HOME
CONTENT
After the
occurrence and during the continuance of a Control Event but prior to the
occurrence of a Consultation Termination Event, each of the Directing
Certificateholder and the senior trust advisor will be entitled to consult
with the special servicer and propose alternative courses of action and
provide other feedback in respect of any Asset Status Report. After the
occurrence of a Consultation Termination Event, the Directing
Certificateholder will have no right to consult with the special servicer
with respect to the Asset Status Reports and the special servicer will only
be obligated to consult with the senior trust advisor with respect to any
Asset Status Reports as described above. The special servicer may choose to
revise the Asset Status Reports as it deems reasonably necessary in
accordance with the Servicing Standard to take into account any input and/or
recommendations of the senior trust advisor or the Directing
Certificateholder during the applicable periods described above, but is
under no obligation to follow any particular recommendation of the senior
trust advisor or the Directing Certificateholder.
|
The Directing Certificateholder
|
Except as
described in this free writing prospectus regarding the mortgage loans,
prior to the occurrence and continuance of any Control Event, the Directing
Certificateholder will be entitled to advise (1) the special servicer, with
respect to all Specially Serviced Mortgage Loans, (2) the special servicer,
with respect to non-Specially Serviced Mortgage Loans, as to all matters for
which the master servicer must obtain the consent or deemed consent of the
special servicer, and (3) the special servicer, with respect to all mortgage
loans for which an extension of maturity is being considered by the special
servicer or by the master servicer, subject to consent or deemed consent of
the special servicer.
Except as
otherwise described in the succeeding paragraphs below, both (a) the master
servicer will not be permitted to take any of the following actions (each, a
“Major
Decision”) unless it has obtained the consent of the special servicer
and (b) with respect to any mortgage loan (other than the Non-Serviced
Mortgage Loan) and any Serviced Whole Loan, prior to the occurrence and
continuance of a Control Event, the special servicer will not be permitted
to consent to the master servicer’s taking any of the following actions, nor
will the special servicer itself be permitted to take any of the following
actions, as to which the Directing Certificateholder has objected in writing
within ten business days (or thirty (30) days with respect to clause (x)
below) after receipt of the written recommendation and analysis (provided that
if such written objection has not been received by the master servicer or
special servicer, as applicable, within such ten-business-day (or 30 day)
period, the Directing Certificateholder will be deemed to have approved such
action):
(i) any proposed or actual foreclosure upon or comparable conversion
(which may include acquisitions of an REO Property) of the ownership of
properties securing such of the mortgage loans as come into and continue in
default;
(ii) any modification, consent to a modification or waiver of any
monetary term (other than late fees and default interest) or material
non-monetary term (including, without limitation, the timing of payments and
acceptance of discounted payoffs) of a mortgage loan or any extension of the
maturity date of such mortgage loan;
(iii) any sale of a Defaulted Mortgage Loan or REO Property (other than
in connection with the termination of the trust as described under “Description
of the Certificates—Termination; Retirement of Certificates” in this
free writing prospectus) for less than the applicable Mortgage Loan
Repurchase Price;
(iv) any determination to bring an REO Property into compliance with
applicable environmental laws or to otherwise address hazardous material
located at an REO Property;
(v) any release of collateral or any acceptance of substitute or
additional collateral for a mortgage loan or any consent to either of the
foregoing, other than if required pursuant to the specific terms of the
related mortgage loan and for which there is no lender discretion;
(vi) any waiver of a “due-on-sale” or “due-on-encumbrance” clause with
respect to a mortgage loan or any consent to such a waiver or consent to a
transfer of the Mortgaged Property or interests in the borrower or consent
to the incurrence of additional debt, other than any such transfer or
incurrence of debt as may be effected without the consent of the lender
under the related loan agreement;
(vii) any property management company changes (with respect to a
mortgage loan with a principal balance greater than $2,500,000) or franchise
changes (with respect to a mortgage loan for which the lender is required to
consent or approve under the mortgage loan documents);
(viii) releases of any escrow accounts, reserve accounts or letters of
credit held as performance escrows or reserves, other than those required
pursuant to the specific terms of the related mortgage loan and for which
there is no lender discretion;
(ix) any acceptance of an assumption agreement releasing a borrower from
liability under a mortgage loan other than pursuant to the specific terms of
such mortgage loan and for which there is no lender discretion;
(x) any determination of an Acceptable Insurance Default;
(xi) any modification, consent to a modification or waiver of any
material term of any intercreditor or similar agreement related to a
mortgage loan, or any action to enforce rights with respect thereto, in each
case, in a manner that materially and adversely affects the Controlling
Class Certificateholders;
(xii)
any exercise of a material remedy with respect to a mortgage loan following
a default or event of default of such mortgage loan; and
(xiii) any consent to incurrence of additional debt by a borrower or
mezzanine debt by a direct or indirect parent of a borrower, to the extent
the mortgagee’s approval is required under the related mortgage loan
documents;
provided, however, that in the event that the special servicer or the
master servicer (in the event the master servicer is otherwise authorized
by the Pooling and Servicing Agreement to take such action), as applicable,
determines that immediate action is necessary to protect the interests of
the Certificateholders (and, with respect to a Serviced Whole Loan, the
interest of the Certificateholders and the holders of the related Serviced
Pari Passu Companion Loan), as a collective whole, the master servicer or
the special servicer, as the case may be, may take any such action without
waiting for the Directing Certificateholder’s response. The special servicer
is not required to obtain the consent of the Directing Certificateholder for
any of the foregoing actions upon the occurrence and during the continuance
of a Control Event; provided, however,
that after the occurrence and during the continuance of a Control Event, but
prior to the occurrence of a Consultation Termination Event, the special
servicer will be required to consult with the Directing Certificateholder in
connection with any Major Decision (and such other matters that are subject
to consultation rights of the Directing Certificateholder pursuant to the
Pooling and Servicing Agreement) and to consider alternative actions
recommended by the Directing Certificateholder in respect thereof. In the
event the special servicer receives no response from the Directing
Certificateholder within 10 days following its written request for input on
any required consultation, the special servicer will not be obligated to
consult with the Directing Certificateholder on the specific matter; provided,
however, that the failure of the Directing Certificateholder to
respond will not relieve the special servicer from consulting with the
Directing Certificateholder on any future matters with respect to the
applicable mortgage loan or any other mortgage loan. In addition, after the
occurrence and during the continuance of a Control Event, the special
servicer will also be required to consult with the senior trust advisor in
connection with any Major Decision (and such other matters that are subject
to
consultation rights of the senior trust advisor pursuant to the Pooling and
Servicing Agreement) and to consider alternative actions recommended by the
senior trust advisor in respect thereof, provided that
such consultation is on a non-binding basis. In the event the special
servicer receives no response from the senior trust advisor within 10 days
following its written request for input on any required consultation and
delivery of all such additional information reasonably requested by the
senior trust advisor related to the subject matter of such consultation, the
special servicer will not be obligated to consult with the senior trust
advisor on the specific matter; provided,
however, that the failure of the senior trust advisor to respond will
not relieve the special servicer from consulting with the senior trust
advisor on any future matters with respect to the applicable mortgage loan
or any other mortgage loan.
In
addition, unless a Control Event has occurred and is continuing, the
Directing Certificateholder may direct the special servicer to take, or to
refrain from taking, other actions with respect to a mortgage loan, as the
Directing Certificateholder may reasonably deem advisable; provided that
the special servicer will not be required to take or refrain from taking any
action pursuant to instructions or objections from the Directing
Certificateholder that would cause it to violate applicable law, the related
mortgage loan documents, any related intercreditor agreement, the Pooling
and Servicing Agreement, including the Servicing Standard, or the REMIC
provisions of the Code, or expose the master servicer, the special servicer,
the certificate administrator, the senior trust advisor, the trust fund or
the trustee to liability, or materially expand the scope of responsibilities
of the master servicer or the special servicer, as applicable, under the
Pooling and Servicing Agreement or cause the master servicer or the special
servicer, as applicable, to act, or fail to act, in a manner which in the
reasonable judgment of the master servicer or the special servicer, as
applicable, is not in the best interests of the Certificateholders (and,
with respect to a Serviced Whole Loan, subject to the rights of the holders
of the related Companion Loan as described under “Description
of the Mortgage Pool—The Meadows Mall Whole Loan”, “—The 589 Fifth Avenue
Whole Loan”, “—The
SanTan Village Whole Loan” and “—The
Southridge Mall Whole Loan” in this free writing prospectus).
With
respect to the Non-Serviced Whole Loan, the Directing Certificateholder will
not be entitled to exercise the above-described rights, but such rights, or
rights substantially similar to those rights, will be exercisable by the
related Non-Serviced Mortgage Loan Controlling Holder; provided that
nothing precludes the Directing Certificateholder from consulting with the
related special servicer, regardless of whether the related Non-Serviced
Mortgage Loan Controlling Holder is entitled to exercise such rights. See “Servicing
of the Mortgage Loans—Servicing of the 589 Fifth Avenue Mortgage Loan”
in this free writing prospectus.
The “Directing
Certificateholder” will be the Controlling Class Certificateholder
(or a representative thereof) selected by more than 50% of the Controlling
Class Certificateholders, by Certificate Balance, as determined by the
certificate registrar from time to time; provided, however,
that (1) absent that selection, or (2) until a Directing Certificateholder
is so selected or (3) upon receipt of a notice from a majority of the
Controlling Class Certificateholders, by Certificate Balance, that a
Directing Certificateholder is no longer designated, the Controlling
Class Certificateholder that owns the largest aggregate Certificate Balance
of the Controlling Class (or a representative thereof) will be the Directing
Certificateholder.
Provided
there has been no change in the Controlling Class, the certificate
administrator, and the other parties to the Pooling and Servicing Agreement,
will be entitled to assume that the identity of the Directing
Certificateholder has not changed absent notice of a replacement of the
Directing Certificateholder from a party holding the requisite interest in
the Controlling Class, or the resignation of the then-current Directing
Certificateholder. After the occurrence and during the continuance of a
Control Event, the Directing Certificateholder will only retain its
consultation rights to the extent specifically provided for in the Pooling
and Servicing Agreement. In the event of a Control Event or a Consultation
Termination Event, in each case, resulting from the application of clause
(ii) of the applicable definition, as described in this free writing
prospectus, there will be no Directing Certificateholder and no party will
be entitled to exercise any of the rights of the Directing Certificateholder
described in this free writing prospectus until such time as such Control
Event or Consultation Termination Event has ended and a new Directing
Certificateholder is appointed. See “Description
of the Certificates—Appraisal Reductions”
in this
free writing prospectus. The initial Directing Certificateholder is expected
to be Saba Capital Management, L.P. (or its affiliate).
A “Controlling
Class Certificateholder” is each holder (or Certificate Owner, if
applicable) of a certificate of the Controlling Class as determined by the
certificate registrar from time to time, upon request by any party to the
Pooling and Servicing Agreement.
The “Controlling
Class” will be as of any time of determination the most subordinate
class of Control Eligible Certificates then outstanding that has an
aggregate Certificate Balance, as notionally reduced by any Appraisal
Reductions allocable to such class, at least equal to 25% of the initial
Certificate Balance of that class. A “Consultation
Termination Event” will occur when (i) there is no class of Control
Eligible Certificates that has a then-outstanding Certificate Balance at
least equal to 25% of the initial Certificate Balance of that class, in each
case, without regard to the application of any Appraisal Reductions; or (ii)
a holder of the Class F Certificates is the majority Controlling Class
Certificateholder and has irrevocably waived its right, in writing, to
exercise any of the rights of the Controlling Class Certificateholder and
such rights have not been reinstated to a successor controlling class
certificateholder pursuant to the terms of the Pooling and Servicing
Agreement; provided that
no Consultation Termination Event resulting solely from the operation of
clause (ii) will be deemed to have existed or be in continuance with respect
to a successor holder of Class F Certificates that has not irrevocably
waived its right to exercise any of the rights of the Controlling Class
Certificateholder. Upon the occurrence of a Consultation Termination Event,
no class of certificates will act as the Controlling Class and the Directing
Certificateholder will have no rights under the Pooling and Servicing
Agreement to consent or consult with the master servicer or special
servicer. The Controlling Class as of the Closing Date will be the Class NR
certificates.
The “Non-Serviced
Mortgage Loan Controlling Holder”, with respect to the Non-Serviced
Whole Loan will be the “controlling class certificateholders” or similar
party under the related pooling and servicing agreement.
The
master servicer, the special servicer, the senior trust advisor, the
certificate administrator, the trustee or any Certificateholder may request
that the certificate registrar determine which class of certificates is the
then-current Controlling Class and the certificate registrar must thereafter
provide such information to the requesting party. The depositor, the
trustee, the certificate administrator, the master servicer, the special
servicer, the senior trust advisor and, prior to the occurrence of a
Consultation Termination Event, the Directing Certificateholder, may request
that the certificate registrar provide, and the certificate registrar must
so provide, a list of the holders (or Certificate Owners, if applicable) of
the Controlling Class. The trustee, the certificate administrator, the
master servicer, the special servicer and the senior trust advisor may each
rely on any such list so provided.
In the
event that no Directing Certificateholder has been appointed or identified
to the master servicer or the special servicer, as applicable, and the
master servicer or special servicer, as applicable, has attempted to obtain
such information from the certificate administrator and no such entity has
been identified to the master servicer or the special servicer, as
applicable, then until such time as the new Directing Certificateholder is
identified, the master servicer or the special servicer, as applicable,
shall have no duty to consult with, provide notice to, or seek the approval
or consent of any such Directing Certificateholder as the case may be.
Notwithstanding anything to the contrary contained in this free writing
prospectus, at any time that the Controlling Class Certificateholder is the
holder of a majority of the Class F Certificates and the Class F
Certificates are the Controlling Class, it may waive its right (a) to
appoint the Directing Certificateholder or (b) to exercise any of the
Directing Certificateholder’s rights set forth in the Pooling and Servicing
Agreement by irrevocable written notice delivered to the depositor,
certificate administrator, master servicer, special servicer and senior
trust advisor. During such time, the special servicer will be required to
consult with only the senior trust advisor in connection with asset status
reports and material special servicing actions to the extent set forth in
the Pooling and Servicing Agreement, and no Controlling Class
Certificateholder will be recognized or have any right to replace the
special servicer or approve or be consulted with respect to asset status
reports or material special servicer actions. Any such waiver will remain
effective until such time as the Controlling Class Certificateholder sells
or transfers all or a portion
of its
interest in the Class F Certificates to an unaffiliated third party if such
unaffiliated third party then holds the majority of the Controlling Class
after giving effect to such transfer. Following any such sale of a Class F
Certificate or transfer, the successor Class F Certificateholder that is the
Controlling Class Certificateholder will again have the rights of the
Controlling Class Certificateholder without regard to any prior waiver by
the predecessor Class F Certificateholder that is the Controlling Class
Certificateholder. The successor Class F Certificateholder that is the
Controlling Class Certificateholder will also have the right to irrevocably
waive its right to appoint the Directing Certificateholder and to exercise
any of the rights of the Controlling Class Certificateholder. In the event
of any transfer of the Class F Certificates by a Controlling Class
Certificateholder that had irrevocably waived its rights as described in
this paragraph, the successor Controlling Class Certificateholder that
purchased such Class F Certificates, even if it does not waive its rights as
described in the preceding sentence, will not have any consent rights with
respect to any mortgage loan that became a Specially Serviced Mortgage Loan
prior to such successor Class F Certificateholder that is the Controlling
Class Certificateholder’s purchase of the Class F Certificates and had not
become a Corrected Mortgage Loan prior to such purchase until such mortgage
loan becomes a Corrected Mortgage Loan.
The “Control
Eligible Certificates” will be any of the Class F, Class G and
Class NR certificates.
A “Control
Event” will occur when (i) the Class F certificates have a
Certificate Balance (taking into account the application of any Appraisal
Reductions to notionally reduce the Certificate Balance of such class) of
less than 25% of the initial Certificate Balance of that class or (ii) a
holder of the Class F Certificates is the majority Controlling Class
Certificateholder and has irrevocably waived its right, in writing, to
exercise any of the rights of the Controlling Class Certificateholder and
such rights have not been reinstated to a successor controlling class
certificateholder.
After the
occurrence of a Consultation Termination Event, the Directing
Certificateholder will have no consultation rights under the Pooling and
Servicing Agreement and will have no right to receive any notices, reports
or information (other than notices, reports or information required to be
delivered to all Certificateholders) or any other rights as Directing
Certificateholder. However, the Directing Certificateholder will maintain
the right to exercise its Voting Rights for the same purposes as any other
Certificateholder under the Pooling and Servicing Agreement.
Neither
the master servicer nor the special servicer will be required to take or to
refrain from taking any action pursuant to instructions from the Directing
Certificateholder, or because of any failure to approve an action by any
such party, or because of an objection by any such party that would cause
either the master servicer or the special servicer to violate applicable
law, the related loan documents, the Pooling and Servicing Agreement
(including the Servicing Standard), any related intercreditor agreements or
the REMIC provisions of the Code.
The
master servicer and the special servicer may resign under the Pooling and
Servicing Agreement at any time if continuing to perform their respective
servicing duties would cause it to be in violation of any applicable law.
The master servicer or the special servicer may generally resign at any time
so long as it provides a replacement meeting the requirements in the Pooling
and Servicing Agreement and that is otherwise acceptable to the Rating
Agencies. Except as limited by certain conditions described under “Transaction
Parties—The Master Servicer and the Special Servicer” in this free
writing prospectus, the special servicer may generally be replaced, prior to
the occurrence and continuance of a Control Event, at any time by the
Directing Certificateholder so long as, among other things, the Directing
Certificateholder provides a replacement special servicer that is acceptable
to the Rating Agencies. After the occurrence and during the continuance of a
Control Event, the special servicer may be replaced with a new special
servicer generally (x) upon the written request of holders of Regular
Certificates (other than the Class X Certificates) evidencing not less than
25% of the Voting Rights (taking into account the application of any
Appraisal Reductions to notionally reduce the respective Certificate
Balances) of the Regular Certificates (other than the Class X Certificates)
and (y) the written direction of holders of Principal Balance Certificates
evidencing at least 75% of a Certificateholder Quorum of the Principal
Balance Certificates. See “Transaction
Parties—Replacement of the Special Servicer” in this free writing
prospectus.
Additionally, either of the master servicer or the special servicer, as the
case may be, may be replaced by the depositor, the trustee, or
Certificateholders representing at least 51% of Voting Rights in the event
that a Servicer Termination Event under the Pooling and Servicing Agreement
occurs with respect to such entity. In the event that either the master
servicer or the special servicer resigns or is replaced and no replacement
is otherwise provided for, the trustee is required to immediately take the
place of such resigning master servicer and the master servicer is required
to immediately take the place of such resigning special servicer unless the
trustee or the master servicer, as applicable, is prohibited by any
applicable law from serving in such capacity. The Certificateholders will
receive notification from the certificate administrator or the master
servicer, as applicable, in any case in which a master servicer or special
servicer resigns or is replaced. See “Servicing
of the Mortgage Loans—Servicer Termination Events” in this free
writing prospectus.
|
Limitation on Liability of Directing Certificateholder
|
The
Directing Certificateholder (and, with respect to the Non-Serviced Whole
Loan, the related Non-Serviced Mortgage Loan Controlling Holder) will not be
liable to the trust fund or the Certificateholders for any action taken, or
for refraining from the taking of any action for errors in judgment.
However, the Directing Certificateholder will not be protected against any
liability to the Controlling Class Certificateholders that would otherwise
be imposed by reason of willful misconduct, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations or
duties owed to the Controlling Class Certificateholders.
Each
Certificateholder acknowledges and agrees, by its acceptance of its
certificates, that the Directing Certificateholder (and, with respect to the
Non-Serviced Whole Loan, the related Non-Serviced Mortgage Loan Controlling
Holder):
(a) may have special relationships and interests that conflict with
those of holders of one or more classes of certificates;
(b) may act solely in the interests of the holders of the Controlling
Class (or, with respect to the Non-Serviced Whole Loan, the related
Non-Serviced Mortgage Loan Controlling Holder);
(c) does not have any liability or duties to the holders of any class
of certificates other than the Controlling Class (or, with respect to the
Non-Serviced Whole Loan, the related Non-Serviced Mortgage Loan Controlling
Holder);
(d) may take actions that favor the interests of the holders of the
Controlling Class (or, with respect to the Non-Serviced Whole Loan, the
related Non-Serviced Mortgage Loan Controlling Holder) over the interests of
the holders of one or more other classes of certificates; and
(e) will have no liability whatsoever (other than to a Controlling
Class Certificateholder) for having so acted as set forth in (a) – (d)
above, and no Certificateholder may take any action whatsoever against the
Directing Certificateholder (or the related Non-Serviced Mortgage Loan
Controlling Holder) or any director, officer, employee, agent or principal
thereof for having so acted.
The
taking of, or refraining from taking, any action by the master servicer or
the special servicer in accordance with the direction of or approval of the
Directing Certificateholder, which does not violate any law or the accepted
servicing practices or the provisions of the Pooling and Servicing Agreement
or any intercreditor agreements, will not result in any liability on the
part of the master servicer or the special servicer.
Generally, the holders of any Companion Loan and its designees (e.g. the
Non-Serviced Mortgage Loan Controlling Holder) will have limitations on
liability with respect to actions taken in connection with the related
mortgage loan similar to the limitations of the Directing Certificateholder
described above.
General Obligations. After the occurrence and during the continuance
of a Control Event, the senior trust advisor will generally review the
special servicer’s operational practices in respect of Specially Serviced
Mortgage Loans to formulate an opinion as to whether or not those
operational practices generally satisfy the Servicing Standard with respect
to the resolution and/or liquidation of the Specially Serviced Mortgage
Loans. In addition, after the occurrence and during the continuance of a
Control Event, the senior trust advisor will consult on a non-binding basis
with the special servicer with regard to certain matters with respect to its
servicing of the Specially Serviced Mortgage Loans to the extent set forth
in the Pooling and Servicing Agreement and described in this free writing
prospectus.
Notwithstanding the foregoing, the senior trust advisor will have no
obligations or consultation rights under the Pooling and Servicing Agreement
for this transaction with respect to the 589 Fifth Avenue Whole Loan or any
related REO Property. However, Pentalpha Surveillance LLC is also the senior
trust advisor under the 2013-C13 pooling and servicing agreement and, in
such capacity, will have certain consultation rights with respect to the 589
Fifth Avenue whole loan that are substantially similar to those of the
senior trust advisor under the pooling and servicing agreement for this
transaction. See “Description
of the Mortgage Pool—The 589 Fifth Avenue Whole Loan” in this free
writing prospectus.
The
senior trust advisor will act solely as a contracting party to the extent
set forth in the Pooling and Servicing Agreement and described in this free
writing prospectus, and will have no fiduciary duty to any party. The senior
trust advisor’s duties will be limited to its specific duties under the
Pooling and Servicing Agreement, and the senior trust advisor will have no
duty or liability to any particular class of certificates or any
Certificateholder. The senior trust advisor is not the special servicer or a
sub-servicer and will not be charged with changing the outcome on any
particular Specially Serviced Mortgage Loan. By purchasing a Certificate,
potential investors acknowledge and agree that there could be multiple
strategies to resolve any Specially Serviced Mortgage Loan and that the goal
of the senior trust advisor’s participation is to provide additional input
relating to the special servicer’s compliance with the Servicing Standard in
making its determinations as to which strategy to execute. The senior trust
advisor’s review of information (other than a Final Asset Status Report and
information accompanying such report) or interaction with the special
servicer related to any specific Specially Serviced Mortgage Loan is only to
provide background information to support the senior trust advisor’s duties
following a servicing transfer, if needed, or to allow more meaningful
interaction with the special servicer. Potential investors should note that
the senior trust advisor is not an “advisor” for any purpose other than as
specifically set forth in the Pooling and Servicing Agreement and is not an
advisor to any person, including without limitation any Certificateholder.
For the avoidance of doubt, the senior trust advisor is not an “investment
adviser” within the meaning of the Investment Advisers Act of 1940, as
amended. See “Risk
Factors—Your Lack of Control Over the Trust Can Adversely Impact Your
Investment” in this free writing prospectus.
In order
to maintain the senior trust advisor’s familiarity with the mortgage loans,
the senior trust advisor is required to promptly review all information
available to Privileged Persons on the certificate administrator’s website
related to Specially Serviced Mortgage Loans and certain information
available to Privileged Persons on the certificate administrator’s website
related to mortgage loans on the CREFC® watch
list report prepared monthly by the master servicer and each Final Asset
Status Report. The special servicer will be required to deliver to the
senior trust advisor each Final Asset Status Report. In addition, prior to
the occurrence and continuance of a Control Event, the special servicer will
forward any Appraisal Reduction and net present value calculations used in
the special servicer’s determination of what course of action to take in
connection with the workout or liquidation of a Specially Serviced Mortgage
Loan to the senior trust advisor after they have been finalized and the
senior trust advisor will review such calculations but will not opine on or
take any affirmative action with respect to such Appraisal Reduction
calculations and/or net present value calculations. Prior to the occurrence
and continuance of a Control Event, the senior trust advisor’s obligations
will be limited to the review described in this paragraph and generally will
not involve an assessment of specific actions of the special servicer and,
in any event, will be subject to limitations set forth in the Pooling and
Servicing Agreement and described in this free writing prospectus.
Prior to
the occurrence and continuance of a Control Event, the senior trust advisor
will have no specific involvement with respect to servicing transfers,
collateral substitutions, assignments, insurance policies, borrower
substitutions, lease changes and other similar actions that the special
servicer may perform under the Pooling and Servicing Agreement.
At all
times, the senior trust advisor will be obligated to keep confidential any
Privileged Information received from the special servicer or Directing
Certificateholder in connection with the Directing Certificateholder’s
exercise of any rights under the Pooling and Servicing Agreement (including,
without limitation, in connection with any Asset Status Report) or otherwise
in connection with the transaction, except under the circumstances described
below. As used in this free writing prospectus, “Privileged
Information” means (i) any correspondence between the Directing
Certificateholder and the special servicer related to any Specially Serviced
Mortgage Loan or the exercise of the Directing Certificateholder’s consent
or consultation rights under the Pooling and Servicing Agreement, (ii) any
strategically sensitive information that the special servicer has reasonably
determined could compromise the trust fund’s position in any ongoing or
future negotiations with the related borrower or other interested party and
(iii) information subject to attorney-client privilege.
The
senior trust advisor will not disclose any Privileged Information to any
person (including any Certificateholders which are not then holders of
Control Eligible Certificates), other than to the other parties to the
Pooling and Servicing Agreement, to the extent expressly required by the
Pooling and Servicing Agreement (which parties, in turn, will not without
the prior written consent of the special servicer and the Directing
Certificateholder, disclose such information to any other person), except to
the extent that (a) such Privileged Information becomes generally available
and known to the public other than as a result of disclosure directly or
indirectly by such parties, (b) it is reasonable and necessary for such
parties to do so in working with legal counsel, auditors, taxing authorities
or other governmental agencies, (c) such Privileged Information was already
known to such party and not otherwise subject to a confidentiality
obligation or (d) such disclosure is required by applicable law, as
evidenced by an opinion of counsel (which will be an expense of the trust)
delivered to the master servicer, the senior trust advisor, the certificate
administrator, the special servicer, the Directing Certificateholder and the
trustee. Notwithstanding the foregoing, the senior trust advisor will be
permitted to share Privileged Information with its affiliates and any
subcontractors of the senior trust advisor that agree in writing to be bound
by the same confidentiality provisions applicable to the senior trust
advisor.
The
senior trust advisor, its affiliates and any of its members, managers,
directors, officers, employees or agents will be entitled to indemnification
by the trust fund against any loss, liability or expense incurred in
connection with any legal or administrative action or claim that relates to
the Pooling and Servicing Agreement or the certificates; provided that
such indemnification will not extend to any loss, liability or expense
incurred by reason of the senior trust advisor’s bad faith, willful
misconduct or negligence in the performance of its obligations or duties
under the Pooling and Servicing Agreement.
The
Senior Trust Advisor will have no obligations with respect to the
Non-Serviced Mortgage Loan.
Annual Report. After the occurrence and during the continuance of a
Control Event, based on the senior trust advisor’s review of any Assessment
of Compliance, Attestation Report, Asset Status Report and other information
(other than any communications between the Directing Certificateholder and
the special servicer that would be Privileged Information) delivered to the
senior trust advisor by the special servicer, including each Asset Status
Report delivered during the prior calendar year, the senior trust advisor
will (if any Mortgage Loans were Specially Serviced Mortgage Loans in the
prior calendar year) prepare an annual report to be provided to the 17g-5
Information Provider (and made available through the 17g-5 Information
Provider’s website) and the certificate administrator for the benefit of the
Certificateholders (and made available through the certificate
administrator’s website) within 120 days of the end of the prior calendar
year for which a Control Event was continuing as of December 31 and setting
forth its assessment of the special servicer’s performance of its duties
under the Pooling and Servicing Agreement on a platform-level basis with
respect to the resolution and liquidation of Specially Serviced Mortgage
Loans.
The
special servicer must be given an opportunity to review any annual report
produced by the senior trust advisor at least 5 business days prior to its
delivery to the certificate administrator and the 17g-5 Information
Provider, provided that
the senior trust advisor will have no obligation to adopt any comments to
such annual report that are provided by the special servicer.
A form of
annual report is attached to this free writing prospectus as Annex C (which
form may, subject to the Pooling and Servicing Agreement, be modified or
supplemented from time to time to cure any ambiguity or error or to
incorporate additional information). In each annual report, the senior trust
advisor will identify any material deviations (i) from the Servicing
Standard and (ii) from the special servicer’s obligations under the Pooling
and Servicing Agreement with respect to the resolution or liquidation of
Specially Serviced Mortgage Loans or REO Properties (other than with respect
to the Non-Serviced Mortgage Loan) based on the limited review required in
the Pooling and Servicing Agreement. Each annual report will be required to
comply with the confidentiality requirements, subject to certain exceptions,
each as described in this free writing prospectus and as provided in the
Pooling and Servicing Agreement regarding Privileged Information.
Consultation Duties of the Senior Trust Advisor After a Control Event
After the
occurrence and during the continuance of a Control Event, the special
servicer will be required to promptly deliver each Asset Status Report
prepared in connection with the workout or liquidation of a Specially
Serviced Mortgage Loan to the senior trust advisor. The senior trust advisor
will be required to provide comments to the special servicer in respect of
the Asset Status Reports, if any, within 10 business days of receipt of such
Asset Status Report or such additional information reasonably requested by
the senior trust advisor related thereto, and propose possible alternative
courses of action to the extent it determines such alternatives to be in the
best interest of the Certificateholders (including any Certificateholders
that are holders of the Control Eligible Certificates), as a collective
whole.
After the
occurrence and during the continuance of a Control Event, the special
servicer will be obligated to consider such alternative courses of action
and any other feedback provided by the senior trust advisor (and, during the
continuance of such Control Event but prior to the occurrence of a
Consultation Termination Event, the Directing Certificateholder) in
connection with the special servicer’s preparation of any Asset Status
Report. The special servicer will revise the Asset Status Reports as it
deems necessary to take into account any input and/or comments from the
senior trust advisor (and, during the continuance of such Control Event but
prior to the occurrence of a Consultation Termination Event, the Directing
Certificateholder), to the extent the special servicer determines that the
senior trust advisor’s and/or Directing Certificateholder’s input and/or
recommendations are consistent with the Servicing Standard and in the best
interest of the Certificateholders (or, with respect to a Serviced Whole
Loan, the best interest of the Certificateholders and the holders of the
related Companion Loan, as a collective whole), taking into account the
interests of all of the Certificateholders as a collective whole. See “Servicing
of the Mortgage Loans—General” in this free writing prospectus.
The
special servicer will not be required to take or to refrain from taking any
action because of an objection or comment by the senior trust advisor or a
recommendation of the senior trust advisor.
After the
occurrence and during the continuance of a Control Event, the special
servicer will forward any Appraisal Reduction or net present value
calculations to the senior trust advisor and the senior trust advisor is
required to promptly recalculate and verify the accuracy of the mathematical
calculations and the corresponding application of the non-discretionary
portion of the applicable formulas required to be utilized in connection
with any Appraisal Reduction or net present value calculations used in the
special servicer’s determination of what course of action to take in
connection with the workout or liquidation of a Specially Serviced Mortgage
Loan prior to utilization by the special servicer. The special servicer will
be required to deliver the foregoing calculations together with information
and supporting materials (including such additional information reasonably
requested by the senior trust advisor to confirm the mathematical accuracy
of such calculations, but not including any Privileged Information) to the
senior trust advisor. The senior trust advisor will recalculate and verify
the accuracy of those calculations and, in the event the senior trust
advisor does not agree with the mathematical calculations of the Appraisal
Reduction (as
calculated by the special servicer) or net present value or the application
of the applicable non-discretionary portions of the formula required to be
utilized for such calculation, the senior trust advisor and special servicer
will consult with each other in order to resolve any inaccuracy in the
mathematical calculations or the application of the non-discretionary
portions of the related formula in arriving at those mathematical
calculations or any disagreement within five (5) business days of delivery
of such calculations. In the event the senior trust advisor and special
servicer are not able to resolve such matters, the senior trust advisor is
required to promptly notify the certificate administrator and the
certificate administrator will determine any necessary action to take in
accordance with the Pooling and Servicing Agreement.
The
ability to perform the duties of the senior trust advisor and the quality
and the depth of any annual report will be dependent upon the timely receipt
of information prepared or made available by others and the accuracy and the
completeness of such information. In addition, in no event will the senior
trust advisor have the power to compel any transaction party to take, or
refrain from taking, any action. It is possible that the lack of access to
Privileged Information may limit or prohibit the senior trust advisor from
performing its duties under the Pooling and Servicing Agreement, in which
case any annual report will describe any resulting limitations.
Replacement of the Special Servicer
After the
occurrence of a Consultation Termination Event, if the senior trust advisor
determines that the special servicer is not performing its duties as
required under the Pooling and Servicing Agreement or is otherwise not
acting in accordance with the Servicing Standard, the senior trust advisor
may recommend the replacement of the special servicer in the manner
described in “Transaction
Parties—Replacement of the Special Servicer” in this free writing
prospectus.
Termination and Resignation of the Senior Trust Advisor
After the
occurrence of a Consultation Termination Event, the senior trust advisor may
be removed upon (i) the written direction of holders of certificates
evidencing not less than 25% of the aggregate Certificate Balance of all
classes of Principal Balance Certificates (taking into account the
application of Appraisal Reductions to notionally reduce the Certificate
Balances of classes to which such Appraisal Reductions are allocable)
requesting a vote to replace the senior trust advisor with a replacement
senior trust advisor selected by such Certificateholders, (ii) payment by
such requesting holders to the certificate administrator of all reasonable
fees and expenses to be incurred by the certificate administrator in
connection with administering such vote and (iii) receipt by the trustee and
the certificate administrator of Rating Agency Confirmation from each Rating
Agency that the appointment of such replacement senior trust advisor will
not result in a downgrade of the Offered Certificates (which confirmations
will be obtained by the certificate administrator at the expense of such
holders). The certificate administrator will be required to promptly provide
written notice to all Certificateholders of such request by posting such
notice on its internet website, and by mail, and conduct the solicitation of
votes of all certificates in such regard. Upon the vote or written direction
of holders of at least 75% of the aggregate Certificate Balance of all
classes of Principal Balance Certificates (taking into account the
application of Appraisal Reductions to notionally reduce the Certificate
Balances of classes to which such Appraisal Reductions are allocable), the
trustee will immediately replace the senior trust advisor with the
replacement senior trust advisor.
In
addition, in the event that the senior trust advisor fails to duly observe
or perform in any material respect any of its duties, covenants or
obligations under the Pooling and Servicing Agreement, then the trustee may,
and upon the written direction of Certificateholders representing at least
51% of the Voting Rights (taking into account the application of any
Appraisal Reductions to notionally reduce the Certificate Balance of the
classes of certificates), the trustee will, terminate the senior trust
advisor for cause. In the event (i) of the insolvency of the senior trust
advisor, or (ii) the senior trust advisor acknowledges in writing its
inability to legally perform its duties under the Pooling and Servicing
Agreement, then the trustee will terminate the senior trust advisor for
cause. Upon the termination of the senior trust advisor, a replacement
senior trust advisor meeting the eligibility requirements set forth in the
Pooling and Servicing
Agreement
and described in this free writing prospectus will be selected by the
certificate administrator. The certificate administrator may rely on a
certification by the replacement senior trust advisor that it meets such
criteria. If the certificate administrator is unable to find a replacement
senior trust advisor within 30 days of the termination of the senior trust
advisor, the depositor will be permitted to find a replacement. Unless and
until a replacement senior trust advisor is appointed, no party may act as
the senior trust advisor. Any replacement senior trust advisor must (or all
of the personnel responsible for supervising the obligations of the senior
trust advisor must) meet either of the following criteria: (A) (i) be
regularly engaged in the business of analyzing and advising clients in
commercial mortgage-backed securities matters and have at least 5 years of
experience in collateral analysis and loss projections, and (ii) have at
least 5 years of experience in commercial real estate asset management and
experience in the workout and management of distressed commercial real
estate assets or (B) be an institution that is a special servicer, senior
trust advisor or operating advisor on a commercial mortgage-backed
securities transaction rated by S&P, Fitch Ratings, Inc., Moody’s,
Morningstar Credit Ratings, LLC, Kroll Bond Rating Agency, Inc., DBRS
Limited or DBRS, Inc. (including, in the case of the senior trust advisor,
this transaction) but has not been special servicer or senior trust advisor
on a transaction for which any Rating Agency has qualified, downgraded or
withdrawn its rating or ratings of, one or more classes of certificates for
such transaction citing servicing concerns with the special servicer or
senior trust advisor as the sole or a material factor in such rating action.
The
senior trust advisor may resign upon 30 days’ prior written notice to the
depositor, master servicer, special servicer, trustee, certificate
administrator and the Directing Certificateholder, if the senior trust
advisor has secured a replacement senior trust advisor meeting the
eligibility requirements set forth in the Pooling and Servicing Agreement
and described in this free writing prospectus and such replacement has
accepted its appointment as the replacement senior trust advisor and the
trustee has received a Rating Agency Confirmation from each Rating Agency.
Prior to
the occurrence and continuance of a Control Event, the Directing
Certificateholder will have the right to consent, such consent not to be
unreasonably withheld, conditioned or delayed to the identity of any
replacement senior trust advisor.
In
addition, in the event there are no classes of certificates outstanding
other than the Control Eligible Certificates and the Class R certificates,
then all of the rights and obligations of the senior trust advisor under the
pooling and servicing agreement will terminate without payment of any
penalty or termination fee. If the senior trust advisor is terminated
pursuant to the foregoing sentence, then no replacement senior trust advisor
will be appointed. In the event the senior trust advisor resigns or is
terminated for any reason it will remain entitled to any accrued and unpaid
fees and reimbursement of Senior Trust Advisor Expenses and any rights to
indemnification provided under the Pooling and Servicing Agreement with
respect to the period for which it acted as senior trust advisor.
Senior Trust Advisor Compensation
The fee
of the senior trust advisor (the “Senior
Trust Advisor Fee”) will be payable monthly from amounts received in
respect of each mortgage loan and REO Loan, and will accrue at a rate (the “Senior
Trust Advisor Fee Rate”), equal to a per
annum rate of 0.00175%. Notwithstanding that the senior trust advisor
will have no obligations or consultation rights under the Pooling and
Servicing Agreement with respect to the 589 Fifth Avenue Whole Loan, the
senior trust advisor will be entitled to collect the Senior Trust Advisor
Fee on each mortgage loan in the trust, including the 589 Fifth Avenue
Mortgage Loan.
A “Senior
Trust Advisor Consulting Fee” will be payable to the senior trust
advisor with respect to each Major Decision on which the senior trust
advisor has consultation obligations and performed its duties with respect
to that Major Decision. The Senior Trust Advisor Consulting Fee will be a
fee for each such Major Decision equal to $10,000 or such lesser amount as
the related borrower agrees to pay with respect to any mortgage loan (other
than the 589 Fifth Avenue Mortgage Loan); provided that
the senior trust advisor may in its sole discretion reduce the Senior Trust
Advisor Consulting Fee with respect to any Major Decision.
Each of
the Senior Trust Advisor Fee and the Senior Trust Advisor Consulting Fee
will be payable from funds on deposit in the Certificate Account out of
amounts otherwise available to make distributions on the Offered
Certificates as described in “Description
of the Certificates—Distributions” in this free writing prospectus,
but with respect to the Senior Trust Advisor Consulting Fee, only as and to
the extent that such fee is actually received from the related borrower. If
the senior trust advisor has consultation rights with respect to a Major
Decision, the Pooling and Servicing Agreement will require the master
servicer or the special servicer, as applicable, to use commercially
reasonable efforts consistent with the Servicing Standard to collect the
applicable Senior Trust Advisor Consulting Fee from the related borrower in
connection with such Major Decision, but only to the extent not prohibited
by the related mortgage loan documents. The master servicer or special
servicer, as applicable, will each be permitted to waive or reduce the
amount of any such Senior Trust Advisor Consulting Fee payable by the
related borrower if it determines that such full or partial waiver is in
accordance with the Servicing Standard but in no event will take any
enforcement action with respect to the collection of such Senior Trust
Advisor Consulting Fee other than requests for collection; provided that
the master servicer or the special servicer, as applicable, will be required
to consult, on a non-binding basis, with the senior trust advisor prior to
any such waiver or reduction.
In
addition to the Senior Trust Advisor Fee and the Senior Trust Advisor
Consulting Fee, the senior trust advisor will be entitled to reimbursement
of Senior Trust Advisor Expenses in accordance with the terms of the Pooling
and Servicing Agreement. “Senior
Trust Advisor Expenses” for each Distribution Date will equal any
unreimbursed indemnification amounts or additional trust fund expenses
payable to the senior trust advisor pursuant to the Pooling and Servicing
Agreement (other than the Senior Trust Advisor Fee and the Senior Trust
Advisor Consulting Fee).
To the
extent permitted by the related mortgage loan and required by the Servicing
Standard, the master servicer (with respect to the mortgage loans and any
related Companion Loan but excluding the Non-Serviced Mortgage Loan) will be
required to use efforts consistent with the Servicing Standard to cause each
borrower to maintain, and the special servicer (with respect to REO
Properties other than the Mortgaged Property securing the Non-Serviced Whole
Loan) will maintain, for the related Mortgaged Property all insurance
coverage required by the terms of the related mortgage loan documents,
except to the extent that the failure of the related borrower to do so is an
Acceptable Insurance Default (as defined below) as long as and only as (1)
the trustee has an insurable interest and (2) it is available at
commercially reasonable rates, as determined (prior to the occurrence and
continuance of any Control Event, any determination that such insurance
coverage is not available or not available at commercially reasonable rates
to be made with the consent of the Directing Certificateholder) by the
master servicer (with respect to the mortgage loans (other than the
Non-Serviced Mortgage Loan) and any related Companion Loan) or the special
servicer (with respect to REO Properties other than a Mortgaged Property
securing the Non-Serviced Whole Loan). This insurance coverage is required
to be in the amounts (which, in the case of casualty insurance, is generally
equal to the lesser of the outstanding principal balance of the related
mortgage loan and the replacement cost of the related Mortgaged Property),
and from an insurer meeting the requirements, set forth in the related
mortgage loan documents. If the borrower does not maintain such coverage,
the master servicer (with respect to such mortgage loans and any related
Companion Loan) or the special servicer (with respect to REO Properties
other than a Mortgaged Property securing the Non-Serviced Whole Loan), as
the case may be, will be required to maintain such coverage to the extent
such coverage is available at commercially reasonable rates and the trustee
has an insurable interest, as determined by the master servicer (with
respect to the mortgage loans and any related Companion Loan) or special
servicer (with respect to REO Properties other than a Mortgaged Property
securing the Non-Serviced Whole Loan), as applicable, in accordance with the
Servicing Standard; provided that
the master servicer will be obligated to use efforts consistent with the
Servicing Standard to cause the borrower to maintain (or to itself maintain)
insurance against property damage resulting from terrorist or similar acts
unless the borrower’s failure is an Acceptable Insurance Default as
determined by the special servicer. See “Description
of the Mortgage Pool—Certain Terms and Conditions of the Mortgage
Loans—Other Releases—Hazard, Liability and Other Insurance” and “Risk
Factors—Availability of Terrorism Insurance” in this free writing
prospectus. Notwithstanding
any
contrary provision above, the master servicer will not be required to
maintain, and will not be in default for failing to obtain, any earthquake
or environmental insurance on any Mortgaged Property unless such insurance
was required at the time of origination of the related mortgage loan and is
currently available at commercially reasonable rates. In addition, the
master servicer and special servicer will be entitled to rely on insurance
consultants (at the applicable servicer’s expense) in determining whether
any insurance is available at commercially reasonable rates. After the
master servicer determines that a Mortgaged Property other than the
Mortgaged Property securing the Non-Serviced Mortgage Loan is located in an
area identified as a federally designated special flood hazard area (and
flood insurance has been made available), the master servicer will be
required to use efforts consistent with the Servicing Standard to (1) cause
each borrower to maintain (to the extent required by the related mortgage
loan documents), and if the borrower does not so maintain, will be required
to (2) itself maintain to the extent the trustee, as mortgagee, has an
insurable interest in the Mortgaged Property and is available at
commercially reasonable rates (as determined by the master servicer in
accordance with the Servicing Standard) a flood insurance policy in an
amount representing coverage not less than the lesser of (x) the outstanding
principal balance of the related mortgage loan (and any related Companion
Loan, if applicable) and (y) the maximum amount of insurance which is
available under the National Flood Insurance Act of 1968, as amended, plus
such additional excess flood coverage with respect to the Mortgaged
Property, if any, in an amount consistent with the Servicing Standard, but
only to the extent that the related mortgage loan permits the lender to
require the coverage and maintaining coverage is consistent with the
Servicing Standard.
Notwithstanding the foregoing, with respect to the mortgage loans (other
than the Non-Serviced Mortgage Loan) and any related Companion Loan that
either (x) require the borrower to maintain “all-risk” property insurance
(and do not expressly permit an exclusion for terrorism) or (y) contain
provisions generally requiring the applicable borrower to maintain insurance
in types and against such risks as the holder of such mortgage loan and any
related Companion Loan reasonably requires from time to time in order to
protect its interests, the master servicer will be required to, consistent
with the Servicing Standard, (A) monitor in accordance with the Servicing
Standard whether the insurance policies for the related Mortgaged Property
contain exclusions in addition to those customarily found in insurance
policies on or prior to September 11, 2001 (“Additional
Exclusions”), (B) request the borrower to either purchase insurance
against the risks specified in the Additional Exclusions or provide an
explanation as to its reasons for failing to purchase such insurance, and
(C) notify the special servicer if it has knowledge that any insurance
policy contains Additional Exclusions or if it has knowledge that any
borrower fails to purchase the insurance requested to be purchased by the
master servicer pursuant to clause (B) above. If the special servicer
determines in accordance with the Servicing Standard that such failure is
not an Acceptable Insurance Default, the special servicer will be required
to notify the master servicer and the master servicer will be required to
use efforts consistent with the Servicing Standard to cause such insurance
to be maintained. If the special servicer determines that such failure is an
Acceptable Insurance Default, it will be required to promptly deliver such
conclusions in writing to the 17g-5 Information Provider for posting to the
17g-5 Information Provider’s website for those mortgage loans that (i) have
one of the ten (10) highest outstanding principal balances of the mortgage
loans then included in the trust or (ii) comprise more than 5% of the
outstanding principal balance of the mortgage loans then included in the
trust.
“Acceptable
Insurance Default” means, with respect to any mortgage loan (other
than the Non-Serviced Mortgage Loan) or Serviced Whole Loan, a default under
the related mortgage loan documents arising by reason of (i) any failure on
the part of the related borrower to maintain with respect to the related
Mortgaged Property specific insurance coverage with respect to, or an
all-risk casualty insurance policy that does not specifically exclude,
terrorist or similar acts, and/or (ii) any failure on the part of the
related borrower to maintain with respect to the related Mortgaged Property,
insurance coverage with respect to damages or casualties caused by terrorist
or similar acts upon terms not materially less favorable than those in place
as of the Closing Date, in each case, as to which default the master
servicer and the special servicer may forbear taking any enforcement
action; provided that
the special servicer has determined in its reasonable judgment based on
inquiry consistent with the Servicing Standard and, unless a Control Event
has occurred and is continuing, with the consent of the Directing
Certificateholder (and after a Control Event has occurred, but prior to the
occurrence of a Consultation Termination Event,
after
consultation with the Directing Certificateholder as provided in the Pooling
and Servicing Agreement), that either (a) such insurance is not available at
commercially reasonable rates and that such hazards are not at the time
commonly insured against for properties similar to the related Mortgaged
Property and located in or around the region in which such related Mortgaged
Property is located, or (b) such insurance is not available at any rate; provided, however,
that the Directing Certificateholder will not have more than 30 days to
respond to the special servicer’s request for such consent; provided, further,
that upon the special servicer’s determination, consistent with the
Servicing Standard, that exigent circumstances do not allow the special
servicer to consult with the Directing Certificateholder, the special
servicer will not be required to do so, provided that
prompt written notice of such action with a reasonably detailed explanation
thereof is provided to the Directing Certificateholder promptly thereafter.
Each of the master servicer (at its own expense) and the special servicer
(at the expense of the trust) will be entitled to rely on insurance
consultants in making the determinations described above.
During
the period that the special servicer is evaluating the availability of such
insurance, or waiting for a response from the Directing Certificateholder,
neither the master servicer nor the special servicer will be liable for any
loss related to its failure to require the borrower to maintain such
insurance and neither will be in default of its obligations as a result of
such failure.
The
special servicer will be required to maintain (or cause to be maintained),
fire and hazard insurance on each REO Property (other than any REO Property
with respect to the Non-Serviced Mortgage Loan), to the extent obtainable at
commercially reasonable rates and the trustee has an insurable interest, in
an amount that is at least equal to the lesser of (1) the full replacement
cost of the improvements on the REO Property, and (2) the outstanding
principal balance owing on the related mortgage loan (and any related
Companion Loan) or REO Loan, as applicable, and in any event, the amount
necessary to avoid the operation of any co-insurance provisions. In
addition, if the REO Property is located in an area identified as a
federally designated special flood hazard area, the special servicer will be
required to cause to be maintained, to the extent available at commercially
reasonable rates (as determined by the special servicer in accordance with
the Servicing Standard), a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration in an
amount representing coverage not less than the maximum amount of insurance
that is available under the National Flood Insurance Act of 1968, as
amended.
The
Pooling and Servicing Agreement provides that the master servicer may
satisfy its obligation to cause each borrower to maintain a hazard insurance
policy and the master servicer or special servicer may satisfy their
respective obligation to maintain hazard insurance by maintaining a blanket
or master single interest or force-placed policy insuring against hazard
losses on the mortgage loans and REO Properties (other than the Mortgaged
Property securing the Non-Serviced Whole Loan), as applicable. Any losses
incurred with respect to mortgage loans (and any related Companion Loan) or
REO Properties due to uninsured risks (including earthquakes, mudflows and
floods) or insufficient hazard insurance proceeds may adversely affect
payments to Certificateholders. Any cost incurred by the master servicer or
special servicer in maintaining a hazard insurance policy, if the borrower
defaults on its obligation to do so, will be advanced by the master servicer
as a Servicing Advance and will be charged to the related borrower.
Generally, no borrower is required by the mortgage loan documents to
maintain earthquake insurance on any Mortgaged Property and the special
servicer will not be required to maintain earthquake insurance on any REO
Properties. Any cost of maintaining that kind of required insurance or other
earthquake insurance obtained by the special servicer will be paid out of a
segregated custodial account created and maintained by the special servicer
on behalf of the trustee in trust for the Certificateholders (the “REO
Account”) or advanced by the master servicer as a Servicing Advance.
The costs
of the insurance may be recovered by the master servicer or the trustee, as
the case may be, from reimbursements received from the borrower or, if the
borrower does not pay those amounts, as a Servicing Advance as set forth in
the Pooling and Servicing Agreement. All costs and expenses incurred by the
special servicer in maintaining the insurance described above on REO
Properties will be paid out of the related REO Account or, if the amount in
such account is insufficient, such costs and expenses will be advanced by
the master servicer to the special servicer as a Servicing Advance to the
extent that such Servicing Advance is not determined to be a Nonrecoverable
Advance.
No pool
insurance policy, special hazard insurance policy, bankruptcy bond,
repurchase bond or certificate guarantee insurance will be maintained with
respect to the mortgage loans, nor will any mortgage loan be subject to FHA
insurance.
|
Modifications, Waivers and Amendments
|
Except as
otherwise set forth in this paragraph, the special servicer (or, with
respect to non-material modifications, waivers and amendments, the master
servicer) may not waive, modify or amend (or consent to waive, modify or
amend) any provision of a mortgage loan and/or Companion Loan that is not in
default or as to which default is not reasonably foreseeable except for
(1) the waiver of any due-on-sale clause or due-on-encumbrance clause to the
extent permitted in the Pooling and Servicing Agreement, and (2) any waiver,
modification or amendment more than three months after the Closing Date that
would not be a “significant modification” of the mortgage loan within the
meaning of Treasury Regulations Section 1.860G-2(b). The master servicer
will not be permitted under the Pooling and Servicing Agreement to agree to
any modifications, waivers and amendments without the consent of the special
servicer (which such consent may be deemed received by the master servicer
if the special servicer does not respond within ten (10) business days of
delivery to the special servicer of the recommendation and analysis and all
information reasonably requested by the special servicer in order to grant
or withhold such consent, plus the time provided to the Directing
Certificateholder or other relevant party under the Pooling and Servicing
Agreement and, if applicable, any time period provided to a holder of a
Companion Loan under a related intercreditor agreement), except certain
non-material consents and waivers described in the Pooling and Servicing
Agreement and as permitted under the mortgage loan documents.
If, and
only if, the special servicer determines that a modification, waiver or
amendment (including the forgiveness or deferral of interest or principal or
the substitution or release of collateral or the pledge of additional
collateral) of the terms of a Specially Serviced Mortgage Loan with respect
to which a payment default or other material default has occurred or a
payment default or other material default is, in the special servicer’s
judgment, reasonably foreseeable, is reasonably likely to produce a greater
recovery on a net present value basis (the relevant discounting to be
performed at the related Mortgage Rate) to the trust and, if applicable, the
holders of any applicable Companion Loan than liquidation of such Specially
Serviced Mortgage Loan, then the special servicer may, but is not required
to, agree to a modification, waiver or amendment of the Specially Serviced
Mortgage Loan, subject to (x) the restrictions and limitations described
below, (y) with respect to any mortgage loan, prior to the occurrence and
during the continuance of a Control Event, the approval of the Directing
Certificateholder (or after the occurrence and continuance of a Control
Event, but prior to a Consultation Termination Event upon consultation with
the Directing Certificateholder) as provided in the Pooling and Servicing
Agreement and described in this free writing prospectus, and, (z) with
respect to a Serviced Whole Loan, the rights of the holder of the related
Companion Loan, to advise or consult with the special servicer with respect
to, or consent to, such modification, waiver or amendment, in each case,
pursuant to the terms of the related intercreditor agreement and, with
respect to a mortgage loan that has mezzanine debt, the rights of the
mezzanine lender to consent to such modification, waiver or amendment, in
each case, pursuant to the terms of the related intercreditor agreement.
In
connection with (i) the release of a Mortgaged Property (other than the
Mortgaged Property securing the Non-Serviced Whole Loan) or any portion of a
Mortgaged Property from the lien of the related Mortgage or (ii) the taking
of a Mortgaged Property or any portion of a Mortgaged Property by exercise
of the power of eminent domain or condemnation, if the mortgage loan
documents require the master servicer or the special servicer, as
applicable, to calculate (or to approve the calculation of the related
borrower of) the loan-to-value ratio of the remaining Mortgaged Property or
Mortgaged Properties or the fair market value of the real property
constituting the remaining Mortgaged Property or Mortgaged Properties, for
purposes of REMIC qualification of the related mortgage loan, then such
calculation will, unless then permitted by the REMIC Provisions, exclude the
value of personal property and going concern value, if any, as determined by
an appropriate third party.
The
special servicer is required to use its reasonable efforts to the extent
reasonably possible to fully amortize a modified mortgage loan prior to the
Rated Final Distribution Date. The special servicer may not
agree to
a modification, waiver or amendment of any term of any Specially Serviced
Mortgage Loan if that modification, waiver or amendment would:
(1) extend the maturity date of the Specially Serviced Mortgage
Loan to a date occurring later than the earlier of (A) five years prior to
the Rated Final Distribution Date and (B) if the Specially Serviced Mortgage
Loan is secured solely or primarily by a leasehold estate and not the
related fee interest, the date occurring twenty years or, to the extent
consistent with the Servicing Standard giving due consideration to the
remaining term of the ground lease and, prior to the occurrence and
continuance of a Control Event, with the consent of the Directing
Certificateholder, ten years, prior to the end of the current term of the
ground lease, plus any options to extend exercisable unilaterally by the
borrower; or
(2) provide for the deferral of interest unless interest accrues
on the mortgage loan or Serviced Whole Loan, generally, at the related
Mortgage Rate.
In the
event of a modification that creates Mortgage Deferred Interest, the Pooling
and Servicing Agreement will provide that the amount of deferred interest
will be allocated to reduce the Distributable Certificate Interest of the
class or classes of certificates (other than the Class X-A, Class X-B, Class
X-C and Class R certificates) with the latest sequential designation then
outstanding, and to the extent so allocated, will be added to the
Certificate Balance of the class or classes.
If the
special servicer gives notice of any modification, waiver or amendment of
any term of any mortgage loan (other than the Non-Serviced Whole Loan) or
related Companion Loan, the special servicer will be required to notify the
master servicer, the applicable mortgage loan seller, the senior trust
advisor (after the occurrence and during the continuance of a Control
Event), the certificate administrator, the trustee, the Directing
Certificateholder (unless a Consultation Termination Event has occurred),
and the 17g-5 Information Provider, who will thereafter post any such notice
to the 17g-5 Information Provider’s website. If the master servicer gives
notice of any modification, waiver or amendment of any term of any such
mortgage loan or related Companion Loan, the master servicer will be
required to notify the certificate administrator, trustee, special servicer
(and, unless a Consultation Termination Event has occurred, the special
servicer will be required to forward any such notice to the Directing
Certificateholder), the related mortgage loan seller and the 17g-5
Information Provider, who will be required to thereafter post any such
notice to the 17g-5 Information Provider’s website. The party providing
notice will be required to deliver to the custodian for deposit in the
related Mortgage File, an original counterpart of the agreement related to
the modification, waiver or amendment, promptly following the execution of
that agreement, and if required, a copy to the master servicer and to the
holder of any related Companion Loan, all as set forth in the Pooling and
Servicing Agreement. Copies of each agreement whereby the modification,
waiver or amendment of any term of any mortgage loan is effected are
required to be available for review during normal business hours at the
offices of the custodian. See “Description
of the Certificates—Reports to Certificateholders; Certain Available
Information” in this free writing prospectus.
The
modification, waiver or amendment of a Serviced Whole Loan or a mortgage
loan that has a related mezzanine loan will be subject to certain
limitations set forth in the related intercreditor agreement. See “Risk
Factors—Additional
Debt or the Ability To Incur Other Borrowings Entails Risk” in this
free writing prospectus.
|
Mortgage Loans with “Due-on-Sale” and “Due-on-Encumbrance”
Provisions
|
The
master servicer, with respect to non-Specially Serviced Mortgage Loans
(other than the Non-Serviced Mortgage Loan), and the special servicer, with
respect to Specially Serviced Mortgage Loans, will be required (a) to
exercise any right it may have with respect to a mortgage loan and any
related Companion Loan containing a “due-on-sale” clause (1) to accelerate
the payments on that mortgage loan and any related Companion Loan, as
applicable, or (2) to withhold its consent to any sale or transfer,
consistent with the Servicing Standard or (b) to waive its right to exercise
such rights; provided, however,
that with respect to such waiver of rights, (i) with respect to all
non-Specially Serviced Mortgage Loans, the master servicer has made a
recommendation and obtained the prior written consent
(or
deemed consent) of the special servicer, (ii) with respect to all Specially
Serviced Mortgage Loans and all non-Specially Serviced Mortgage Loans, prior
to the occurrence and continuance of a Control Event, the special servicer
has obtained the prior written consent (or deemed consent) of the Directing
Certificateholder (or after the occurrence and continuance of a control
event, but prior to a Consultation Termination Event has consulted with the
Directing Certificateholder), if applicable, and (iii) with respect to any
mortgage loan (x) with a Stated Principal Balance greater than or equal to
$20,000,000, (y) with a Stated Principal Balance greater than or equal to 5%
of the aggregate Stated Principal Balance of the mortgage loans then
outstanding, and (z) together with all other mortgage loans with which it is
cross-collateralized or cross-defaulted or together with all other mortgage
loans with the same or an affiliated borrower, that is one of the ten
largest mortgage loans outstanding (by Stated Principal Balance), a Rating
Agency Confirmation is received by the master servicer or the special
servicer, as the case may be, from Moody’s and Fitch, provided,
however, that with respect to clauses (y) and (z) of this paragraph,
such mortgage loan will also be required to have a Stated Principal Balance
of at least $5,000,000 for such Rating Agency Confirmation requirement to
apply.
With
respect to a mortgage loan (other than the Non-Serviced Mortgage Loan) and
any related Companion Loan with a “due-on-encumbrance” clause, the master
servicer, with respect to non-Specially Serviced Mortgage Loans, and the
special servicer, with respect to Specially Serviced Mortgage Loans, will be
required (a) to exercise any right it may have with respect to a mortgage
loan containing a “due-on-encumbrance” clause (1) to accelerate the payments
thereon, or (2) to withhold its consent to the creation of any additional
lien or other encumbrance, consistent with the Servicing Standard or (b) to
waive its right to exercise such rights, provided,
however, that, with respect to such waiver of rights, (i) if the
mortgage loan is a non-Specially Serviced Mortgage Loan, the master servicer
has made a recommendation and obtained the prior written consent (or deemed
consent) of the special servicer, (ii) with respect to all Specially
Serviced Mortgage Loans and all non-Specially Serviced Mortgage Loans, prior
to the occurrence and continuance of a Control Event, the special servicer
has obtained the consent of the Directing Certificateholder (or after the
occurrence and continuance of a control event, but prior to a Consultation
Termination Event has consulted with the Directing Certificateholder), if
applicable, and (iii) the master servicer or the special servicer, as the
case may be, has received a Rating Agency Confirmation from each Rating
Agency if such mortgage loan (1) has an outstanding principal balance that
is greater than or equal to 2% of the aggregate Stated Principal Balance of
the mortgage loans or (2) has a loan-to-value ratio greater than 85%
(including any existing and proposed debt) or (3) has a debt service
coverage ratio less than 1.20x (in each case, determined based upon the
aggregate of the Stated Principal Balance of the mortgage loan and related
Companion Loan, if any, and the principal amount of the proposed additional
loan) or (4) is one of the ten largest mortgage loans (by Stated Principal
Balance) or (5) has a Stated Principal Balance over $20,000,000; provided, however,
that with respect to clauses (1), (2), (3) and (4), such mortgage loan must
also have a Stated Principal Balance of at least $5,000,000 for such Rating
Agency Confirmation requirement to apply.
Any
modification, extension, waiver or amendment of the payment terms of the
Non-Serviced Whole Loan will be required to be structured so as to be
consistent with the Servicing Standard and the allocation and payment
priorities in the related loan documents and the related intercreditor
agreement, such that neither the trust as holder of the Non-Serviced
Mortgage Loan nor any holder of the related Companion Loan gains a priority
over the other holder that is not reflected in the related loan documents
and the related intercreditor agreement.
|
Realization Upon Defaulted Mortgage Loans
|
Within 30
days after a Defaulted Mortgage Loan has become a Specially Serviced
Mortgage Loan, the special servicer will be required to order an appraisal
of the related Mortgaged Property (which will not be required to be received
within that 30-day period) and, not more than 30 days after receipt of such
appraisal, determine the fair value of the mortgage loan in accordance with
the Servicing Standard. The special servicer will be permitted to change,
from time to time thereafter, its determination of the fair value of a
mortgage loan in default based upon changed circumstances, new information
or otherwise, in accordance with the Servicing Standard. The special
servicer will promptly notify the master servicer in writing of the initial
fair value determination and any adjustment to its fair value
determination. “Defaulted
Mortgage Loan” means a mortgage loan (i) that is delinquent at least
sixty (60) days in respect of its Periodic Payments or more than thirty (30)
days (or sixty (60) days with respect to the circumstances described under clause (1) of
the definition of Specially Serviced Mortgage Loan) delinquent in respect of
its balloon payment, if any, in either case such delinquency to be
determined without giving effect to any grace period permitted by the
related mortgage or mortgage note and without regard to any acceleration of
payments under the related mortgage and mortgage note or (ii) 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.
The
Pooling and Servicing Agreement will provide that the special servicer may
offer to sell to any person any Specially Serviced Mortgage Loan (to the
extent consistent with the term of any related intercreditor agreement) or
may offer to purchase any Specially Serviced Mortgage Loan, if and when the
special servicer determines, consistent with the Servicing Standard, that no
satisfactory arrangements (including by way of a discounted pay-off) can be
made for collection of delinquent payments thereon and such a sale would be
in the best economic interests of the trust on a net present value basis.
The special servicer is required to give the trustee not less than five days
prior written notice of its intention to sell any Specially Serviced
Mortgage Loan, in which case the special servicer is required to accept the
highest offer (taking into account the credit-worthiness of the purchaser
and the certainty of execution) received from any person for any Specially
Serviced Mortgage Loan in an amount at least equal to par plus accrued
interest plus all other outstanding amounts due under such mortgage loan (or
REO Loan) or, if applicable, Serviced Whole Loan and any outstanding
expenses of the trust relating to such mortgage loan (the “Mortgage
Loan Repurchase Price”) or, at its option, if it has received no
offer at least equal to the Mortgage Loan Repurchase Price therefor,
purchase the Specially Serviced Mortgage Loan at such Mortgage Loan
Repurchase Price.
In the
absence of any such offer (or purchase by the special servicer), the special
servicer will accept the highest offer (taking into account the
credit-worthiness of the purchaser and the certainty of execution) received
from any person that is determined by the special servicer to be a fair
price for such Specially Serviced Mortgage Loan, if the highest offeror
(taking into account the credit-worthiness of the purchaser and the
certainty of execution) is a person other than the depositor, the master
servicer, the special servicer, the certificate administrator, the trustee,
the senior trust advisor, any borrower, any manager of a Mortgaged Property,
any independent contractor engaged by the special servicer, a holder of any
related Companion Loan (in connection with offers related to any Serviced
Whole Loan), a holder of a related mezzanine loan (except to the extent
described below), or any known affiliate of any of them (any such person, an
“Interested
Person”). The trustee (based upon, among other things, updated
independent appraisals ordered by the Special Servicer and received by the
trustee (the cost of which will be a Servicing Advance by the master
servicer), is required to determine the fair price for the Specially
Serviced Mortgage Loan if the highest offeror is an Interested Person. The
reasonable cost of such independent appraisal will be an expense of the
trust. Any such determination by the trustee will be binding on all parties.
Neither the trustee, in its individual capacity, nor any of its affiliates
may make an offer for or purchase any Specially Serviced Mortgage Loan.
The
Pooling and Servicing Agreement will not obligate the special servicer to
accept the highest offer if the special servicer determines, in accordance
with the Servicing Standard, that rejection of such offer would be in the
best interests of the holders of certificates. In addition, the special
servicer may accept a lower offer if it determines, in accordance with the
Servicing Standard, that acceptance of such offer would be in the best
interests of the holders of certificates (for example, if the prospective
buyer making the lower offer is more likely to perform its obligations, or
the terms offered by the prospective buyer making the lower offer are more
favorable), provided that
the offeror is not the special servicer or a person affiliated with the
special servicer. The special servicer is required to use reasonable efforts
to sell all Specially Serviced Mortgage Loans prior to the Rated Final
Distribution Date.
Notwithstanding the foregoing, with respect to each mortgage loan (other
than the Non-Serviced Mortgage Loan) with a related mezzanine loan, the sale
by the special servicer of any Specially Serviced Mortgage Loan is subject
to the rights of the holder of the related mezzanine debt to exercise its
option to purchase the related mortgage loan or REO Property, as applicable,
following a default as described
under the
related intercreditor agreement (and such purchase price is subject to the
terms of such intercreditor agreement). See “Description
of the Mortgage Pool—Additional Debt—Mezzanine Debt” in this free
writing prospectus.
Pursuant
to the terms of the related intercreditor agreement, if a Serviced Whole
Loan becomes a defaulted mortgage loan, and if the special servicer
determines to sell the related Serviced Mortgage Loan that has become a
Specially Serviced Mortgage Loan in accordance with the terms described
above, then the special servicer will be required to sell the related
Serviced Pari Passu Companion Loan together with the related Serviced
Mortgage Loan as one whole loan and will be required to require that all
offers be submitted to the certificate administrator in writing and be
accompanied by a refundable deposit of cash in an amount equal to 5% of the
offer amount (subject to a cap of $2,500,000). Notwithstanding the
foregoing, the special servicer will not be permitted to sell a Serviced
Whole Loan if it becomes a Specially Serviced Mortgage Loan without the
written consent of the holder of the related Serviced Pari Passu Companion
Loan (provided that
such consent is not required if the holder of the related Serviced Pari
Passu Companion Loan is the borrower or an affiliate of the borrower) unless
the special servicer has delivered to the holder of the related Serviced
Pari Passu Companion Loan: (a) at least 15 business days prior written
notice of any decision to attempt to sell such Serviced Whole Loan; (b) at
least 10 days prior to the permitted sale date, a copy of each bid package
(together with any material amendments to such bid packages) received by the
special servicer in connection with any such proposed sale; (c) at least 10
days prior to the proposed sale date, a copy of the most recent appraisal
for such Serviced Whole Loan, and any documents in the servicing file
reasonably requested by the holder of the related Serviced Pari Passu
Companion Loan that are material to the sale price of such Serviced Whole
Loan; and (d) until the sale is completed, and a reasonable period of time
(but no less time than is afforded to other offerors) prior to the proposed
sale date, all information and other documents being provided to other
offerors and all leases or other documents that are approved by the master
servicer or the special servicer in connection with the proposed sale; provided that
with respect to each of the Serviced Whole Loans, the holder of the related
Pari Passu Companion Loan may waive any of the delivery or timing
requirements set forth in this sentence. The holder of a Serviced Pari Passu
Companion Loan (or its representative) will be permitted to bid at any sale
of the related Serviced Whole Loan. See “Description
of the Mortgage Pool—The Meadows Mall Whole Loan—Consultation and Control”,
“—Sale
of a Defaulted Meadows Mall Whole Loan”, “Description
of the Mortgage Pool—The SanTan Village Whole Loan—Consultation and Control”, “—Sale
of Defaulted SanTan Village Whole Loan”, “Description
of the Mortgage Pool—The Southridge Mall Whole Loan—Consultation and Control”, and “—Sale
of Defaulted Southridge Mall Whole Loan”, in this free writing
prospectus.
Pursuant
to the terms of the 589 Fifth Avenue Intercreditor Agreement, if the 589
Fifth Avenue Whole Loan becomes a defaulted mortgage loan, and if the
2013-C13 Special Servicer determines to sell the related Pari Passu
Companion Loan that has become a specially serviced mortgage loan in
accordance with the 2013-C13 Pooling and Servicing Agreement, then the
2013-C13 Special Servicer will be required to sell the 589 Fifth Avenue
Mortgage Loan together with the Pari Passu Companion Loan as one whole loan.
In connection with any such sale, the 2013-C13 Special Servicer will be
required to follow procedures substantially similar to those described
above. Notwithstanding the foregoing, the 2013-C13 Special Servicer will not
be permitted to sell the 589 Fifth Avenue Whole Loan if it becomes a
defaulted mortgage loan without the written consent of the Special Servicer
(and prior to the occurrence and continuance of a Control Event (provided that
such consent is not required if such party is the borrower or an affiliate
of the borrower), the Directing Certificateholder) unless the 2013-C13
Special Servicer has delivered to the special servicer, who will forward to
the Directing Certificateholder: (a) at least 15 business days prior written
notice of any decision to attempt to sell the 589 Fifth Avenue Whole Loan;
(b) at least 10 days prior to the permitted sale date, a copy of each bid
package (together with any material amendments to such bid packages)
received by the 2013-C13 Special Servicer in connection with any such
proposed sale; (c) at least 10 days prior to the proposed sale date, a copy
of the most recent appraisal for the 589 Fifth Avenue Whole Loan, and any
documents in the servicing file reasonably requested by the holder of the
589 Fifth Avenue Mortgage Loan that are material to the sale price of the
589 Fifth Avenue Whole Loan; and (d) until the sale is completed, and a
reasonable period of time (but no less time than is afforded to other
offerors) prior to the proposed sale date, all information and other
documents being provided to other offerors and all leases or other documents
that are approved by the
2013-C13
Master Servicer or the 2013-C13 Special Servicer in connection with the
proposed sale; provided that
the special servicer for this securitization may in accordance with the
Pooling and Servicing Agreement waive any of the delivery or timing
requirements set forth in this sentence.
If title
to any Mortgaged Property is acquired by the trust fund, the special
servicer, on behalf of the trust fund (and the holder of any related
Companion Loan, if applicable), will be required to sell the Mortgaged
Property prior to the close of the third calendar year beginning after the
year of acquisition, unless (1) the IRS grants or has not denied an
extension of time to sell the property or (2) the trustee, the certificate
administrator and the master servicer receive an opinion of independent
counsel to the effect that the holding of the property by the trust fund
longer than the above-referenced three year period will not result in the
imposition of a tax on either the Lower-Tier REMIC or the Upper-Tier REMIC
or cause the trust fund (or either the Lower-Tier REMIC or the Upper-Tier
REMIC) to fail to qualify as a REMIC under the Code at any time that any
certificate is outstanding. Subject to the foregoing and any other
tax-related limitations, pursuant to the Pooling and Servicing Agreement,
the special servicer will generally be required to attempt to sell any
Mortgaged Property so acquired on the same terms and conditions it would if
it were the owner. The special servicer will also be required to ensure that
any Mortgaged Property acquired by the trust fund is administered so that it
constitutes “foreclosure property” within the meaning of Section 860G(a)(8)
of the Code at all times and that the sale of the property does not result
in the receipt by the trust fund or the holder of any Companion Loan of any
“income from non-permitted assets” as described in Section 860F(a)(2)(B) of
the Code, endanger the status of the Lower-Tier REMIC or the Upper-Tier
REMIC as a REMIC, or result in the imposition of a tax upon the Lower-Tier
REMIC or the Upper-Tier REMIC or the trust fund (including but not limited
to the tax on “prohibited transactions” as defined in Section 860F(a)(2) of
the Code and the tax on contributions to a REMIC set forth in Section
860G(d) of the Code, but not including the tax on “net income from
foreclosure property” as defined in Section 860G(c)(2) of the Code). If the
trust fund acquires title to any Mortgaged Property, the special servicer,
on behalf of the trust fund, will retain, at the expense of the trust fund,
an independent contractor to manage and operate the property. The
independent contractor generally will be permitted to perform construction
(including renovation) on a foreclosed property only if the construction was
more than 10% completed before default on the related mortgage loan became
imminent. The retention of an independent contractor, however, will not
relieve the special servicer of its obligation to manage the Mortgaged
Property as required under the Pooling and Servicing Agreement.
Generally, neither the Lower-Tier REMIC nor the Upper-Tier REMIC will be
taxable on income received with respect to a Mortgaged Property acquired by
the trust fund to the extent that it constitutes “rents from real property,”
within the meaning of Section 856(d) of the Code and Treasury regulations
under the Code. Rents from real property include fixed rents and rents based
on the receipts or sales of a tenant but do not include the portion of any
rental based on the net income or profit of any tenant or sub-tenant. No
determination has been made whether rent on any of the Mortgaged Properties
meets this requirement. Rents from real property include charges for
services customarily furnished or rendered in connection with the rental of
real property, whether or not the charges are separately stated. Services
furnished to the tenants of a particular building will be considered as
customary if, in the geographic market in which the building is located,
tenants in buildings that are of similar class are customarily provided with
the service. No determination has been made whether the services furnished
to the tenants of the Mortgaged Properties are “customary” within the
meaning of applicable regulations. It is therefore possible that a portion
of the rental income with respect to a Mortgaged Property owned by the trust
fund would not constitute rents from real property, or that none of such
income would qualify if a separate charge is not stated for such
non-customary services or they are not performed by an independent
contractor. Rents from real property also do not include income from the
operation of a trade or business on the Mortgaged Property, such as a hotel,
or rental income attributable to personal property leased in connection with
a lease of real property if the rent attributable to that personal property
exceeds 15% of the total rent at the related mortgaged property for the
taxable year. Any of the foregoing types of income may instead constitute
“net income from foreclosure property,” which would be taxable to the
Lower-Tier REMIC at the highest marginal federal corporate rate (currently
35%) and may also be subject to state or local taxes. The Pooling and
Servicing Agreement provides that the special servicer will be permitted to
cause the Lower-Tier REMIC to earn “net income from foreclosure property”
that is subject to tax if it determines that the net after-tax benefit to
Certificateholders is greater than another method of operating
or net
leasing the Mortgaged Property. Because these sources of income, if they
exist, are already in place with respect to the Mortgaged Properties, it is
generally viewed as beneficial to Certificateholders to permit the trust
fund to continue to earn them if it acquires a Mortgaged Property, even at
the cost of this tax. These taxes would be chargeable against the related
income for purposes of determining the proceeds available for distribution
to holders of certificates. See “Material
Federal Income Tax Consequences—Federal Income Tax Consequences for REMIC
Certificates—Taxes That May Be Imposed on the REMIC Pool” in the
prospectus.
To the
extent that Liquidation Proceeds collected with respect to any mortgage loan
are less than the sum of: (1) the outstanding principal balance of the
mortgage loan, (2) interest accrued on the mortgage loan and (3) the
aggregate amount of expenses reimbursable to the master servicer, the
special servicer, the certificate administrator, the senior trust advisor or
the trustee or paid out of the trust fund that were not reimbursed by the
related borrower (including any unpaid servicing compensation, unreimbursed
Servicing Advances and unpaid and accrued interest on all Advances and
additional trust fund expenses) incurred with respect to the mortgage loan,
the trust fund will realize a loss in the amount of the shortfall. The
trustee, the certificate administrator, the master servicer, the special
servicer and/or the senior trust advisor will be entitled to reimbursement
out of the Liquidation Proceeds recovered on any mortgage loan, prior to the
distribution of those Liquidation Proceeds to Certificateholders, of any and
all amounts that represent unpaid servicing compensation in respect of the
related mortgage loan, certain unreimbursed expenses incurred with respect
to the mortgage loan and any unreimbursed Advances (including interest
thereon) made with respect to the mortgage loan. In addition, amounts
otherwise distributable on the certificates will be further reduced by
interest payable to the master servicer, the special servicer or the trustee
on these Advances.
If any
Mortgaged Property suffers damage and the proceeds, if any, of the related
hazard insurance policy are insufficient to restore fully the damaged
property, the master servicer will not be required to advance the funds to
effect the restoration unless (1) the special servicer determines that the
restoration will increase the proceeds to Certificateholders on liquidation
of the mortgage loan after reimbursement of the special servicer or the
master servicer, as the case may be, for its expenses and (2) the master
servicer has not determined that the advance would be a Nonrecoverable
Advance.
|
Servicing of the 589 Fifth Avenue Mortgage Loan
|
The 589
Fifth Avenue Mortgage Loan, and any related REO Property, is being serviced
under the 2013-C13 Pooling and Servicing Agreement. Accordingly, the
2013-C13 Master Servicer will generally make servicing advances and remit
collections on the 589 Fifth Avenue Mortgage Loan to or on behalf of the
trust for this securitization. However, the master servicer for this
securitization will generally be obligated to compile reports that include
information on the 589 Fifth Avenue Mortgage Loan, and, to the extent
required by the Servicing Standard, to enforce the rights as holders of the
589 Fifth Avenue Mortgage Loan under the terms of the 589 Fifth Avenue
Intercreditor Agreement and make P&I Advances with respect to the 589 Fifth
Avenue Mortgage Loan, subject to any non-recoverability determination. The
servicing arrangements under the 2013-C13 Pooling and Servicing Agreement
differ in certain respects from the servicing arrangements under the Pooling
and Servicing Agreement. Below are certain provisions in the 2013-C13
Pooling and Servicing Agreement for your consideration:
|
|
●
|
The master servicer, the special servicer, the certificate
administrator, senior trust advisor and the trustee under the
Pooling and Servicing Agreement will have no obligation or
authority to (a) supervise the 2013-C13 Master Servicer, the
2013-C13 Special Servicer, or any of the trustee, certificate
administrator or senior trust advisor under the 2013-C13 Pooling
and Servicing Agreement or (b) make Servicing Advances with
respect to the 589 Fifth Avenue Mortgage Loan. The obligation of
the master servicer for this securitization to provide
information and collections and make P&I Advances to the
certificate administrator for the benefit of the
Certificateholders with respect to the 589 Fifth Avenue Mortgage
Loan is dependent on its receipt of the corresponding
information and/or collections from the 2013-C13 Master Servicer
or the 2013-C13 Special Servicer.
|
|
|
|
Pursuant to the 2013-C13 Pooling and Servicing Agreement, the
liquidation fee, the special servicing fee and the workout fee
with respect to the 589 Fifth Avenue Mortgage Loan will be
generally similar to the corresponding fee payable under the
Pooling and Servicing Agreement.
|
|
|
|
The master servicer for this securitization will be required to
make P&I Advances with respect to the 589 Fifth Avenue Mortgage
Loan, unless it has determined that such Advance would not be
recoverable from collections on the 589 Fifth Avenue Mortgage
Loan.
|
|
|
|
The 2013-C13 Master Servicer is obligated to make servicing
advances with respect to the 589 Fifth Avenue Whole Loan. If the
2013-C13 Master Servicer determines that a servicing advance it
made with respect to the 589 Fifth Avenue Whole Loan or the
related Mortgaged Property is nonrecoverable, it will be
entitled to be reimbursed first from collections on, and
proceeds of, the 589 Fifth Avenue Mortgage Loan and the 589
Fifth Avenue Pari Passu Companion Loan, on a pro rata basis
(based on each such loan’s outstanding principal balance), and
then from general collections on the mortgage loans in the trust
established under the 2013-C13 Pooling and Servicing Agreement.
|
|
|
|
With respect to the 589 Fifth Avenue Mortgage Loan, prior to the
occurrence and continuance of any control event under the
2013-C13 Pooling and Servicing Agreement, the 2013-C13 Directing
Certificateholder will have the right to terminate the 2013-C13
Special Servicer, with or without cause, and appoint itself or
an affiliate or another person as the successor 2013-C13 Special
Servicer.
|
|
|
|
In addition, with respect to the 589 Fifth Avenue Mortgage Loan,
after the occurrence and continuance of any control event under
the 2013-C13 Pooling and Servicing Agreement, at the written
direction of holders of principal balance certificates under the
2013-C13 Pooling and Servicing Agreement evidencing not less
than 25% of the voting rights of such certificates, a request
can be made to vote to terminate the 2013-C13 Special Servicer
and appoint a successor 2013-C13 Special Servicer.
|
|
|
|
In addition, with respect to the 589 Fifth Avenue Mortgage Loan,
following the occurrence of a consultation termination event
under the 2013-C13 Pooling and Servicing Agreement, if the
senior trust advisor under the 2013-C13 Pooling and Servicing
Agreement determines that the 2013-C13 Special Servicer is not
performing its duties under the 2013-C13 Pooling and Servicing
Agreement or is otherwise not acting in accordance with the
related servicing standard, the senior trust advisor under the
2013-C13 Pooling and Servicing Agreement will have the right to
recommend the replacement of the 2013-C13 Special Servicer.
|
|
|
●
|
If the 589 Fifth Avenue Mortgage Loan becomes a defaulted
mortgage loan, the 2013-C13 Special Servicer will be required to
take actions that are substantially similar to the actions
described under “Servicing
of the Mortgage Loans—Realization Upon Defaulted Mortgage Loans” in
this free writing prospectus.
|
|
|
●
|
With respect to the 589 Fifth Avenue Mortgage Loan, the
servicing provisions relating to performing inspections and
collecting operating information are substantially similar to
those of the Pooling and Servicing Agreement.
|
|
|
●
|
The 2013-C13 Master Servicer and 2013-C13 Special Servicer (a)
have substantially similar rights related to resignation and (b)
are subject to servicer termination events substantially similar
to those in the Pooling and Servicing Agreement, as well as the
rights related thereto.
|
|
Inspections; Collection of Operating Information
|
The
master servicer will be required to perform (at its own expense) or cause to
be performed (at its own expense), physical inspections of each Mortgaged
Property relating to a mortgage loan (other than the Mortgaged Property
securing the Non-Serviced Mortgage Loan, which is subject to inspection
pursuant
to the related pooling and servicing agreement, and other than a Specially
Serviced Mortgage Loan) with a Stated Principal Balance of (A) $2,000,000 or
more at least once every 12 months and (B) less than $2,000,000 at least
once every 24 months, in each case commencing in the calendar year 2014
unless a physical inspection has been performed by the special servicer
within the previous 12 months and the master servicer has no knowledge of a
material change in the Mortgaged Property since such physical inspection; provided, further, however,
that if any scheduled payment becomes more than 60 days delinquent on the
related mortgage loan, the special servicer is required to inspect or cause
to be inspected the related Mortgaged Property as soon as practicable after
the mortgage loan becomes a Specially Serviced Mortgage Loan and annually
thereafter for so long as the mortgage loan remains a Specially Serviced
Mortgage Loan (the cost of which inspection will be reimbursed first from
default interest and late charges constituting additional compensation of
the special servicer on the related mortgage loan (but with respect to a
Serviced Whole Loan, only amounts available for such purpose under the
related intercreditor agreement) and then from
the Certificate Account as an expense of the trust fund, and, in the case of
a Serviced Whole Loan, as an expense of the holders of the related Serviced
Mortgage Loan and Serviced Pari Passu Companion Loan, pro
rata, to the extent provided in the related intercreditor agreement.
The special servicer or the master servicer, as applicable, will be required
to prepare or cause to be prepared a written report of the inspection
describing, among other things, the condition of and any damage to the
Mortgaged Property to the extent evident from the inspection and specifying
the existence of any material vacancies in the Mortgaged Property, of any
sale, transfer or abandonment of the Mortgaged Property of which it has
knowledge or that is evident from the inspection, of any adverse change in
the condition of the Mortgaged Property of which the preparer of such report
has knowledge or that is evident from the inspection, and that the preparer
of such report deems material, or of any material waste committed on the
Mortgaged Property to the extent evident from the inspection.
With
respect to each mortgage loan that requires the borrower to deliver
Operating Statements, the special servicer or the master servicer, as
applicable, is also required to use reasonable efforts to collect and review
the annual Operating Statements beginning with calendar year end 2013 of the
related Mortgaged Property. Most of the mortgage loan documents obligate the
related borrower to deliver annual property Operating Statements. However,
we cannot assure you that any Operating Statements required to be delivered
will in fact be delivered, nor is the special servicer or the master
servicer likely to have any practical means of compelling the delivery in
the case of an otherwise performing mortgage loan.
Copies of
the inspection reports referred to above that are delivered to the
certificate administrator will be posted to the certificate administrator’s
website for review by Privileged Persons pursuant to the Pooling and
Servicing Agreement. See “Description
of the Certificates—Reports to Certificateholders; Certain Available
Information” in this free writing prospectus.
|
Certain Matters Regarding the Master Servicer, the Special
Servicer, the Senior Trust Advisor and the Depositor
|
The
Pooling and Servicing Agreement permits the master servicer and the special
servicer to resign from their respective obligations only upon (a) the
appointment of, and the acceptance of the appointment by, a successor and
receipt by the certificate administrator and the trustee of a Rating Agency
Confirmation from each of the Rating Agencies and confirmation of the
applicable rating agencies that such action will not result in the
downgrade, withdrawal or qualification of its then-current ratings of any
securities related to any Serviced Pari Passu Companion Loan (provided that
such rating agency confirmation may be considered satisfied in the same
manner as any Rating Agency Confirmation may be considered satisfied with
respect to the certificates as described in this free writing prospectus);
and, as to the special servicer only, for so long as a Control Event has not
occurred and is not continuing, the approval of such successor by the
Directing Certificateholder, or (b) a determination that their respective
obligations are no longer permissible with respect to the master servicer or
the special servicer, as the case may be, under applicable law. No
resignation will become effective until the trustee or other successor has
assumed the obligations and duties of the resigning master servicer or
special servicer, as the case may be, under the Pooling and Servicing
Agreement. Further, the resigning master servicer or
special
servicer, as the case may be, must pay all costs and expenses associated
with the transfer of its duties. Other than as described under “—Servicer
Termination Events” below, in no event will the master servicer or
the special servicer have the right to appoint any successor master servicer
or special servicer if such master servicer or special servicer, as
applicable, is terminated or removed pursuant to the Pooling and Servicing
Agreement.
The
Pooling and Servicing Agreement will provide that none of the master
servicer, the special servicer, the depositor, the senior trust advisor or
any partner, shareholder, member, manager, director, officer, employee or
agent of any of them will be under any liability to the trust fund,
Certificateholders or holders of the related Companion Loan for any action
taken, or not taken, in good faith pursuant to the Pooling and Servicing
Agreement or for errors in judgment; provided, however,
that none of the master servicer, the special servicer, the depositor, the
senior trust advisor or similar person will be protected against any
liability that would otherwise be imposed by reason of willful misconduct,
bad faith or negligence in the performance of obligations or duties under
the Pooling and Servicing Agreement or by reason of negligent disregard of
such obligations and duties. The Pooling and Servicing Agreement will also
provide that the master servicer, the special servicer, the depositor, the
senior trust advisor and their respective affiliates and any partner,
shareholder, member, manager, director, officer, employee or agent of any of
them will be entitled to indemnification by the trust fund against any
claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and other costs, liabilities, fees and expenses
incurred in connection with any legal action or claim that relates to the
Pooling and Servicing Agreement, the mortgage loans, any related Companion
Loan or the certificates; provided, however,
that the indemnification will not extend to any loss, liability or expense
incurred by reason of willful misconduct, bad faith or negligence in the
performance of obligations or duties under the Pooling and Servicing
Agreement, by reason of negligent disregard of such party’s obligations or
duties, or in the case of the depositor and any of its partners,
shareholders, directors, officers, members, managers, employees and agents,
any violation by any of them of any state or federal securities law. The
Pooling and Servicing Agreement will also provide that any related master
servicer, depositor, special servicer, senior trust advisor or trustee under
the related pooling and servicing agreement with respect to the Non-Serviced
Pari Passu Companion Loan and any director, officer, employee or agent of
any of them will be entitled to indemnification by the trust fund and held
harmless against the trust’s pro
rata share of any liability or expense incurred in connection with
any legal action or claim that relates to such Non-Serviced Mortgage Loan
under the related pooling and servicing agreement or the Pooling and
Servicing Agreement; provided, however,
that such indemnification will not extend to any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence on the
part of the related master servicer, depositor, special servicer, senior
trust advisor or trustee under the related pooling and servicing agreement
in the performance of obligations or duties or by reason of negligent
disregard of obligations or duties under the related pooling and servicing
agreement.
In
addition, the Pooling and Servicing Agreement will provide that none of the
master servicer, the special servicer, the depositor or senior trust advisor
will be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its respective responsibilities under the
Pooling and Servicing Agreement or that in its opinion may involve it in any
expense or liability not reimbursed by the trust. However, each of the
master servicer, the special servicer, the depositor and the senior trust
advisor will be permitted, in the exercise of its discretion, to undertake
any action that it may deem necessary or desirable with respect to the
enforcement and/or protection of the rights and duties of the parties to the
Pooling and Servicing Agreement and the interests of the Certificateholders
(and, in the case of a Serviced Whole Loan, the rights of the
Certificateholders and the holders of the related Companion Loan (as a
collective whole)) under the Pooling and Servicing Agreement; provided, however,
that if a Serviced Whole Loan and/or the holder of the related Companion
Loan are involved, such expenses, costs and liabilities will be payable out
of funds related to such Serviced Whole Loan in accordance with the related
intercreditor agreement and will also be payable out of the other funds in
the Certificate Account if amounts on deposit with respect to such Serviced
Whole Loan are insufficient therefor. If any such expenses, costs or
liabilities relate to a mortgage loan or Companion Loan, then any subsequent
recovery on that mortgage loan or Companion Loan, as applicable, will be
used to reimburse the trust for any amounts advanced for the payment of such
expenses, costs or liabilities. In that event, the legal expenses and costs
of the action, and any liability resulting from the action, will be
expenses,
costs and
liabilities of the Certificateholders, and the master servicer, the special
servicer or the depositor, as the case may be, will be entitled to charge
the Certificate Account for the expenses.
Pursuant
to the Pooling and Servicing Agreement, the master servicer and the special
servicer will each be required to maintain a fidelity bond and errors and
omissions policy or their equivalent that provides coverage against losses
that may be sustained as a result of an officer’s or employee’s
misappropriation of funds or errors and omissions, subject to certain
limitations as to amount of coverage, deductible amounts, conditions,
exclusions and exceptions permitted by the Pooling and Servicing Agreement.
Notwithstanding the foregoing, the master servicer and the special servicer
will be allowed to self-insure with respect to an errors and omission policy
and a fidelity bond so long as certain conditions set forth in the Pooling
and Servicing Agreement are met.
Any
person into which the master servicer, the special servicer, the depositor
or senior trust advisor may be merged or consolidated, or any person
resulting from any merger or consolidation to which the master servicer, the
special servicer, the depositor or senior trust advisor is a party, or any
person succeeding to the business of the master servicer, the special
servicer, the depositor or senior trust advisor, will be the successor of
the master servicer, the special servicer, the depositor or senior trust
advisor, as the case may be, under the Pooling and Servicing Agreement. The
master servicer, the special servicer and the senior trust advisor may have
other normal business relationships with the depositor or the depositor’s
affiliates.
Unless
and until the special servicer liquidates a mortgage loan (other than the
Non-Serviced Mortgage Loan) following a default with respect to such
mortgage loan, the special servicer will be required to pursue such other
resolution strategies available under the Pooling and Servicing Agreement,
including, without limitation, workout, sale and foreclosure, consistent
with the Servicing Standard and any applicable REMIC provisions of the Code.
In
connection with the master servicer and the special servicer’s duties, all
net present value calculations and determinations made under the Pooling and
Servicing Agreement with respect to a mortgage loan, Serviced Pari Passu
Companion Loan, Mortgaged Property or REO Property (including for purposes
of the definition of “Servicing Standard”) will be made using a discount
rate appropriate for the type of cash flows being discounted; namely (i) for
principal and interest payments on a mortgage loan or Serviced Pari Passu
Companion Loan, a sale of a mortgage loan by the special servicer, the
higher of (1) the rate determined by the master servicer or special
servicer, as applicable, that approximates the market rate that would be
obtainable by the borrower on non-defaulted debt of such borrower as of such
date of determination and (2) the Mortgage Rate on the applicable mortgage
loan or Serviced Pari Passu Companion Loan based on its outstanding
principal balance and (ii) for all other cash flows, including property cash
flow, the “discount rate” set forth in the most recent appraisal (or update
of such appraisal) of the related Mortgaged Property.
|
Rating Agency Confirmations
|
The
Pooling and Servicing Agreement will provide that, notwithstanding the terms
of the related mortgage loan documents or other provisions of the Pooling
and Servicing Agreement, if any action under such mortgage loan documents or
the Pooling and Servicing Agreement requires a Rating Agency Confirmation
from each of the Rating Agencies as a condition precedent to such action, if
the party (the “Requesting
Party”) required to obtain such Rating Agency Confirmations has made
a request to any Rating Agency for such Rating Agency Confirmation and,
within 10 business days of such request being posted to the 17g-5
Information Provider’s website, such Rating Agency has not replied to such
request or has responded in a manner that indicates that such Rating Agency
is neither reviewing such request nor waiving the requirement for Rating
Agency Confirmation, then such Requesting Party will be required to confirm
(through direct communication and not by posting any confirmation on the
17g-5 Information Provider’s website) that the applicable Rating Agency has
received the Rating Agency Confirmation request, and, if it has, promptly
request the related Rating Agency Confirmation again. The circumstances
described in the preceding sentence are referred to in this free writing
prospectus as a “RAC
No-Response Scenario”.
If there
is no response to either such Rating Agency Confirmation request within 5
business days of such second request in a RAC No-Response Scenario or if
such Rating Agency has responded in a manner that indicates such Rating
Agency is neither reviewing such request nor waiving the requirement for
Rating Agency Confirmation, then such Requesting Party will be required
(without providing notice to the 17g-5 Information Provider) to confirm (by
direct communication and not by posting any confirmation on the 17g-5
Information Provider’s website) that the applicable Rating Agency has
received such second request and, following such confirmation, (x) with
respect to any condition in any mortgage loan document requiring such Rating
Agency Confirmation, or with respect to any other matter under the Pooling
and Servicing Agreement relating to the servicing of the mortgage loans
(other than as set forth in clause (y) below), the requirement to obtain a
Rating Agency Confirmation will be deemed not to apply (as if such
requirement did not exist) with respect to such Rating Agency, and the
master servicer or the special servicer, as the case may be, may then take
such action if the master servicer or the special servicer, as applicable,
confirms its original determination (made prior to making such request) that
taking the action with respect to which it requested the Rating Agency
Confirmation would still be consistent with the Servicing Standard, and (y)
with respect to a replacement of the master servicer or special servicer,
such condition will be deemed not to apply (as if such requirement did not
exist) (i) if the replacement master servicer or the special servicer, as
applicable, has not been cited by Moody’s as having servicing concerns as
the sole or material factor in any qualification, downgrade or withdrawal of
the ratings (or placement on “watch status” in contemplation of a ratings
downgrade or withdrawal) of securities in a transaction serviced by the
applicable servicer prior to the time of determination, if Moody’s is the
non-responding Rating Agency or (ii) if the applicable replacement master
servicer or special servicer is rated at least “CMS3” (in the case of the
master servicer) or “CSS3” (in the case of the special servicer), if Fitch
is the non-responding Rating Agency. Promptly following the master
servicer’s or special servicer’s determination to take any action discussed
above following any requirement to obtain Rating Agency Confirmation being
deemed not to apply (as if such requirement did not exist) as described in
clause (x) above, the master servicer or special servicer will be required
to provide written notice to the 17g-5 Information Provider, who will
promptly post such notice to the 17g-5 Information Provider’s website
pursuant to the Pooling and Servicing Agreement, of the action taken.
For all
other matters or actions not specifically discussed above, the applicable
Requesting Party will be required to obtain a Rating Agency Confirmation
from each of the Rating Agencies. In the event an action otherwise requires
a Rating Agency Confirmation from each of the Rating Agencies, in absence of
such Rating Agency Confirmation, we cannot assure you that any Rating Agency
will not downgrade, qualify or withdraw its ratings as a result of any such
action taken by the master servicer or the special servicer in accordance
with the procedures discussed above.
As used
above, “Rating
Agency Confirmation” means, with respect to any matter, confirmation
in writing by each applicable Rating Agency that a proposed action, failure
to act or other event specified in this free writing prospectus will not in
and of itself result in the downgrade, withdrawal or qualification of the
then-current rating assigned to any class of certificates (if then rated by
the Rating Agency); provided that
a written waiver or acknowledgment from the Rating Agency indicating its
decision not to review the matter for which the Rating Agency Confirmation
is sought will be deemed to satisfy the requirement for the Rating Agency
Confirmation from the Rating Agency with respect to such matter.
Any
Rating Agency Confirmation requests made by the master servicer, special
servicer, certificate administrator, or trustee, as applicable, pursuant to
the Pooling and Servicing Agreement, will be required to be made in writing,
which writing must contain a cover page indicating the nature of the Rating
Agency Confirmation request, and must contain all back-up material necessary
for the Rating Agency to process such request. Such written Rating Agency
Confirmation requests must be provided in electronic format to the 17g-5
Information Provider (who will be required to post such request on the 17g-5
Information Provider’s website in accordance with the Pooling and Servicing
Agreement).
The
master servicer, the special servicer, the certificate administrator and the
trustee will be permitted to orally communicate with the Rating Agencies
regarding any of the mortgage loan documents or any matter related to the
mortgage loans, the related Mortgaged Properties, the related borrowers or
any other matters relating to the Pooling and Servicing Agreement or any
related intercreditor agreement;
provided that such party summarizes the information provided to the
Rating Agencies in such communication in writing and provides the 17g-5
Information Provider with such written summary the same day such
communication takes place, provided,
that the summary of such oral communications will not identify with which
Rating Agency the communication was. The 17g-5 Information Provider will be
required to post such written summary on the 17g-5 Information Provider’s
website in accordance with the provisions of the Pooling and Servicing
Agreement. All other information required to be delivered to the Rating
Agencies pursuant to the Pooling and Servicing Agreement or requested by the
Rating Agencies, will first be provided in electronic format to the 17g-5
Information Provider, who will be required to post such information to the
17g-5 Information Provider’s website in accordance with the Pooling and
Servicing Agreement, and thereafter be delivered by the applicable party to
the Rating Agencies in accordance with the delivery instructions set forth
in the Pooling and Servicing Agreement. The senior trust advisor will have
no obligation or authority to communicate directly with the Rating Agencies,
but may deliver required information to the Rating Agencies to the extent
set forth in this free writing prospectus.
The
Pooling and Servicing Agreement will provide that the Pooling and Servicing
Agreement may be amended to change the procedures regarding compliance with
Rule 17g-5 without any Certificateholder consent; provided that
notice of any such amendment must be provided to the 17g-5 Information
Provider (who will post such notice to the 17g-5 Information Provider’s
website) and to the certificate administrator (which will post such report
to the certificate administrator’s website).
To the
extent required under the Pooling and Servicing Agreement, in the event a
confirmation is required by the applicable rating agencies that any action
under any mortgage loan documents or the Pooling and Servicing Agreement
will not result in the downgrade, withdrawal or qualification of any such
rating agency’s then-current ratings of any securities related to a
Companion Loan, then such rating agency confirmation may be considered
satisfied in the same manner as described above with respect to any Rating
Agency Confirmation from a Rating Agency.
|
Evidence as to Compliance
|
Each of
the master servicer, the special servicer (regardless of whether the special
servicer has commenced special servicing of a mortgage loan), the custodian,
the trustee and the certificate administrator will be required to furnish
(and each such party will be required, with respect to each servicing
function participant with which it has entered into a servicing relationship
with respect to the mortgage loans, to use reasonable efforts to cause such
servicing function participant to furnish) to the depositor, the certificate
administrator, the trustee and the 17g-5 Information Provider, an officer’s
certificate of the officer responsible for the servicing activities of such
party stating, among other things, that (i) a review of that party’s
activities during the preceding calendar year or portion of that year and of
performance under the Pooling and Servicing Agreement or any sub-servicing
agreement in the case of an additional master servicer or special servicer,
as applicable, has been made under such officer’s supervision and (ii) to
the best of such officer’s knowledge, based on the review, such party has
fulfilled all of its obligations under the Pooling and Servicing Agreement
or the sub-servicing agreement in the case of an additional master servicer
or special servicer, as applicable, in all material respects throughout the
preceding calendar year or portion of such year, 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 of the
failure.
In
addition, each of the master servicer, the special servicer (regardless of
whether the special servicer has commenced special servicing of the mortgage
loan), the trustee, the custodian, the certificate administrator and the
senior trust advisor will be required to furnish (and each such party will
be required, with respect to each servicing function participant with which
it has entered into a servicing relationship with respect to the mortgage
loans, to use reasonable efforts to cause such servicing function
participant to furnish) to the trustee, the certificate administrator, the
17g-5 Information Provider and the depositor a report (an “Assessment
of Compliance”) assessing compliance by that party with the servicing
criteria set forth in Item 1122(d) of Regulation AB (as described below)
under the Securities Act of 1933, as amended (the “Securities
Act”) that contains the following:
|
|
●
|
a statement of the party’s responsibility for assessing
compliance with the servicing criteria set forth in Item 1122 of
Regulation AB applicable to it;
|
|
|
|
a statement that the party used the criteria in Item 1122(d) of
Regulation AB to assess compliance with the applicable servicing
criteria;
|
|
|
|
the party’s assessment of compliance with the applicable
servicing criteria during and as of the end of the fiscal year,
covered by the Form 10-K required to be filed pursuant to the
Pooling and Servicing Agreement setting forth any material
instance of noncompliance identified by the party, a discussion
of each such failure and the nature and status of such failure;
and
|
|
|
|
a statement that a registered public accounting firm has issued
an attestation report (an “Attestation
Report”) on the party’s assessment of compliance with the
applicable servicing criteria during and as of the end of the
prior fiscal year.
|
Each
party that is required to deliver an Assessment of Compliance will also be
required to simultaneously deliver an Attestation Report of a registered
public accounting firm, prepared in accordance with the standards for
attestation engagements issued or adopted by the public company accounting
oversight board, that expresses an opinion, or states that an opinion cannot
be expressed (and the reasons for this), concerning the party’s assessment
of compliance with the applicable servicing criteria set forth in Item
1122(d) of Regulation AB.
“Regulation
AB” means subpart 229.1100 - Asset
Backed Securities (Regulation AB), 17 C.F.R. §§229.1100 - 229.1123, as such
rules may be amended from time to time, and subject to such clarification
and interpretation as have been provided by the SEC 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 SEC, or as may be
provided by the SEC or its staff from time to time.
|
Servicer Termination Events
|
A “Servicer
Termination Event” under the Pooling and Servicing Agreement with
respect to the master servicer or the special servicer, as the case may be,
will include, without limitation:
(a) (i) any failure by the master servicer to make a required deposit
to the Certificate Account or remit to the companion paying agent for
deposit into the related companion distribution account on the day such
deposit or remittance was first required to be made, which failure is not
remedied within one business day, or (ii) any failure by the master servicer
to deposit into, or remit to the certificate administrator for deposit into,
the Distribution Account any amount required to be so deposited or remitted,
which failure is not remedied by 11:00 a.m. New York City time on the
relevant Distribution Date;
(b) any failure by the special servicer to deposit into the REO Account
within one business day after the day such deposit is required to be made,
or to remit to the master servicer for deposit in the Certificate Account,
or any other account required under the Pooling and Servicing Agreement, any
such remittance required to be made by the special servicer on the day such
remittance is required to be made under the Pooling and Servicing Agreement;
(c) any failure by the master servicer or the special servicer duly to
observe or perform in any material respect any of its other covenants or
obligations under the Pooling and Servicing Agreement, which failure
continues unremedied for 30 days (or (i) with respect to any year that a
report on Form 10-K is required to be filed, five business days in the case
of the master servicer’s or special servicer’s, as applicable, obligations
regarding Exchange Act reporting required under the Pooling and Servicing
Agreement and compliance with Regulation AB, (ii) 15 days in the case of the
master servicer’s failure to make a Servicing Advance or (iii) 15 days in
the case of a failure to pay the premium for any property insurance policy
required to be maintained under the Pooling and Servicing Agreement) after
written notice of the failure has been given to the master servicer or the
special servicer, as the case may be, by any other party to the Pooling and
Servicing Agreement, or to the
master
servicer or the special servicer, as the case may be, with a copy to each
other party to the related Pooling and Servicing Agreement, by
Certificateholders of any class, evidencing as to that class, Percentage
Interests aggregating not less than 25% or, with respect to a Serviced Whole
Loan, by the holder of the related Companion Loan; provided, however,
that if that failure is capable of being cured and the master servicer or
the special servicer, as the case may be, is diligently pursuing that cure,
that 30-day period will be extended an additional 30 days; provided, further, however,
that such extended period will not apply to the obligations regarding
Exchange Act reporting;
(d) any breach on the part of the master servicer or the special
servicer of any representation or warranty in the Pooling and Servicing
Agreement that materially and adversely affects the interests of any class
of Certificateholders or holders of any Companion Loan (excluding the holder
of the Non-Serviced Pari Passu Companion Loan) and that continues unremedied
for a period of 30 days after the date on which notice of that breach,
requiring the same to be remedied, will have been given to the master
servicer or the special servicer, as the case may be, by the depositor, the
certificate administrator or the trustee, or to the master servicer, the
special servicer, the depositor, the certificate administrator and the
trustee by the Certificateholders of any class, evidencing as to that class,
Percentage Interests aggregating not less than 25% or, with respect to a
Serviced Whole Loan, by the holder of the related Companion Loan; provided, however,
that if that breach is capable of being cured and the master servicer or the
special servicer, as the case may be, is diligently pursuing that cure, that
30-day period will be extended an additional 30 days;
(e) certain events of insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings in respect of or relating to
the master servicer or the special servicer, and certain actions by or on
behalf of the master servicer or the special servicer indicating its
insolvency or inability to pay its obligations;
(f) Moody’s (i) has qualified, downgraded or withdrawn its ratings of
one or more classes of certificates, or (ii) has placed one or more classes
of certificates on “watch status” in contemplation of a rating downgrade or
withdrawal (and such “watch status” placement has not been withdrawn by
Moody’s within 60 days of such actual knowledge by the master servicer or
the special servicer, as the case may be) and, in the case of either of
clauses (i) or (ii), cited servicing concerns with the master servicer or
the special servicer, as the case may be, as the sole or a material factor
in such action; or
(g) the master servicer or the special servicer is no longer rated at
least “CMS3” or “CSS3”, respectively, by Fitch and such master servicer or
special servicer is not reinstated to at least that rating within 60 days of
the delisting.
|
Rights Upon Servicer Termination Event
|
If a
Servicer Termination Event occurs with respect to the master servicer or the
special servicer under the Pooling and Servicing Agreement, then, so long as
the Servicer Termination Event remains unremedied, the depositor or the
trustee will be authorized, and at the written direction of
Certificateholders entitled to not less than 51% of the Voting Rights or,
for so long as a Control Event has not occurred and is not continuing, the
Directing Certificateholder (solely with respect to the special servicer),
the trustee will be required to terminate all of the rights and obligations
of the defaulting party as master servicer or the special servicer, as the
case may be (other than certain rights in respect of indemnification and
certain items of servicing compensation), under the Pooling and Servicing
Agreement. The trustee will then succeed to all of the responsibilities,
duties and liabilities of the defaulting party as master servicer or special
servicer, as the case may be, under the Pooling and Servicing Agreement and
will be entitled to similar compensation arrangements. If the trustee is
unwilling or unable so to act, it may (or, at the written request of
Certificateholders entitled to not less than 51% of the Voting Rights, or,
for so long as a Control Event has not occurred and is not continuing, the
Directing Certificateholder, it will be required to) appoint, or petition a
court of competent jurisdiction to appoint, a loan servicing institution or
other entity that would not result in the downgrade, qualification or
withdrawal of the then-current ratings assigned to any class of Offered
Certificates by any Rating Agency to act as
successor
to the master servicer or special servicer, as the case may be, under the
Pooling and Servicing Agreement and, for so long as a Control Event has not
occurred and is not continuing, that has been approved by the Directing
Certificateholder, which approval may not be unreasonably withheld.
In
addition, the Depositor may direct the Trustee to terminate each of the
master servicer or the special servicer, as applicable, upon five business
days’ notice if there is a Servicer Termination Event under clause (c)(i)
above.
Notwithstanding anything to the contrary contained in the section described
above, if a Servicer Termination Event on the part of the special servicer
remains unremedied and affects the holder of a Companion Loan, and the
special servicer has not otherwise been terminated, the holder of such
Companion Loan (or, if applicable, the related trustee, acting at the
direction of the related controlling class representative) will be entitled
to direct the trustee to terminate the special servicer solely with respect
to the related Serviced Whole Loan. The appointment (or replacement) of a
special servicer with respect to a Serviced Whole Loan will in any event be
subject to Rating Agency Confirmation from each Rating Agency. A
replacement special servicer will be selected by the trustee or, prior to a
Consultation Termination Event, by the Directing Certificateholder; provided, however,
that any successor special servicer appointed to replace the special
servicer with respect to a Serviced Mortgage Loan cannot at any time be the
person (or an affiliate thereof) that was terminated at the direction of the
holder of the related Companion Loan, without the prior written consent of
such holder of the related Companion Loan.
Notwithstanding anything to the contrary contained in the section described
above, if a servicer termination event on the part of the special servicer
under the pooling and servicing agreement entered into in connection with
the securitization of the Non-Serviced Pari Passu Companion Loan (such
special servicer, the related “Non-Serviced
Special Servicer”) remains unremedied and affects the holder of such
Non-Serviced Mortgage Loan, and the related Non-Serviced Special Servicer
has not otherwise been terminated, the holder of the related Non-Serviced
Mortgage Loan (or, if applicable, the Special Servicer, acting at the
direction of the Directing Certificateholder) will be entitled to direct the
trustee under the related pooling and servicing agreement (the “Non-Serviced
Trustee”) to terminate the related Non-Serviced Special Servicer
solely with respect to the related Whole Loan). The appointment (or
replacement) of a Non-Serviced Special Servicer with respect to the
Non-Serviced Whole Loan will in any event be subject to Rating Agency
Confirmation from each Rating Agency. Such replacement special servicer
will be selected by the related Non-Serviced Trustee or, prior to a
consultation termination event under the related pooling and servicing
agreement, by the related directing holder; provided,
however, that any successor Non-Serviced Special Servicer appointed
to replace the terminated Non-Serviced Special Servicer with respect to the
Non-Serviced Whole Loan cannot at any time be the person (or its affiliate)
that was terminated at the direction of the holder of the Non-Serviced
Mortgage Loan, without the prior written consent of the Special Servicer on
behalf of the holder of such Non-Serviced Mortgage Loan.
In
addition, notwithstanding anything to the contrary contained in the section
described above, if the master servicer receives notice of termination
solely due to a Servicer Termination Event described in clauses (f) or (g)
under “—Servicer
Termination Events” above, and prior to being replaced as described
in the second preceding paragraph, the master servicer will have 45 days
after receipt of the notice of termination to find, and sell its rights and
obligations to, a successor master servicer that meets the requirements of a
master servicer under the Pooling and Servicing Agreement; provided that
the Rating Agencies have each provided a Rating Agency Confirmation. The
termination of the master servicer will be effective when such successor
master servicer has succeeded the terminated master servicer, as successor
master servicer and such successor master servicer has assumed the
terminated master servicer’s servicing obligations and responsibilities
under the Pooling and Servicing Agreement. If a successor has not entered
into the Pooling and Servicing Agreement as successor master servicer within
45 days after notice of the termination of the master servicer, the master
servicer will be replaced by the trustee as described in the previous
paragraph.
No
Certificateholder will have any right under the Pooling and Servicing
Agreement to institute any proceeding with respect to the certificates or
the Pooling and Servicing Agreement unless the holder previously has given
to the trustee and the certificate administrator written notice of default
and the continuance of the default and unless the holders of certificates of
any class evidencing not less than
25% of
the aggregate Percentage Interests constituting the class have made written
request upon the trustee to institute a proceeding in its own name (as
trustee) and have offered to the trustee reasonable indemnity, and the
trustee for 60 days after receipt of the request and indemnity has neglected
or refused to institute the proceeding. However, the trustee will be under
no obligation to exercise any of the trusts or powers vested in it by the
Pooling and Servicing Agreement or to institute, conduct or defend any
related litigation at the request, order or direction of any of the
Certificateholders, unless the Certificateholders have offered to the
trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred as a result.
Further,
if replaced as a result of a Servicer Termination Event any master servicer
or special servicer, as the case may be, will be responsible for the costs
and expenses associated with the transfer of its duties.
The
Pooling and Servicing Agreement may be amended by the parties to the Pooling
and Servicing Agreement, without the consent of any of the holders of
certificates:
(a) to correct any defect or ambiguity in the Pooling and Servicing
Agreement in order to address any manifest error in any provision of the
Pooling and Servicing Agreement;
(b) to cause the provisions in the Pooling and Servicing Agreement to
conform or be consistent with or in furtherance of the statements made in
the prospectus supplement with respect to the certificates, the trust or the
Pooling and Servicing Agreement or to correct or supplement any of its
provisions which may be inconsistent with any other provisions in the
Pooling and Servicing Agreement or to correct any error;
(c) to change the timing and/or nature of deposits in the Certificate
Account, the Distribution Accounts or any REO Account, provided that
(A) the Master Servicer Remittance Date will in no event be later than the
business day prior to the related Distribution Date and (B) the change would
not adversely affect in any material respect the interests of any
Certificateholder, as evidenced in writing by an opinion of counsel at the
expense of the party requesting such amendment or as evidenced by a Rating
Agency Confirmation from each of the Rating Agencies with respect to such
amendment;
(d) to modify, eliminate or add to any of its provisions to the extent
as will be necessary to maintain the qualification of either the Lower-Tier
REMIC or the Upper-Tier REMIC as a REMIC or the Grantor Trust as a grantor
trust under the relevant provisions of the Code at all times that any
certificate is outstanding, or to avoid or minimize the risk of imposition
of any tax on the Lower-Tier REMIC, the Upper-Tier REMIC or the Grantor
Trust that would be a claim against the Lower-Tier REMIC or the Upper-Tier
REMIC or the Grantor Trust; provided that
the trustee and the certificate administrator have received an opinion of
counsel (at the expense of the party requesting the amendment) to the effect
that (1) the action is necessary or desirable to maintain such qualification
or to avoid or minimize the risk of imposition of any such tax and (2) the
action will not adversely affect in any material respect the interests of
any holder of the certificates or holder of a Companion Loan;
(e) to modify, eliminate or add to any of its provisions to restrict
(or to remove any existing restrictions with respect to) the transfer of the
Residual Certificates; provided that
the depositor has determined that the amendment will not give rise to any
tax with respect to the transfer of the Residual Certificates to a
non-permitted transferee; provided that
the depositor may conclusively rely upon an opinion of counsel to such
effect;
(f) to make any other provisions with respect to matters or questions
arising under the Pooling and Servicing Agreement or any other change, provided that
the required action will not adversely affect in any material respect the
interests of any Certificateholder or any holder of a Companion Loan not
consenting thereto, as evidenced in writing by an opinion of counsel at the
expense of the party requesting such amendment or as evidenced by a Rating
Agency Confirmation from each of the Rating Agencies with respect to such
amendment or supplement and confirmation of the applicable
rating
agencies that such action will not result in the downgrade, withdrawal or
qualification of its then-current ratings of any securities related to a
Companion Loan, if any (provided that such rating agency confirmation may be
considered satisfied in the same manner as any Rating Agency Confirmation
may be considered satisfied with respect to the certificates as described in
this free writing prospectus);
(g) to amend or supplement any provision of the Pooling and Servicing
Agreement to the extent necessary to maintain the then-current ratings
assigned to each class of Offered Certificates by each Rating Agency, as
evidenced by a Rating Agency Confirmation from each of the Rating Agencies
and confirmation of the applicable rating agencies that such action will not
result in the downgrade, withdrawal or qualification of its then-current
ratings of any securities related to a Companion Loan, if any (provided that
such rating agency confirmation may be considered satisfied in the same
manner as any Rating Agency Confirmation may be considered satisfied with
respect to the certificates as described in this free writing prospectus); provided that
such amendment or supplement would not adversely affect in any material
respect the interests of any Certificateholder not consenting thereto, as
evidenced by an opinion of counsel;
(h) to modify the provisions of the Pooling and Servicing Agreement
with respect to reimbursement of Nonrecoverable Advances and Workout-Delayed
Reimbursement Amounts if (a) the depositor, the master servicer, the trustee
and, for so long as a Control Event has not occurred and is not continuing,
the Directing Certificateholder, determine that the commercial mortgage
backed securities industry standard for such provisions has changed, in
order to conform to such industry standard, (b) such modification does not
adversely affect the status of the Upper-Tier REMIC or the Lower-Tier REMIC
as a REMIC or the status of the Grantor Trust as a grantor trust under the
relevant provisions of the Code, as evidenced by an opinion of counsel and
(c) a Rating Agency Confirmation and confirmation of the applicable rating
agencies that such action will not result in the downgrade, withdrawal or
qualification of its then-current ratings of any securities related to a
Companion Loan, if any (provided that such rating agency confirmation may be
considered satisfied in the same manner as any Rating Agency Confirmation
may be considered satisfied with respect to the certificates as described in
this free writing prospectus);
(i) to modify the procedures set forth in the Pooling and Servicing
Agreement relating to compliance with Rule 17g-5, provided that
the change would not adversely affect in any material respect the interests
of any Certificateholder, as evidenced by (A) an opinion of counsel or (B)
if any certificate is then rated, Rating Agency Confirmation from each
Rating Agency rating such certificates; and provided, further,
that the certificate administrator must give notice of any such amendment to
the 17g-5 Information Provider for posting on the 17g-5 Information
Provider’s website and the certificate administration must post such notice
to its website; and
(j) in the event of a TIA Applicability Determination (as defined
below), to modify, eliminate or add to the provisions of the Pooling and
Servicing Agreement to such extent as shall be necessary to (A) effect the
qualification of the Pooling and Servicing Agreement under the TIA or under
any similar federal statute hereafter enacted and to add to the Pooling and
Servicing Agreement such other provisions as may be expressly required by
the TIA, and (B) modify such other provisions as necessary to conform the
Pooling and Servicing Agreement and be consistent with the modifications
made pursuant to the preceding clause (A); provided,
that any amendment pursuant to this clause (j) will be at the sole cost and
expense of the depositor.
With
respect to paragraph (j) above, in a number of cases that have been filed
alleging certain violations of the Trust Indenture Act of 1939, as amended
(the “TIA”),
certain lower courts have held that the TIA was applicable to certain
agreements similar to the Pooling and Servicing Agreement and that the
mortgage-backed certificates issued pursuant to such agreements were not
exempt under Section 304(a)(2) of the TIA. (See for example, in Retirement
Board of the Policemen’s Annuity and Benefit Fund of the City of Chicago v.
The Bank of New York Mellon, 11 Civ. 5459 (WHP) (SDNY Apr. 3, 2012)
and Policemen’s
Annuity and Benefit Fund of the City of Chicago v. Bank of America, et.al,
12 Civ. 2865 (KBF) (S.D.N.Y. Dec. 7, 2012)). These rulings are contrary to
more than three decades of market and SEC practice, as well as guidance
provided by the Division of Corporation Finance Interpretive Response
202.01
regarding the TIA, Section 304(a)(2) (which guidance was updated on May 3,
2012 to note the first of these rulings referred to above and to state that
the “staff is considering CDI 202.01 in light of this ruling”). See also Harbor
Financial, Inc. 1988 SEC No-Act. LEXIS 1463 (Oct. 31, 1988). If any
of these rulings by the lower courts is affirmed on appeal, or if there is a
change by the Division of Corporation Finance of its position that
agreements similar to the Pooling and Servicing Agreement are exempt from
the TIA under Section 304(a)(2), that would likely result in the Pooling and
Servicing Agreement being required to be qualified under the TIA.
In the
event that subsequent to the date of this free writing prospectus the
depositor informs the trustee that it has determined that the TIA does apply
to the Pooling and Servicing Agreement (a “TIA
Applicability Determination”), the Pooling and Servicing Agreement
will provide that it will be amended, without the consent of any
Certificateholder and at the expense of the depositor, to the extent
necessary to comply with the TIA. In addition, if the TIA were to apply to
the Pooling and Servicing Agreement, the TIA provides that certain
provisions would automatically be deemed to be included in the Pooling and
Servicing Agreement (and the Pooling and Servicing Agreement thus would be
statutorily amended without any further action); provided, however,
that it shall be deemed that the parties to the Pooling and Servicing
Agreement have agreed that, to the extent permitted under the TIA, the
Pooling and Servicing Agreement shall expressly exclude any non-mandatory
provisions that (x) conflict with the provisions of the Pooling and
Servicing Agreement or would otherwise alter the provisions thereof or
(y) increase the obligations, liabilities or scope of responsibility of any
party thereto. Generally, the TIA provisions include additional obligations
of the trustee, certain additional reporting requirements, and heightened
conflict of interest rules which may require, for example, that the trustee
resign in the event the interests of the holders of the various classes of
certificates differ from one another under certain circumstances and that
one or more other trustees be appointed in its place. While investors should
understand the potential for such amendments, investors should not purchase
Certificates with any expectation that the TIA will be determined to apply
or that any such amendments will be made.
The
Pooling and Servicing Agreement may also be amended by the parties to the
Pooling and Servicing Agreement with the consent of the holders of
certificates of each class affected by such amendment evidencing, in each
case, not less than 51% of the aggregate Percentage Interests constituting
the class for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Pooling and Servicing
Agreement or of modifying in any manner the rights of the holders of the
certificates, except that the amendment may not directly (1) reduce in any
manner the amount of, or delay the timing of, payments received on the
mortgage loans that are required to be distributed on a certificate of any
class without the consent of the holder of such certificate or which are
required to be distributed to a holder of a Companion Loan without the
consent of such holder, (2) reduce the aforesaid percentage of certificates
of any class the holders of which are required to consent to the amendment
or remove the requirement to obtain consent of any holder of a Companion
Loan, without the consent of the holders of all certificates of that class
then-outstanding or such holder of the related Companion Loan, (3) adversely
affect the Voting Rights of any class of certificates, without the consent
of the holders of all certificates of that class then outstanding,
(4) change in any manner the obligations of any mortgage loan seller under
such Purchase Agreement without the consent of the applicable mortgage loan
seller, or (5) amend the Servicing Standard without, in each case, the
consent of 100% of the holders of certificates or a Rating Agency
Confirmation by each Rating Agency and confirmation of the applicable rating
agencies that such action will not result in the downgrade, withdrawal or
qualification of its then-current ratings of any securities related to a
Companion Loan, if any (provided that such rating agency confirmation may be
considered satisfied in the same manner as any Rating Agency Confirmation
may be considered satisfied with respect to the certificates as described in
this free writing prospectus).
Notwithstanding the foregoing, no amendment to the Pooling and Servicing
Agreement may be made that changes in any manner the obligations of any
mortgage loan seller under such Purchase Agreement or the rights of any
mortgage loan seller, including as a third party beneficiary, under the
Pooling and Servicing Agreement, without the consent of such mortgage loan
seller.
Also,
notwithstanding the foregoing, no party will be required to consent to any
amendment to the Pooling and Servicing Agreement without the trustee, the
certificate administrator, the master servicer, the special servicer and the
senior trust advisor having first received an opinion of counsel (at the
trust fund’s expense) to the effect that the amendment does not conflict
with the terms of the Pooling and Servicing Agreement and that the amendment
or the exercise of any power granted to the master servicer, the special
servicer, the depositor, the certificate administrator, the trustee or any
other specified person in accordance with the amendment, will not result in
the imposition of a tax on any portion of the trust fund or cause either the
Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC or
cause the Grantor Trust to fail to qualify as a grantor trust under the
relevant provisions of the Code.
CERTAIN AFFILIATIONS, RELATIONSHIPS AND RELATED TRANSACTIONS INVOLVING
TRANSACTION PARTIES
JPMCB and
its affiliates are playing several roles in this transaction. J.P. Morgan
Chase Commercial Mortgage Securities Corp. is the depositor and a
wholly-owned subsidiary of JPMCB. JPMCB and the other mortgage loan sellers
originated or acquired the mortgage loans and will be selling them to the
depositor. JPMCB is also an affiliate of J.P. Morgan Securities LLC, an
underwriter for the offering of the certificates.
Barclays
is a sponsor and a mortgage loan seller. It is also an affiliate of Barclays
Capital Inc., an underwriter for the offered certificates and an initial
purchaser of the non-offered certificates. Barclays provides warehouse
financing to RAIT CMBS Conduit II, LLC, an affiliate of RAIT Funding, LLC,
an originator, through a repurchase facility. Certain of the mortgage loans
intended to be included in the trust that RAIT Funding, LLC originated are
subject to that repurchase facility. Proceeds received by RAIT CMBS Conduit
II, LLC will be applied, among other things, to make payments to Barclays
Bank PLC as the repurchase agreement counterparty.
Further,
JPMCB holds mezzanine loans related to the mortgage loans identified as
Loan Nos. 6 and 11 on Annex A-1 to this free writing prospectus. See also
Annex D-2 to this free writing prospectus and “Risk
Factors—Additional Debt or the Ability To Incur Other Borrowings Entails
Risk”. In addition, JPMCB currently holds the Meadows Mall Pari
Passu Companion Loan; however, JPMCB expects to deposit such loan into a
future securitization. With respect to one (1) mortgage loan (identified as
Loan No. 17 on Annex A-1 to this free writing prospectus), representing
approximately 1.9% of the Initial Pool Balance, JPMorgan Chase Bank,
National Association is the largest tenant at the related mortgaged property
and occupies approximately 78.2% of the net rentable area at such
property. See “Risk
Factors—Potential
Conflicts of Interest of the Underwriters and Their Affiliates” in
this free writing prospectus.
Wells
Fargo Bank, National Association is the trustee, the certificate
administrator, the tax administrator, the custodian, the certificate
registrar and the 17g-5 Information Provider.
Midland
Loan Services, a Division of PNC Bank, National Association, the special
servicer, is an affiliate of BlackRock Financial Management, Inc., which on
behalf of one or more managed funds or accounts, is expected to be
designated as the initial directing certificateholder.
Midland,
which is expected to act as the special servicer, assisted BlackRock
Financial Management, Inc. with due diligence relating to the mortgage loans
to be included in the mortgage pool.
See “Risk
Factors—Potential Conflicts of Interest” and “—Mortgaged
Properties Leased to Borrowers or Borrower Affiliated Entities Also Have
Risks” in this free writing prospectus. For a description of certain
other affiliations, relationships and related transactions, to the extent
known and material, among the transaction parties, see the individual
descriptions of the transaction parties under “Transaction
Parties” in this free writing prospectus.
PENDING LEGAL PROCEEDINGS INVOLVING TRANSACTION PARTIES
While the
sponsors have been involved in, and are currently involved in, certain
litigation or potential litigation, including actions relating to repurchase
claims, there are no legal proceedings pending, or any proceedings known to
be contemplated by any governmental authorities, against the sponsors that
are material to Certificateholders.
For a
description of certain other material legal proceedings pending against the
transaction parties, see the individual descriptions of the transaction
parties under “Transaction
Parties” in this free writing prospectus.
YIELD AND MATURITY CONSIDERATIONS
General. The yield on any class of Offered Certificates will depend
on: (1) the Pass-Through Rate for the class; (2) the price paid for such
certificates and, if the price was other than par, the rate and timing of
payments (whether as a result of voluntary or involuntary prepayments
received in respect of the mortgage loans) of principal on the certificate
(or, in the case of the Class X-A, Class X-B and Class X-C certificates,
reduction of the Notional Amount of the Class X-A, Class X-B and Class X-C
certificates, as applicable); (3) the aggregate amount of distributions on
the certificates (or in the case of the Class X-A, Class X-B and Class X-C
certificates, the resulting reductions of the Notional Amount of the
Class X-A, Class X-B and Class X-C certificates, as applicable, as a result
of such principal distributions); and (4) the aggregate amount of Collateral
Support Deficit amounts allocated to a class of certificates (or, in the
case of the Class X-A, Class X-B and Class X-C certificates, in reduction of
the Notional Amount of the Class X-A, Class X-B and Class X-C certificates,
as applicable).
Pass-Through Rate. The Pass-Through Rate applicable to each class of
Offered Certificates for any Distribution Date will equal the rate set forth
on the cover of this free writing prospectus (including additional
information indicated by any relevant footnotes). See “Description
of the Certificates” in this free writing prospectus.
Rate and Timing of Principal Payments. The yield to holders of
Offered Certificates that are purchased at a discount or premium will be
affected by the rate and timing of principal payments on the mortgage loans
(including principal prepayments on the mortgage loans resulting from both
voluntary prepayments by the borrowers and involuntary liquidations). As
described in this free writing prospectus, the Principal Distribution Amount
for each Distribution Date will generally be distributable first,
in respect of the Class A-SB certificates until their Certificate Balance is
reduced to the Class A-SB Planned Principal Balance for such Distribution
Date, second,
in respect of the Class A-1 certificates until their Certificate Balance is
reduced to zero, third,
in respect of the Class A-2 certificates until their Certificate Balance is
reduced to zero, fourth,
in respect of the Class A-3 certificates until their Certificate Balance is
reduced to zero, fifth,
in respect of the Class A-4 certificates until their Certificate Balance is
reduced to zero, and sixth,
in respect of the Class A-SB certificates, without regard to the Class A-SB
Planned Principal Balance, until their Certificate Balance is reduced to
zero. After those distributions, the remaining Principal Distribution Amount
with respect to the pool of mortgage loans will generally be distributable
entirely in respect of the Class A-S certificates, the Class B certificates,
the Class C certificates, the Class D certificates, the Class E
certificates, the Class F certificates, the Class G certificates and the
Class NR certificates, in that order, in each case until the Certificate
Balance of such class of certificates is reduced to zero. Consequently, the
rate and timing of principal payments on the mortgage loans will in turn be
affected by their amortization schedules, lockout periods, defeasance
provisions, requirements to pay Yield Maintenance Charges and/or other
prepayment consideration in connection with principal payments, the dates on
which balloon payments are due, incentives for a borrower to repay an ARD
Loan by the related anticipated repayment date, property release provisions,
any extensions of maturity dates by the master servicer or the special
servicer and the rate and timing of principal prepayments and other
unscheduled collections received in respect of the mortgage loans (including
for this purpose, collections made in connection with liquidations of
mortgage loans due to defaults, casualties or condemnations affecting the
Mortgaged Properties, or purchases of mortgage loans out of the trust fund).
Furthermore, because the Class X Certificates are not entitled to
distributions of principal, the yield on such certificates will be extremely
sensitive to prepayments received in respect of the mortgage loans to the
extent distributed to reduce the related Notional Amount of the applicable
class of Class X Certificates. In addition, although the borrower under each
ARD Loan may have certain incentives to prepay the related ARD Loan on its
Anticipated Repayment Date, we cannot assure you that the borrower will be
able to prepay such ARD Loan on its related Anticipated Repayment Date. The
failure of the borrower to prepay the related ARD Loan on the Anticipated
Repayment Date will not be an event of default under the terms of the ARD
Loans, and pursuant to the terms of the Pooling and Servicing Agreement,
neither the master servicer nor the special servicer will be permitted to
take any
enforcement action with respect to the borrower’s failure to pay Excess
Interest, other than to make requests for collection, until the scheduled
maturity of the related ARD Loan; provided that
the master servicer or the 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 related ARD Loan documents.
With respect to the Class A-SB certificates, the extent to which the planned
balances are achieved and the sensitivity of the Class A-SB certificates to
principal prepayments on the mortgage loans will depend in part on the
period of time during which the Class A-1, Class A-2, Class A-3 and
Class A-4 certificates remain outstanding. As such, the Class A-SB
certificates will become more sensitive to the rate of prepayments on the
mortgage loans than they were when the Class A-1, Class A-2, Class A-3 and
Class A-4 certificates were outstanding.
Prepayments and, assuming the respective stated maturity dates (or, if
applicable, Anticipated Repayment Dates) for the mortgage loans have not
occurred, liquidations and purchases of the mortgage loans will result in
distributions on the Offered Certificates of amounts that would otherwise be
distributed over the remaining terms of the mortgage loans to maturity (or,
if applicable, to the related anticipated repayment date). Defaults on the
mortgage loans particularly at or near their stated maturity dates (or, if
applicable, Anticipated Repayment Dates), may result in significant delays
in anticipated payments of principal on the mortgage loans (and,
accordingly, on the Offered Certificates) while work-outs are negotiated or
foreclosures are completed. See “Servicing
of the Mortgage Loans—Modifications, Waivers and Amendments” and “—Realization
Upon Defaulted Mortgage Loans” and “Certain
Legal Aspects of the Mortgage Loans” in this free writing prospectus.
Because the rate of principal payments on the mortgage loans will depend on
future events and a variety of factors (as described below), we cannot
assure you as to the rate of principal payments or the rate of principal
prepayments in particular. We are not aware of any relevant publicly
available or authoritative statistics with respect to the historical
prepayment experience of a large group of mortgage loans comparable to the
mortgage loans.
The
extent to which the yield to maturity of any class of Offered Certificates
may vary from the anticipated yield will depend upon the degree to which the
certificates are purchased at a discount or premium and when, and to what
degree, payments of principal on the mortgage loans are in turn distributed
on the certificates or, in the case of the Class X-A or Class X-B
certificates applied to reduce the Notional Amount of the Class X-A or Class
X-B certificates, as applicable. An investor should consider, in the case of
any certificate (other than the Class X Certificates) purchased at a
discount, the risk that a slower than anticipated rate of principal payments
on the mortgage loans could result in an actual yield to such investor that
is lower than the anticipated yield and, in the case of any certificate
purchased at a premium, the risk that a faster than anticipated rate of
principal payments could result in an actual yield to such investor that is
lower than the anticipated yield. In general, the earlier a payment of
principal on the mortgage loans is distributed or otherwise results in
reduction of the principal balance of a certificate purchased at a discount
or premium, the greater will be the effect on an investor’s yield to
maturity. As a result, the effect on an investor’s yield of principal
payments distributed on an investor’s certificates occurring at a rate
higher (or lower) than the rate anticipated by the investor during any
particular period would not be fully offset by a subsequent like reduction
(or increase) in the rate of principal payments.
Because
the Notional Amounts of the Class X-A and Class X-B certificates are based
on the outstanding Certificate Balances of, in the case of the Class X-A
certificates, the Class A Certificates and, in the case of the Class X-B
certificates, the Class B and Class C certificates, the yield to maturity on
the Class X-A and Class X-B certificates will be extremely sensitive to the
rate and timing of prepayments of principal on the mortgage loans.
Principal
prepayments on the mortgage loans may also affect the yield on the classes
of certificates with a Pass-Through Rate equal to, based on, or limited by
the WAC Rate, to the extent that mortgage loans with higher Mortgage Rates
prepay faster than mortgage loans with lower Mortgage Rates. The
Pass-Through Rates on these classes of certificates may be adversely
affected by a decrease in the WAC Rate even if principal prepayments do not
occur.
Losses and Shortfalls. The yield to holders of the Offered
Certificates will also depend on the extent to which the holders are
required to bear the effects of any losses or shortfalls on the mortgage
loans.
Losses
and other shortfalls on the mortgage loans will generally be borne by the
holders of the Class NR certificates, the Class G certificates, the Class F
certificates, the Class E certificates, the Class D certificates, the
Class C certificates, Class B certificates and the Class A-S certificates,
in that order, in each case to the extent of amounts otherwise distributable
in respect of the class of Subordinate Certificates. Although losses on the
Class B and Class C certificates will not be allocated to the Class X-B
certificates directly, they will reduce the Notional Amount of the Class X-B
certificates, which will reduce the yield on such Offered Certificates. In
the event of the reduction of the Certificate Balances of all those classes
of Subordinate Certificates to zero, the resulting losses and shortfalls
will then be borne, pro
rata, by the Class A-1, Class A-2, Class A-3, Class A-4 and
Class A-SB certificates. Although losses on the Class A Certificates will
not be allocated to the Class X-A certificates directly, they will reduce
the Notional Amount of the Class X-A certificates, which will reduce the
yield on such Offered Certificates.
Certain Relevant Factors.
The rate and timing of principal payments and defaults and the severity of
losses on the mortgage loans may be affected by a number of factors,
including, without limitation, prevailing interest rates, the terms of the
mortgage loans (for example, due-on-sale clauses, lockout periods or Yield
Maintenance Charges, release of property provisions, amortization terms that
require balloon payments and incentives for a borrower to repay its mortgage
loan by an anticipated repayment date), the demographics and relative
economic vitality of the areas in which the Mortgaged Properties are located
and the general supply and demand for rental properties in those areas, the
quality of management of the Mortgaged Properties, the servicing of the
mortgage loans, possible changes in tax laws and other opportunities for
investment. See “Risk
Factors” and “Description
of the Mortgage Pool” and “Yield
and Maturity Considerations” in this free writing prospectus.
The rate
of prepayment on the pool of mortgage loans is likely to be affected by
prevailing market interest rates for mortgage loans of a comparable type,
term and risk level as the mortgage loans. When the prevailing market
interest rate is below a mortgage coupon, a borrower may have an increased
incentive to refinance its mortgage loan. However, under all of the mortgage
loans, voluntary prepayments are subject to lockout periods and/or Yield
Maintenance Charges. See “Description
of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans”
in this free writing prospectus. In any case, we cannot assure you that the
related borrowers will refrain from prepaying their mortgage loans due to
the existence of Yield Maintenance Charges or prepayment premiums, or that
involuntary prepayments will not occur.
With
respect to certain mortgage loans, the related mortgage loan documents allow
for the sale of individual properties and the severance of the related debt
and the assumption by the transferee of such portion of the mortgage loan as
is allocable to the individual property acquired by that transferee, subject
to the satisfaction of certain conditions. In addition, with respect to
certain mortgage loans, the related mortgage loan documents allow for
partial releases of individual Mortgaged Properties during a lockout period
or during such time as a yield maintenance charge would otherwise be
payable, which could result in a prepayment of a portion of the initial
principal balance of the related mortgage loan without payment of a yield
maintenance charge or prepayment premium. Additionally, in the case of a
partial release of an individual Mortgaged Property, the related release
amount in many cases is greater than the allocated loan amount for the
Mortgaged Property being released, which would result in a greater than
proportionate paydown of the mortgage loan. For more information see “Description
of the Mortgage Pool—Certain Terms and Conditions of the Mortgage
Loans—Releases of Individual Mortgaged Properties” in this free
writing prospectus.
Depending
on prevailing market interest rates, the outlook for market interest rates
and economic conditions generally, some borrowers may sell Mortgaged
Properties in order to realize their equity in the Mortgaged Property, to
meet cash flow needs or to make other investments. In addition, some
borrowers may be motivated by federal and state tax laws (which are subject
to change) to sell Mortgaged Properties prior to the exhaustion of tax
depreciation benefits.
The
depositor makes no representation as to the particular factors that will
affect the rate and timing of prepayments and defaults on the mortgage
loans, as to the relative importance of those factors, as to the percentage
of the principal balance of the mortgage loans that will be prepaid or as to
which a default
will have
occurred as of any date or as to the overall rate of prepayment or default
on the mortgage loans or related mortgage loans.
Delay in Payment of
Distributions. Because each monthly distribution is made on each
Distribution Date, which is at least 15 days after the end of the related
Interest Accrual Period for the certificates, the effective yield to the
holders of such certificates will be lower than the yield that would
otherwise be produced by the applicable Pass-Through Rates and purchase
prices (assuming the prices did not account for the delay).
Unpaid Distributable
Certificate Interest. As described under “Description
of the Certificates—Distributions—Priority” in this free writing
prospectus, if the portion of the Available Distribution Amount
distributable in respect of interest on any class of certificates on any
Distribution Date is less than the Distributable Certificate Interest then
payable for that class of certificates, then the shortfall will be
distributable to holders of that class of certificates on subsequent
Distribution Dates, to the extent of available funds. Any shortfall will not
bear interest, however, so it will negatively affect the yield to maturity
of the related class of certificates for so long as it is outstanding.
Similarly, any amounts constituting Collateral Support Deficit that are
subsequently reimbursed generally will not bear interest (except as provided
in this free writing prospectus with respect to Accrued Interest From
Recoveries).
The
weighted average life of a Regular Certificate refers to the average amount
of time that will elapse from the date of its issuance until each dollar
allocable to principal of the certificate is distributed to the related
investor. The weighted average life of a Regular Certificate will be
influenced by, among other things, the rate at which principal on the
mortgage loans is paid or otherwise received, which may be in the form of
scheduled amortization, voluntary prepayments, Insurance and Condemnation
Proceeds and Liquidation Proceeds. As described in this free writing
prospectus, the Principal Distribution Amount for each Distribution Date
will generally be distributable first,
in respect of the Class A-SB certificates until their Certificate Balance is
reduced to the Class A-SB Planned Principal Balance for such Distribution
Date, second, in
respect of the Class A-1 certificates until their Certificate Balance is
reduced to zero, third,
in respect of the Class A-2 certificates until their Certificate Balance is
reduced to zero, fourth,
in respect of the Class A-3 certificates until their Certificate Balance is
reduced to zero, fifth,
in respect of the Class A-4 certificates until their Certificate Balance is
reduced to zero, and sixth,
in respect of the Class A-SB certificates, without regard to the Class A-SB
Planned Principal Balance, until their Certificate Balance is reduced to
zero. After those distributions, the remaining Principal Distribution Amount
with respect to all the mortgage loans will generally be distributable
entirely in respect of the A-S certificates, then the
Class B certificates, then the
Class C certificates, then the
Class D certificates, then the
Class E certificates, then the
Class F certificates, then the
Class G certificates, and then the
Class NR certificates, in that order, in each case until the Certificate
Balance of each such class of certificates is reduced to zero.
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The “Constant Prepayment Rate” or “CPR”
model represents an assumed constant annual rate of prepayment each month,
expressed as a per annum percentage
of the then-scheduled principal balance of the pool of mortgage loans. The “CPY”
model represents an assumed CPR prepayment rate after any applicable lockout
period, any applicable period in which Defeasance is permitted and any
applicable yield maintenance period. The model used in this free writing
prospectus is the CPY model. As used in each of the following tables, the
column headed “0% CPY” assumes that none of the mortgage loans is prepaid
before its maturity date or Anticipated Repayment Date, as the case may be.
The columns headed “25% CPY”, “50% CPY”, “75% CPY” and “100% CPY” assume
that prepayments on the mortgage loans are made at those levels of CPR
following the expiration of any applicable lockout period, any applicable
period in which Defeasance is permitted and any applicable yield maintenance
period (except as described below). We cannot assure you, however, that
prepayments of the mortgage loans will conform to any level of CPY, and no
representation is made that the mortgage loans will prepay at the levels of
CPY shown or at any other prepayment rate.
The
following tables indicate the percentage of the initial Certificate Balance
of each class of the Offered Certificates that would be outstanding after
each of the dates shown at various CPYs and the corresponding weighted
average life of each class of Offered Certificates. The tables have been
prepared on the basis of the following assumptions (the “Modeling
Assumptions”), among others:
(a) scheduled Periodic Payments including payments due at maturity of
principal and/or interest on the mortgage loans will be received on a timely
basis and will be distributed on the 15th day of the related month,
beginning in September 2013;
(b) the
Mortgage Rate in effect for each mortgage loan as of the Cut-off Date will
remain in effect to the related maturity date or Anticipated Repayment Date,
as the case may be, and will be adjusted as required pursuant to the
definition of Mortgage Rate;
(c) the
mortgage loan sellers will not be required to repurchase any mortgage loan,
and none of the holders of the Controlling Class (or any other
Certificateholder), the special servicer, the master servicer or the holders
of the Class R certificates will exercise its option to purchase all the
mortgage loans and thereby cause an early termination of the trust fund and
no holder of any mezzanine or other indebtedness will exercise its option to
purchase the related mortgage loan;
(d) any
principal prepayments on the mortgage loans will be received on their
respective Due Dates after the expiration of any applicable lockout period,
any applicable period in which Defeasance is permitted, and any applicable
yield maintenance period, in each case, at the respective levels of CPY set
forth in the tables (without regard to any limitations in such mortgage
loans on partial voluntary principal prepayment);
(e) no
Prepayment Interest Shortfalls are incurred and no prepayment premiums or
Yield Maintenance Charges are collected;
(f) the Closing Date is on August 19, 2013;
(g) each ARD Loan prepays in full on the related Anticipated Repayment
Date;
(h) the
Pass-Through Rates, initial Certificate Balances and initial Notional
Amounts of the respective classes of Offered Certificates are as described
in this free writing prospectus;
(i) the Administrative Cost Rate is calculated on the Stated Principal
Balance of the mortgage loans and in the same manner as interest is
calculated on the mortgage loans;
(j) no
reserves, earnouts, holdbacks, insurance proceeds or condemnation proceeds
are applied to prepay any related mortgage loan in whole or in part;
(k) no
additional trust fund expenses or Senior Trust Advisor Expenses are
incurred;
(l) no
property releases (or related re-amortizations) occur;
(m) the
optional termination is not exercised;
(n) there are no modifications or maturity date extensions in respect of
the mortgage loans; and
(o) the
mortgage loan secured by the mortgaged property identified on Annex A-1 to
this free writing prospectus 575 Mayville Centre Drive, representing
approximately 2.3% of the Initial Pool Balance, amortizes based on the
amortization schedule attached to this free writing prospectus as Annex F.
To the
extent that the mortgage loans have characteristics that differ from those
assumed in preparing the tables set forth below, a class of Offered
Certificates may mature earlier or later than indicated by the tables. The
tables set forth below are for illustrative purposes only and it is highly
unlikely that the mortgage loans will actually prepay at any constant rate
until maturity or that all the mortgage
loans
will prepay at the same rate. In addition, variations in the actual
prepayment experience and the balance of the mortgage loans that prepay may
increase or decrease the percentages of initial Certificate Balances (and
weighted average lives) shown in the following tables. These variations may
occur even if the average prepayment experience of the mortgage loans were
to equal any of the specified CPY percentages. Investors should not rely on
the prepayment assumptions set forth in this free writing prospectus and are
urged to conduct their own analyses of the rates at which the mortgage loans
may be expected to prepay, based on their own assumptions. Based on the
foregoing assumptions, the following tables indicate the resulting weighted
average lives of each class of Offered Certificates and set forth the
percentage of the initial Certificate Balance of the class of the
certificate that would be outstanding after each of the dates shown at the
indicated CPYs.
Percent of the Initial Certificate Balance
of the Class A-1 Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
83
|
|
|
83
|
|
|
83
|
|
|
83
|
|
|
83
|
|
|
August 2015
|
|
66
|
|
|
66
|
|
|
66
|
|
|
66
|
|
|
66
|
|
|
August 2016
|
|
45
|
|
|
44
|
|
|
42
|
|
|
40
|
|
|
1
|
|
|
August 2017
|
|
22
|
|
|
9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
August 2018
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
2.69
|
|
|
2.53
|
|
|
2.44
|
|
|
2.37
|
|
|
2.23
|
|
|
(1)
|
The weighted average life of the Class A-1 certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-1 certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-1 certificates.
|
Percent of the Initial Certificate Balance
of the Class A-2 Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
99
|
|
|
95
|
|
|
82
|
|
|
August 2018
|
|
26
|
|
|
26
|
|
|
26
|
|
|
26
|
|
|
26
|
|
|
August 2019
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
5.18
|
|
|
5.14
|
|
|
5.09
|
|
|
5.02
|
|
|
4.82
|
|
|
(1)
|
The weighted average life of the Class A-2 certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-2 certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-2 certificates.
|
Percent of the Initial Certificate Balance
of the Class A-3 Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2019
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
99
|
|
|
August 2020
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
99
|
|
|
August 2021
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
99
|
|
|
August 2022
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
99
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
9.82
|
|
|
9.75
|
|
|
9.66
|
|
|
9.60
|
|
|
9.46
|
|
|
(1)
|
The weighted average life of the Class A-3 certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-3 certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-3 certificates.
|
Percent of the Initial Certificate Balance
of the Class A-4 Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2019
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2020
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2021
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2022
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
9.87
|
|
|
9.86
|
|
|
9.85
|
|
|
9.81
|
|
|
9.59
|
|
|
(1)
|
The weighted average life of the Class A-4 certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-4 certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-4 certificates.
|
Percent of the Initial Certificate Balance
of the Class A-SB Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
98
|
|
|
98
|
|
|
98
|
|
|
98
|
|
|
98
|
|
|
August 2019
|
|
78
|
|
|
78
|
|
|
78
|
|
|
78
|
|
|
79
|
|
|
August 2020
|
|
59
|
|
|
59
|
|
|
59
|
|
|
59
|
|
|
60
|
|
|
August 2021
|
|
39
|
|
|
39
|
|
|
39
|
|
|
39
|
|
|
40
|
|
|
August 2022
|
|
18
|
|
|
18
|
|
|
18
|
|
|
18
|
|
|
19
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
7.46
|
|
|
7.46
|
|
|
7.46
|
|
|
7.46
|
|
|
7.47
|
|
|
(1)
|
The weighted average life of the Class A-SB certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-SB certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-SB certificates.
|
Percent of the Initial Certificate Balance
of the Class A-S Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2019
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2020
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2021
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2022
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
9.91
|
|
|
9.91
|
|
|
9.91
|
|
|
9.91
|
|
|
9.66
|
|
|
(1)
|
The weighted average life of the Class A-S certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class A-S certificates to the related
Distribution Date, (b) summing the results and (c) dividing the
sum by the aggregate amount of the reductions in the principal
balance of the Class A-S certificates.
|
Percent of the Initial Certificate Balance
of the Class B Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2019
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2020
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2021
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2022
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
9.99
|
|
|
9.96
|
|
|
9.93
|
|
|
9.91
|
|
|
9.70
|
|
|
(1)
|
The weighted average life of the Class B certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class B certificates to the related Distribution
Date, (b) summing the results and (c) dividing the sum by the
aggregate amount of the reductions in the principal balance of
the Class B certificates.
|
Percent of the Initial Certificate Balance
of the Class C Certificates at the Respective CPYs
Set Forth Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Percentage
|
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
100
|
% |
|
August 2014
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2015
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2016
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2017
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2018
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2019
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2020
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2021
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2022
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
100
|
|
|
August 2023
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
Weighted Average Life (years)(1)
|
|
9.99
|
|
|
9.99
|
|
|
9.99
|
|
|
9.96
|
|
|
9.74
|
|
|
(1)
|
The weighted average life of the Class C certificates is
determined by (a) multiplying the amount of each principal
distribution on it by the number of years from the date of
issuance of the Class C certificates to the related Distribution
Date, (b) summing the results and (c) dividing the sum by the
aggregate amount of the reductions in the principal balance of
the Class C certificates.
|
Yield Sensitivity of the Class X-A and Class X-B Certificates
The yield
to maturity of the Class X-A and Class X-B certificates will be highly
sensitive to the rate and timing of principal payments including by reason
of prepayments (whether voluntary or involuntary), principal losses and
other factors described above to the extent allocated to, (a) in the case of
the Class X-A certificates, the Class A Certificates and (b) in the case of
the Class X-B certificates, the Class B and Class C certificates. Investors
in the Class X-A and Class X-B certificates should fully consider the
associated risks, including the risk that an extremely rapid rate of
amortization, prepayment or other liquidation of the mortgage loans could
result in the failure of such investors to recoup fully their initial
investments.
Any optional termination by the holders of the Controlling Class, the
special servicer, the master servicer or the holders of the Class R
certificates would result in prepayment in full of the
Offered Certificates and would have an adverse effect on the yield of a
class of Class X-A and Class X-B certificates because a termination would
have an effect similar to a principal prepayment in full of the mortgage
loans and, as a result, investors in any Class X-A and Class X-B
certificates and any other certificates purchased at premium might not fully
recoup their initial investment. See “Description
of the Certificates—Termination; Retirement of Certificates” in this
free writing prospectus.
Pre-Tax Yield to Maturity Tables
The
following tables indicate the approximate pre-tax yield to maturity on a
corporate bond equivalent (“CBE”)
basis on the certificates offered hereby for the specified CPYs based on the
assumptions set forth under “—Weighted
Average Life” above. It was further assumed that the purchase price
of the certificates offered hereby is as specified in the tables below,
expressed as a percentage of the initial Certificate Balance or Notional
Amount, as applicable, plus accrued interest from August 1, 2013 to the
Closing Date.
The
yields set forth in the following tables were calculated by determining the
monthly discount rates that, when applied to the assumed streams of cash
flows to be paid on the applicable class of Offered Certificates, would
cause the discounted present value of such assumed stream of cash flows to
equal the assumed purchase price of such class, and by converting
such monthly rates to semi-annual corporate bond equivalent rates. Such
calculations do not take into account shortfalls in collection of interest
due to prepayments (or other liquidations) of the mortgage loans or the
interest rates at which investors may be able to reinvest funds received by
them as distributions on the applicable class of certificates (and,
accordingly, do not purport to reflect the return on any investment in the
applicable class of Offered Certificates when such reinvestment rates are
considered).
The
characteristics of the mortgage loans may differ from those assumed in
preparing the tables below. In addition, we cannot assure you that the
mortgage loans will prepay in accordance with the above assumptions at any
of the rates shown in the tables or at any other particular rate, that the
cash flows on the applicable class of Offered Certificates will correspond
to the cash flows shown in this free writing prospectus or that the
aggregate purchase price of such class of Offered Certificates will be as
assumed. In addition, it is unlikely that the mortgage loans will prepay in
accordance with the above assumptions at any of the specified CPYs until
maturity or that all the mortgage loans will so prepay at the same rate.
Timing of changes in the rate of prepayments may significantly affect the
actual yield to maturity to investors, even if the average rate of principal
prepayments is consistent with the expectations of investors. Investors must
make their own decisions as to the appropriate prepayment assumption to be
used in deciding whether to purchase any class of Offered Certificates.
For
purposes of this free writing prospectus, prepayment assumptions with
respect to the mortgage loans are presented in terms of the CPY model
described under “—Weighted
Average Life” above.
TABLES OF PRE-TAX YIELD TO MATURITY FOR THE CLASS A-1, CLASS A-2, CLASS A-3,
CLASS A-4, CLASS A-SB, CLASS X-A, CLASS X-B, CLASS A-S, CLASS B AND CLASS C
CERTIFICATES
Pre-Tax Yield to Maturity for the Class A-1 Certificates
Assumed Purchase Price
(% of Initial Certificate Balance
of Class A-1 certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class A-2 Certificates
Assumed Purchase Price
(% of Initial Certificate Balance
of Class A-2 certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class A-3 Certificates
Assumed Purchase Price
(% of Initial Certificate Balance
of Class A-3 certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class A-4 Certificates
Assumed Purchase Price
(% of Initial Certificate Balance
of Class A-4 certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class A-SB Certificates
Assumed Purchase Price
(% of Initial Certificate Balance
of Class A-SB certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class X-A Certificates
Assumed Purchase Price
(% of Initial Notional Amount
of Class X-A certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Yield to Maturity for the Class X-B Certificates
Assumed Purchase Price
(% of Initial Notional Amount
of Class X-B certificates)
|
|
Prepayment Assumption (CPY)
|
|
|
|
|