). Upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be provided to it and are reasonably necessary to vest in the purchaser of such Defaulted Mortgage Loan or related REO Property ownership of the Defaulted Mortgage Loan or related REO Property. The Custodian, upon receipt of a Request for Release, shall release or cause to be released to the Master Servicer or Special Servicer the related Mortgage File. In connection with any such purchase, the Special Servicer shall deliver the related Servicing File to the purchaser of a Defaulted Mortgage Loan or related REO Property.

(m)      Notwithstanding the foregoing, each mezzanine lender will have the right to purchase the related Mortgage Loan and cure defaults relating thereto as set forth in the related mezzanine intercreditor agreement.

 

 

Section 3.19

Additional Obligations of Master Servicer and Special Servicer.

(a)       The Master Servicer shall deposit in the Certificate Account on each P&I Advance Date, without any right of reimbursement therefor with respect to each Mortgage Loan (other than a Specially Serviced Mortgage Loan and other than any

 

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Mortgage Loan for which the Special Servicer has waived a prepayment restriction) that was subject to a voluntary Principal Prepayment during the most recently ended Collection Period creating a Prepayment Interest Shortfall, an amount equal to the lesser of (i) the amount of the related Prepayment Interest Shortfall and (ii) the sum of (A) the Master Servicing Fee (calculated for this purpose only at a rate of 0.0100% per annum) received by the Master Servicer during such Collection Period on such Mortgage Loan and (B) investment income earned by the Master Servicer on the related Principal Prepayment during the most recently ended Collection Period; provided, however, to the extent any such Prepayment Interest Shortfall is the result of the Master Servicer’s failure to enforce the applicable Mortgage Loan documents the amount in clause (A) shall include the entire Master Servicing Fee on the applicable Mortgage Loan for such Collection Period.

(b)       The Master Servicer shall, as to each Mortgage Loan which is secured by the interest of the related Mortgagor under a Ground Lease, promptly (and in any event within 60 days of the Closing Date) notify the related ground lessor in writing of the transfer of such Mortgage Loan to the Trust Fund pursuant to this Agreement and inform such ground lessor that any notices of default under the related Ground Lease should thereafter be forwarded to the Master Servicer.

(c)       The Master Servicer shall provide to each Companion Holder any reports or notices required to be delivered to such Companion Holder pursuant to the related Intercreditor Agreement.

 

 

Section 3.20

Modifications, Waivers, Amendments and Consents.

(a)       Subject to Sections 3.20(b) through 3.20(o) below and further subject to Sections 3.08(b) and 6.11 and further subject to any applicable Intercreditor Agreement or similar agreement, the Master Servicer (to the extent provided in Section 3.02(a) and Section 3.20(i) below) and the Special Servicer may, on behalf of the Trustee, agree to any modification, waiver or amendment of any term of any Mortgage Loan (including, subject to Section 3.20(i), the lease reviews and lease consents related thereto) without the consent of the Trustee or any Certificateholder.

(b)       All modifications, waivers or amendments of any Mortgage Loan (including, subject to Section 3.20(i), the lease reviews and lease consents related thereto) shall be in writing and shall be considered and effected in accordance with the Servicing Standard; provided, however, neither the Master Servicer nor the Special Servicer, as applicable, shall make or permit or consent to, as applicable, any modification, waiver or amendment of any term of any Mortgage Loan not otherwise permitted by this Section 3.20 that would constitute a “significant modification” of such Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b).

 

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(c)       Except as provided in 3.20(d) and the last sentence of Section 3.02(a), the Special Servicer, on behalf of the Trustee, shall not agree or consent to any modification, waiver or amendment of any term of any Mortgage Loan that would:

(i)       affect the amount or timing of any related payment of principal, interest or other amount (including Prepayment Premiums or Yield Maintenance Charges, but excluding Penalty Interest and amounts payable as additional servicing compensation) payable thereunder;

(ii)      affect the obligation of the related Mortgagor to pay a Prepayment Premium or Yield Maintenance Charge or permit a Principal Prepayment during any period in which the related Mortgage Note prohibits Principal Prepayments;

(iii)     except as expressly contemplated by the related Mortgage or pursuant to Section 3.09(d), result in a release of the lien of the Mortgage on any material portion of the related Mortgaged Property without a corresponding Principal Prepayment in an amount not less than the fair market value (as determined by an appraisal by an Independent Appraiser delivered to the Special Servicer at the expense of the related Mortgagor and upon which the Special Servicer may conclusively rely) of the property to be released other than in connection with a taking of all or part of the related Mortgaged Property or REO Property for not less than fair market value by exercise of the power of eminent domain or condemnation or casualty or hazard losses with respect to such Mortgaged Property or REO Property;

(iv)      if such Mortgage Loan is equal to or in excess of 5% of the then aggregate current principal balances of all Mortgage Loans or $35,000,000 (or, with respect to Moody’s, $25,000,000), or is one of the ten largest Mortgage Loans by Stated Principal Balance as of such date, permit the transfer or transfers of (A) the related Mortgaged Property or any interest therein or (B) equity interests in the Mortgagor or any equity owner of the Mortgagor that would result, in the aggregate during the term of the related Mortgage Loan, in a transfer greater than 49% of the total interest in the Mortgagor and/or any equity owner of the Mortgagor or a transfer of voting control in the Mortgagor or an equity owner of the Mortgagor without the prior written confirmation from each Rating Agency that such changes will not result in the qualification, downgrade or withdrawal to the ratings then assigned to the Certificates;

(v)       allow any additional lien on the related Mortgaged Property if such Mortgage Loan is equal to or in excess of 2% of the then aggregate current principal balances of the Mortgage Loans or $20,000,000, is one of the ten largest Mortgage Loans by Stated Principal Balance as of such date, or with respect to S&P only, has an aggregate Loan-to-Value Ratio that is equal to or greater than 85% or has an aggregate Debt Service Coverage Ratio that is less than 1.20x, without the prior written confirmation from each Rating Agency (as applicable) that such change will not result in the qualification, downgrade or withdrawal or the ratings then assigned to the Certificates; or

 

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(vi)      in the reasonable, good faith judgment of the Special Servicer, otherwise materially impair the security for such Mortgage Loan or reduce the likelihood of timely payment of amounts due thereon.

(d)       Notwithstanding Section 3.20(c), but subject to the third paragraph of this Section 3.20(d), and the rights of the Controlling Class Representative and the rights (if any) of a Companion Holder pursuant to the related Intercreditor Agreement, the Special Servicer may (i) reduce the amounts owing under any Specially Serviced Mortgage Loan by forgiving principal, accrued interest or any Prepayment Premium or Yield Maintenance Charge, (ii) reduce the amount of the Periodic Payment on any Specially Serviced Mortgage Loan, including by way of a reduction in the related Mortgage Rate, (iii) forbear in the enforcement of any right granted under any Mortgage Note or Mortgage relating to a Specially Serviced Mortgage Loan, (iv) extend the maturity date of any Specially Serviced Mortgage Loan (and the Master Servicer may extend the maturity date of Mortgage Loans with an original maturity of five years or less with the approval of the Controlling Class for up to two (2) six-month extensions) or (v) accept a Principal Prepayment on any Specially Serviced Mortgage Loan during any Lockout Period; provided that (A) the related Mortgagor is in default with respect to the Specially Serviced Mortgage Loan or, in the reasonable, good faith judgment of the Special Servicer, such default is reasonably foreseeable, and (B) in the reasonable, good faith judgment of the Special Servicer, such modification would increase the recovery on the Mortgage Loan to Certificateholders on a net present value basis (the relevant discounting of amounts that will be distributable to Certificateholders to be performed at the related Net Mortgage Rate). In the case of every other modification, waiver or consent, the Special Servicer shall determine and may rely on an Opinion of Counsel (which Opinion of Counsel shall be an expense of the Trust Fund to the extent not paid by the related Mortgagor) to the effect that such modification, waiver or amendment would not both (1) effect an exchange or reissuance of the Mortgage Loan under Treasury Regulations Section 1.860G-2(b) of the Code and (2) cause any ED Loan REMIC, REMIC I or REMIC II to fail to qualify as a REMIC under the Code or result in the imposition of any tax on “prohibited transactions” or “contributions” after the Startup Day under the REMIC Provisions.

In addition, notwithstanding Section 3.20(c), but subject to the third paragraph of this Section 3.20(d), the Special Servicer may extend the date on which any Balloon Payment is scheduled to be due in respect of a Specially Serviced Mortgage Loan if the conditions set forth in the proviso to the prior paragraph are satisfied and the Special Servicer has obtained an Appraisal of the related Mortgaged Property, in connection with such extension, which Appraisal supports the determination of the Special Servicer contemplated by clause (B) of the proviso to the immediately preceding paragraph.

In no event will the Special Servicer (i) extend the maturity date of a Mortgage Loan beyond a date that is two years prior to the Rated Final Distribution Date, (ii) reduce the Mortgage Rate of a Mortgage Loan to less than the lesser of (A) the original Mortgage Rate of such Mortgage Loan, (B) the highest Pass-Through Rate of any Class of Certificates (other than the Class IO Certificates) then outstanding and (C) a rate below the then prevailing interest rate for comparable loans, as determined by the Special Servicer, (iii) if the Mortgage Loan is

 

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secured by a Ground Lease (and not by the corresponding fee simple interest), extend the maturity date of such Mortgage Loan beyond a date which is less than 20 years prior to the expiration of the term of such Ground Lease; (iv) defer interest due on any Mortgage Loan in excess of 10% of the Stated Principal Balance of such Mortgage Loan or defer the collection of interest on any Mortgage Loan without accruing interest on such deferred interest at a rate at least equal to the Mortgage Rate of such Mortgage Loan.

The determination of the Special Servicer contemplated by clause (B) of the proviso to the first paragraph of this Section 3.20(d) shall be evidenced by an Officer’s Certificate to such effect delivered to the Trustee and the Master Servicer and describing in reasonable detail the basis for the Special Servicer’s determination. The Special Servicer shall append to such Officer’s Certificate any information including but not limited to income and expense statements, rent rolls, property inspection reports and appraisals that support such determination.

(e)       Any payment of interest or recovery of costs and expenses that is deferred pursuant to any modification, waiver or amendment permitted hereunder, shall not, for purposes hereof, including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such modification, waiver or amendment so permit. The foregoing shall in no way limit the Special Servicer’s ability to charge and collect from the Mortgagor costs otherwise collectible under the terms of the related Mortgage Note and this Agreement together with interest thereon.

(f)        The Special Servicer or, with respect to clause (i) below, the Master Servicer may, as a condition to granting any request by a Mortgagor for consent, modification, waiver or indulgence or any other matter or thing, the granting of which is within its discretion pursuant to the terms of the instruments evidencing or securing the related Mortgage Loan and is permitted by the terms of this Agreement, require that such Mortgagor pay to it (i) as additional servicing compensation, a reasonable or customary fee for the additional services performed in connection with such request; provided such fee would not itself be a “significant modification” pursuant to Treasury Regulations Section 1.1001-3(e)(2) and (ii) any related costs and expenses incurred by it. In no event shall the Master Servicer or the Special Servicer be entitled to payment for such fees or expenses unless such payment is collected from the related Mortgagor.

(g)       The Special Servicer shall notify the Master Servicer, any related Sub-Servicers, the Trustee, the Controlling Class Representative, the Rating Agencies and with respect to any Co-Lender Loan, the related Companion Holder, in writing, of any material modification, waiver or amendment of any term of any Mortgage Loan (including fees charged the Mortgagor) and the date thereof, and shall deliver to the Custodian for deposit in the related Mortgage File, an original counterpart of the agreement relating to such modification, waiver or amendment, promptly (and in any event within ten Business Days) following the execution thereof. Copies of each agreement whereby any such modification, waiver or amendment of any term of any Mortgage Loan is effected shall be made available for review upon prior request during

 

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normal business hours at the offices of the Special Servicer pursuant to Section 3.15 hereof.

(h)       The Master Servicer shall not permit defeasance of any Mortgage Loan to the extent inconsistent with the terms of such Mortgage Loan. Unless and to the extent the Master Servicer is precluded from preventing such defeasance by the related Mortgage Loan documents or otherwise (provided that the Master Servicer shall not allow such defeasance to cause any ED Loan REMIC, REMIC I or REMIC II created hereunder to fail to qualify as a REMIC; provided, further, the Master Servicer may rely on an Opinion of Counsel as provided for in (ii) below), the Master Servicer will not permit defeasance of any Mortgage Loan, unless: (i) the defeasance collateral consists of non-callable “government securities” within the meaning of the Investment Company Act of 1940, (ii) the Master Servicer has determined that the defeasance will not result in an Adverse REMIC Event (provided that the Master Servicer shall be entitled to rely conclusively on an Opinion of Counsel to that effect), (iii) the Master Servicer has notified the Rating Agencies, (iv) to the extent the defeasance of the Mortgage Loan is required by the then current applicable Rating Agency criteria to be reviewed by a Rating Agency, such Rating Agency has confirmed that such defeasance will not result in the qualification, downgrade or withdrawal of the rating then assigned to any Class of Certificates to which a rating has been assigned by such Rating Agency, (provided that no confirmation from S&P shall be required if the Mortgage Loan being defeased, together with all Mortgage Loans cross-collateralized with such Mortgage Loan, (i) is not one of the ten (10) largest Mortgage Loans (or cross-collateralized groups of Mortgage Loans) by Stated Principal Balance in the Trust Fund, and (ii) has a Stated Principal Balance at the time of the defeasance that is less than $35,000,000 and less than 5% of the aggregate Stated Principal Balance at the time of the defeasance of the Mortgage Loans and the Master Servicer shall have delivered a Defeasance Certificate substantially in the form of Exhibit N hereto), (v) the Master Servicer has requested and received from the related Mortgagor (A) an Opinion of Counsel generally to the effect that the Trustee will have a perfected, first priority security interest in such defeasance collateral and (B) written confirmation from a firm of Independent accountants stating that payments made on such defeasance collateral in accordance with the terms thereof will be sufficient to pay the subject Mortgage Loan in full on or before its Stated Maturity Date and in accordance with the Periodic Payment (or, in the case of an ARD Loan, on or before its Anticipated Repayment Date) and to timely pay each Periodic Payment scheduled to be due on or prior thereto but after the defeasance and (vi) a single purpose entity (as defined below) is designated to assume the Mortgage Loan and own the defeasance collateral; provided that if under the terms of the related Mortgage Loan documents, the related Mortgagor delivers cash to purchase the defeasance collateral rather than the defeasance collateral itself, the Master Servicer shall purchase the U.S. government obligations contemplated by the related Mortgage Loan documents on behalf of the related Mortgagor. Any customary and reasonable out-of-pocket expense incurred by the Master Servicer pursuant to this Section 3.20(h) shall be paid by the Mortgagor of the defeased Mortgage Loan pursuant to the related Mortgage, Mortgage Note or other pertinent document. Notwithstanding the foregoing, if at any time, a court with jurisdiction in the matter shall hold that the related Mortgagor may obtain a release of the subject Mortgaged Property but is not obligated to deliver the full amount of the

 

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defeasance collateral contemplated by the related Mortgage Loan documents (or cash sufficient to purchase such defeasance collateral), then the Master Servicer shall (i) if consistent with the related Mortgage Loan documents, refuse to allow the defeasance of the Mortgage Loan or (ii) if the Master Servicer cannot so refuse and if the related Mortgagor has delivered cash to purchase the defeasance collateral, the Master Servicer shall either (A) buy such defeasance collateral or (B) prepay the Mortgage Loan, in either case, in accordance with the Servicing Standard. For purposes of this paragraph, a “single purpose entity” shall mean a Person, other than an individual, whose organizational documents provide as follows: it is formed solely for the purpose of owning and pledging Defeasance Collateral related to one or more of the Mortgage Loans; it may not engage in any business unrelated to such Defeasance Collateral and the financing thereof; it does not have and may not own any assets other than those related to its interest in the Defeasance Collateral or the financing thereof and may not incur any indebtedness other than as permitted by the related Mortgage or Mortgages; it shall maintain its own books, records and accounts, in each case which are separate and apart from the books, records and accounts of any other person; it shall hold regular meetings, as appropriate, to conduct its business, and shall observe all entity-level formalities and record keeping; it shall conduct business in its own name and use separate stationery, invoices and checks; it may not guarantee or assume the debts or obligations of any other person other than in connection with the defeasance of a Mortgage Loan; it shall not commingle its assets or funds with those of any other person; it shall pay its obligations and expenses from its own funds and allocate and charge reasonably and fairly any common employees or overhead shared with affiliates; it shall prepare separate tax returns and financial statements or, if part of a consolidated group, shall be shown as a separate member of such group; it shall transact business with affiliates on an arm’s length basis pursuant to written agreements; and it shall hold itself out as being a legal entity, separate and apart from any other person. The single purpose entity organizational documents shall provide that any dissolution and winding up or insolvency filing for such entity requires the unanimous consent of all partners or members, as applicable, and that such documents may not be amended with respect to the single purpose entity requirements during the term of the Mortgage Loan.

(i)        For any Mortgage Loan (other than a Specially Serviced Mortgage Loan) and subject to the rights of the Special Servicer set forth in this Section 3.20, the Master Servicer, without the consent of the Special Servicer or the Controlling Class Representative, as applicable, shall be responsible for any request by a Mortgagor for the consent of the mortgagee for a modification, waiver or amendment of any term with respect to:

(i)       approving routine leasing activity (including any subordination, standstill and attornment agreements) with respect to any lease for less than the lesser of (a) 30,000 square feet or (b) 20% of the related Mortgaged Property;

(ii)      approving a change of the property manager at the request of the related Mortgagor; provided that (A) the successor property manager is not affiliated with the Mortgagor and is a nationally or regionally recognized manager of similar properties, (B) the related Mortgage Loan does not have an outstanding principal balance in excess

 

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of $5,000,000 and (C) the subject Mortgaged Property does not secure a Companion Loan;

(iii)     approving any waiver affecting the timing of receipt of financial statements from any Mortgagor; provided that such financial statements are delivered no less than quarterly and within 60 days of the end of the calendar quarter;

(iv)      approving annual budgets for the related Mortgaged Property; provided that no such budget (1) provides for the payment of operating expenses in an amount equal to more than 110% of the amounts budgeted therefor for the prior year or (2) provides for the payment of any material expenses to any affiliate of the Mortgagor (other than the payment of a management fee to any property manager if such management fee is no more than the management fee in effect on the Cut-Off Date);

(v)       subject to other restrictions herein regarding Principal Prepayments, waiving any provision of a Mortgage Loan requiring a specified number of days notice prior to a Principal Prepayment;

(vi)      approving modifications, consents or waivers (other than those set forth in Section 3.20(c)) in connection with a defeasance permitted by the terms of the related Mortgage Loan if the Master Servicer receives an Opinion of Counsel (which Opinion of Counsel shall be an expense of the Mortgagor) to the effect that such modification, waiver or consent would not cause any REMIC to fail to qualify as a REMIC under the Code or result in a “prohibited transaction” under the REMIC Provisions; and

(vii)     approving certain consents with respect to right-of-ways and easements and consent to subordination of the related Mortgage Loan to such easements or right-of-ways; provided that the Master Servicer shall have determined in accordance with the Servicing Standard that such easement or right-of-way shall not materially interfere with the then current use of the related Mortgaged Property, or the security intended to be provided by such Mortgage, the related Mortgagor’s ability to repay the Mortgage Loan, or materially or adversely affect the value of such Mortgaged Property or cause the Mortgage Loan to cease to be a “qualified mortgage” for REMIC purposes;

provided, however, if the Mortgage Loan is a Co-Lender Loan, the Master Servicer shall provide written notice of such modification, waiver and amendment to the related Companion Holder to the extent required under the related Intercreditor Agreement; provided, further, the Master Servicer shall promptly notify the Special Servicer of any requests not subject to this Section 3.20(i) for which the Special Servicer is responsible pursuant to this Section 3.20 and shall deliver to the Special Servicer (which delivery may be by electronic transmission in a format acceptable to the Master Servicer and Special Servicer) a copy of the request, and all information in the possession of the Master Servicer that the Special Servicer may reasonably request related thereto.

(j)        For the avoidance of doubt, and without limiting the generality of the foregoing, any request (1) for the disbursement of earnouts or holdback amounts or (2) for the release of letters of credit held in connection with an earnout or holdback, with

 

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respect to any Mortgage Loan set forth on attached Exhibit J hereto, received by the Master Servicer shall be forwarded to the Special Servicer for process and approval (which approval shall be deemed given if the request is not denied by the Special Servicer in writing to the Master Servicer within ten (10) Business Days of the Special Servicer’s receipt of such request). For purposes of this Agreement, “disbursement of earnouts or holdback amounts” shall mean the disbursement or funding to a Mortgagor of previously unfunded, escrowed or otherwise reserved portions of the loan proceeds of the applicable Mortgage Loan until certain conditions precedent thereto relating to the satisfaction of performance related criteria (i.e., project reserve thresholds, lease–up requirements, sales requirements, etc.) as set forth in the applicable Mortgage Loan documents, have been satisfied.

(k)       To the extent that either the Master Servicer or Special Servicer waives any Penalty Interest or late charge in respect of any Mortgage Loan, whether pursuant to Section 3.02(a) or this Section 3.20, the respective amounts of additional servicing compensation payable to the Master Servicer and the Special Servicer under Section 3.11 out of such Penalty Interest or late payment charges shall be reduced proportionately, based upon the respective amounts that had been payable thereto out of such Penalty Interest or late payment charges immediately prior to such waiver.

(l)        Notwithstanding anything to the contrary in this Agreement, neither the Master Servicer nor the Special Servicer, as applicable, shall take the following action unless it has received prior written confirmation (the cost of which shall be paid by the related Mortgagor, if so allowed by the terms of the related Mortgage Loan documents) from the Rating Agencies that such action will not result in a qualification, downgrade or withdrawal of any of the ratings assigned by such Rating Agency to the Certificates:

(i)       With respect to any Mortgaged Property that secures a Mortgage Loan with an unpaid principal balance that is at least equal to (A) one of the top ten Mortgage Loans by Stated Principal Balance, (B) five percent (5%) of the then aggregate principal balance of all Mortgage Loans or (C) $35,000,000, the giving of any consent, approval or direction regarding the termination of the related property manager or the designation of any replacement property manager; and

(ii)      With respect to each Mortgage Loan with an unpaid principal balance that is equal to or greater than (A) two percent (2%) of the then aggregate principal balance of all the Mortgage Loans or (B) $10,000,000 and which is secured by a Mortgaged Property which is a hospitality property, the giving of any consent to any change in the franchise affiliation of such Mortgaged Property.

(m)      In the event the Special Servicer, in connection with a modification, waiver or amendment in respect of any Co-Lender Loan, modifies, waives or amends the terms thereof such that (i) the Stated Principal Balance is decreased, (ii) the Mortgage Rate is reduced, (iii) payments of interest or principal are waived, reduced or deferred or (iv) any other adjustment is made to any of the terms of such Co-Lender Loan, all payments made in respect of the related Mortgage Loan shall be

 

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made as though such modification, waiver or amendment did not occur, with the payment terms of such Co-Lender Loan remaining the same as they are on the related Cut Off Date, and the related Subordinate Companion Loan(s) shall bear the full economic effect of all waivers, reductions or deferrals of amounts due on such Co-Lender Loan attributable to such modification, waiver or amendment.

(n)       Subject to the terms of the related Mortgage Loan documents and Intercreditor Agreement, the Master Servicer may extend the maturity date of Mortgage Loans with an original maturity of five years or less with the approval of the Controlling Class Representative for up to two six month extensions.

(o)       Notwithstanding any timing requirement that is contained in this Section 3.20, with respect to any Mortgage Loan that contains a “deemed approval” or “deemed consent” provision in the related Mortgage Loan documents, the Master Servicer or the Special Servicer shall be required to respond to any request for approval by a Mortgagor or request additional information from a Mortgagor, as applicable, within the specified period of time under the terms of such Mortgage Loan documents. Unless doing so would violate the Servicing Standard, the Master Servicer or Special Servicer shall deny any such request unless the Controlling Class Representative has approved or directed otherwise. For the avoidance of doubt, any request for approval received by the Master Servicer that does not relate to an item set forth in Section 3.20(i) shall be forwarded promptly (but in any event within five (5) Business Days) to the Special Servicer for processing.

Section 3.21     Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping.

(a)       Upon determining that a Servicing Transfer Event has occurred with respect to any Mortgage Loan, the Master Servicer or Special Servicer, as applicable, shall promptly notify the Trustee, Controlling Class Representative and Master Servicer or Special Servicer, as applicable, and, if the Master Servicer is not also the Special Servicer, the Master Servicer shall immediately deliver or cause to be delivered a copy of the related Mortgage File and Servicing File, to the Special Servicer and shall use reasonable efforts to provide the Special Servicer with all information, documents (or copies thereof) and records (including records stored electronically on computer tapes, magnetic discs and the like) relating to the Mortgage Loan and, if applicable the related Companion Loan, either in the Master Servicer’s or any of its directors’, officers’, employees’, affiliates’ or agents’ possession or control or otherwise available to the Master Servicer without undue burden or expense, and reasonably requested (from time to time) by the Special Servicer to enable it to assume its functions hereunder with respect thereto without acting through a Sub-Servicer. The Master Servicer shall use reasonable efforts to comply with the preceding sentence within 5 Business Days of the occurrence of each related Servicing Transfer Event; provided, however, if the information, documents and records requested by the Special Servicer are not contained in the Servicing File, the Master Servicer shall have such period of time as reasonably necessary to make such delivery. Notwithstanding the occurrence of a

 

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Servicing Transfer Event, the Master Servicer shall continue to receive payments on such Mortgage Loan (including amounts collected by the Special Servicer).

Upon determining that a Specially Serviced Mortgage Loan has become a Corrected Mortgage Loan and if the Master Servicer is not also the Special Servicer, the Special Servicer shall immediately give notice thereof to the Master Servicer, and shall return the related Mortgage File and Servicing File and all other information, documents and records that were not part of the Servicing File when it was delivered to the Special Servicer within 5 Business Days of the occurrence, to the Master Servicer (or such other Person as may be directed by the Master Servicer) and upon giving such notice, and returning such Servicing File, to the Master Servicer (or such other Person as may be directed by the Master Servicer), the Special Servicer’s obligation to service such Mortgage Loan, and, if applicable, the Companion Loan, and the Special Servicer’s right to receive the Special Servicing Fee with respect to such Mortgage Loan shall terminate, and the obligations of the Master Servicer to service and administer such Mortgage Loan and, if applicable, the related Companion Loan shall resume.

(b)       In servicing any Specially Serviced Mortgage Loans, the Special Servicer shall provide to the Custodian originals of documents included within the definition of “Mortgage File” for inclusion in the related Mortgage File (with a copy of each such original to the Master Servicer).

(c)       On or before each Determination Date, the Special Servicer shall deliver to the Master Servicer and each Rating Agency (or such other Person as may be directed by the Master Servicer) a statement in writing and in computer readable format (the form of such statement to be agreed upon by the Master Servicer) describing, on a loan-by-loan and property-by-property basis, (1) insofar as it relates to Specially Serviced Mortgage Loans and REO Properties, the information described in clauses (x) through (xiii) of Section 4.02(a) and, insofar as it relates to the Special Servicer, the information described in clauses (xxviii), (xxix) and (xxx) of Section 4.02(a), (2) the amount of all payments, Insurance Proceeds and Liquidation Proceeds received, and the amount of any Realized Loss incurred, with respect to each Specially Serviced Mortgage Loan during the related Collection Period, and the amount of all REO Revenues, Insurance Proceeds and Liquidation Proceeds received, and the amount of any Realized Loss incurred, with respect to each REO Property during the related Collection Period, (3) the amount, purpose and date of all Servicing Advances requested by the Special Servicer with respect to each Specially Serviced Mortgage Loan and REO Property during the related Collection Period and (4) such additional information relating to the Specially Serviced Mortgage Loans and REO Properties as the Master Servicer reasonably requests to enable it to perform its responsibilities under this Agreement. Notwithstanding the foregoing provisions of this subsection (c), the Master Servicer shall maintain ongoing payment records with respect to each of the Specially Serviced Mortgage Loans and REO Properties and shall provide the Special Servicer with any information reasonably available to the Master Servicer required by the Special Servicer to perform its duties under this Agreement.

(d)       No later than 60 days after a Mortgage Loan and, if applicable, Companion Loan becomes a Specially Serviced Mortgage Loan, the Special Servicer

 

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shall deliver to each Rating Agency, the Trustee, the Master Servicer and the Controlling Class Representative (and, in the case of a Co-Lender Loan, the related Companion Holder), a report (the “Asset Status Report”) with respect to such Mortgage Loan and the related Mortgaged Property. Such Asset Status Report shall set forth the following information to the extent reasonably determinable:

(i)       summary of the status of such Specially Serviced Mortgage Loan and negotiations with the related Mortgagor;

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

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

(iv)      the Appraised Value of the Mortgaged Property together with the assumptions used in the calculation thereof;

(v)       summary of the Special Servicer’s recommended action with respect to such Specially Serviced Mortgage Loan; and

(vi)      such other information as the Special Servicer deems relevant in light of the Servicing Standard.

Any Asset Status Report with respect to a Co-Lender Loan shall also include any additional information required by the related Intercreditor Agreement. In addition, with respect to a Co-Lender Loan, the Controlling Class Representative’s approval or disapproval of any actions recommended by such Asset Status Report relating to such Co-Lender Loan will be subject to the rights of the related Companion Holder pursuant to the terms of the related Intercreditor Agreement.

If within 10 Business Days of receiving an Asset Status Report which relates to a recommended action for which the Controlling Class Representative is entitled to object under Section 6.11, the Controlling Class Representative does not disapprove such Asset Status Report in writing, the Special Servicer shall implement the recommended action as outlined in such Asset Status Report; provided, however, the Special Servicer may not take any action that is contrary to applicable law, the Servicing Standard, or the terms of the applicable Mortgage Loan documents. If the Controlling Class Representative disapproves such Asset Status Report, the Special Servicer will revise such Asset Status Report and deliver to the Controlling Class Representative, the Rating Agencies and the Master Servicer a new Asset Status Report as soon as practicable, but in no event later than 30 days after such disapproval.

The Special Servicer shall revise such Asset Status Report as described above in this Section 3.21(d) until the Controlling Class Representative shall fail to disapprove such revised Asset Status Report in writing within 10 Business Days of receiving such revised Asset

 

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Status Report or until the Special Servicer makes one of the determinations described below. The Special Servicer may, from time to time, modify any Asset Status Report it has previously delivered and implement such report; provided such report shall have been prepared, reviewed and not rejected pursuant to the terms of this Section. Notwithstanding the foregoing, the Special Servicer (i) may, following the occurrence of an extraordinary event with respect to the related Mortgaged Property, take any action set forth in such Asset Status Report (and consistent with the terms hereof) before the expiration of a 10 Business Day period if the Special Servicer has reasonably determined that failure to take such action would materially and adversely affect the interests of the Certificateholders or, if a Loan Pair is involved, the Certificateholders and the related Companion Holders (as a collective whole), and it has made a reasonable effort to contact the Controlling Class Representative and (ii) in any case, shall determine whether such affirmative disapproval is not in the best interest of all the Certificateholders pursuant to the Servicing Standard.

Upon making such determination in clause (ii) of the immediately preceding paragraph, the Special Servicer shall notify the Trustee of such rejection and deliver to the Trustee, a proposed notice to Certificateholders which shall include a copy of the Asset Status Report, and the Trustee shall send such notice to all Certificateholders. If the majority of such Certificateholders, as determined by Voting Rights, fail, within 5 days of the Trustee’s sending such notice, to reject such Asset Status Report, the Special Servicer shall implement the same. If the Asset Status Report is rejected by a majority of the Certificateholders, (other than for a reason which violates the Servicing Standard, which shall control), the Special Servicer shall revise such Asset Status Report as described above in this Section 3.21(d) and provide a copy of such revised report to the Master Servicer. The Trustee shall be entitled to reimbursement from the Trust Fund for the reasonable expenses of providing such notices. Notwithstanding the foregoing, the Controlling Class Representative’s approval of or failure to respond to an Asset Status Report shall not be deemed to be a substitute for any specific consent required pursuant to Section 6.11(a).

The Special Servicer shall have the authority to meet with the Mortgagor for any Specially Serviced Mortgage Loan and take such actions consistent with the Servicing Standard, the terms hereof and the related Asset Status Report. The Special Servicer shall not take any action inconsistent with the related Asset Status Report, unless such action would be required in order to act in accordance with the Servicing Standard.

No direction of the Controlling Class Representative or the majority of the Certificateholders shall (a) require or cause the Special Servicer to violate the terms of a Specially Serviced Mortgage Loan, applicable law or any provision of this Agreement, including the Special Servicer’s obligation to act in accordance with the Servicing Standard and to maintain the REMIC status of any ED Loan REMIC, REMIC I and REMIC II and the grantor trust status of the Grantor Trusts, (b) result in the imposition of a “prohibited transaction” or “prohibited contribution” tax under the REMIC Provisions or (c) expose the Master Servicer, the Special Servicer, the Depositor, any of the Mortgage Loan Sellers, the Trust Fund or the Trustee or the officers and the directors of each party to claim, suit or liability or (d) expand the scope of the Master Servicer’s, Trustee’s or Special Servicer’s responsibilities under this Agreement. Notwithstanding the foregoing, it is agreed and acknowledged that, with respect to the Co-Lender Loans, the holders of the Companion Loans have certain consent and direction rights

 

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in the related Intercreditor Agreements, but nothing herein shall be construed to prevent the Controlling Class Representative from consulting on a non-binding basis with the Special Servicer about any applicable Mortgage Loan.

 

 

Section 3.22

Sub-Servicing Agreements.

(a)       The Master Servicer and the Special Servicer (and, with respect to the Special Servicer, only with the consent of the Controlling Class Representative) may enter into Sub-Servicing Agreements to provide for the performance by third parties of any or all of their respective obligations hereunder; provided that in each case, the Sub-Servicing Agreement: (i) is consistent with this Agreement in all material respects, requires the Sub-Servicer to comply with all of the applicable conditions of this Agreement and includes events of default with respect to the Sub-Servicer substantially similar to the Events of Default set forth in Section 7.01(a) hereof (other than Section 7.01(a)(ix) and (x) to the extent applicable (modified to apply to the Sub-Servicer instead of the Master Servicer); (ii) provides that if the Master Servicer or the Special Servicer, as the case may be, shall for any reason no longer act in such capacity hereunder (including, without limitation, by reason of an Event of Default), the Trustee or its designee may thereupon assume all of the rights and, except to the extent such obligations arose prior to the date of assumption, obligations of the Master Servicer or the Special Servicer, as the case may be, under such agreement or (except with respect only to the Sub-Servicing Agreements in effect as of the date of this Agreement) may terminate such Sub-Servicing Agreement without cause and without payment of any penalty or termination fee (other than the right of reimbursement and indemnification); (iii) provides that the Trustee, for the benefit of the Certificateholders, shall be a third party beneficiary under such agreement, but that (except to the extent the Trustee or its designee assumes the obligations of the Master Servicer or the Special Servicer, as the case may be, thereunder as contemplated by the immediately preceding clause (ii) none of the Trustee, the Trust Fund, any successor Master Servicer or Special Servicer, as the case may be, or any Certificateholder shall have any duties under such agreement or any liabilities arising therefrom; (iv) permits any purchaser of a Mortgage Loan pursuant to this Agreement to terminate such agreement with respect to such purchased Mortgage Loan at its option and without penalty; (v) with respect to any Sub-Servicing Agreement entered into by the Special Servicer, does not permit the Sub-Servicer to enter into or consent to any modification, waiver or amendment or otherwise take any action on behalf of the Special Servicer contemplated by Section 3.20 hereof without the consent of such Special Servicer or conduct any foreclosure action contemplated by Section 3.09 hereof or sale of a Mortgage Loan or REO Property contemplated by Section 3.18 hereof; (vi) does not permit the Sub-Servicer any direct rights of indemnification that may be satisfied out of assets of the Trust Fund; and (vii) with respect to any Sub-Servicing Agreement entered into after the Closing Date and prior to the date upon which the Trust Fund’s Exchange Act reporting obligations are terminated by the filing of a Form 15 Suspension Notice as contemplated by Section 8.17(l), any Sub-Servicer (which is a Reporting Party) is not a Prohibited Party. In addition, each Sub-Servicing Agreement entered into by the Master Servicer shall provide that such agreement shall be subject to Section 3.21 hereof with respect to any Mortgage Loan that becomes a Specially Serviced Mortgage Loan. The Master Servicer and the Special Servicer shall each deliver to the

 

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Trustee and to each other copies of all Sub-Servicing Agreements, and any amendments thereto and modifications thereof, entered into by it promptly upon its execution and delivery of such documents. References in this Agreement to actions taken or to be taken by the Master Servicer or the Special Servicer include actions taken or to be taken by a Sub-Servicer on behalf of the Master Servicer or the Special Servicer, as the case may be; and, in connection therewith, all amounts advanced by any Sub-Servicer to satisfy the obligations of the Master Servicer or the Special Servicer hereunder to make P&I Advances or Servicing Advances shall be deemed to have been advanced by the Master Servicer or the Special Servicer, as the case may be, out of its own funds and, accordingly, such P&I Advances or Servicing Advances shall be recoverable by such Sub-Servicer in the same manner and out of the same funds as if such Sub-Servicer were the Master Servicer or the Special Servicer, as the case may be. For so long as they are outstanding, Advances shall accrue interest in accordance with Sections 3.03(d) and 4.03(d), such interest to be allocable between the Master Servicer or the Special Servicer, as the case may be, and such Sub-Servicer as they may agree. For purposes of this Agreement, the Master Servicer and the Special Servicer each shall be deemed to have received any payment when a Sub-Servicer retained by it receives such payment. The Master Servicer and the Special Servicer each shall notify the other, the Trustee and the Depositor in writing promptly of the appointment by it of any Sub-Servicer.

(b)       Each Sub-Servicer shall be authorized to transact business in the state or states in which the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law.

(c)       The Master Servicer and the Special Servicer, for the benefit of the Trustee and the Certificateholders, shall (at no expense to the Trustee, the Certificateholders or the Trust Fund) monitor the performance and enforce the obligations of their respective Sub-Servicers under the related Sub-Servicing Agreements. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Sub-Servicing Agreements in accordance with their respective terms and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Master Servicer or the Special Servicer, as applicable, in its good faith business judgment, would require were it the owner of the Mortgage Loans. Subject to the terms of the related Sub-Servicing Agreement, the Master Servicer and the Special Servicer may each have the right to remove a Sub-Servicer at any time it considers such removal to be in the best interests of Certificateholders.

(d)       In the event of the resignation, removal or other termination of Wachovia Bank, National Association, or any successor Master Servicer hereunder for any reason, the Trustee or other Person succeeding such resigning, removed or terminated party as Master Servicer, shall elect, with respect to any Sub-Servicing Agreement in effect as of the date of this Agreement: (i) to assume the rights and obligations of the Master Servicer under such Sub-Servicing Agreement and continue the sub-servicing arrangements thereunder on the same terms (including without limitation the obligation to pay the same sub-servicing fee); (ii) to enter into a new Sub-Servicing Agreement with such Sub-Servicer on such terms as the Trustee or other successor Master Servicer and

 

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such Sub-Servicer shall mutually agree (it being understood that such Sub-Servicer is under no obligation to accept any such new Sub-Servicing Agreement or to enter into or continue negotiations with the Trustee or other successor Master Servicer in which case the existing Sub-Servicing Agreement shall remain in effect); or (iii) to terminate the Sub-Servicing Agreement if an Event of Default (as defined in such Sub-Servicing Agreement) has occurred and is continuing or otherwise in accordance with the Sub-Servicing Agreement, in each case without paying any Sub-Servicer termination fee.

Each Sub-Servicing Agreement will provide, among other things, that the Master Servicer and its successors may at its sole option, terminate any rights the Sub-Servicer may have thereunder with respect to any or all Mortgage Loans if Moody’s or S&P (i) reduces the rating assigned to one or more Classes of the respective Certificates as a result of the sub-servicing of the Mortgage Loans by the Sub-Servicer, or (ii) advises the Master Servicer or the Trustee in writing that it will cause a qualification, downgrade or withdrawal of such rating due to the continued servicing by the Sub-Servicer.

(e)       Notwithstanding any Sub-Servicing Agreement, the Master Servicer and the Special Servicer shall remain obligated and liable to the Trustee and the Certificateholders for the performance of their respective obligations and duties under this Agreement in accordance with the provisions hereof to the same extent and under the same terms and conditions as if each alone were servicing and administering the Mortgage Loans or REO Properties for which it is responsible.

(f)        The Special Servicer shall not enter into a Sub-Servicing Agreement unless it receives the consent of the Controlling Class Representative and each Rating Agency has confirmed in writing that the execution of such agreement will not result in a qualification, downgrade, or withdrawal of the then-current ratings on the outstanding Certificates or such Sub-Servicing Agreement relates to a Mortgage Loan or Mortgage Loans (along with any Mortgage Loans previously sub-serviced pursuant to this section) that represent less than 25% of the outstanding principal balance of all Specially Serviced Mortgage Loans. The Special Servicer shall comply with the terms of each such Sub-Servicing Agreement to the extent the terms thereof are not inconsistent with the terms of this Agreement and the Special Servicer’s obligations hereunder.

(g)       The Master Servicer shall cause any Sub-Servicer engaged by the Master Servicer (or by any Sub-Servicer) for the benefit of the Depositor and the Trustee to comply with the provisions of this Section 3.22 and with Section 8.17 of this Agreement to the same extent as if such Sub-Servicer were the Master Servicer, and to provide the information required with respect to such Sub-Servicer under this Section 3.22. The Master Servicer shall be responsible for obtaining from each such Sub-Servicer and delivering to the Trustee and any applicable Persons any servicer compliance statement required to be delivered by such Sub-Servicer under Section 3.13 and any assessment of compliance report and related accountant’s attestation required to be delivered by such Sub-Servicer under Section 3.14, in each case, as and when required to be delivered.

 

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(h)       Each of the Master Servicer, the Special Servicer, the Sub-Servicer and the Trustee (each of the Master Servicer, the Special Servicer and the Trustee and each Sub-Servicer, for purposes of this paragraph and the succeeding paragraph, a “Servicer”) is permitted to utilize one or more Subcontractors to perform certain of its obligations hereunder. Such Servicer shall promptly upon request provide to the Depositor and the Trustee a written description (in form and substance satisfactory to the Depositor) of the role and function of each Subcontractor utilized by such Servicer, specifying (i) the identity of each Subcontractor, (ii) which (if any) of such Subcontractors are Servicing Participants, and (iii) which elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this paragraph. As a condition to the utilization by such Servicer of any Subcontractor determined to be a Servicing Participant, such Servicer shall cause any such Subcontractor used by such Servicer for the benefit of the Depositor and the Trustee to comply with the provisions of Sections 3.13, 3.14 and 8.17 of this Agreement to the same extent as if such Subcontractor were such Servicer. Such Servicer shall be responsible for obtaining from each such Subcontractor and delivering to the applicable Persons any assessment of compliance report and related accountant’s attestation required to be delivered by such Subcontractor under Section 3.13, Section 3.14 and Section 3.17, in each case, as and when required to be delivered.

(i)        Notwithstanding the foregoing, if a Servicer engages a Subcontractor in connection with the performance of any of its duties under this Agreement, such Servicer shall be responsible for determining whether such Subcontractor is a “servicer” within the meaning of Item 1101 of Regulation AB and whether any such affiliate or third-party vendor meets the criteria in Item 1108(a)(2)(i) or (ii) or (iii) of Regulation AB. If a Servicer determines, pursuant to the preceding sentence, that such Subcontractor is a “servicer” within the meaning of Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i) or (ii) or (iii) of Regulation AB, then such Subcontractor shall be deemed to be a Sub-Servicer for purposes of this Agreement, the engagement of such Sub-Servicer shall not be effective unless and until notice is given to the Depositor and the Trustee of any such Sub-Servicer and Sub-Servicing Agreement. No Sub-Servicing Agreement shall be effective until 30 days after such written notice is received by the Depositor and the Trustee. Such notice shall contain all information reasonably necessary to enable the Trustee to accurately and timely report the event pursuant to Section 8.17.

Section 3.23     Representations and Warranties of Master Servicer and Special Servicer.

(a)       Wachovia Bank, National Association, in its capacity as Master Servicer, hereby represents and warrants to the Trustee, for its own benefit and the benefit of the Certificateholders and the Companion Holders, and to the Depositor and the Special Servicer, as of the Closing Date, that:

(i)       The Master Servicer is a national banking association, duly organized under the laws of the United States of America, and the Master Servicer is in compliance

 

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with the laws of each State in which any Mortgaged Property is located to the extent necessary to perform its obligations under this Agreement.

(ii)      The execution and delivery of this Agreement by the Master Servicer, and the performance and compliance with the terms of this Agreement by the Master Servicer, will not violate the Master Servicer’s articles of association or by-laws or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other material instrument to which it is a party or by which it is bound.

(iii)     The Master Servicer has the full power and authority to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.

(iv)      This Agreement, assuming due authorization, execution and delivery by each of the other parties hereto, constitutes a valid, legal and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with the terms hereof, subject to (A) applicable receivership, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and the rights of creditors of banks, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

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

(vi)      No litigation is pending or, to the best of the Master Servicer’s knowledge, threatened, against the Master Servicer that would prohibit the Master Servicer from entering into this Agreement or, in the Master Servicer’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Master Servicer to perform its obligations under this Agreement or the financial condition of the Master Servicer, calculated on a consolidated basis.

(vii)     Each officer, director, employee, consultant or advisor of the Master Servicer with responsibilities concerning the servicing and administration of Mortgage Loans is covered by errors and omissions insurance in the amounts and with the coverage as, and to the extent, required by Section 3.07(c).

(viii)    The net worth of the Master Servicer (or, in the case of the initial Master Servicer, the consolidated net worth thereof and of its direct or indirect parent),

 

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determined in accordance with generally accepted accounting principles, is not less than $15,000,000.

(ix)      Any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery and performance by the Master Servicer of or compliance by the Master Servicer with this Agreement or the consummation of the transactions contemplated by this Agreement has been obtained and is effective.

(x)       The Master Servicer possesses the fidelity bond required pursuant to Section 3.07(c) of this Agreement.

(b)       CWCapital Asset Management LLC, in its capacity as the Special Servicer, hereby represents and warrants to the Trustee, for its own benefit and the benefit of the Certificateholders and the Companion Holders, and to the Depositor and the Master Servicer, as of the Closing Date, that:

(i)       The Special Servicer is a limited liability company duly organized under the laws of the Commonwealth of Massachusetts, validly existing and the Special Servicer is in compliance with the laws of each State in which any Mortgaged Property is located to the extent necessary to perform its obligations under this Agreement.

(ii)      The execution and delivery of this Agreement by the Special Servicer, and the performance and compliance with the terms of this Agreement by the Special Servicer, will not violate the Special Servicer’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach of, any material agreement or other material instrument by which it is bound.

(iii)      The Special Servicer has the full power and authority to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution, delivery and performance of this Agreement, and has duly executed and delivered this Agreement.

(iv)      This Agreement, assuming due authorization, execution and delivery by each of the other parties hereto, constitutes a valid, legal and binding obligation of the Special Servicer, enforceable against the Special Servicer in accordance with the terms hereof, subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally, and (B) general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law.

(v)       The Special Servicer is not in violation of, and its execution and delivery of this Agreement and its performance and compliance with the terms of this Agreement will not constitute a violation of, any law, any order or decree of any court or arbiter, or any order, regulation or demand of any federal, state or local governmental or regulatory authority, which violation, in the Special Servicer’s good faith and reasonable judgment, is likely to affect materially and adversely either the ability of the Special Servicer or to

 

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perform its obligations under this Agreement or the financial condition of the Special Servicer.

(vi)      No litigation is pending or, to the best of the Special Servicer’s knowledge, threatened, against the Special Servicer the outcome of which in the Special Servicer’s good faith and reasonable judgment could reasonably be expected to prohibit the Special Servicer from entering into this Agreement or, in the Special Servicer’s good faith and reasonable judgment, is likely to materially and adversely affect either the ability of the Special Servicer to perform its obligations under this Agreement or the financial condition of the Special Servicer.

(vii)     Each officer, director and employee of the Special Servicer and each consultant or advisor of the Special Servicer with responsibilities concerning the servicing and administration of Mortgage Loans is covered by errors and omissions insurance in the amounts and with the coverage required by Section 3.07(c).

(viii)    Any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery and performance by the Special Servicer of or compliance by the Special Servicer with this Agreement or the consummation of the transactions contemplated by this Agreement has been obtained and is effective.

(ix)     The Special Servicer possesses all insurance required pursuant to Section 3.07(c) of this Agreement.

(c)       The representations and warranties of the Master Servicer and the Special Servicer, set forth in Section 3.23(a) (with respect to the Master Servicer) and Section 3.23(b) (with respect to the Special Servicer) respectively, shall survive the execution and delivery of this Agreement and shall inure to the benefit of the Persons for whose benefit they were made for so long as the Trust Fund remains in existence. Upon discovery by any party hereto of any breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the other parties hereto.

 

 

Section 3.24

Sub-Servicing Agreement Representation and Warranty.

The Master Servicer, in such capacity, hereby represents and warrants to the Trustee, for its own benefit and the benefit of the Certificateholders, and to the Depositor and the Special Servicer, as of the Closing Date, that each Sub-Servicing Agreement satisfies the requirements for such Sub-Servicing Agreements set forth in Sections 3.22(a) and the second paragraph of 3.22(d) in all material respects.

 

 

Section 3.25

Designation of Controlling Class Representative.

(a)       The Holders (or, in the case of Book-Entry Certificates, the Certificate Owners) of Certificates representing more than 50% of the Class Principal Balance of the Controlling Class shall be entitled in accordance with this Section 3.25 to select a representative having the rights and powers specified in this Agreement

 

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(including those specified in Section 6.11) or to replace an existing Controlling Class Representative. The advisor referred to above is referred to herein as the “Controlling Class Representative”. Upon (i) the receipt by the Trustee of written requests for the selection of a Controlling Class Representative from the Holders (or, in the case of Book-Entry Certificates, the Certificate Owners) of Certificates representing more than 50% of the Class Principal Balance of the Controlling Class, (ii) the resignation or removal of the Person acting as Controlling Class Representative or (iii) a determination by the Trustee that the Controlling Class has changed, the Trustee shall promptly notify the Depositor and the Holders (and, in the case of Book-Entry Certificates, to the extent actually known to a Responsible Officer of the Trustee or identified thereto by the Depository or the Depository Participants, the Certificate Owners) of the Controlling Class that they may select a Controlling Class Representative. Such notice shall set forth the process for selecting a Controlling Class Representative, which shall be the designation of the Controlling Class Representative by the Holders (or Certificate Owners) of Certificates representing more than 50% of the Class Principal Balance of the Controlling Class by a writing delivered to the Trustee. No appointment of any Person as a Controlling Class Representative shall be effective until such Person provides the Trustee and the Master Servicer with written confirmation of its acceptance of such appointment, an address and telecopy number for the delivery of notices and other correspondence and a list of officers or employees of such Person with whom the parties to this Agreement may deal (including their names, titles, work addresses and telecopy numbers). American Capital Strategies, Ltd., or an affiliate, shall be the initial Controlling Class Representative with respect to the Mortgage Loans without need for further designation or notice.

Notwithstanding anything in this Section 3.25(a), the holders of the Companion Loans have certain consent and direction rights pursuant to the terms of the related Intercreditor Agreements, and this Section shall not supersede any such rights, but nothing herein shall be construed to limit the right of the Controlling Class Representative to consult on a non-binding basis with the Special Servicer about any applicable Mortgage Loan.

(b)       Within 10 Business Days (or as soon thereafter as practicable if the Controlling Class consists of Book-Entry Certificates) of receiving a request therefor from the Master Servicer or Special Servicer, the Trustee shall, to the extent in its possession, deliver to the requesting party the identity of the Controlling Class Representative and a list of each Holder (or, in the case of Book-Entry Certificates, to the extent actually known to a Responsible Officer of the Trustee or identified thereto by the Depository or the Depository Participants, each Certificate Owner) of the Controlling Class, including, in each case, names and addresses. With respect to such information, the Trustee shall be entitled to conclusively rely on information provided to it by the Depository, and the Master Servicer and the Special Servicer shall be entitled to rely on such information provided by the Trustee with respect to any obligation or right hereunder that the Master Servicer and the Special Servicer may have to deliver information or otherwise communicate with the Controlling Class Representative or any of the Holders (or, if applicable, Certificate Owners) of the Controlling Class. In addition to the foregoing, within two (2) Business Days of the selection, resignation or removal of a Controlling Class Representative, the Trustee shall notify the other parties to this

 

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Agreement of such event. The expenses incurred by the Trustee in connection with obtaining information from the Depository or Depository Participants with respect to any Book-Entry Certificate shall be expenses of the Trust Fund payable out of the Certificate Account pursuant to Section 3.05(a).

(c)       A Controlling Class Representative may at any time resign as such by giving written notice to the Trustee and to each Holder (or, in the case of Book-Entry Certificates, Certificate Owner) of the Controlling Class. The Holders (or, in the case of Book-Entry Certificates, the Certificate Owners) of Certificates representing more than 50% of the Class Principal Balance of the Controlling Class shall be entitled to remove any existing Controlling Class Representative by giving written notice to the Trustee and to such existing Controlling Class Representative.

(d)       Once a Controlling Class Representative has been selected pursuant to this Section 3.25, each of the parties to this Agreement and each Certificateholder (or Certificate Owner, if applicable) shall be entitled to rely on such selection unless a majority of the Holders (or, in the case of Book-Entry Certificates, the Certificate Owners) of the Controlling Class, by aggregate Certificate Principal Balance, or such Controlling Class Representative, as applicable, shall have notified the Trustee and each other Holder (or, in the case of Book-Entry Certificates, Certificate Owner) of the Controlling Class, in writing, of the resignation or removal of such Controlling Class Representative.

(e)       Any and all expenses of the Controlling Class Representative shall be borne by the Holders (or, if applicable, the Certificate Owners) of Certificates of the Controlling Class, pro rata according to their respective Percentage Interests in such Class, and not by the Trust Fund. Notwithstanding the foregoing, if a claim is made against the Controlling Class Representative by a Mortgagor with respect to this Agreement or any particular Mortgage Loan, the Controlling Class Representative shall immediately notify the Trustee, the Master Servicer and the Special Servicer, whereupon (if the Special Servicer or the Trust Fund are also named parties to the same action and, in the reasonable judgment of the Special Servicer, (i) the Controlling Class Representative had acted in good faith, without negligence or willful misfeasance with regard to the particular matter, and (ii) there is no potential for the Special Servicer or the Trust Fund to be an adverse party in such action as regards the Controlling Class Representative) the Special Servicer on behalf of the Trust Fund shall, subject to Section 6.03, assume the defense of any such claim against the Controlling Class Representative. This provision shall survive the termination of this Agreement and the termination or resignation of the Controlling Class Representative.

(f)        Subject to the terms of each Intercreditor Agreement with respect to information to be provided to a Companion Holder that is a Mortgagor or an affiliate of a Mortgagor, all rights to, and requirements for, information or notice (including, but not limited to the delivery of information, notice or access to information) provided to the Controlling Class Representative or Certificateholders, in general contained in this Agreement shall also apply to each Companion Holder (provided such Companion Holder is not a Mortgagor or an affiliate of a Mortgagor) with respect to information

 

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relating to the related Co-Lender Loan (but, in the case of information relating to a Co-Lender Loan, excluding the fair value determination thereof and information relating to the Co-Lender Loan once such Mortgage Loan is a Defaulted Mortgage Loan or has become a Specially Serviced Mortgage Loan, unless otherwise expressly provided herein).

 

 

Section 3.26

Companion Paying Agent.

(a)       The Master Servicer shall be the initial Companion Paying Agent hereunder. The Companion Paying Agent undertakes to perform such duties and only such duties as are specifically set forth herein. The Companion Paying Agent shall promptly make available to the Companion Holders all reports available to the Companion Paying Agent that the Trustee has made available to Certificateholders under this Agreement.

(b)       No provision of this Agreement shall be construed to relieve the Companion Paying Agent from liability for its own negligent failure to act, bad faith or its own willful misfeasance; provided, however, the duties and obligations of the Companion Paying Agent shall be determined solely by the express provisions of this Agreement, the Companion Paying 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 Companion Paying Agent and, in the absence of bad faith on the part of the Companion Paying Agent, the Companion Paying 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 instrument furnished to the Companion Paying Agent by any Person and which on their face do not contradict the requirements of this Agreement.

(c)       If the Companion Paying Agent is also the Master Servicer, upon the resignation or removal of the Master Servicer pursuant to this Agreement, the Companion Paying Agent shall be deemed simultaneously to resign or be removed.

(d)       This Section shall survive the termination of this Agreement or the resignation or removal of the Companion Paying Agent, as regards rights accrued prior to such resignation or removal.

 

 

Section 3.27

Companion Register.

The Companion Paying Agent shall maintain a register (the “Companion Register”) on which it will record the names and addresses of, and wire transfer instructions for, the Companion Holders from time to time, to the extent such information is provided in writing to it by the Companion Holder. Each initial Companion Holder, along with its name, address, wiring instructions and tax identification number, is listed on Exhibit L hereto. Upon the sale or transfer of a Companion Loan or portion thereof, the transferring Companion Holder shall inform the Companion Paying Agent and the Master Servicer in writing that such transfer has taken place and provide the Companion Paying Agent and the Master Servicer with the name, address, wiring instructions and tax identification number of the transferee. In the event the

 

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Companion Holder transfers a Companion Loan without notice to the Companion Paying Agent, the Companion Paying Agent shall have no liability for any misdirected payment in the related Companion Loan and shall have no obligation to recover and redirect such payment.

The Companion Paying Agent shall promptly provide the name and address of the Companion Holders to any party hereto or any successor Companion Holders upon written request and any such Person may, without further investigation, conclusively rely upon such information. The Companion Paying Agent shall have no liability to any Person for the provision of any such names and addresses.

 

 

Section 3.28

Future Debt Secured by Interests in Related Mortgagors.

In the event the Mortgage Loan documents permit ownership interests in the related Mortgagor to be pledged as security for mezzanine debt in the future, in addition to any consents required hereunder, the Master Servicer shall require, to the extent not inconsistent with the Mortgage Loan documents, the execution in favor of the Trust Fund of a subordination and standstill agreement or an intercreditor agreement, as applicable, in form and substance that would be satisfactory to a commercially reasonable and prudent mortgage lender.

Section 3.29     Certain Matters Relating to the Future Securitization of the Pari Passu Companion Loans.

Subject to Section 8.19, the parties shall:

(a)       Each of the Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer and the Special Servicer shall use reasonable efforts to cause any Sub-Servicer appointed by such party with respect to each Pari Passu Mortgage Loan to, upon request or notice from such Mortgage Loan Seller, cooperate with any Mortgage Loan Seller that is selling the related Pari Passu Companion Loan into a securitization that is required to comply with Regulation AB (a “Regulation AB Companion Loan Securitization”) and, to the extent necessary in order to comply with Regulation AB, provide to the Mortgage Loan Seller information about itself that such Mortgage Loan Seller reasonably requires to meet the requirements of Items 1117 and 1119 and paragraphs (b), (c)(3), (c)(4) and (c)(5) of Item 1108 of Regulation AB and shall cooperate with such Mortgage Loan Seller to provide such other information as may be necessary to comply with the requirements of Regulation AB. Each of the Trustee, the Master Servicer and the Special Servicer understands that such information provided by the Trustee (where such information pertains to Wells Fargo Bank, N.A. individually and not to any specific aspect of the Trustee’s duties or obligations under this Agreement), the Master Servicer (where such information pertains to Wachovia Bank, National Association individually and not to any specific aspect of the Master Servicer’s duties or obligations under this Agreement) and the Special Servicer (where such information pertains to CWCapital Asset Management LLC individually and not to any specific aspect of the Special Servicer’s duties or obligations under this Agreement), as applicable, to such Mortgage Loan Seller as required by this clause (a) may be included in the offering material related to a Regulation AB Companion Loan Securitization and agrees to indemnify and hold the related depositor and underwriter(s) of the Regulation

 

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AB Loan Securitization harmless for any costs, liabilities, fees and expenses incurred by the Mortgage Loan Seller as a result of any material misstatements or omissions or any alleged material misstatements or alleged omissions in any such offering material to the extent that such material misstatement or omission was made in reliance upon any such information provided by such person. Any such indemnification shall be in substantially the same form as provided by such party in this transaction. Notwithstanding the foregoing, to the extent that the information provided by the Trustee, the Master Servicer or the Special Servicer, as applicable, for inclusion in the offering materials related to such Regulation AB Companion Loan Securitization is substantially and materially similar to the information provided by such party with respect to the offering materials related to this transaction, subject to any required changes due to any amendments to Regulation AB or any changes in the interpretation of Regulation AB, such party shall be deemed to be in compliance with this Section 3.29(a). Both the Master Servicer and the Special Servicer shall provide an opinion of counsel (which opinion of counsel shall be an expense of the trust fund created in connection with the Regulation AB Companion Loan Securitization) in substantially the same form as provided in this transaction which provides that any information provided by such party pursuant to this Section 3.29(a) with respect to such Regulation AB Companion Loan Securitization complies with Items 1117 and 1119 (with respect to Item 1119, only as it relates to any Sub-Servicer, subcontractor or agent retained by it) and paragraphs (b), (c)(3), (c)(4) (but only with regard to second sentence thereof) and (c)(5) of Item 1108 of Regulation AB and that the offering material related to such Regulation AB Companion Loan Securitization contains all information required of such party to meet the requirements of Items 1117 and 1119 (with respect to Item 1119, only as it relates to any Sub-Servicer, subcontractor or agent retained by it) and paragraphs (b), (c)(3), (c)(4) (but only with regard to second sentence thereof) and (c)(5) of Item 1108 of Regulation AB to the extent that any such party would be required pursuant to Regulation AB to provide such information.

(b)       Each of the Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer and the Special Servicer shall use reasonable efforts to cause any Sub-Servicer, if any, appointed with respect to each Pari Passu Mortgage Loan to, upon request or notice from such parties (which request or notice shall be given each time a filing is required), cooperate with the trustee, master servicer or special servicer for any Regulation AB Companion Loan Securitization in preparing each Form 10 D required to be filed by such Regulation AB Companion Loan Securitization (until January 30 of the first year in which the trustee for such Regulation AB Companion Loan Securitization files a Form 15 Suspension Notice with respect to the related trust fund) and shall provide to such trustee or master servicer within the time period set forth in the pooling and servicing agreement for such Regulation AB Companion Loan Securitization such information relating to the related Pari Passu Companion Loan as may be necessary for the servicer and trustee of the Regulation AB Companion Loan Securitization to comply with the reporting requirements of Regulation AB (provided such time period is not earlier than the time period set forth in this Agreement); provided, however, any parties to any Regulation AB Companion Loan Securitization shall consult with the Trustee, the Master Servicer and the Special Servicer (and the Master Servicer shall consult with any Sub-Servicer appointed with respect to the Pari Passu Companion Loan), and the Trustee, the Master Servicer and the Special Servicer shall cooperate

 

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with such parties in respect of establishing the time periods for preparation of the Form 10-D reports in the documentation for such Regulation AB Companion Loan Securitization. Notwithstanding the foregoing, to the extent the Trustee, the Master Servicer or the Special Servicer complies in all material respects with the timing, reporting and attestation requirements in Section 8.17 of this Agreement with respect to the comparable timing, reporting and attestation requirements contemplated in this Section 3.29(b) with respect to such Regulation AB Companion Loan Securitization, such party shall be deemed to be in compliance with the provisions of this Section 3.29(b).

(c)       Each of the Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer and the Special Servicer shall use reasonable efforts to cause any Sub-Servicer, if any, appointed with respect to each Pari Passu Mortgage Loan to, upon request from the trustee under the Regulation AB Companion Loan Securitization (which request or notice shall be given each time a filing is required), provide the trustee under a Regulation AB Companion Loan Securitization (until January 30 of the first year in which the trustee for such Regulation AB Companion Loan Securitization files a Form 15 Suspension Notice with respect to the related trust fund) information with respect to any event that is required to be disclosed under Form 8 K with respect to the Pari Passu Companion Loan within two Business Days after the occurrence of such event of which it has knowledge. Notwithstanding the foregoing, to the extent the Trustee, the Master Servicer or the Special Servicer complies in all material respects with the timing, reporting and attestation requirements in Section 8.17 of this Agreement with respect to the comparable timing, reporting and attestation requirements contemplated in this Section 3.29(c) with respect to such Regulation AB Companion Loan Securitization, such party shall be deemed to be in compliance with the provisions of this Section 3.29(c).

(d)       On or before March 15 (with a 7 Business Day notice as provided in Section 7.01(a)(iv) herein) of each year during which a Regulation AB Companion Loan Securitization is required to file an annual report on Form 10 K (and not in respect of any year in which such Regulation AB Companion Loan Securitization is not required to file an annual report on Form 10 K because a Form 15 Suspension Notice with respect to the related trust fund was filed), each of the Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer and the Special Servicer shall use reasonable efforts to cause any Sub-Servicer appointed with respect to each Pari Passu Mortgage Loan to, upon request from the trustee under the Regulation AB Companion Loan Securitization (which request or notice shall be given each time a filing is required), provide, with respect to itself, to the trustee under such Regulation AB Companion Loan Securitization, to the extent required pursuant to Item 1122 of Regulation AB, (i) a report on an assessment of compliance with the servicing criteria to the extent required pursuant to Item 1122(a) of Regulation AB, (ii) a registered accounting firm’s attestation report on such Person’s assessment of compliance with the applicable servicing criteria to the extent required pursuant to Item 1122(b) of Regulation AB and (iii) such other information as may be required pursuant to Item 1122(c) of Regulation AB. Notwithstanding the foregoing, to the extent the Trustee, the Master Servicer or the Special Servicer complies in all material respects with the timing, reporting and attestation requirements in Section 8.17 of this Agreement with respect to the comparable

 

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timing, reporting and attestation requirements contemplated in this Section 3.29(d) with respect to such Regulation AB Companion Loan Securitization, such party shall be deemed to be in compliance with the provisions of this Section 3.29(d).

(e)       On or before March 15 (with a 7 Business Day notice as provided in Section 7.01(a)(iv) herein) of each year during which a Regulation AB Companion Loan Securitization is required to file an annual report on Form 10 K (and not in respect of any year in which such Regulation AB Companion Loan Securitization is not required to file an annual report on Form 10 K because a Form 15 Suspension Notice with respect to the related trust fund was filed), each of the Trustee, the Master Servicer and the Special Servicer shall, and the Master Servicer shall use reasonable efforts to cause the Primary Servicer, if applicable, and any Sub-Servicer appointed with respect to each Pari Passu Mortgage Loan to, to the extent required pursuant to Item 1123 of Regulation AB, deliver, with respect to itself, to the trustee, upon request from such trustee (which request or notice shall be given each time a filing is required), under such Regulation AB Companion Loan Securitization a servicer compliance statement signed by an authorized officer of such Person that satisfies the requirements of Item 1123 of Regulation AB. Notwithstanding the foregoing, to the extent the Trustee, the Master Servicer or the Special Servicer complies in all material respects with the timing, reporting and attestation requirements in Section 8.17 of this Agreement with respect to the comparable timing, reporting and attestation requirements contemplated in this Section 3.29(e) with respect to such Regulation AB Companion Loan Securitization, such party shall be deemed to be in compliance with the provisions of this Section 3.29(e).

(f)        Each of the Trustee, the Master Servicer and the Special Servicer shall use reasonable efforts to cause a Sub-Servicer appointed by such party to agree, (severally but not jointly) to indemnify (such indemnity limited to each such parties respective failure described below) and hold the related depositor or underwriter(s) under a Regulation AB Companion Loan Securitization harmless for any costs, liabilities, fees and expenses incurred by such Mortgage Loan Seller, depositor, trustee or master servicer as a result of any failure by the Trustee, the Master Servicer and the Special Servicer, as applicable, to comply with the reporting requirements to the extent applicable set forth under Sections 3.29(b), (c), (d) and (e) above. Any such indemnification by a Sub-Servicer shall be in substantially the same form as provided by the Trustee, the Master Servicer or the Special Servicer, as applicable, in this transaction.

Each Sub-Servicing Agreement related to each Pari Passu Mortgage Loan shall contain a provision requiring the related Sub-Servicer to provide to the Master Servicer or Special Servicer, as applicable, information, reports and certificates with respect to itself comparable to any information, reports or certificates required to be provided by the Master Servicer or Special Servicer pursuant to this Section 3.29, even if such Sub-Servicer is not otherwise required to provide such information, reports or certificates to any Person in order to comply with Regulation AB. Such information, reports or certificates shall be provided to the Master Servicer or Special Servicer, as applicable, no later than two Business Days prior to the date on which the Master Servicer or Special Servicer, as applicable, is required to deliver its comparable information, reports or certificates pursuant to this Section 3.29.

 

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Section 3.30

Litigation Control.

(a)       The Special Servicer shall with respect to Specially Serviced Mortgage Loans and at the direction of the Controlling Class Representative any other Mortgage Loan, (1) direct, manage, prosecute and/or defend any action brought by a Mortgagor against the Trust Fund and/or the Special Servicer and (2) represent the interests of the Trust Fund in any litigation relating to the rights and obligations of the Mortgagor or the Trust Fund, or the enforcement of the obligations of a Mortgagor, under the related Mortgage Loan documents (“Trust-Related Litigation”).

(b)       To the extent the Master Servicer is named in Trust-Related Litigation, and the Trust Fund or Special Servicer is not named, in order to effectuate the role of the Special Servicer as contemplated by the immediately preceding paragraph, the Master Servicer shall (1) notify the Special Servicer of such Trust-Related Litigation within ten (10) days of the Master Servicer receiving service of such Trust-Related Litigation; (2) provide monthly status reports to the Special Servicer, regarding such Trust-Related Litigation; (3) seek to have the Trust Fund replace the Master Servicer as the appropriate party to the lawsuit; and (4) so long as the Master Servicer remains a party to the lawsuit, consult with and act at the direction of the Special Servicer with respect to decisions and resolutions related to the interests of the Trust Fund in such Trust-Related Litigation, including but not limited to the selection of counsel, provided however, if there are claims against the Master Servicer and the Master Servicer has not determined that separate counsel is required for such claims, such counsel shall be reasonably acceptable to the Master Servicer.

(c)       Notwithstanding the right of the Special Servicer to represent the interests of the Trust Fund in Trust-Related Litigation, and subject to the rights of the Special Servicer to direct the Master Servicer’s actions in this Section 3.30 below, the Master Servicer shall retain the right to make determinations relating to claims against the Master Servicer, including but not limited to the right to engage separate counsel in the Master Servicer’s reasonable discretion, the cost of which shall be subject to indemnification pursuant to this Section 3.30.

(d)       Further, nothing in this section shall require the Master Servicer to take or fail to take any action which, in the Master Servicer’s good faith and reasonable judgment, may (1) result in an Adverse REMIC Event or Adverse Grantor Trust Event or (2) subject the Master Servicer to liability or materially expand the scope of the Master Servicer’s obligations under this Agreement.

(e)       Notwithstanding the Master Servicer’s right to make determinations relating to claims against the Master Servicer, the Special Servicer shall have the right at any time to (1) direct the Master Servicer to settle any claims brought against the Trust Fund, including claims asserted against the Master Servicer (whether or not the Trust Fund or the Special Servicer is named in any such claims or Trust-Related Litigation) and (2) otherwise reasonably direct the actions of the Master Servicer relating to claims against the Master Servicer (whether or not the Trust Fund or the Special Servicer is named in any such claims or Trust-Related Litigation); provided in either case

 

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that (A) such settlement or other direction does not require any admission, or is not likely to result in a finding of liability or wrongdoing on the part of the Master Servicer, (B) the cost of such settlement or any resulting judgment is and shall be paid by the Trust Fund, (C) the Master Servicer is and shall be indemnified pursuant to Section 6.03 hereof for all costs and expenses of the Master Servicer incurred in defending and settling the Trust-Related Litigation and for any judgment, (D) any such action taken by the Master Servicer at the direction of the Special Servicer be deemed (as to the Master Servicer) to be in compliance with the Servicing Standard and (E) the Special Servicer provides the Master Servicer with assurance reasonably satisfactory to the Master Servicer as to the items in clauses (A), (B) and (C).

(f)        In the event both the Master Servicer and the Special Servicer or Trust Fund are named in litigation, the Master Servicer and the Special Servicer shall cooperate with each other to afford the Master Servicer and the Special Servicer the rights afforded to such party in this Section 3.30.

(g)       Notwithstanding anything to the contrary herein, if the Master Servicer controls certain Trust-Related Litigation on behalf of the Trust Fund with respect to performing, serviced Mortgage Loans in accordance with this Section 3.30, the Special Servicer shall retain the right to make determinations relating to claims against the Special Servicer, including but not limited to the right to engage separate counsel in the Special Servicer’s reasonable discretion, the cost of which shall be subject to indemnification pursuant to Section 6.03. Nothing in this Section 3.30 shall be intended to limit the rights of the Controlling Class Representative under any other section of this Agreement.

(h)       The Special Servicer or the Master Servicer, as applicable, will have the right to direct, manage, prosecute and/or defend any and all litigation and/or claims relating to (a) the enforcement of the obligations of a Mortgagor under the related Mortgage Loan documents and (b) any claim or action brought by a Mortgagor against the Trust Fund; provided that (i) in the event that any action, suit, litigation or proceeding names the Trustee in its individual capacity, or in the event that any judgment is rendered against the Trustee in its individual capacity, the Trustee, upon prior written notice to the Special Servicer or the Master Servicer, as applicable, may retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interests (but not to otherwise direct, manage or prosecute such litigation or claim), (ii) in the event of any action, suit, litigation or proceeding, other than an action, suit, litigation or proceeding relating to the enforcement of the obligations of a Mortgagor under the related Mortgage Loan documents or otherwise relating to a Mortgage Loan or Mortgaged Property, neither the Master Servicer nor the Special Servicer shall, without the prior written consent of the Trustee, (A) initiate any action, suit, litigation or proceeding in the name of the Trustee, whether in such capacity or individually, (B) engage counsel to represent the Trustee, or (C) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any other similar action with the intent to cause, and that actually causes, the Trustee to be registered to do business in any state (provided that none of the Master Servicer, the Special Servicer or the Trustee shall be responsible for any delay due to the unwillingness

 

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of the Trustee to grant such consent), and (iii) in the event that any court finds that the Trustee is a necessary party in respect of any action, suit, litigation or proceeding relating to or arising from this Agreement or any Mortgage Loan, the Trustee shall have the right to retain counsel and appear in any such proceeding on its own behalf in order to protect and represent its interest (but not to otherwise direct, manage or prosecute such litigation or claim); provided, however, that nothing in this paragraph shall be interpreted to preclude either the Master Servicer or the Special Servicer from initiating any action, suit, litigation or proceeding in its name as a representative of the Trustee or Trust Fund.

ARTICLE IV

 

DISTRIBUTIONS TO CERTIFICATEHOLDERS

 

 

Section 4.01

Distributions.

(a)       On each Distribution Date the Paying Agent shall (except as otherwise provided in Section 9.01), based on information provided by the Master Servicer and the Special Servicer, apply amounts on deposit in the Distribution Account, after payment of amounts payable from the Distribution Account in accordance with Section 3.05(b)(ii) through (vii), deemed distributions from each ED Loan REMIC to REMIC I pursuant to Section 4.01(n) and deemed distributions from REMIC I to REMIC II pursuant to Section 4.01(h), for the following purposes and in the following order of priority, in each case to the extent of the remaining portion of the Available Distribution Amount:

(i)       concurrently, (i) from the Loan Group 1 Available Distribution Amount, to distributions of interest to the Holders of the Class A-1, Class A-2, Class A-PB, and Class A-3 Certificates, up to an amount equal to, and pro rata as among such Classes in accordance with, all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, if any, (ii) from the Loan Group 2 Available Distribution Amount, to distributions of interest to the Holders of the Class A-1A Certificates, up to an amount equal to all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, if any, and (iii) from the Loan Group 1 Available Distribution Amount and/or the Loan Group 2 Available Distribution Amount, to distributions of interest to the Holders of the Class IO Certificates, all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, if any; provided, however, if the Loan Group 1 Available Distribution Amount and/or the Loan Group 2 Available Distribution Amount is insufficient to pay in full the total amount of Distributable Certificate Interest, as provided above, payable in respect of any Class of Senior Certificates on such Distribution Date, then the entire Available Distribution Amount shall be applied to make distributions of interest to the Holders of the respective Classes of the Senior Certificates, up to an amount equal to, and pro rata as among such Classes in accordance with, all Distributable Certificate Interest in respect of each such Class of Certificates for such

 

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Distribution Date and, to the extent not previously paid, for all prior Distribution Dates, if any;

(ii)      to distributions of principal to the Holders of the Class A-PB Certificates, in an amount equal to the Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the entire Loan Group 2 Principal Distribution Amount for such Distribution Date remaining after making any distributions required pursuant to clause (vii) below on such Distribution Date, until the Class Principal Balance of the Class A-PB Certificates is reduced to the Class A-PB Planned Principal Balance;

(iii)     after the Class Principal Balance of the Class A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance, to distributions of principal to the Holders of the Class A-1 Certificates, in an amount (not to exceed the Class Principal Balance of the Class A-1 Certificates outstanding immediately prior to such Distribution Date) equal to the entire Loan Group 1 Principal Distribution Amount and, after the Class Principal Balance of the Class A-1A Certificates has been reduced to zero, the entire Loan Group 2 Principal Distribution Amount for such Distribution Date remaining after making any distributions required pursuant to clause (vii) below on such Distribution Date, less any portion thereof distributed in respect of the Class A-PB Certificates on such Distribution Date;

(iv)    after the Class Principal Balance of the Class A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance and after the Class Principal Balance of the Class A-1 Certificates has been reduced to zero, to distributions of principal to the Holders of the Class A-2 Certificates, in an amount (not to exceed the Class Principal Balance of the Class A-2 Certificates outstanding immediately prior to such Distribution Date) equal to the entire Loan Group 1 Principal Distribution Amount and, after the Class Principal Balance of the Class A-1A Certificates has been reduced to zero, the entire Loan Group 2 Principal Distribution Amount for such Distribution Date remaining after making any distributions required pursuant to clause (vii) below on such Distribution Date (in each case, net of any portion thereof distributed on such Distribution Date to the Holders of the Class A-PB Certificates and the Class A-1 Certificates pursuant to clauses (ii) and (iii) above);

(v)       after distributions of principal have been made from the Loan Group 1 Principal Distribution Amount to the Class A-PB Certificates, the Class A-1 Certificates and the Class A-2 Certificates as set forth in clauses (ii), (iii) and (iv) above, to distributions of principal to the holders of the Class A-PB Certificates in an amount (not to exceed the then outstanding Class Principal Balance of the Class A-PB Certificates) equal to the remaining Loan Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A Certificates have been retired, the Loan Group 2 Principal Distribution Amount remaining after payments to the Class A-1A Certificates have been made on such Distribution Date, in each case, less any portion thereof distributed in respect of the Class A-PB Certificates, the Class A-1 Certificates and the Class A-2 Certificates on such Distribution Date;

 

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(vi)      after the Class Principal Balance of each of the Class A-PB, Class A-1 and Class A-2 Certificates has been reduced to zero, to distributions of principal to the Holders of the Class A-3 Certificates, in an amount (not to exceed the Class Principal Balance of the Class A-3 Certificates outstanding immediately prior to such Distribution Date) equal to the entire Loan Group 1 Principal Distribution Amount and, after the Class Principal Balance of the Class A-1A Certificates has been reduced to zero, the entire Loan Group 2 Principal Distribution Amount for such Distribution Date remaining after making any distributions required pursuant to clause (vii) below on such Distribution Date (in each case, net of any portion thereof distributed on such Distribution Date to the Holders of the Class A-PB, Class A-1 and Class A-2 Certificates pursuant to clauses (ii), (iii), (iv) and (v) above);

(vii)     to distributions of principal to the Holders of the Class A-1A Certificates, in an amount (not to exceed the Class Principal Balance of the Class A-1A Certificates outstanding immediately prior to such Distribution Date) equal to the entire Loan Group 2 Principal Distribution Amount and, after the Class Principal Balances of the Class A-PB, Class A-1, Class A-2 and Class A-3 Certificates have been reduced to zero, the entire Loan Group 1 Principal Distribution Amount for such Distribution Date remaining after making any distributions required pursuant to clauses (ii), (iii), (iv), (v), and (vi) above;

(viii)    to distributions to the Holders of the Class A-PB Certificates, the Class A-1 Certificates, the Class A-2 Certificates, the Class A-3 Certificates and the Class A-1A Certificates, pro rata as among such Classes, in accordance with, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to each such Class and not previously reimbursed;

(ix)  to distributions of interest to the Holder of the Class A-M Certificates, in an amount equal to all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(x)   after the Class Principal Balances of the Class A Certificates have been reduced to zero, to distributions of principal to the Holder of the Class A-M Certificates, pro rata in an amount (not to exceed the Class Principal Balance of the Class A-M Certificates outstanding immediately prior to such Distribution Date) equal to the Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates and/or Regular Interest pursuant to any prior clause of this Section 4.01(a));

(xi)  to distributions to the Holder of the Class A-M Certificates in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Expenses, if any, previously allocated to the Class A-M Certificates and not previously reimbursed;

(xii)to distributions of interest to the Holders of the Class A-J Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class of

 

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Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xiii)    after the Class Principal Balances of the Class A Certificates and the Class A-M Certificates have been reduced to zero, to distributions of principal to the Holders of the Class A-J Certificates, in an amount (not to exceed the Class Principal Balance of the Class A-J Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates and/or the Regular Interest pursuant to any prior clause of this Section 4.01(a));

(xiv)     to distributions to the Holders of the Class A-J Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class A-J Certificates and not previously reimbursed;

(xv)      to distributions of interest to the Holders of the Class B Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xvi)     after the Class Principal Balance of the Class A-J Certificates has been reduced to zero, to distributions of principal to the Holders of the Class B Certificates, in an amount (not to exceed the Class Principal Balance of the Class B Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xvii)    to distributions to the Holders of the Class B Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class B Certificates and not previously reimbursed;

(xviii)   to distributions of interest to the Holders of the Class C Certificates in an amount equal to all Distributable Certificate Interest in respect of such Class of Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xix)     after the Class Principal Balance of the Class B Certificates has been reduced to zero, to distributions of principal to the Holders of the Class C Certificates, in an amount (not to exceed the Class Principal Balance of the Class C Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

 

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(xx)     to distributions to the Holders of the Class C Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class C Certificates and not previously reimbursed;

(xxi)    to distributions of interest to the Holders of the Class D Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class D Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxii)   after the Class Principal Balance of the Class C Certificates has been reduced to zero, to distributions of principal to the Holders of the Class D Certificates, in an amount (not to exceed the Class Principal Balance of the Class D Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxiii)  to distributions to the Holders of the Class D Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class D Certificates and not previously reimbursed;

(xxiv) to distributions of interest to the Holders of the Class E Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class E Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxv)  after the Class Principal Balance of the Class D Certificates has been reduced to zero, to distributions of principal to the Holders of the Class E Certificates, in an amount (not to exceed the Class Principal Balance of the Class E Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxvi) to distributions to the Holders of the Class E Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class E Certificates and not previously reimbursed;

(xxvii) to distributions of interest to the Holders of the Class F Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class F Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxviii) after the Class Principal Balance of the Class E Certificates has been reduced to zero, to distributions of principal to the Holders of the Class F Certificates, in

 

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an amount (not to exceed the Class Principal Balance of the Class F Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxix)    to distributions to the Holders of the Class F Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class F Certificates and not previously reimbursed;

(xxx)     to distributions of interest to the Holders of the Class G Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class G Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxxi)    after the Class Principal Balance of the Class F Certificates has been reduced to zero, to distributions of principal to the Holders of the Class G Certificates, in an amount (not to exceed the Class Principal Balance of the Class G Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxxii)   to distributions to the Holders of the Class G Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class G Certificates and not previously reimbursed;

(xxxiii)  to distributions of interest to the Holders of Class H Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class H Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxxiv) after the Class Principal Balance of the Class G Certificates has been reduced to zero, to distributions of principal to the Holders of the Class H Certificates, in an amount (not to exceed the Class Principal Balance of the Class H Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxxv)  to distributions to the Holders of the Class H Certificates in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class H Certificates and not previously reimbursed;

 

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(xxxvi) to distributions of interest to the Holders of the Class J Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class J Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xxxvii) after the Class Principal Balance of the Class H Certificates has been reduced to zero, to distributions of principal to the Holders of the Class J Certificates, in an amount (not to exceed the Class Principal Balance of the Class J Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xxxviii) to distributions to the Holders of the Class J Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class J Certificates and not previously reimbursed;

(xxxix)   to distributions of interest to the Holders of the Class K Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class K Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xl)       after the Class Principal Balance of the Class J Certificates has been reduced to zero, to distributions of principal to the Holders of the Class K Certificates, in an amount (not to exceed the Class Principal Balance of the Class K Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xli)     to distributions to the Holders of the Class K Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class K Certificates and not previously reimbursed;

(xlii)     to distributions of interest to the Holders of the Class L Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class L Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xliii)    after the Class Principal Balance of the Class K Certificates has been reduced to zero, to distributions of principal to the Holders of the Class L Certificates, in an amount (not to exceed the Class Principal Balance of the Class L Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on

 

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such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xliv)    to distributions to the Holders of the Class L Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class L Certificates and not previously reimbursed;

(xlv)     to distributions of interest to the Holders of the Class M Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class M Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xlvi)    after the Class Principal Balance of the Class L Certificates has been reduced to zero, to distributions of principal to the Holders of the Class M Certificates, in an amount (not to exceed the Class Principal Balance of the Class M Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(xlvii)   to distributions to the Holders of the Class M Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class M Certificates and not previously reimbursed;

(xlviii)  to distributions of interest to the Holders of the Class N Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class N Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(xlix)    after the Class Principal Balance of the Class M Certificates has been reduced to zero, to distributions of principal to the Holders of the Class N Certificates, in an amount (not to exceed the Class Principal Balance of the Class N Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(l)        to distributions to the Holders of the Class N Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class N Certificates and not previously reimbursed;

(li)       to distributions of interest to the Holders of the Class O Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class O Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

 

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(lii)     after the Class Principal Balance of the Class N Certificates has been reduced to zero, to distributions of principal to the Holders of the Class O Certificates, in an amount (not to exceed the Class Principal Balance of the Class O Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(liii)     to distributions to the Holders of the Class O Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class O Certificates and not previously reimbursed;

(liv)     to distributions of interest to the Holders of the Class P Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class P Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(lv)      after the Class Principal Balance of the Class O Certificates has been reduced to zero, to distributions of principal to the Holders of the Class P Certificates, in an amount (not to exceed the Class Principal Balance of the Class P Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(lvi)    to distributions to the Holders of the Class P Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class P Certificates and not previously reimbursed;

(lvii)    to distributions of interest to the Holders of the Class Q Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class Q Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(lviii)   after the Class Principal Balance of the Class P Certificates has been reduced to zero, to distributions of principal to the Holders of the Class Q Certificates, in an amount (not to exceed the Class Principal Balance of the Class Q Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(lix)     to distributions to the Holders of the Class Q Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund

 

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Expenses, if any, previously allocated to the Class Q Certificates and not previously reimbursed;

(lx)      to distributions of interest to the Holders of the Class S Certificates, in an amount equal to all Distributable Certificate Interest in respect of the Class S Certificates for such Distribution Date and, to the extent not previously paid, for all prior Distribution Dates;

(lxi)     after the Class Principal Balance of the Class Q Certificates has been reduced to zero, to distributions of principal to the Holders of the Class S Certificates, in an amount (not to exceed the Class Principal Balance of the Class S Certificates outstanding immediately prior to such Distribution Date) equal to the entire Principal Distribution Amount for such Distribution Date (net of any portion thereof distributed on such Distribution Date to the Holders of any other Class of Certificates pursuant to any prior clause of this Section 4.01(a));

(lxii)    to distributions to the Holders of the Class S Certificates, in an amount equal to, and in reimbursement of, all Realized Losses and Additional Trust Fund Expenses, if any, previously allocated to the Class S Certificates and not previously reimbursed; and

(lxiii)   to make distributions to the Holders of the Class R-II Certificates, in an amount equal to the excess, if any, of (A) the aggregate distributions deemed made in respect of the REMIC I Regular Interests on such Distribution Date pursuant to Section 4.01(h), over (B) the aggregate distributions made in respect of the Regular Certificates on such Distribution Date pursuant to clauses (i) through (lxii) above;

provided that on each Distribution Date after the aggregate of Class Principal Balances of each Class of Subordinated Certificates have been reduced to zero, but any two or more of the Class A-1 Certificates, the Class A-2 Certificates, the Class A-PB Certificates, the Class A-3 Certificates and the Class A-1A Certificates remain outstanding, the payments of principal to be made as contemplated by clauses (iii) through (vii) above with respect to the Class A Certificates will be made to the Holders of the respective Classes of such Class A Certificates up to an amount equal to, and pro rata as among such Classes in accordance with the respective then outstanding Class Principal Balances of such Classes and without regard to the Principal Distribution Amount for such Distribution Date and without regard to Loan Group. Distributions in reimbursement of Realized Losses and Additional Trust Fund Expenses previously allocated to a Class of Certificates shall not constitute distributions of principal and shall not result in reduction of the related Class Principal Balance.

All distributions of interest made in respect of the Class IO Certificates on any Distribution Date pursuant to clause (i) above, shall be deemed to have been made in respect of all the Components of such Class, pro rata in accordance with the respective amounts of interest that would be payable on such Components on such Distribution Date based on the Strip Rate of such Component multiplied by its Component Notional Amount, together with any amounts thereof remaining unpaid from previous Distribution Dates.

 

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(b)       On each Distribution Date, the Paying Agent shall withdraw from the Distribution Account any amounts that represent Prepayment Premiums and/or Yield Maintenance Charges actually collected on the Mortgage Loans and any REO Loans during the related Collection Period and shall be deemed to distribute such Prepayment Premiums and/or Yield Maintenance Charges from REMIC I to REMIC II in respect of REMIC I Regular Interest LA-1 (whether or not such Class has received all distributions of interest and principal to which it is entitled), and then shall distribute each such Prepayment Premium and/or Yield Maintenance Charge, as additional yield, as follows:

(i)       First, to the Holders of the respective Classes of Regular Certificates (other than any Excluded Class thereof) entitled to distributions of principal pursuant to Section 4.01(a) on such Distribution Date, up to an amount equal to, and pro rata based on, the Additional Yield Amounts for each such Class of Certificates for such Distribution Date; and

(ii)      Second, to the Holders of the Class IO Certificates, to the extent of any remaining portion of such Yield Maintenance Charges and/or Prepayment Premiums.

All distributions of Prepayment Premiums and/or Yield Maintenance Charges collected during the related Collection Period that represent Prepayment Premiums and/or Yield Maintenance Charges actually collected on any ED Loan shall be deemed to be distributed from the related ED Loan REMIC to REMIC I in respect of the related ED Loan REMIC Regular Interest prior to their distribution in respect of REMIC I Regular Interest LA-1A as described above.

(iii)     On each Distribution Date, the Paying Agent shall withdraw from the Additional Interest Account any amounts that represent (A) Additional Interest actually collected during the related Collection Period on the ARD Loans and any related REO Loans and shall distribute such amounts among the Holders of the Class Z Certificates pro rata in accordance with the respective Percentage Interests of such Class, and (B) interest and investment income, if any, earned in respect of amounts held in the Additional Interest Account as provided in Section 3.06, but only to the extent of the Net Investment Earnings with respect to such account for the related Distribution Date, and shall distribute such amount to the Trustee as additional compensation.

(c)       All distributions made with respect to each Class on each Distribution Date shall be allocated pro rata among the outstanding Certificates in such Class based on their respective Percentage Interests. Except as otherwise provided below, all such distributions with respect to each Class on each Distribution Date shall be made to the Certificateholders of the respective Class of record at the close of business on the related Record Date and shall be made by wire transfer of immediately available funds to the account of any such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder shall have provided the Paying Agent with wiring instructions no less than 5 Business Days prior to the related Record Date (which wiring instructions may be in the form of a standing order applicable to all subsequent Distribution Dates), or otherwise by check mailed to the address of such Certificateholder as it appears in the Certificate Register. The final distribution on each

 

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Certificate (determined, in the case of a Sequential Pay Certificate, without regard to any possible future reimbursement of any Realized Loss or Additional Trust Fund Expense previously allocated to such Certificate, but taking into account possible future distributions of Additional Interest) will be made in a like manner, but only upon presentation and surrender of such Certificate at the offices of the Certificate Registrar or such other location specified in the notice to Certificateholders of such final distribution. Prior to any termination of the Trust Fund pursuant to Section 9.01, any distribution that is to be made with respect to a Certificate in reimbursement of a Realized Loss or Additional Trust Fund Expense previously allocated thereto, which reimbursement is to occur after the date on which such Certificate is surrendered as contemplated by the preceding sentence, will be made by check mailed to the address of the Certificateholder that surrendered such Certificate as such address last appeared in the Certificate Register or to any other address of which the Paying Agent was subsequently notified in writing. If such check is returned to the Paying Agent, the Paying Agent, directly or through an agent, shall take such reasonable steps to contact the related Holder and deliver such check as it shall deem appropriate. Any funds in respect of a check returned to the Paying Agent shall be set aside by the Paying Agent and held uninvested in trust and credited to the account of the appropriate Holder. The costs and expenses of locating the appropriate Holder and holding such funds shall be paid out of such funds. No interest shall accrue or be payable to any former Holder on any amount held in trust hereunder. If the Paying Agent has not, after having taken such reasonable steps, located the related Holder by the second anniversary of the initial sending of a check, the Paying Agent shall, subject to applicable law, distribute the unclaimed funds to the Holders of the Class R-II Certificates.

(d)       Each distribution with respect to a Book-Entry Certificate shall be paid to the Depository, as Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such distribution to the related Certificate Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the related Certificate Owners that it represents. None of the Trustee, the Paying Agent, the Certificate Registrar, the Depositor or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Agreement or applicable law. The Trustee and the Depositor shall perform their respective obligations under a Letter of Representations among the Depositor, the Trustee and the Initial Depository dated as of the Closing Date.

(e)       The rights of the Certificateholders to receive distributions from the proceeds of the Trust Fund in respect of the Certificates, and all rights and interests of the Certificateholders in and to such distributions, shall be as set forth in this Agreement. Neither the Holders of any Class of Certificates nor any party hereto shall in any way be responsible or liable to the Holders of any other Class of Certificates in respect of amounts properly previously distributed on the Certificates.

 

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(f)        Except as otherwise provided in Section 9.01, whenever the Paying Agent receives written notification of or expects that the final distribution with respect to any Class of Certificates (determined without regard to any possible future reimbursement of any Realized Loss or Additional Trust Fund Expense previously allocated to such Class of Certificates) will be made on the next Distribution Date, the Paying Agent shall, no later than 5 days after the related Determination Date, mail to each Holder of record on such date of such Class of Certificates a notice to the effect that:

(i)       the Paying Agent expects 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 Certificate Registrar or at such other location therein specified, and

(ii)      no interest shall accrue on such Certificates from and after such Distribution Date.

Any funds not distributed to any Holder or Holders of Certificates of such Class on such Distribution Date because of the failure of such Holder or Holders to tender their Certificates shall, on such date, be set aside and held uninvested in trust and credited to the account or accounts of the appropriate non-tendering Holder or Holders. If any Certificates as to which notice has been given pursuant to this Section 4.01(f) shall not have been surrendered for cancellation within six months after the time specified in such notice, the Paying Agent shall mail a second notice to the remaining non-tendering Certificateholders to surrender their Certificates for cancellation in order to receive the final distribution with respect thereto. If within one year after the second notice all such Certificates shall not have been surrendered for cancellation, the Paying Agent, directly or through an agent, shall take such steps to contact the remaining non-tendering Certificateholders concerning the surrender of their Certificates as it shall deem appropriate. The costs and expenses of holding such funds in trust and of contacting such Certificateholders following the first anniversary of the delivery of such second notice to the non-tendering Certificateholders shall be paid out of such funds. No interest shall accrue or be payable to any former Holder on any amount held in trust pursuant to this paragraph. If all of the Certificates shall not have been surrendered for cancellation by the second anniversary of the delivery of the second notice, the Paying Agent shall, subject to applicable law, distribute to the Holders of the Class R-II Certificates all unclaimed funds and other assets which remain subject thereto.

(g)       Notwithstanding any other provision of this Agreement, the Paying Agent shall comply with all federal withholding requirements respecting payments to Certificateholders of interest or original issue discount that the Paying Agent reasonably believes are applicable under the Code. The Certificate Registrar shall promptly provide the Paying Agent with any IRS Forms W-9, W-8BEN, W-8IMY (and all appropriate attachments) or W-8ECI upon its receipt thereof. The consent of Certificateholders shall not be required for such withholding. If the Paying Agent does withhold any amount from interest or original issue discount payments or advances thereof to any Certificateholder pursuant to federal withholding requirements, the Paying Agent shall indicate the amount withheld to such Certificateholders. Such amounts shall be deemed to have been distributed to such Certificateholders for all purposes of this Agreement.

 

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(h)       The amount and timing of all distributions of interest and principal made in respect of any Class of Sequential Pay Certificates on each Distribution Date pursuant to Section 4.01(a) or Section 9.01 shall be deemed to have first been distributed, with respect to the Sequential Pay Certificates from REMIC I to REMIC II in respect of its Corresponding REMIC I Regular Interest set forth in the Preliminary Statement hereto; provided that all distributions made in respect of the Class IO Certificates on each Distribution Date pursuant to Section 4.01(a) or Section 9.01, and allocable to any particular Component of such Class of Certificates in accordance with the last paragraph of Section 4.01(a), shall be deemed to have been first distributed from REMIC I to REMIC II in respect of such Component’s Corresponding REMIC I Regular Interest.

(i)        Reimbursements of Realized Losses and Additional Trust Fund Expenses to the classes of Sequential Pay Certificates shall be allocated to the corresponding REMIC I Regular Interests in the same manner as distributions of principal specified above. All distributions of principal and reimbursements of Realized Losses and Additional Trust Fund Expenses made in respect of any Class of Sequential Pay Certificates on each Distribution Date pursuant to Section 4.01(a) shall be deemed to have first been distributed from REMIC I to REMIC II in respect of its Corresponding REMIC I Regular Interest set forth in the Preliminary Statement hereto; provided, however, that distributions of reimbursements of Realized Losses and Additional Trust Fund Expenses shall be made in sequential order of the priority set forth in Section 4.01(h) for principal distributions, up to the amount of Realized Losses and Additional Trust Fund Expenses previously allocated to a particular Class of Certificates or REMIC I Regular Interest. Any amounts remaining in REMIC I on any Distribution Date after the foregoing distributions shall be distributed to the Holders of the Class R-I Certificates.

(j)        [Reserved]

(k)       [Reserved]          

(l)        On each Distribution Date, or with respect to a Companion Loan then included in a securitization, on each P&I Advance Date, the Companion Paying Agent (based upon a statement of the Master Servicer to be delivered to the Companion Paying Agent that specifies the amount required to be deposited in the Companion Distribution Account and any amounts payable to the Master Servicer from the Companion Distribution Account pursuant to this Section 4.01(l) shall make withdrawals and payments from the Companion Distribution Account for the related Companion Loans in the following order of priority:

(i)       to pay the Trustee or any of its directors, officers, employees or agents, as the case may be, any amounts payable or reimbursable to any such Person pursuant to Section 8.05, to the extent any such amounts relate solely to a Loan Pair;

(ii)      to pay for the cost of the Opinions of Counsel sought by the Trustee as contemplated by Sections 9.02(a) and 10.01(h), to the extent any such costs relate to a Loan Pair;

 

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(iii)     to pay to the Master Servicer any amounts deposited by the Master Servicer in the Companion Distribution Account not required to be deposited therein;

(iv)     on each Distribution Date, to pay all amounts remaining in the Companion Distribution Account to the Companion Holder; and

(v)       to clear and terminate the Companion Distribution Account at the termination of this Agreement pursuant to Section 9.01.

All distributions from a Companion Distribution Account required hereunder shall be made by the Companion Paying Agent to the Companion Holder by wire transfer in immediately available funds to the account of such Companion Holder or an agent therefor appearing on the Companion Register on the related Record Date (or, if no such account so appears or information relating thereto is not provided at least 5 Business Days prior to the related Record Date, by check sent by first-class mail to the address of such Companion Holder or its agent appearing on the Companion Register). Any such account shall be located at a commercial bank in the United States of America. For the avoidance of doubt, in no event shall the Companion Paying Agent withdraw from funds on deposit in the Companion Distribution Account any amounts allocable to any of the Companion Loans (other than Penalty Interest and late payment charges) to be applied to, or to provide reimbursement for, any costs, expenses, indemnities, losses or liabilities relating or allocable to any Mortgage Loan or Companion Loan other than the related Mortgage Loan or its related Pari Passu Companion Loan.

To the extent amounts are payable to or in respect of the Trust Fund pursuant to this Section 4.01(l)(i) or (ii), the Companion Distribution Account shall be considered an “outside reserve fund” within the meaning of the REMIC Provisions, beneficially owned by the Companion Holder for federal income tax purposes, who shall be taxable on all reinvestment income thereon, and who shall be deemed to have received any amounts reimbursed from the Trust Fund to the Companion Distribution Account.

(m)      On each Distribution Date, the Paying Agent shall withdraw amounts from the Gain-on-Sale Reserve Account and shall distribute such amounts to reimburse the Holders of each Class of Sequential Pay Certificates (in order of priority) up to an amount equal to all Realized Losses and Additional Trust Fund Expenses, if any, previously deemed allocated to such Classes and unreimbursed after application of the Available Distribution Amount for such Distribution Date. Amounts paid from the Gain-on-Sale Reserve Account pursuant to the preceding sentence shall first be deemed to have been distributed to the Corresponding REMIC I Regular Interest in reimbursement of Realized Losses and Additional Trust Fund Expenses previously allocated thereto as provided in Section 4.01(i). Amounts paid from the Gain-on-Sale Reserve Account will not reduce the Certificate Principal Balances of the Classes of Sequential Pay Certificates receiving such distributions. Any amounts remaining in the Gain-on-Sale Reserve Account after such distributions shall be applied to offset future Realized Losses and Additional Trust Fund Expenses and upon termination of the Trust Fund, any amounts remaining in the Gain-on-Sale Reserve Account shall be distributed to the Class R-I Certificateholders.

 

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(n)       All payments made on the ED Loans or any related subsequently acquired REO Property shall be deemed to be assets of the related ED Loan REMIC and such amounts shall be deemed distributed to REMIC I in respect of such ED Loan REMIC Regular Interest (in the case of interest, at the Net Mortgage Rate of the applicable ED Loan) before distributions are deemed to be made on the REMIC I Regular Interests pursuant to Section 4.01(h), and shall be treated as principal, interest, Prepayment Premiums or Yield Maintenance Charges, as the case may be, based on these characterizations with respect to the ED Loans (or REO Property), and, in addition, any payment of principal on or reduction in the Stated Principal Balance of the ED Loans shall reduce the principal balance of the related ED Loan REMIC Regular Interest. Any payments on or with respect to the ED Loans in excess of the principal, interest, Prepayment Premiums and Yield Maintenance Charges distributable on the related ED Loan REMIC Regular Interest shall be distributable to the Class R-I Certificates in respect of amounts distributed on any ED Loan REMIC Residual Interest and, in the case of Gain-on-Sale Proceeds with respect to the ED Loans, shall be deposited in REMIC I as provided in Section 3.04(f).

Section 4.02     Statements to Certificateholders; CMSA Loan Periodic Update File.

(a)       On each Distribution Date, the Trustee shall make available on the Trustee’s Internet Website or, upon written request, forward by mail (or by electronic transmission acceptable to the recipient) to each Certificateholder, each initial Certificate Owner and (upon written request made to the Trustee), each subsequent Certificate Owner (as identified to the reasonable satisfaction of the Trustee), the Depositor, the Master Servicer, the Special Servicer, the Companion Holders, the Underwriters, and each Rating Agency, a statement (a “Distribution Date Statement”), as to the distributions made on such Distribution Date, based on information provided to it by the Master Servicer and the Special Servicer, setting forth:

(i)       the Record Date, the Determination Date, the Distribution Date and dates of the Interest Accrual Period for each Class of Certificates;

(ii)      the amount of the distribution on such Distribution Date to the Holders of each Class of Regular Certificates in reduction of the Class Principal Balance thereof;

(iii)     the amount of the distribution on such Distribution Date to the Holders of each Class of Regular Certificates allocable to Distributable Certificate Interest;

(iv)      the amount of the distribution on such Distribution Date to the Holders of each Class of Regular Certificates allocable to Prepayment Premiums and/or Yield Maintenance Charges;

(v)       the amount of the distribution on such Distribution Date to the Holders of each Class of Regular Certificates in reimbursement of previously allocated Realized Losses and Additional Trust Fund Expenses;

 

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(vi)      the Available Distribution Amount for such Distribution Date and the sources of such amount;

(vii)    (a) the aggregate amount of P&I Advances made in respect of such Distribution Date on a loan by loan basis with respect to the Mortgage Pool and on an aggregate basis with respect to each Loan Group pursuant to Section 4.03(a), including, without limitation, any amounts applied pursuant to Section 4.03(a)(ii), and the aggregate amount of unreimbursed P&I Advances with respect to the Mortgage Pool and each Loan Group that had been outstanding at the close of business on the related Determination Date and the aggregate amount of interest accrued and payable to the Master Servicer or the Trustee in respect of such unreimbursed P&I Advances in accordance with Section 4.03(d) as of the close of business on the related Determination Date and (b) the aggregate amount of Servicing Advances on a loan by loan basis with respect to the Mortgage Pool and on an aggregate basis with respect to each Loan Group as of the close of business on the related Determination;

(viii)    the aggregate unpaid principal balance of the Mortgage Pool and each Loan Group outstanding as of the close of business on the related Determination Date;

(ix)      the aggregate Stated Principal Balance of the Mortgage Pool and each Loan Group outstanding immediately before and immediately after such Distribution Date;

(x)       the number, aggregate unpaid principal balance, weighted average remaining term to maturity or Anticipated Repayment Date, each Mortgage Rate and weighted average Mortgage Rate of the Mortgage Loans in the Mortgage Pool and each Loan Group as of the close of business on the related Determination Date presented in distributional groups and/or incremental ranges acceptable to the Depositor in its reasonable discretion;

(xi)      the number of Mortgage Loans and the aggregated Stated Principal Balance (immediately after such Distribution Date) (and with respect to each delinquent Mortgage Loan, a brief description of the reason for delinquency, if known by the Master Servicer or Special Servicer, as applicable, and provided to the Trustee) of Mortgage Loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent more than 89 days, (D) as to which foreclosure proceedings have been commenced, (E) with respect to each Specially Serviced Mortgage Loan, the Mortgaged Property type and a brief description of the reason for delinquency and the Mortgage Loan’s status, if known by the Master Servicer or Special Servicer, as applicable, and provided to the Trustee, (F) to the actual knowledge of the Master Servicer or Special Servicer in bankruptcy proceedings and (G) any material changes to the information specified in Item 1100(b)(5) of Regulation AB, as amended;

(xii)     as to each Mortgage Loan referred to in the preceding clause (x) above, (A) the loan number thereof, (B) the Stated Principal Balance thereof immediately following such Distribution Date, and (C) a brief description of any loan modification, extension or waiver (identifying the relevant loan number);

 

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(xiii)    with respect to any Mortgage Loan as to which a Liquidation Event occurred during the related Collection Period (other than a payment in full), (A) the loan number thereof, (B) the aggregate of all Liquidation Proceeds and other amounts received in connection with such Liquidation Event (separately identifying the portion thereof allocable to distributions on the Certificates), and (C) the amount of any Realized Loss in connection with such Liquidation Event;

(xiv)     with respect to any REO Property included in the Trust Fund as to which a Final Recovery Determination was made during the related Collection Period, (A) the loan number of the related Mortgage Loan, (B) the aggregate of all Liquidation Proceeds and other amounts received in connection with such Final Recovery Determination (separately identifying the portion thereof allocable to distributions on the Certificates), and (C) the amount of any Realized Loss in respect of the related REO Property, in connection with such Final Recovery Determination;

(xv)      the Accrued Certificate Interest and Distributable Certificate Interest in respect of each Class of Regular Certificates for such Distribution Date;

(xvi)     any unpaid Distributable Certificate Interest in respect of each Class of Regular Certificates after giving effect to the distributions made on such Distribution Date;

(xvii)    the Pass-Through Rate for each Class of Regular Certificates for such Distribution Date;

(xviii)   the Principal Distribution Amount;

(xix)     the Principal Distribution Amount, the Loan Group 1 Principal Distribution Amount and the Loan Group 2 Principal Distribution Amount for such Distribution Date, separately identifying the respective components thereof (and, in the case of any Principal Prepayment or other unscheduled collection of principal received during the related Collection Period, the loan number for the related Mortgage Loan and the amount of such prepayment or other collection of principal);

(xx)      the aggregate of all Realized Losses incurred during the related Collection Period and all Additional Trust Fund Expenses incurred during the related Collection Period;

(xxi)     the aggregate of all Realized Losses and Additional Trust Fund Expenses that were allocated to each Class of Certificates on such Distribution Date;

(xxii)    the Class Principal Balance of each Class of Regular Certificates (other than the Class IO Certificates) and the Notional Amounts of the Class IO Certificates immediately before and immediately after such Distribution Date, separately identifying any reduction therein due to the allocation of Realized Losses and Additional Trust Fund Expenses on such Distribution Date;

 

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(xxiii)   the Certificate Factor for each Class of Regular Certificates immediately following such Distribution Date;

(xxiv)   the aggregate amount of interest on P&I Advances paid to the Master Servicer and the Trustee with respect to the Mortgage Pool and each Loan Group during the related Collection Period in accordance with Section 4.03(d);

(xxv)    the aggregate amount of interest on Servicing Advances paid to the Master Servicer, the Trustee and the Special Servicer during the related Collection Period in accordance with Section 3.03(d) with respect to the Mortgage Pool and each Loan Group;

(xxvi)   the aggregate amount of (i) Servicing Fees paid to the Master Servicer, (ii) the Servicing Fees paid to the Special Servicer, and (iii) Trustee Fees paid to the Trustee during the related Collection Period;

(xxvii)  the loan number for each Required Appraisal Mortgage Loan and any related Appraisal Reduction Amount as of the related Determination Date;

(xxviii) the loan number for each Mortgage Loan which has experienced a breach of the representations and warranties, including identification of the applicable representation and warranty, given with respect to a Mortgage Loan by the applicable Mortgage Loan Seller, as provided by the Master Servicer or the Depositor;

(xxix)   the original and thereafter, the current credit support levels for each Class of Regular Certificates;

(xxx)    the original and thereafter, the current ratings for each Class of Regular Certificates;

(xxxi)   the aggregate amount of Prepayment Premiums and Yield Maintenance Charges with respect to the Mortgage Pool and each Loan Group collected during the related Collection Period;

(xxxii)  the amounts, if any, actually distributed with respect to the Class Z Certificates, Class R-I Certificates or Class R-II Certificates on such Distribution Date;

(xxxiii) the value of any REO Property included in the Trust Fund as of the end of the related Collection Period, based on the most recent Appraisal or valuation;

(xxxiv) identification of any Mortgage Loan which has been substituted as a result of a breach of a representation and warranty;

In the case of information to be furnished pursuant to clauses (i) through (iv) above, the amounts shall be expressed as a dollar amount in the aggregate for all Certificates of each applicable Class and per Single Certificate. In the case of information provided to the Trustee as a basis for information to be furnished pursuant to clauses (x) through (xiii), and (xxix) and (xxxiv) above, insofar as the underlying information is solely within the control of the

 

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Special Servicer, the Trustee and the Master Servicer may, absent manifest error, conclusively rely on the reports to be provided by the Special Servicer.

The Trustee may rely on and shall not be responsible absent manifest error for the content or accuracy of any information provided by third parties for purposes of preparing the Distribution Date Statement and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

The Trustee shall, and the Master Servicer may, but is not required to, make available on or prior to the Distribution Date in each month to the general public (i) the Distribution Date Statement via their respective Internet Websites, (ii) as a convenience for interested parties, the Prospectus Supplement, the Prospectus and this Agreement on the Trustee’s and/or the Master Servicer’s respective Internet Websites and (iii) any other items at the request of the Depositor via the Trustee’s and/or the Master Servicer’s respective Internet Websites. In addition, the Trustee shall make available each month, on each Distribution Date, the Unrestricted Servicer Reports, the CMSA Loan Periodic Update File, the CMSA Loan Setup File, the CMSA Bond File, and the CMSA Collateral Summary File to the general public on its Internet Website. The Trustee shall make available each month, on each Distribution Date, (i) the Restricted Servicer Reports, (ii) the CMSA Property File and the CMSA Financial File and (iii) the CMSA Reconciliation of Funds Report to any Privileged Person and to any other Person upon the direction of the Depositor.

Absent manifest error, none of the Master Servicer or the Special Servicer shall be responsible for the accuracy or completeness of any information supplied to it by a Mortgagor or third party that is included in any reports, statements, materials or information prepared or provided by the Master Servicer or the Special Servicer, as applicable. The Trustee shall not be responsible absent manifest error for the accuracy or completeness of any information supplied to it for delivery pursuant to this Section 4.02(a). Neither the Trustee, the Master Servicer nor the Special Servicer shall have any obligation to verify the accuracy or completeness of any information provided by a Mortgagor or third party.

Within a reasonable period of time after the end of each calendar year, the Trustee shall, upon request, send to each Person who at any time during the calendar year was a Certificateholder of record, a report summarizing on an annual basis (if appropriate) the items provided to Certificateholders pursuant to clauses (i), (ii), (iii) and (iv) of the description of “Distribution Date Statement” above and such other information as may be required to enable such Certificateholders to prepare their federal income tax returns. Such information shall include the amount of original issue discount accrued on each Class of Certificates and information regarding the expenses of the Trust Fund. Such requirement shall be deemed to be satisfied to the extent such information is provided pursuant to applicable requirements of the Code from time to time in force.

If any Certificate Owner does not receive through the Depository or any of its Depository Participants any of the statements, reports and/or other written information described above in this Section 4.02(a) that it would otherwise be entitled to receive if it were the Holder of a Definitive Certificate evidencing its ownership interest in the related Class of Book Entry Certificates, then the Trustee shall mail or cause the mailing of or, provide electronically or

 

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cause the provision electronically of, such statements, reports and/or other written information to such Certificate Owner upon the request of such Certificate Owner made in writing to the Corporate Trust Office (accompanied by current verification of such Certificate Owner’s ownership interest). Such portion of such information as may be agreed upon by the Depositor and the Trustee shall be furnished to any such Person via overnight courier delivery or telecopy from the Trustee; provided that the cost of such overnight courier delivery or telecopy shall be an expense of the party requesting such information.

The Trustee shall only be obligated to deliver the statements, reports and information contemplated by this Section 4.02(a) to the extent it receives the necessary underlying information from the Special Servicer or Master Servicer, as applicable, and shall not be liable for any failure to deliver any thereof on the prescribed due dates, to the extent caused by failure to receive timely such underlying information. Nothing herein shall obligate the Trustee or the Master Servicer to violate any applicable law prohibiting disclosure of information with respect to any Mortgagor and the failure of the Trustee, Master Servicer or the Special Servicer to disseminate information for such reason shall not be a breach hereof.

(b)       No later than 3:00 p.m. New York City time on the second Business Day preceding each Distribution Date the Master Servicer shall furnish to the Trustee, the Depositor, the Special Servicer and the Underwriters, by electronic transmission (or in such other form to which the Trustee or the Depositor, as the case may be, and the Master Servicer may agree), with a hard copy (other than in the case of the Trustee) of such transmitted information to follow promptly, an accurate and complete CMSA Loan Periodic Update File providing the required information for the Mortgage Loans as of such Determination Date. The Depositor shall provide the information necessary for the CMSA Loan Setup File on the Closing Date. Not later than 2:00 p.m. New York City time on the second Business Day preceding each Distribution Date, the Master Servicer shall deliver to the Trustee notice of the Discount Rate applicable to each Principal Prepayment received in the related Collection Period.

In the performance of its obligations set forth in Section 4.05, and its other duties hereunder, the Trustee (including in its capacity as Paying Agent) may conclusively rely on reports provided to it by the Master Servicer, and the Trustee shall not be responsible to recompute, recalculate or verify the information provided to it by the Master Servicer. In the case of information to be furnished by the Master Servicer to the Trustee pursuant to this Section 4.02(b), insofar as such information is solely within the control of the Special Servicer, the Master Servicer shall have no obligation to provide such information until it has received such information from such party, shall not be in default hereunder due to a delay in providing the CMSA Loan Periodic Update File caused by the such party’s failure to timely provide any report required under this Agreement and may, absent manifest error, conclusively rely on the reports to be provided by the such party.

 

Section 4.03

P&I Advances.

(a)       No later than 2:00 p.m., New York City time, on each P&I Advance Date, the Master Servicer shall (i) apply amounts in the Certificate Account received after the end of the related Collection Period or otherwise held for future

 

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distribution to Certificateholders in subsequent months in discharge of its obligation to make P&I Advances or (ii) subject to Section 4.03(c) below, remit from its own funds to the Paying Agent for deposit into the Distribution Account, an amount equal to the aggregate amount of P&I Advances, if any, to be made in respect of the related Distribution Date. The Master Servicer may also make P&I Advances in the form of any combination of clauses (i) and (ii) above aggregating the total amount of P&I Advances to be made. Any amounts held in the Certificate Account for future distribution and so used to make P&I Advances shall be appropriately reflected in the Master Servicer’s records and replaced by the Master Servicer by deposit in the Certificate Account on or before the next succeeding Determination Date (to the extent not previously replaced through the deposit of Late Collections of the delinquent principal and interest in respect of which such P&I Advances were made). If, as of 3:00 p.m., New York City time, on any P&I Advance Date, the Master Servicer shall not have made any P&I Advance required to be made on such date pursuant to this Section 4.03(a) (and shall not have delivered to the Trustee the requisite Officer’s Certificate and documentation related to a determination of nonrecoverability of a P&I Advance), then the Trustee shall provide notice of such failure to a Servicing Officer of the Master Servicer by facsimile transmission sent to telecopy (704) 715-0036 (or such alternative number provided by the Master Servicer to the Trustee in writing) and by telephone at (704) 593-7836 or (704) 593-7867 (or such alternative number provided by the Master Servicer to the Trustee in writing) as soon as possible, but in any event before 4:00 p.m., New York City time, on such P&I Advance Date. If the Trustee does not receive the full amount of such P&I Advances by 10:00 a.m., New York City time, on the related Distribution Date, then, subject to Section 4.03(c), (i) the Trustee shall, no later than 11:00 a.m., New York City time, on such related Distribution Date make the portion of such P&I Advances that was required to be, but was not, made by the Master Servicer on such P&I Advance Date, and (ii) the provisions of Sections 7.01 and 7.02 shall apply.

(b)       The aggregate amount of P&I Advances to be made by the Master Servicer or the Trustee in respect of any Distribution Date shall, subject to Section 4.03(c) and Section 4.03(e) below, equal the aggregate of all Periodic Payments (other than Balloon Payments) and any Assumed Scheduled Payments, net of related Servicing Fees due or deemed due, as the case may be, in respect of the Mortgage Loans (including, without limitation, Balloon Mortgage Loans delinquent as to their respective Balloon Payments) and any REO Loans on their respective Due Dates during (or deemed to be during) the related Collection Period in each case, to the extent such amount was not paid by or on behalf of the related Mortgagor or otherwise collected (including as net income from REO Properties) as of the close of business on the last day of related Collection Period; provided that (x) if the Periodic Payment on any Mortgage Loan has been reduced in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20, or if the final maturity on any Mortgage Loan shall be extended in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment granted or agreed to by the Special Servicer pursuant to Section 3.20, and the Periodic Payment due and owing during the extension period is less than the related Assumed Scheduled Payment, then the Master Servicer or the Trustee shall, as to such Mortgage Loan only, advance only the amount of

 

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the Periodic Payment due and owing after taking into account such reduction (net of related Servicing Fees) in the event of subsequent delinquencies thereon; and (y) if it is determined that an Appraisal Reduction Amount exists with respect to any Required Appraisal Mortgage Loan, then, with respect to the Distribution Date immediately following the date of such determination and with respect to each subsequent Distribution Date for so long as such Appraisal Reduction Amount exists with respect to such Required Appraisal Mortgage Loan, the Master Servicer or the Trustee will be required in the event of subsequent delinquencies to advance in respect of such Mortgage Loan only an amount equal to the sum of (A) the amount of the interest portion of the P&I Advance that would otherwise be required without regard to this clause (y), minus the product of (1) such Appraisal Reduction Amount and (2) the per annum Pass-Through Rate (i.e., for any month, one-twelfth of the Pass-Through Rate) applicable to the Class of Certificates to which such Appraisal Reduction Amount is allocated pursuant to Section 4.04(d) and (B) the amount of the principal portion of the P&I Advance that would otherwise be required without regard to this clause (y).

(c)       Notwithstanding anything herein to the contrary, no P&I Advance shall be required to be made hereunder if such P&I Advance would, if made, constitute a Nonrecoverable P&I Advance. The determination by the Master Servicer or the Special Servicer that the Master Servicer has made a Nonrecoverable P&I Advance or that any proposed P&I Advance, if made, would constitute a Nonrecoverable P&I Advance, shall be evidenced by an Officer’s Certificate delivered to the Trustee and the Depositor on or before the related P&I Advance Date, setting forth the basis for such determination, together with any other information, including Appraisals (the cost of which may be paid out of the Certificate Account pursuant to Section 3.05(a)) (or, if no such Appraisal has been performed pursuant to this Section 4.03(c), a copy of an Appraisal of the related Mortgaged Property performed within the twelve months preceding such determination), related Mortgagor operating statements and financial statements, budgets and rent rolls of the related Mortgaged Properties, engineers’ reports, environmental surveys and any similar reports that the Master Servicer may have obtained consistent with the Servicing Standard and at the expense of the Trust Fund, that support such determination by the Master Servicer or the Special Servicer. As soon as reasonably practical after making such determination, the Special Servicer shall report to the Master Servicer the Special Servicer’s determination as to whether each P&I Advance made with respect to any previous Distribution Date or required to be made with respect to such Distribution Date with respect to any Specially Serviced Mortgage Loan or REO Loan is a Nonrecoverable P&I Advance. The Master Servicer shall be entitled to conclusively rely on such determination by the Special Servicer. The Trustee shall be entitled to rely, conclusively, on any determination by the Master Servicer or the Special Servicer that a P&I Advance, if made, would be a Nonrecoverable Advance (and with respect to a P&I Advance, the Trustee shall rely on the Master Servicer’s determination that the P&I Advance would be a Nonrecoverable Advance if the Trustee determines that it does not have sufficient time to make such determination); p